TVA expects to add $921 million to its debt this year, pushing the utility’s total obligations to close to 90 percent of its borrowing ability.
But a new long-term power plan — the Integrated Resource Plan — being developed by TVA doesn’t include raising the $30 billion cap on debt set for it by Congress more than three decades ago. Even with continued construction of nuclear plants and cleanup of older coal plants, TVA President Tom Kilgore said he doesn’t plan to ask for more borrowing authority at least for several years.
“We’ve survived since 1979 with this debt cap and there is a limit on how long that can go, but we’re not at that point yet,” Kilgore said. “We are working on that and thinking what we may want to do.”
TVA, which spent 34 cents of every dollar on debt service in the late 1990s, has cut those borrowing expenses to 12 cents of every dollar.
BY THE NUMBERS* $26 billion — Current level of TVA debt and debt-like obligations* $30 billion — Debt cap set by Congress for TVA in 1979* $3.3 billion — New borrowings in fiscal 2011 for new plants, refinancing and environmental cleanup* $2.4 billion — Debt paydown in fiscal 2011* $921 million — Net new borrowings projected for current yearSource: Tennessee Valley AuthorityTVA DEBT GUIDELINES* Retire debt over useful life of assets* Issue new debt only for new assets* Prepay a portion of capital costs for new nuclear plants* Rate increases to fund increased operating costsSource: TVA Financial Guidelines adopted by the board in 2008.