Tennessee Valley Authority employees will have an extra reason to be thankful next week ahead of Thanksgiving.
Most of the agency's nearly 10,000 employees will be getting a year-end performance bonus that will give the typical TVA employee $364 more than last year's Winning Performance payment.
TVA will distribute more than $163 million in performance payments over the next week to most employees in recognition of achieving and surpassing most of TVA's corporate goals in fiscal 2020. The median bonus being paid under the Winning Performance program this year is $7,204 for the typical employee, up from the median of $6,840 paid to each TVA employee a year ago. Such at-risk pay is above the base hourly pay or salaries given to TVA employees.
Last week, the TVA board approved paying 137% of the targeted amount for the year-end performance bonuses to yield the biggest such payments to TVA employees in at least the past decade.
"It's been an amazing year of accomplishments," said A.D. Frazier, a TVA director and chair of the board's People and Performance Committee.
Despite the coronavirus pandemic cutting power sales and slowing the economy, TVA reported Tuesday that it reduced its power rates, cut its debt and provided more assistance to its local power companies and communities within its seven-state region during fiscal 2020. Power sales dropped about 5% in the past year, but TVA said lower fuel expenses, improved operations and lower interest rates helped the federal utility lower its rates and still improve its own financial standing.
Total winning performance payments
2020: $163 million2019: $133 million2018: $144.5 million2017: $112.5 million2016: $102 million2015: $113 million2014: $131 millionSource: Tennessee Valley Authority. Total Winning Performance payments are distributed among all full-time employees who were on the job in the past year based upon their pay levels and their work responsibilities. The totals include executive bonuses paid to TVA’s top managers.
With its debt at a 30-year low and below the $21.6 billion recommended by the Government Accounting Office, TVA Chief Financial Officer John Thomas said TVA's financial standing is as sound as it has been in decades and TVA is well positioned to hold rates constant over the next decade. In the current year, TVA is providing a $200 million pandemic relief program to aid its local power companies while also helping to fund economic development, recreation and charitable causes - all without any taxpayer support.
At the same time, TVA reduced its rate of serious injuries among its employees to an all-time low during fiscal 2020 and continued to cut its carbon emissions to reach a level 60% below where they were in 2005.
Such measurements of success are used by TVA to determine the annual bonuses paid to employees.
"Exceptional performance will generate higher payouts (under the Winning Performance program) and that's what we have seen this year," said Sue Collins, senior vice president and chief human resources officer at TVA. "Being able to do this in a pandemic with the extra challenges we've seen is just extraordinary. Our employees really delivered this year."
TVA President Jeff Lyash credits the utility's staff for helping hold costs down and keep the lights on during a challenging 2020 year. Lyash, a veteran utility executive who headed Ontario Power Co. before joining TVA last year, said performance bonuses and at-risk pay for employees are key to aligning corporate targets and outcomes.
TVA accomplishments
* Lowered wholesale rates an average of 5.5% in the past two years, keeping residential prices for electricity below 70% of America and industrial power rates below 90% of the country.* Improved power reliability to the best in TVA’s 87-year history after two decades of 99.999% power delivery.* Reduced instances of serious employee injuries at TVA to an all-time low* Provided $200 million of pandemic rate relief to local power companies and over $3 million in additional donations to local charities during the pandemic.* Reduced TVA debt by over $6 billion since 1996 to $21.4 billion, or $200 million below what the GAO set as a target for TVA* Helped support business investments in 2020 of $8.6 billion, creating or preserving 67,000 jobs.Source: Tennessee Valley Authority
"What we are doing is very consistent with what every high performing organization that I have worked for has done," Lyash said."You align the mission and the goals with clear metrics and compensation and that is a very powerful tool."
Lyash said TVA needs to reward and compensate qualified workers at TVA, who run America's third largest nuclear fleet, the second largest transmission system and one of the biggest river networks.
In fiscal 2020, the Tennessee Valley Authority reported $10.2 billion in total operating revenues on more than 151 billion kilowatt-hours of electricity sales for the fiscal year 2020.
Total operating revenues decreased about 9% from the prior year driven primarily by lower sales volume, lower effective base rates, and lower fuel cost recovery revenues. TVA estimates base revenues were approximately $185 million lower due to the impacts of the COVID-19 pandemic.
"TVA's strong financial position helped us absorb the impacts of the pandemic in 2020 and still provide extra support for our customers," Lyash said Tuesday. "And TVA was in a position to reduce effective power rates for customers for 2021, when our communities need relief the most. This would not have been possible without the ongoing financial discipline of our employees."
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.