Electricity users in the Tennessee Valley spent 20 percent more on electricity in the fourth quarter of 2010 than they did a year ago as colder temperatures and higher fuel costs combined to boost winter heating bills by $479 million during the final three months of the year.
But even with record-high sales during the quarter, the Tennessee Valley Authority still reported a quarterly loss of $48 million on sales of $2.8 billion.
In the same quarter a year ago, TVA earned $150 million on sales of only $2.3 billion.
In a regulatory filing to the Securities and Exchange Commission on Wednesday, TVA said it bought more expensive fuel and purchased power to meet the higher power demand and to make up for less hydroelectric generation from its dams.
“By not increasing base prices, TVA expected to have a slight net operating loss in the first quarter,” TVA Chief Financial Officer John Thomas said in a statement Wednesday. “As sales increase during the winter and summer months, we will return to a positive net income, to be reinvested in the power system.”
As a government-owned utility, TVA uses its net income to pay bondholders and to reinvest in its power system.
TVA said it generated 45 percent less hydroelectric power in the fourth quarter of 2010 because of the drop in rainfall in the Valley. TVA purchased 31 percent more power from other utilities because of higher overall power demand.
Earnings were hurt by unexpected outages at two nuclear plants in December, higher employee benefit expenses and extra expenses for plant maintenance and energy conservation programs, Thomas said.