A milder winter and a slowdown in economic activity late in the first quarter cut electricity sales in the Tennessee Valley by about 2% during the first three months of 2020.
The Tennessee Valley Authority said Tuesday that lower power sales and rebates given to local power companies that signed 20-year power agreements cut TVA revenues by 8.3% in the past quarter to just over $2.5 billion. But operating expenses in the three-month period fell even more, dropping 11.3% to $1.9 billion with declines in everything from fuel costs to interest payments.
As a result, TVA said its net income rose in the past quarter by 5.8% to $255 million as cheaper fuel and purchased power and lower operating costs saved the utility $231 million during the period.
TVA said so far the coronavirus has not significantly affected power sales or delivery. But in its quarterly report Tuesday, TVA projects that the economic slowdown from the COVID-19 pandemic is likely to cut TVA revenues from $300 million to $500 million during the balance of its fiscal 2020 year.
Due to higher volatility in the financial markets from COVID-19, TVA also increased its target balance of cash and cash equivalents by $500 million in what officials said was “a precautionary measure” for a more uncertain future.