ML19261B654
| ML19261B654 | |
| Person / Time | |
|---|---|
| Site: | Sequoyah  |
| Issue date: | 02/20/1979 |
| From: | Gilleland J TENNESSEE VALLEY AUTHORITY |
| To: | Varga S Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 7902280342 | |
| Download: ML19261B654 (60) | |
Text
.
TENNESSEE VALLEY AUTHORITY CH ATTANOOGA. TENNESSEE 37401 500C Chestnut Street Tower 11 FEB 2 01979
/\
Director of Nuclear Reactor Regulation Attention: Mr. S. A. Varga, Chief / /)?/gO )n, Light Water Reactors BraIch No. 4h UQp ][lIQ Division of Project Management hu,jg' U.S. Nuclear Regulatory Commission I C ,sG/4f?n f
Washington, DC 20555 p ,OEg
Dear Mr. Varga:
In the & tter of the Application of ) Docket Nos. 50-327 Tennessee Valley Authority ) 50-328 Enclosed are 10 copies of TVA's responses to your request for additional financial information on the Sequoyah Nuclear Plant. This information was requested in your letter to N. B. Hughes dated December 29, 1978.
If you have any questions, please get in touch with M. R. Wisenburg at FTS 854-2581.
Very truly yours, 1
[J.E.Gilleland Assistant Manager of Power Enclosure (10)
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7902280342._ $m+ s e
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An Equal Opportunity Employer v$
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ENCLOSURE RESPONSES TO REQUESTS FOR ADDITIONAL FINANCIAL INFORMATION SEQUOYAll NUCLEAR PLANT UE tTS 1 AND 2 DOCKET NOS. 50-327 Jl'D 50-328 Question la Indicate the estimated annual costs by year for each unit to operate the subject facility for the first five full years of ccamercial operation.
The types of costs included in the estimates should be indicated and should include (but not necessarily be limited to) operation and main-tenance expenses with fuel costs shown separately, depreciation, taxes, and reasonable return on investment. (Enclosed is a form which should be used for each year of the five year period.) Indicate the proj ected plant capacity of each unit for each year. In addition, provide similar data assuming plant capacity factors of SQ% and 60%.
Response
See the attached forms following this page for the estimated annual costs by year for each unit for plant capacity factors of 70 percent, 60 percent, and 50 percent.
Question lb Indicate the unit price per kWh experienced on system-wide sales of electric power to all customers for the most recent 12-month period.
Response
The average price per kWh from the sale of power for calendar year 1978 was 20.59 mills for the TVA system.
8 ATTACitMEN_T ESTittATED ANNUAL COST OF OPEPXIING NUC1.E1.R CEh7.RA-(13C UNIT: sFOPOVAH 1 FOR Tile CALEND/J1 YEAR 1981 (thousands of dollars)
Operation and maintenance exocnses Kuclear pauer p.eneration Nuclear fuel expense (plant factor 50 7.)............... S17355 Other operating expenses...............,,,,,,.............. 67nn lia in t e n a n c o e x p e n c e n . . . . . . . . . . . . . . . . . . , , . . . . . . . . . . . . . . . . . . . _E200 1 Total nuclear power generation................. anoss Transmission expenses........................................ _635 Administrative and reneral expenses i Property and liability insurance........................... 353 Other A.LG. expennes................................ ...... 2500 Total A.AC. cxpenses.................................. 2853
! TOTAL OLH EXPES5ES.................................... _33743 Depreciation expense........................................... .
26000
.' -Taxen other than inconc taxes i Property taxes.......................................... .... -
j 0ther........................................................ -
l Total taxca other than income taxes................... -
t i Income tn>:es - Federa1......................,.................. -
Income taxco - other........................................... -
1)cierred income taxes - net.....................,,,............ -
Investnent tax credit adjustments - net........................
Return (rate of return: N/A 7.).......,,,,................. _
TOTAL Al'NUAL COST OP OPERATION $597A3 _ ,
4 ATTACit?!ENT_
ESTIMATED ANNt!AL COST OF OPERATI!iG h*UCLD.R CEST.RNll3G UNIT: qFOFOYAH 1 FOR THE CALENDAR YEAP.191 4
(thousands of dollars)
Operation and caintenance exceenses Kuclear payer genernt_lon Nuclear Iuel expense (plant factor 60 %)............... S22510 Other operating expenses...............,,,,,,......,,...... 6700 t h in t e n a n c o e x p e n n e n . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . R00 Total nuclear power generation................. 35410 Transmission expenses........................................ _762 Administrag;c an:1 ceneral expenses Property and liability incurance........................... 353 _
Other A.f.G. expenner........................................ 2500 Total A.&C. cxpenses.................................. 2853 TOTAL OLH EXPE5SES.................................... ago2s Depreciation expense........................................... 26000
_Taxen other than inconc tures Property taxes.......................................,,,,,,,,
0ther........................................................
Total taxca other than incoine taxes...................
Income taxes - Federa1......................,,,................
Incorae taxca - other...........................................
D c i e r r e d i n c or.: e t a x c u - n e t . . . . . . . . . . . . . . . . . . . , , , , , . . . . . . . . . . . .
Inve stirent t a >: c r e d i t a d j u s t in e n t a - n e t . . . . . . . . . . . . . . . . . . . . . . . .
Return (rate of return: %).......,,,,,,,..............
TOTAL AN!;UAL COST 07 OPEllATION $iS025 .,
e
J ATTACitMEN_T._
F.STIllATED ANNUAL COST or OPERA'lI!iC NI; CLEAR Cth7.RM DC UNIT: qFOUOYAU 1 ,,
FOR TitC CALENDAR YEAR ly;l t
(thousands of dollars)
Operation and esaintenance exocnses Nuclear ppyer generation Nuclear fuel expenr.c (plant factor 70 7.)............... S 29734 Other operating expenses... ...........,,,,,,......,....... 6700 Maintenanco expencen...... .................... .. ....... 6200 Total nuclear power generation................. 42634 T r a n s :: i s s i o n e x p e n c e c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 889 Adtiinistrative and general expenses Property and liability incurance........................... 353 Other A.LC. expennen....................................... 2500 Total A.6G. cxpenses.................................. 2853 1 TOTAL O&M EXPT,S5ES.................................... 46176 Depreciation expence........................................... 26000 Tax _cc other than incorc taxes Property taxes........................................,,,,...
0ther........................................................
Total taxco other then income taxes...................
Income taxer. - Federal......................,,,................
Incorme taxca - other...........................................
, Dcferred income taxes - net....................,,,,............
Invest tr ent tax credit adjesteients - net........................
Return (rate of return: %).......,,,,,,...............
TOTAL ANNUAL COST OF OPERATION $J_2316 _ ,
8 ATT ACit?!Et_;T. __
EST111ATI:D AN1:UAL COST or OPEM11!iC N1lCLEr.R CthT.M7156 UNIT: unnmy w 1 ___
FOR TliC CALEKD/tR YEldt 192 2-4 (thousands of dollara)
Of eration and oaintenance exnenr.es Nuclear pm:cr generat ion Nuclear fuel expent.c (plant factor sn 7.)............... S_2))s o Other operating, expenses...............,,,,,,.. ... ....... 6700 lbintenanco expennen....................................... 6200 Total nuclear power p.cneration................. 36640 T r a n s :,- i s s i o n e x p e n n e c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 705 Ad rai n i <; t r a t i ve a n:1 cenerni expensey Property and liability inr.utance................. ....... _j32 _
Other A.f.C. cxpenner........................................
_23n0 Tote.1 A.AC. cxpensen................ ................ _2832-
~
T OTAL 0 51-1 E X P T.:; 5 E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
g D e p r e c i a t i c n e x p e n t; e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26000
, hxen other than i n c o r.c (nxc3 Property taxes...............................................
Other... ........ ...........................................
[ Total taxca other than i nc oine taxes...................
t i Income taxen - redera1......................,,,................
Inc or:.e taxco - other...........................................
Deferred income taxes - net....................,,,,............
Investnent tax credit a d j u s t in e n t a - n e t . . . . . . . . . . . . . . . . . . . . . . . .
Return (rate of return: %).........,,,................
TOTAL ANNUAL COST OF OPERATIU.T $w66177
-- e=,
i ATTACitMENT F.STL11ATED Al?Nt!AL COST or OPEPATIriC liUCLE/.R GEST.T2*lDC UNIT: CFnPnVAM 1 FOR TilC CALE!!Did IEAR 19 82 s
(thousands of dollars)
Operation and maintenance execnses fiuclear pmter generat ion Nuclear fuel expense (plant factor go 7.)............... $ osq1n Other operating expenses...............,,,,,,.............. 6700 Ma in t e n a n c o e x p e n c e n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _f2D0 Total nuclear power generation................. 38710 Transmission expensec........................................ 846 Administrative and cenerni expenses Property and liability incurance........................... 332 Other A.LG. expennes....................................... 2500 Total A.6C. cxpenses........................ ......... 2832 TOTAL 0 511 E X P ES 5 L S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496nR Depreciation expense........................................... 96000
_Taxec other than incor:c taxes Property taxes........................................,,,,,..
0ther........................................................
Total taxca other than income taxes...................
i Income taxes - Federa1......................,, ................
I n c o rs e t a x c o - o t h e r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes - net....................,,,,............
Inv est n'en t tax credit adjustments - net........................
Return (rate of return: 7.).......,,,,,,...............
iJTAL A!!!;UAL COST OF OPERATION Sg408 _ ,
i ATTACitMENT F.STIllATED Afil;bAL COST OF CPERATI!iG liUC1. EAR CEh7.RM13C UNIT: 9FOPOVAH 1 _ ,
FOR lilE CALEliDAR YEAR 19g 4
(thousands of dollars)
Operation and maintenance exocnses
!;uc lea r ppuer genernt_fon o Nuclear fuel expense (plant factor 70 7.)............... S 32138 Other operating expenses...............,,,,,,.. ........... 6700 Maintenanco expennen....................................... 6200 Total nuclear power generation................. 45038 Transmission expensec........................................ 987 Administrative and renerni expenses
~
l Property ind liability incurance........................... 332 Other A.LC. expennen............ ......................... 2500 Total A.&C. cxpenses.................................. 2832 TOTAL OS H E X P E:; 5 E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4sas7 Depreciation expense........................................... . 96000
'I..xec other than incore taxes i Property taxes........................................,,,...,
0ther............................................... ........
Total taxco other than income taxes...................
f I n c om e t a x e s - F e d e r a 1. . . . . . . . . . . . . . . . . . . . . . , , , . . . . . . . . . . . . . . . .
Income taxco - other...........................................
Dcierred incore taxes - net.....................,,,............
Investnent tax credit adjustmenta - net........................
Return (rate of return: 7.)......... ,,,...............
TOTAL Al?tiUAL COST OF OPEPATIU.T $.74857 ,
4 ATTACit!!EN_T ESTit1ATED A!!NUAL COST or OPERA *1IliC NUCLEAR CEh7. taw 13C UNIT: 9FnPOVAH 1 __
FOR'TitC CALENDAR YEAR 19 n 4
(thousands of dollars)
Operation and maintenance exocnses Nuclear pauer gener.1 tion Nuclear fuel expense (plant factor 50 2)............... S 23924 Other operating expenses................,,,,,......,....... 6700 Maintenanco expencen................,,,,................... 6200 Total nuclear power generation................. 36824 Transmission expences........................................ 1660 Administ rapye _an:1 cener_al expenses Property and liability ine.orance........................... 332 Other A.LC. expennes....................................... 2500 Total A.&C. cxpenses.................................. 2832 TOIAL On! EXPT.55T,S.................................... ai u 6 Depreciation expense........................................... 960nn i Taxec other than incor.c taxes I
Property taxes.......................................,,,,....
0ther........................................................
Total taxca other than income taxes...................
Income taxes - Pedera1......................,,.................
Income taxco - other...........................................
Deferred income taxes - net.....................,,,.. .........
Investnent tax credit adjustments - net.............. .........
Return (rate of return: 7.)......... ,,,,..............
TOTAL ANNUAL COST OP OPERATION $.67316 _ ,
ATTACitMENT ESTIMATED ANNLIA', COST OF OPERATINC NUCLEAR GEXf.RWinC UNIT: rnunvsn 1 FOR Tlic CALENDitR YEAR 19 g3 i
(thousands of dollars)
Operation and caintenance execnses Nuclear pauer generation Nuclear fuel expense (plant factor 60 7.)............... S 29290 __
Other operating expenses................,,,,,......,,...... 6700 Maintenance expencen..................,,................... 6200 Total nuclear power generation................. 42189 Transmission expenses........................................ 1992 Administrative and e,eneral expenses Property and liability insurance........................... 332 Other A.6C. expenr.es....................................... 2500 Total A.AG. cxpenses......................... ........ 2832 TOTAL OLH EXPES5ES.................................... 47011 Depreciatien expense........................................... 26000 Taxec other than incor:c taxes Property taxes................................... ... ,,,,...
0ther........................................................
Total taxca other than inco):e taxes...................
i i
Income taxes - Federal....................,,,,,................
Income taxco - other...........................................
Deferred income taxes - net....................,,,,,..........
Inv e s t n'e n t tax credit adjustments - net........................
Return (rate of return: 7.)......... ,,,,..............
TOTAL ANNUAL COST OF OPERATION $.73011 ,
I i
ATTACIDENT ESTillATED /JmUAL COST OF OPEMTINC NUCLE / R CEST.M7DC UNIT: 9 F 0 F O V A1T 1 FOR TilU CALEh'Did YEldt 19 qq t
(thousands of dollara)
Operation and maintenance exocnses N_u c le a r ppuer generati_o_n Nuclear fuel expense (plant factor 70 %)............... S 35824 Other operating expenses...............,,,,,,.......,,..... 6700 Maintenanco expencen....................................... 6200 Total nuclear power generation................. 48724 Transmission expensec........................................ 2324 Administrative and e,eneral expenses Property and liability incurance........................... .1?
Other A.LC. expennes....................................... ? son Total A.&c. cxpenses.................................. 9919 T OTAL 05 M E X P C; 5 E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51RRO ___
Depreciation expense........................................... . 26000
--Taxen other than inconc tures Property taxes........................................,,,....
0ther........................................................
i Total taxes other than inco):e taxes...................
l l Income t a x e r. - F e d e r a l . . . . . . . . . . . . . . . . . . . . . . , , , . . . . . . . . . . . . . . . .
Income taxes - other...........................................
Deferred income taxes - net...................,,,,,............
Inv est n en t tax credit adjustments - net........................
Return (rate of return: %)........,,,,,...............
TOTAL ANNUAL COST or OPERATION $ 79880
I ATTACitMENT F.STIllATED ANNUAL COST OF OPERATI!iC NUCLE 1.R GENT.LW MG UNIT: qFnPOYAH 1 _
FOR Tile CALE!!DitR YEAR 19 84 o
(thousands of dollars)
Operation and maintenance exocnses
_liuclear pauer generat ion Nuclear Iuel expense (plant factor 50 7.)............... S 24908 Other operating expenses...............,...,,......,,...... 6700 Maintenanco expensen..................,.................... __6,? 00 Total nuclear power generation.........,....... 37808 T r a n s ::: i s s i o n e x p e n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1440 Administr.tive and renerni expenses Property and liability insurance........................... 332 Other A.f.C. expenner.............,..........................
2500 2832 "otal A.AG. cxpenses..................................
T OTAL 0511 E X P E5 5 E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49n9n Depreciation expense........................................... . ? rinno Tax _cc other than incor:e taxes Property taxes.........................................,,....
0ther........................................................
Total taxes other than inco::e taxes...................
I n c ora c t a x e s - P e d e r a 1. . . . . . . . . . . . . . . . . . . . . . , , , . . . . . . . . . . . . . . . .
! Incorae taxco - other...........................................
I i
D e f e r r e d i n c o r:e t a x e s - n e t . . . . . . . . . . . . . . . . . . . . . , , , . . . . . . . . . . . .
l Investirent t a >: cre ~it adjustments - net....... ................
Return (rate of return: 7,)........... ,,..............
TOTAL AN!!UAL COST OF OPERATION $d80B0 m
I ATTACll!EN_T__
ESTil1ATED A10't!AL COST OF OPERNII!ic NL'cLEr,R CEST.RA7 nG UNIT: (;FnUnv AU 1 FOR Tile CALENDid YEAR 19 84 (thousands of dollars) 02 cration and maintenance exocnses I;utlear pmter generat ion Nuclear fuel expense (plant factor (;n 7,)............... $ 19150 Other operating, expenses................,,,,,... .......... 6700 liaintenanco expennen................ .,,,,................. 6200 Total nuclear power generation................. 52050 Transmission expencec........................................ 1728 Administrative and reneral expenses Property and liability insurance........................... 332 Other A.LC. expennar.............,..........................
2500
' Total A 6G. cxpenses........................... ...... 2832 T OT AL O E M EX P C; 3 E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5ccin Depreciation expenr.e........................................... 26000
.T._a x e n o t h e r than inconc taxes Property taxes.........................................,,....
0ther........................................................
Total taxca other than income taxes...................
I n c orse t a x e s - F e d e r a 1. . . . . . . . . . . . . . . . . . . . . , , , , . . . . . . . . . . . . . . . .
l Income taxca - other...........................................
l Dcierred income taxes - net....................,,,,............
Inv est n'ent tax credit adjustments - net........................
Return (rate of return: 7.).......,,,,,,,,,............
TOTAL ANNUAL COST OP OPERATION Sd2f 10 _ ,
l ATTACIDENT ESTIMATED ANNUAL COST or OPERAII!ic NL: CLEAR GENT.rauDC UNIT: synpoyAn 1 ,
, FOR TitC CALEKDAR YEAR 19 84 e
(thousands of dollars) 1 Operation and maintenance exocnses
_ Nuclear pm:cr generat, ion Nuclear fuel expense (plant factor 70 7.)............... S 38144 Other operating expenses...............,,,,,,.............. 6700 11a in t e n a n c o e x p e n c e n . . . . . . . . . . . . . . . . . . . . . . . . ...... ....... 62_00 Total nuclear power generation................. 51244 Transmission expences........................................ 2016 Administrative and c,enerni expenses Pr opnr t y a nd li abili t y inc uranc e . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 Other A.LC. expennen............,.......................... 2500 Total A.LC. cxpenses.................................. 2832 T OTAL O & M E X P E:; 5 E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56142 Depreciation expense........................................... 9 Anno Taxen other than incorr.c taxes Property taxes...............................................
0ther........................................................
Total taxca other than income taxes...................
I Income taxes - Tederal......................,,,................
Incorae taxco - other...........................................
Deferred income taxes - net....................,,,,,...........
Investnent tax credit adjustments - net........................
Return (rate of return: 7.).........,,,,,..............
TOTAL ANNUAL COST OF OPEPATIUN $.82142 _,
Y i
i J
I
-ATTACIDEN_T __
P.STIllATED A!!NUAL COST or OPERATING NUCLEt.R CEST.RA'll3C UNIT: qvnPnvAF 1 FOR "IllC CALENDitR YEMI 19 85 e
(thousands of dollars) i Operation and maintenance exocnses Nuclear pauer generation Nuclear fuel expenr.e (plant factor sq 7.)............... S 33617 Other operating expenses...............,,,,,,......,....... 6700 Maintenanco expennen..................,,,,................. __6200 To tal nuclea r powe r gener at. ion. . . . . . . . . . . . . . . . . 46517 T r a n s :: i s s i o n e x p e n s e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 805 Administ rat ive an:1 ceneral expenses Property and liability incurance........................... 332 Other A.I.G. cxpennen............,..........................
2500 Total A.LC. cxpenses.................................. 2832 T OTAL O M 1 E X P E5 5 E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50154 Depreciation expenne........................................... . 26000
_Taxen other than incore taxes Property taxes..........................................,,,,.
0ther........................................................
s Total taxca other than incoine taxes...................
l I I n c ome t a x e s - r e d e r a 1. . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . .
i
! Incor-e taxco - other...........................................
l j neferred inco=e taxes - net....................................
Investnent tax credit adjustetents - net........................
Return (rate of return: 7.)..........,,,...............
TOTAL ANNUAL COST OF OPERATION $l6154 ___.
I ATTACitMEN_T __
F.STitlATED A!;1:UAL COST or OPEPXII!ic NUC1. EAR CEST.rXf13G UNIT: SEnUOYAll 1 ___
, FOR Tile CALEt DAR 'iEldt 19 85 (thousands of dollars)
O J eration and tnaintenance exocnst.s
_N uc l e a r ppyc r ge n e r a t,ipn_
!!uclear luel expenr.c (plant factor 60 7.)............... S 35072 Other t.gerating, expenses.................,,,,.............. 6700 liaintenaico expencer...................,,,,...... .......... _6_200 Total nuclear power generat. ion................. 47972 T r a n s :: i s s i o n e x p e n s e c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _966 Adrainist ra t ive and e,eneral expen ses Property and . liability incurance.......................... 332 Other A.6C. expennen............,.......................... 2500 Total A.AC. cxpenses.................................. 2832 T OTAL 0 511 E X P E:; 5 E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . s177n Depreciation expence........................................... ')6000 Tnxec other t han incort.c taxc a Property taxes................................... .....,,....
0ther.................................................. .....
Tctal taxca other thr.n income taxes................... _
1 l I ncorne taxes - Federal......................,,.................
Incor>e taxco - other...........................................
Deferred incorce taxes - net....................,,,,............
I nv e r.t n e n t tax credit a d j u s t in e n t s - n e t . . . . . . . . . . . . . . . . . . . . . . . .
Return (rate of return: 7.).......,,,,................. _
TOTAL At:!!UAL COST OP OPEPATFJS $ 77770
. = = ~
l l ATTACittEN_T
]
f ESTIMATED ANHl!AL COST or OPERN1INC NtlC1.E/.R GEh7.RA~ln C UNIT: qvornvAn 1 __
, FOR TitC CALENDAR YEAR 19 g e
(thousands of dollars)
Operation and maintenance exocnses Nuclear ppuer generati,on_
Nuclear fuel expense (plant factor 70 7.)............... S 40313 Other operating expenses................,,,,,......,,...... 6700 Maintenanco expencen..................,,,,................. 6200 Total nuclear power generation................. 53213 Transmissic, expennen........................................ 1127 Adeinistrati,s and e.eneral expenses Property and liability insurance........................... 332 Other A.LC. expenses............,.......................... 2500 Total A.ac. cxpentes.................................. 2832 TOTAL 0$M EXPE55ES.................................... 57172 Depreciation expense...........................................
. 26000 Taxec other than incone taxes Propert: taxes.......................................,,,,,...
0ther........................................................
Total taxca other than incoce taxes................... ,
Income taxes - Federal......................,,,................
Incorse taxco - other...........................................
Dcierred income taxes - net....................,,,,............
Investnent tax credit adjustmenta - net........................ .__
Return (rate of return: 7,).......... ,,........... ...
TOTAL ANNUAL COST OF OPERATION $ 33172
t i
- _ TAC 1tMENT_ - -
=AT ESTIMATED Ala;t!AL COST or OPEM11 tic NUCLEI.R CDT.Ta713G L* NIT: anqnny,h 2 FOR Tile CA1.E!!!OI YE/J1 l9 81 o
(thousands of dollars)
Oycration and maintenance exocnses
_liuclear pyyer generat_fon
!!uclear f uel expent.e (plant factor 50 7.)............... $_26304 Other operating, expenses...............,,,,,,.............. 6700 Maintenanco expennen................,,,,................... 6200 Total nuclear power generation................. 39294 Transmission expences........................................ 450 Administrative and Eenerni expenses P r op e r t y a n d l i alu l i t y in c u r a nc e . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 Other A.LC. expennen............,.......................... 2s00 Total A.&G. cxpenses.................................. _2661 T OTAL O S H E X P E:; 5 P S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aosns Depreciation expenne........................................... 16ago Taxec other t han incor:c t ures Property taxes.........................................,,,,,,
0ther........................................................
Total taxco other than income taxes...................
Income taxes - Pederal......................,,,................
i
' Incor-e taxco - other...........................................
l l 1)eferred income taxes - net.....................,,.............
Investnent tax credit adjustments - net........................
Return irate of return: %)............................
TOTAL A!!!aJAL COST OP OPEMTION $ 58865
- - _a
I ATTACitMFNT. -
ESTil1ATED Ala:UAL COST or OPI.PKII!iC NtlCl.E/.R CthT.TXlDG
, UNIT: S Ent'OYAU _ 2 ._
FOR Tile CAI.E!!DAR YEAR 19 81 e
(thousands of dollars) 1 Operation and esintenance exoenses I;uc le a r pauer generation Nuclear fuel expense (plant factor 60 7.)............... S 25573
- Other operating expenses...........................,....... 6700 Maintenanco expencen..................,,,,................. 6200 Total nuclear power generat. ion................. 38473 Transmission expences........................................ 540 Administratiye and gener_ni expenses Pr op er t y a nd li abi li t y inc ut anc e . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 Other A.I.C. expennen............,..........................
2500 Total A.&G. cxpenses.................................. 2661 TOTAL 0511 EXPT.';5tS.................................... 41674 Depreciatien expense........................................... . ,' 460
,Tnxec other than incor:c taxes Property taxes........................................,,,,,,, ,
0ther........................................................
Total taxca other then inco;te taxes...................
I n c ora e t a x e s - P e d e r a 1. . . . . . . . . . . . . . . . . . . . . . , , , . . . . . . . . . . . . . . . .
I Incon.e taxco - other...........................................
, Deferred income taxes - net....................,,,,............
Investnent tax credit adjustocata - net........................
Return (rate of return: 7.).......,,,,,,...............
TOTAL A!;!!UAL COST OF OPERATION Sl8L3 A _ ,
I ATTACIU!ENT_
ESTil1ATED ANMUAL COST or OpERATI!ic NUCI. EAR CEST.RMDC UNIT: qnnnnu,h 9 ____
FOR TitC CALEL;DAR YEAR 19 81 (thousands of dollars)
_ Operation and maintenance execuses
_!;uc l e a r pyyer generation Nuclear fuel expense (plant factor 70 7.)............... S 306?3 Other operating, expenses................,,,,,...... ,,..... 6700 Maintenanco expencen................,,,,,.................. 6200 Total nuclear power generation................. 43523 Transmission expences........................................ 630 Administratiye and gener_ni expenses Property and liability incurance........................... 161 Other A.LC cxpennen............,.......................... 2500 Total A.AC. cxpenses.................................. 2661 T OTAL O L H EX P E:; 5 E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46814 Depreciation expense........................................... .
16460 hxen other than incor.c taxes Property taxes.......................................,,,,,...
0ther........................................................
Total taxca other than income taxes...................
Income taxes - Federal......................,,.................
f Incorse taxco - other...........................................
Deferred incor.e taxes - net....................,,,,............
Investnent tax credit adjustments - net........................
Return (rate of return: 7.).......,,,,,,,.............. __
TOTAL AN!;UAL COST OF OPERATION $.63214 ,
4 ATTACIDEt_2T __
ESTIllATED A!;1 UAL COST OP OPLiWIIfic In' CLEAR GEST.ran uG UtilT : c;FOUOYAH 2 ._
FOR Tite CALEt:DitR YEAR 19 82 (thousands of dollars)
Operation and maintenance exocnses liuc lea r ppycr generat, ion
!;uclear iuel expense (plant factor 50 7.)............... S 2243n '
i Other operating expenses...............,,,,,,...... ...,... 6700 lb in t e n a n c o e x p e n c e n . . . . . . . . . . . . . . . . , , , , , . . . . . . . . . . . . . . . . . . 6200 Total nuclear power generation................. 35830 Transmission expenses........................................ 4Rs Adtiinistra g ;c and generni expenses Property and liability incurance........................... 140 Other A.LC. expenur........................................
. 2500 Total A.AG. cxpenses........................ ......... 2640
.' T OT AL DE M E X P E:; S E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3sgss Depreciation expense........................................... . 16460 Taxen other than inconc taxes Property taxes........................................,,,,,,,
0ther........................................................
Total taxes other than incor.e taxes...................
?
I n c o ra c t a x e s - F e d e r a l . . . . . . . . . . . . . . . . . . . . . . , , , . . . . . . . . . . . . . . . .
f i
i n c o m e e a x c o - o tt e r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I i
Deferred income taxes - net...................,,,,,............
Investnent tax credit adjustments - net........................
Return (rate of return: 7.)............................
TOTAL A!;!!UAL COST OF OPERATIU.T $_55415 m_ ,
I ATTACitMENT F.ST111ATED A!!NUAL COST OP OPEPXIIfic NUCLD.R CDT.TWl13G UNIT: qvnenyAn 9 ,
FOR Tile CALE!!DitR YEAR 19 y n
(thoussnds of dollars)
Operation and eaintenance execnses
!;ut le a r p:n cr generat ion Nuclear fuel expense (plant factor 60 7.)............... S 33637 Other operating expenses...............,,,,,,......,....... 6700 Maintenanco expennen..................,,................... 6200 Total nuclear power generation................. 46537 Trans:Ission expences........................................ 582 Administrat ive an:1 cenerni expenses Property and liability insurance........................... 140 Other A.LC, expennes............,.......................... 2500 Total A.&C. cxpenses.................................. 2640 T OTAL 05)! E X P E:; 5 E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 697so Depreciation expense........................................... 16660 Taxen other than Incon.c taxes Property taxes.........................................,,,...
0ther........................................................
Total taxen other than incor.e taxes...................
! Income taxes - Federal......................,,.................
t
- I n c o m e t a ): c a - o t h e r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dcierred income taxes - net.....................,,,............
Investnent tax credit adjustnents - net........................
Return (rate of return: 7.)..........,,,,..............
TOTAL AN!;UAL COST OP OPERATION $_66219 ,
i I
ATTACit!ENT_ - -
ESTIMATED Ala:UAL COST OF OPERA ~II!;C Ntl CLEAR CEh7.TXl13G UNIT: SEnUOVE 2 _
. FOR TitC CALENDAR YEAP.19 82 d
(thousands of dollars)
Operation and tnaintenance exocnses f;uc lea r pg er generat_fon Nuclear fuel expense (plant factor 70 7.)............... S 32400 Other operating expenses.................,,,,.............. 6700 Maintenanco expencen..................,, .................. 6200 Total nuclear power generation................. 45300 Transmission expences........................................ 679 Administrative _and teneral expenses Property and liability incurance........................... 140 Other A.LC. expenner.............,.......................... 2500 Total A.AC. cxpenses.................................. 2640 TOTAL 0&M EXPC;5ES.................................... 4R7no Depreciation expense........................................... 16AAn
_Taxen other than inconc taxes Property taxer................................................
0ther........................................................
Total taxes other than inco:e taxes...................
Income taxes - Federal...................,,,,..................
i Income taxes - other...........................................
Deferred income taxes - net.....................,,,............
Investnent tax credit adjustments - net........................
Return (rate of return: 7.).........,,,, ..............
TOTAL ANNUAL. COST OF OPERATION $_ _f 5169 ..
I ATTACit?IEN_T Pc. tit 1ATED ANMUAL COST or OPERA'II!ic Nt' CLEAR CEh7.RA~l13G UNIT: grnrnv m 9 .
, FOR Tile CALENDAR YEAR 19ga e
(thousands of dollars)
Operation and tnaintenance exocnses Kuclear ppycr generation, Nuclear fuel expense (plant factor 50 7.)............... S 23608 Other operating expenses...............,,,,,,...... ....... _ 6700 lia in t e n a n c o e x p e n c e n . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . 6200 Total nuclear power generation................. 36598 Transeicsion expennec........................................ 400 Administratixe and ceneral expenses Property and liability incurance........................... 140 Other A.I.C. expennen............,.......................... 2500 Total A.&C. cxpenses.................................. 2640 TOTAL OLM EXPE55ES.................................... 39638 Depreciatien expenne........................................... . 16460 Taxec other than inconc tures Property taxes.........................................,,,...
0ther.................................................. .....
To tal t axco ot her than inco: e taxes. . . . . . . . . . . . . . . . . . .
. Income taxes - Federa1......................,,.................
i income taxco - other...........................................
i
- Deferred income taxes - net.....................,,,............
Investnent tax credit adjustmenta - net........................
Return (rate of return: 7.)......... ..,,..............
TOTAL ANNUAL COST OF OPERATION $ -- -56098_.
1 I
ATTACit!EN_T ESTIMATED ANNUAL COST or OPERATINC NUCLEAR CEST.TWlDG UNIT: grnrnysn 9 .
, FOR THE CALENDAR YEAR 19 g3 e
(thousands of dollars)
Operation and maintenance exocnses Fuclear ppycr generation h'uclear f uel expense (plant factor 6n 7.)............... S 30834 Other operating expenses...............,,,,,,......,....... 6700 Maintenanco expencen.......................... ............ 6200 Total nuclear power generation................. 43734 Transmission expenses........................................ 480 Administrative and teneral expenses Property and liability incurance........................... 140 Other A.LC. cxpennes........_...,.......................... 2500 Total A.6C. cxpenses.................................. 2640-TOTAL O&M EXPEN5ES.................................... 46854 Depreciation expenr.e........................................... 16460
_Taxen other than inconc taxes Property taxes...............................................
Other............. . ........................................
Total taxca other than incor.e taxes...................
l Income taxes - Federal......................,,.................
Incorse taxco - other...........................................
I Deferred income taxes - net....................,,,,............
Investnent tax credit adjustmenta - net........................
Return (rate of return: 7,).......,,,,,,,..............
TOTAL ANNUAL COST OF OPERATION S. 63314
i a
4 ATTAcitMEN_T _
ESTIMATED A!!1:11AL COST OF OPERA' LING NL'CI. EAR CEST.TX(DC UNIT: <;FOPOY AU 2 ___
FOR Tite CALE!!DisR YEAR 19 83 a
(thousands of dollars)
Operation and tnaintenance execnses Nuclear paver generation Nuclear fuel expense (plant factor 70 7.)............... S 176A> _
Other operating expenses.................,,,,......,....... 6700 Maintenanco expencen................,,,,................... 6?00 Total nuclear power generat. ion................. 50562 T r a n s :; i s i o n e x p e n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560 Administratiye and reneral expense _s Property and liability insurance........................... 140 Other A.I.G. expennen............,.........................,
2500 Total A.6C. cxpenses.................................. 2640 TOTAL OSM EXPC;SES.................................... s,769 Depreciation expense........................................... . 164A0
.Ta._x e c o t h e r than incort.c taxes Property taxes........................................,,,,...
0ther........................................................
1 Total taxca other than income taxes...................
l I Income taxes - redera1......................,,.................
l Incorae taxca - other...........................................
Deterred income taxes - net.................... ,,,.. .........
Investnent tax credit adj u s tinen t s - net . . . . . . . . . . . . . . . . . . . . . . . .
Return (rate of return: 7.).......,.,,,,...............
TOTAL ANiiUAL CO.7i OF OPERATION $_. 70202
i ATTACitMEtiT
- ESTIllATED ANNUAL COST OP OPEPXIINC Ntl CLEAR GENT.M7DC UNIT
- c rnmv r u o _ . .
, FOR '71tC CALENDAR YE AR 19 g4 e
(thousands of dollars)
Operation and maintenance execnses fiuclear pauer generation Nuclear fuel expenGe (plant factor 50 7.)............... S 11414
, Other operating expenses...............,,,,,,.............. 6700 liaintenanco expensen................,,,,................... 6200 Total nuclear power generation................. 46334 Transe.ission expences........................................ 315 Adcinistrative and reneral expenses Property and liability incurance........................... 140 Other A.LG. expenn0s.......................................
. 2500 Total A.&G. cxpenses.................................. 2640 TOTAL OEM EXPES3ES.................................... 49289 Depreciation expense........................................... . 1646n g en other than incorr.c taxes Property taxes.......................................... ....
0ther........................................................
Total taxca other than incor.e taxes................... ,
I n c o m e t a x e s - F e d e r a 1. . . . . . . . . . . . . . . . . . . . . . , , . . . . . . . . . . . . . . . . .
Income taxco - other...........................................
i
, Deferred income taxes - net....................,,,,............
Investnent tax credit adjustments - net........................
Return (rate of return: 7.)..........,,,...............
TOTAL ANNUAL COST OF OPERATION $_.65749 _
I ATTACitMEliT F.STIllA*IED ANNUAL COST or OPERXIIRC N11 CLEAR CEST.RrlDC UNIT: synpoy w 2 .
FOR Tile CALENDAR YEAR 19 84 e
(thousands of dollars)
Operation and osintenance exocnses Nuclear _1gn:cr genern t_lon Nuclear fuel expense (plant factor 60 7.)............... S 19419 Other operating expenses...............,,,,,,.............. 6700 liaintenanco expennen................,,,,,.................. _b200 Total nuclear power generation................. 45332 Transmission expences........................................ 378 Administrative and cenerni expenses Property and liability incurance........................... 140 Other A.LC. cxpennes............ .......................... 2500 Total A.6C. cxpenses.................................. 2640 TOTAL O & M E X P E:; 5 E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4R1sn Depreciation expense........................................... . 16460
.Taxen other than incorte taxes
--Property taxes....................................... ,,,,...
0ther........................................................
i Total taxca other than inco:e taxes...................
I Income taxes - Pedera1......................,,.................
1
! income taxco - other...........................................
Dcierred income taxes - net....................,,,,............
Investnent tax credit adjustments - net................... ....
Return (rate of return: 7.)........,,..................
TOTAL AN!!UAl. COST OF OPERATION $.64810 _,
j i
ATTACitMENT ESTIMATED AN1l!AL COST Or OPEPXIING NUCLEAR GENT.r:rtn G UNIT: qFopOVAy 2 ,
FOR Tile CALENDAR YEAP 19 84 4
(thousands of dollars)
Operation and caintenance exocnses Jiuclear paver generntion Nuclear fuel expense (plant factor 70 7.)............... S 1997' Other operating, expenses...............,,,,,,......,....... 6700 Maintenance expennen....................................... 6200 Total nuclear power generation................. 52472 Transmission expences........................................ 441 Administrative and general expenses Property and liabijity insurance........................... 140 Other A.LC expenses............,..........................
. 2500 Total A.&c. cxpenses................................ . 2640 TOTAL OSM EXPE55ES.................................... ssss, Depreciation expense........................................... 16460 hven other than inconc tures Property taxes.........................................,,,...
l 0ther........................................................
Total taxca other than income taxes................... ,
Income taxes - Federal......................,,.................
Income taxco - other...........................................
Deferred income taxes - net....................,,,,............
Investnent tax credit adjustments - net........................
Return (rate of return: %)............................
TOTAL ANNUAL COST OP OPEPATION $ _ .72 011 ,
4 ATTAC1tMENT. - -
ESTIMATED A!!NUAL COST or OPERATIlic NUCLE 1.R CENT.LA~lDC UNIT: SEOUOYAH 2 ~
, FOR Ti!E CALEliDAR YEAR 19 85 (thousands of dollars)
Operation and eaintenance execnses Jiuclear pm.cr genera t ioil Nuclear fuel expense (plant factor 50 7.)............... S 27989 Other operating expenses...............,,,,,,. ....,....... 6700 Maintenanco expencen.....................,................. 6200 Tctal nuclear power generation................. 40889 Transmission < '
- ec........................................ .520 Administrative and reneral exnenses Property and liability insurance........................... 140 Other A.LC. expennes............,.......................... 2500 Total A.&C. expenses.................................. 2640
, T OTAL O S M EX P E'; 5 E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44049 Depreciation expenne........................................... 16460
_Taxen other than incor:c taxes Property taxes........................................,,,,,,.
- 0ther........................................................
! Total taxca other than inco;ne taxes...................
1 l Income taxes - Federa1....................,,,,.................
I l
Income taxco - other...........................................
Deferred income taxes - net.................... ,,,............
Investnent tax credit adjustments - net........................
Return (rate of return: 7.).........,,,,,..............
TOTAL AN!;UAL COST OF OPEPATION $_60500 ,
I ATTACHMENT F.STIMATED A10 UAL COST OP OPEMTIric NUCLEAR GF.hT. Ming UNIT: grnenv m o .
FOR TitC CALENDitR YEAR 19 g e
(thousands of dollars)
Operation and ciaintenance exocnses I;utlear Upuer genernt_fotl o Nuclear fuel expense (plant factor 60 7.)............... S 33611 Other operating expenses................. ................. 6700 Ma in t e n a n c o e x p e n c e n . . . . . . . . . . . . . . . . . . , , . . . . . . . . . . . . . . . . . . . 6200 1 To t.a l nu cle a r powe r ge n e r at.io n. . . . . . . . . . . . . . . . . 46511 T r a n s ::: i s s i o n e x p e n s e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624 Adtiinistrat ive an:1 ceneral expenses Pr oper t y a nd li abi li t y inc u ranc e. . . . . . . . . . . . . . . . . . . . . . . . . . . 140 Other A.LC. expennen....................................... 9s00 Total A.&C. cxpenses......._.,......................... _2640 TOTAL 0$M EXPESSES..................................., f10 7 7 s Depreciation expence........................................... . 16460 Tax _cc other than incone taxes Property taxes........................................,,,....
0ther........................................................
Total taxca other than income taxes...................
I n c o m e t n >; e s - F e d e r a l . . . . . . . . . . . . . . . . . . . . . . , , . . . . . . . . . . . . . . . . .
Income taxco - other...........................................
D e f e r r e d i nc o::e t ax e s - n e t . . . . . . . . . . . . . . . . . . . . . , , , . . . . . . . . . . . .
Inv e st n en t t ax cr ed i t a dj u o t tacn t s - ne t . . . . . . . . . . . . . . . . . . . . . . . .
Return (rate of return: 7.)........,,,.................
TOTAL A!!NUAL COST OF OPEP.ATIO.T $.6635 O
s., -- . - -w
I ATTACitMEliT ESTIl1ATED Ala;UAL COST Or OPEMTIric In CLEIJt Ct.NT.MluG UNIT: grnrnv in 9 ___
FOR Tile cal.ElmAR YEldt 19J (thousands of dollars)
Operation and maintenance exocnses
_liutlear pauer generation b'uclear fuel expense (plant factor 70 %)............... S AnA7'.
Other operating expenses................,,,,,......,....... 67nn lia in t e n a n c o e x p e n c e n . . . . . . . . . . . . . . . . . . , , , .......... .... 6900 Total nuclear power generatic................... s1s74 Transmission expences........................................ _728 Administrative and r,enerni expenses Pr oper t y a nd li nhi li t y inc u ra nc e. . . . . . . . . . . . . . . . . . . . . . . . . . . 140 _
Other A.LG. expennes....................................... 2500 Total A.6C. cxpenses......._........................... 2640 T OTAL 0 51-1 E X P E:; 5 E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . s60to Depreciation expense........................................... . 16460 hx_en other than incor:c tures Property taxes........................................,,,....
0ther........................................................
l Total taxen other than income taxes...................
1
- Income t a x e s - F e d e r a 1. . . . . . . . . . . . . . . . . . . . . . , , , . . . . . . . . . . . . . . . .
Income taxco - other...........................................
Deferred income taxes - net....................,,,,............
Investnent tax credit adjustments - net........................
Return (rate of return: %)..........,,,,. ............
TOTAL A!;l;UAL COST OF OPEP.ATION SJ3402
. a
-- . . . . - - - - . . - - - - - - - - - - +
Question 2 Indicate the estimated costs of permanently shutting down the facility, a listing of what is included in such costs, the assumptions made in estimating the costs, the type of shutdown contemplated, and the source of funds to cover these costs.
Response
At this time, no specific decommissioning plan has been developed for the Sequoyah Plant. Near the time that decommissioning is necessary, detailed plans will be prepared in compliance with regulations effective at that time. However, for planning purposes, estimates have been orepared for the mothballing and for the prompt removal / dismantling concepts as defined in the A1F/NESP-0095R report.
The estimated cost of mothballing the Sequoyah units is $6,500,000, and the estimated cost of removal / dismantling is $72,000,000. Both of these estimates are expressed in 1979 dollars.
Under TVA's present accounting procedure,'an adjusted depreciation rate is applied to account for decommissioning cost. This has the same effect as adding an amount for decommissioning to the construction cost for each nuclear plant and depreciating the total over the plant's life. The actual source of funds at the time of decommissioning will be a combination of internally generated and borrowed funds.
Question 3 Provide an estimate of the annual cost to maintain tiie shutdown facility in a safe condition. Indicate what is included in the estimate, assumptiens made in estimating the costs, and the-source of funds to cover these costs.
Response
The estimated annual post-decommissioning cost associated with the moth-balling concept is $292,000 in 1979 dollars. There would be no post-decommissioning cost associated with the removal / dismantling concept.
The most likely source of funds to cover these costs would be revenues since these costs would be classified as operating expenses.
Question 4 Provide copies of TVA's " Power Quarterly Report" for the most recent period. Also, provide a copy of the most recent " Power Annual Report."
Response
The Power Quarterly Report for the nine months ending June 30, 1978, is enclosed. Seventy copies of the most recent Power Annual Report were transmitted to the NRC in my letter to E. G. Case dated April 17, 1978.
1 guestion 5 Provide copies of the prospectus for TVA's most recent security issue and copies of the preliminary prospectus for any pending issue (s).
Response
The most recent security issue prospectus is enclosed.
Question 6 Indicate the amount of TVA's most recent rate relief action and provide copies of the order authorizing the rates. Provide details of the amount and timing of any prospective rate increases.
Response
Since August 1974, TVA rates have included a fuel adjustment addendum.
In January 1979, this addendum was removed and replaced by a fixed amount in the rates. In addition, a $22 million rate adjustment was made to recover the lag between collected revenues and fuel adj ustment costs projected to occur during the year because the fuel adjustment addendum was based on a two-month differential between the occurrence of the costs and the collection of revenues.
liefore this action, the most recent rate adjustment was made in July 1978.
This was an 8-1/2 percent rate adjustment on an annual basis.
The statutory basis for the rate setting authority of the TVA Board is con-tained in Subsection (F) of Section 15(d) of the TVA Act.
PO'#ER ASSETS AND LIABILITIES AtJune30 1978 1977 ASSEIS IThousands)
Property, Plan t, and Equipment Completed plant; see note $5,738,059 $5,498,191 1,ess accumulated depreciation 1,719,143 1,578,772 Net completed plant 4,018,916 R19,419 Construction in progress 4,265,985 3.028,975 Nuclear fue 443,677 336,382 i
.- A Less accumulated 11 p>
amortization 79,440 43,851 c--'*
J .-
Nuclear fuel, net 364.237 292.531 Total property, plant, and equipment 8,649,138 7,240,925 Current A ssets 635,323 693,764 1Jeferred Charges 58,022 34,680 tot AL AwtTs $9,342,483 $7,969,569 LIA BILITIES Proprietary Capital FM/ E" E
- 1) Y v Appropriation mvestment $ 952,516 $ 971,913 - -
f Less requirement for repayment of appropriation invest.
ment 15,000 Retained earnings 15,000 h h h-d-L reinvested in power program 1,148,249 1,026,189 Totalproprietary capital 2,085,765 1,983,102 Exng-Term Debt Principal 5,525,000 4,725,0w Unamortized discount
- and premium, net 6,576* 7,032*
Total long-term debt 5,518.422 4.717,968 Curren t Liabilities Short-term note.'
U.S. Trensury 150,000 150,000 Federal Financing llank 1.050,000 645,000 Short-term notes 1,200,000 795,000 Other current liabilities 538,296 473,499 Total current Nine Months Ended liabilities lb rAL Li s m t.m Es 1,738,296
$9,342,483 1,268,499
$7,969,569 hgg jh%
Tennessee Valley Authority N,, te Total enngle-use puu er plant plun portsons of multspurpose Jame ellocated to cou er The ruralann estment an multspurpose dams at Ju ne ,RX 19'M. uns St.W9 mdison, clasenfied as follou s peu er.
04A mdlu sn. otherpet: grume, $.Swimdhon
RATES - Electric rates were adjusted, effective in Most of the 20 percent increase in revenues to July, to provide an additional $60 million in $1.7 billion is due to a previous rate adjustment revenues for fiscal year 1978 to meet the financial applicable in July 1977. The increase in net in-requirements of the TVA Act and the Basic Hond come was only $35 million because of the higher liesolution. General cost increases had been ex- costs and lower Federal sales described earlier.
pected to require a rate adjustment in fiscal year 1979, but developments during the current year NEW FINANCING - There were no new long-term led to an earlier one. borrowings during the quarter, but outstanding
- * * ' " "88 "#"*'" "~
The underlying reason is the delay in completion . Total debt outstanding on June 30 was $6.7 of new generating capacity. This caused TVA to billion.
contract for reductions in load and to operate older and more expensive power plants which led to reductions in expected revenues from Depart. GENERATION IMPROVEMENTS - In view of re-ment of Energy (DOE) facilities at Oak Itidge and cent industry experience, and replacement power Paducah and increased materials and labor costs costs during unit outages, the time between for power plant maintenance. DOE reduced its refuelings at Browns Ferry is being extended to demand at TVA's request under arrangements 18 months from 12 months. TVA is considering worked out between the two agencies to help con- an 18-month cycle for the rest of its nuclear serve coal and to reduce high system peak bads. plants.
Without this reduction additional power, if A program has also been underway to reduce available, would have had to be imported at very nuclear unit refueling time and expense -nd to im-high cost.
prove the availability of the units in other ways.
Iligher costs for fuel, power imports, Major improvements have been started to better maintenance, and mterest brought about by assure unit availability at 7 c' TVA's 12 coal fired construction delays raise power bills and make steam plants. About $23 million will be spent for conservation all the more vital.
major components, including new cyclone furnaces The adjustment, an 8.5 percent increase on the for Paradise units 1 and 2, six spare or replace-average, is being accompanied by a stringent and ment turbine spindles for other plants, and a systematic cost-cutting effort. spare generator rotor for Cumberland Steam The average residential rate in the areas served
" **
- Spindles and the rotor e uld'save $155180 milh.on in replacement power by TVA power is expected to be 2.8 cents per c sts if the existing parts failed.
kilowatthour in July, weil below the national average of about four cents.
FUEL SUPPLIES - Hetween March and mid July, SALES, REVENUES, AND EARNINGS - Sales for the nine months trailed those for the corresp nd-
" ' . " "" E* ' * * '
pliance program for meeting State and Federal ing period a year earb.er mostly because of a 22 percent reduction m sales to DOE. TVA and DOE emission limitations for sulfur dioxide. Included have further agreed to a reduction m demand of were 29 million tons of low-sulfur coal to meet stringent air quality standards at Shawnee Steam one milhon kilowatts during this summer, next i,lant ~
~
winter, and next summer. The reduction will save consumers money compared to other ways of sup- The average delivered price of the new coal is run-plying that amount of power during heavy ning about $9 a ton more than the coal delivered demands, in fiscal year 1977.
Total sales for the nine months were 88 billion TVA's program for purchase of compliance quality killowatthours. Sales of 58 billion kilowatthours coal began in May 1976. The Board authorized to municipalities and cooperatives were 2 percent negotiation of contracts on an emergency basis higher than for the same period a year earlier, and when bids opened in October 1976 failed to pro-sales of 17 billion kilowatthours to industries duce offers of complying coal in sufficient quari-served directly by TVA were almost the same as a tities. As of July 1978, TVA had bough 1 a year ago. Sales to Federal agencies were 13 suhtantial part of the coal required for its com-bi!!Mn. plianee plan.
Capital expenditures of $101 million have been gallons per minute) is equivalent to the energy authorized to produce uranium ore over the next from about 7 million barrels of oil per year.
six years from previously leased properties in the nterest-free loan of $90,000 was provided to Gas Ifills area of central % yoming. The mining is the city of Gallatin, Tennessee, for engineering being done for TVA by Federal-American Partners design of an energy from-waste demonstration (FAP). Other properties with uranium reserves were recently leased m %,yoming and will be project to produce steam and electricity. The Gallatin project is the first step in a valley-wide added to the FAP project. solid waste management program. The total cost of the Gallatin project is estimated to be $8 ENVIRONMENTAL PROTECTION - TVA has con. million. Most of this cost will be borne by the tinued its substantial investment in faci'ities to city.
improve air quality. A contract for $20 million was awarded for the construction of new elec- BoardofDirectors. Tennessee Valley Authorxty trostatic precipitators at Paradise unit 3. Existing S. D AVID FREEM AN. Chairman equipment, completed with the plant in 1970, is not adequate to meet present fly ash standards. Knoxville. Tennessee Preliminary construction began in April on an $80 August 1978 million baghouse installation to control fly ash emissions when low-sulfur coal is used at 3.hawnee. Also during the quarter activity began in preparation for scrubber additions. - g . ,,
" ~~~ "~
TVA has awarded a contract for more than -
$ r r'
$842,000 for the construction and operation of a high intensity ionizer to demonstrate this method of greatly increasing the effectiveness of existmg f'- ~'I Tj electrostatic precipitators. The ionizer, scheduled . -
to operate in September, will be put on one duct of unit 3 at Shawnee. 2 A test of a 10,000-kilowatt pilot cocurrent scrub- ~ ,'
- ber at Shawnee, in cooperation with the Electric -
f' Power llesearch Institute, neared startup. -
RESEARCH AND DEVELOPMENT - On May 3 (Sun Day) TVA announced a pilot project to in-3 s%
74 stall 10 solar water heater systems in selected homes in Memphis, Tennessee. These pilot in-stallations have been made and experience with The generator stator of Watts Bar Hydro Plant unit 1 them has helped identify costs and resolve prob- uas reu ound after 36 years of reliable service. During lems in preparation for a broader test of 1,000 these necessary repairs, the capacity of the generator similar heaters in the Memphis area. TVA is seek- u as increased by 3.300 kilou atts at practically no ing ways to accelerate efficient use of available additionalcost.
energy resources and will continue to support Above, the 175-ton rotor of unit 1 is replaced after being development and commercialization of solar ,, ,,,,,,g ,, ,, g , ,,, , 7,, , y , ,,,.;, g,,, ,,,,, , g, , _
energy systems.
Use of waste heat from power plants is receiving a great deal of attention from TVA because of the large amounts of unused energy involved. A feasibility study has been started for a waste heat distribution system at Watts Bar Nuclear Plant including possible commercial uses of the heat.
The heat in the flow of condenser cooling water being considered in this study (about 250,000
Nine Mon th s Twelve Mon th s NE,I POWER INCOME EndedJune 30 Ended June 30
( And Retained Earnings Reinvested) 1978 1977 1978 1977 (Thousands) (Thousands)
Operating Revenues Sales of electric energy Municipalities and cooperatives $ 1,095,081 8 882,197 $ 1,451,210 51,178.039 Federal agencies 229.900 226,200 326,315 310,441 Indust ries 320,662 252,693 423,682 348,207 Electric utilities 3,199 2,387 3,723 2.782 Interdivisional 4m4_7R 4,457 JS43. 5 H37 TOT AI. SALEsoE Eu cTHic ENE RGY 1,653,320 1,367,934 2,210.573 1,845,306 Itents and other miscellaneous revenue _ _ 30,115 30,446 _ 41,171 _ _.36,184 TOTAt.OPER 4rtNo HEVENLEs 1,683,435 _1,398.380 2,251,744 1,881,490 Operating Expen ses Fuel 732,077 646,4 h0 994,789 877,280 Other production expense 388,437 295,876 492,571 388.343 Taxes and payments in lieu of taxes 69,215 57,972 88,170 79,409 Depreciation 112.244 99,127 151,515 130,737 Other 83,291 _ _ 65,226 _ 108,395 84,798 To rat. On n 4 TING ExFENsEs 1,385.264 1,164,681 1,835,440 _1,560,573 Other in come and Deduction s, Net A BG* 1,287* 139*
TorALINcoME 298,179 233,613 415,017 320,778 Interest Charges Interest on debt 353,284 275.362 456,251 358,076 Allowance for borrowed funds used in construction and nuclear fuel 177,508* 129,508* 226,621* 169,228' Amortization of debt discount, premium, and expense, net III fM2 1.036 797 ToTAt lNTr nest Cli nacEs 176,553 146,523 230,666 1 t 9,64 5 N ET INeou E 121,626 87,090 184,351 131,133 Return on approprietion investment 46,287 48,013 62,291 64,347 INcnE AsE IN REra NED EARNINcs 75,339 39,077 122,060 66,786 Retained earnings reinvested at beginning of period _12 072,910 9R7,l l 2 1,026,189 959,403 RETAINEn EARNINGS R :NVEsTEn AT END oF PERIOD $1,148,249 $1,026,189 $ 1,148,249 $ 1,026,189 NET POWER PROCEEDS From Pou er Operations Net income $ 121,626 $ 87,090 $ 184,351 $ 131,133 Nuclear fuel amortized to operations 24,825 22,136 34,620 22,447 Depreciation, depletion, and other amortization 113,281 100,080 154,336 131,957 1nterest on debt 353,284 275,362 456,251 358,076 Allowance for borrowed funds used in construction and nuclear fuel 177.509' __122,50d* __jl26 62l' _16222R,.*
435,508 355,160 602,937 474,385 From Sale of Pou er Facilities 1,125 888 1.527 1,236 TOTAL NET power Paoctros 436,633 356,048 604,464 475,621 Net Pou er Proceeds Uses Interest on debt 353,284 275,362 456,251 358,076 Return on appropriation investment 46,287 48,013 62.291 64,347 Repayment of appropriationinvestment 15,000 15,000 20,000 20,000 B ALANCE AV Alt.AHLE eor INS EsTMENT IN power AssErs S 22,062 $ 17,673 5 65,922_ $ 33,19R Net borrowings invested in power assets s_ _870,000 $ 660,000 $ 1,205,000 $ 1,115,000
- Deduct
OFFICIAL STATEMENT
$100,000,000 TEXXESSEE VALLEY AUTHORITY 8.10% Power Bonds 1974 Series B Dated April 1,1974 Due April 1,1979 Principal and semi-annual interest i April I and October 1i will be payable at the principal offices of Bankers Trust Company, New York. N. Y. (the Trustee and Begistrar), The First National Bank of Chicago, Chicago, Ill., Bank of America N.T. & S.A., San Francisco, Calif., Third National Bank in Nashville. Nashsille, Tenn., and American National Bank anil Tru-t Company, Chattanooga, Tenn. The Bonds will be available in coupon form registrable as to principal only in denominations of $1,000 and
$5,000 or in fully registered form in denominations of $1,000 or any multiple thereof.
't he Bonds will not be subject to redemption prior to maturity.
The Bonds will be issued to assist in prosiding capital for the Power Program of the Tennessee Valley Authority. Principal and interest will be payable solely from the Tennessee Valley Authority's Net Power Proceeds as herein defined. The Bonds will not be obligations of, nor will payment of the principal thereof or the interest thereon be guaranteed by, the United States of America.
Interest on the Bonds willl e subject to Federal income taxation; but, under present laws and decisions, in the opinion of coun-ci, the Bonil are esempt frorn per onal property taxes. and the interest thereon is exempt from income taxes, r.ow or hereafter imposed by any state or local taxing authority.
Application will be made to list the Bonds on the New York Stock Exchange.
Price 100%
(plus accrued interest)
The Bonds are ofTered when, as and if issued and subject to acceptance by the Purchasers, to approval of counsel, to prior sale and to withdrawal, cancellatLn or modification of the offer without notice. The Purchasers reserve the right to reject any orders for the Bonds. It is expected that the Bonds in definitise form will be available for delivery on or about April 21,1971.
The list of Purchasers of the Bonds set foith herein includes:
THE CH ASE M ANH ATTAN BANK, N.A. BEAR, STEARNS & CO.
CHEMICAL BANK WM. E. POLLOCK & CO., INC.
THE FIRST NATIONAL BANK OF MEMPHIS H ALSEY, STU ART & CO. INC AFFILI ATE OF B ACME & CO. INCO9PORATED SMITH, B ARNEY & CO.
INCOR POR A TE D WHITE, WELD & CO.
fNCORPORATED The date of this Official Statement is April 16.1974.
IN CONNECTION WITil Tills OFFEllING, TIIE PURCIIASERS 31AY OVER. ALLOT Olt EFFECT TilANSACTIONS WIIICil STAlllLIZE OR 31 AINTAIN TIIE 3IAltKET PRICE OF Tile IlONDS IIEREllY OFFERED AT A LEVEL AllOVE TIIAT WillCil 311GIIT OTilEllWISE PREVAIL IN Tile OPEN 31AllKET. SUCil STAlllLIZING, IF CO3DIENCED, 31AY llE DISCONTINUED AT ANY TDIE.
TAllLE OF CONTENTS PAGE The Tennessee Valley Authority . . ...... .................... 3 Power Assets . . . ....... . . .......... . 4 Power Earnings .. .. . .... . 4 Area Supplied and Customers . ....... .... . ..... 5 Contracts and Rates . . ... .. ........ 5 h1unicipal and Cooperative Distributors ..... . .. 5 Industries Served Directly . ........ ....... 6 Federal Agencies ... .. ..... ............... 6 Sources of Operoting Revenues .. ..... .................. 6 Power System . ... . ...... ... .. ... 6 Construction Program .... ....... ....... 8 Payments in Lieu of Taxes . ...... ............ 9 Payments to the United States Treasury . .. .. . ...... 9 Description of New Series Bonds . . . ...... .. 10 Application of Net Power Proceeds . . .. .... . 10 Rate Covenant . .. .... .... .... ... 11 Cover. ant for Protection of Bondholders' Investment ... ... .... 11 Depreciation . . . .. . ... ... 11 Issuance of Additional Bonds and Other Indebtedness ... . 11 Afortgaging and Disposal of Power Properties . .......... 12 Alodifications of Resolutions and Outstanding Bonds . . . ..... 12 Insurance . . ............ . ......... . 12 hianagement and Personnel . . ........ . . ...... 12 Financial Statements .. . . . . . ....... . ... .. 14 Purchasers . . .. .... .. . . .............. .. 23 No dealer. salesman or other person has been authorized to gise any information or to make any representation not contained in the Official $tatement in connection with the offer made by this Official Stateznent and, if given or made. such information or representation must not be relied upon as hasing been authorized by the Tennessee Valle.t Authority or the l'unhasers. 'Ihis Otticial 5tatement is not an olier to sell, or a solicitation of an offer to buy. by any Purchaser in any state in which it is unlawful for such Purchawr to make such an offer or solicitation.
2
OFFICIAL STATE 31ENT of TENNESSEE VAI.I.EY AUTIIOlllTY A Wholly Owneel Corpornte Agency ami Instrumentality of the UNITED STATES OF A31EllICA The Tennessee Valley Authority (TVA or Corporation) presents this Official Statement for the information of purchasers of its Power Bonds 1974 Series B due April 1,1979, in the principal amount of $100,000,000 (New Series Bonds). It contains information concerning TVA; the Tennessee Valley Authority Act of 1933, as amended ( Act); TVA's Power Program; the Basic Tennessee Valley Authority Power Bond Resol; tion (Basic Resolution) adopted on October 6,1960, by the Board of Directors of TVA (Board); and the Supplemental Resolution authorizing the New Series Bonds (Supplemental Reso-lution) adopted by the Board ou April 16,1974.
TIIE TENNESSEE VAI.I.EY AUTIIORITY TVA was established by the Act. Its objective is the development of the resources of the Ten-nessee Valley and adjacent areas in order to strengthen the regional and national econcmy and the national defense. Its specific purposes include: (1) flood control on the Tennessee River and its tributaries, and assistance to llood control on the lower Ohio and the Mississippi; (2) a modern navi-gable channel for the Tennessee River; (3) an ample supply of power within an area of 80,000 square miles; (4) development and introduction of more efficient soil fertilizers; and (5) greater agricultural and industrial development and improved forestry in the region. All programs of TVA lend support to the economy of the region. Its activities other than power thus add substantially to the stability and growth of the Power Program.
The protection of the environment has been considered by TVA as an integral part of TVA's objectives, and TVA pursues an active program of mitiating and developing improvements for the protection of the environment. Expenditures for the Power Program for pollution control facilities are expected to total about $150.000,000 for fiscal year 1974. Various environmental regulations relating principally to air and water quality have been adopted by state and Federal authorities and others are under consideration. Compliance with some of these regulations may present technological and operational problems and is likely to involve substantial costs, the extent of which cannot be determined at this time. See also the discussion relating to certain litigation under " Power System" and " Construction Program" below and note 8 of the " Notes to Financial Statements."
TVA a authorized to issue bonds, notes, and other evidences of indebtedness (herein collectively called " Evidences of Indebtedness") to assist in financing its Power Program in an amount not exceeding
$5,C')0,000,000 outstanding at any one time. Evidences of indebtedness, excluding the New Series Bonds, are presently outstanding in the aggregate principal amount of 52,555,000,000, which includes an increase of $100 miilion in bonds and a decrease of 580 million in short-term notes since December
- 31. 1973. Congress has reserved the right to alter, amenJ. or repeal the Act, but has provided that no amendment or repeal shall operate to impair the obligation cf any contract made by TVA under any power conferred by the Act. FinanMly, the Power Program is separate from nonpower activities.
Separate accounting lor the Power Program is required by the Act and Basic Resolution.
3
l'OWEll ASSETS The following table presents a summary of TVA Power Assets and their derivation as of Decem-ber 31,1973.
At Dec. 31, 1973 (Unaudited)
Otilliorts)
Assets Completed plant $4,002.0 Less accumulated depreciation 1.203.8 Net completed plant T798.2 Construction a'..i investigations m progress 1.346.8 Nuc! ear fuel 106.4 Current assets 240.4 Deferred charges 16.1 Total 54.507.9 Derived from Appropriations by the Congress S t .383.5 Transfers of property from other Federal agencies 21.6 1,405.1 1.ess rcpayments 370.1 Appropriation imestment 1,035.0__
Retained earnings reinvested in the power program 808.4 Prop-;etaty capital 1,843.4 Long-term debt .
2,025.0*
Short. term notes Payable to U. S. Treasury 100.0 Payable to public 410.0 "
510.0 Other current liabilities 128.5 Deferred credits .1 Contributions in aid of construction .9 Total 54,507.9
- Includes a $150-million bond issue sold in July 1973 and a $100-million bond issue sold in October 1973.
" Includes a decrease of $70 milhon since June 30,1973.
POWElt EAltNINGS The following tab!c presents a summary of TVA power carnings for each of the latest five fiscal years ended June 30, and for the 12 months ended December 31, 1973:
Operating Depreciation Interest Charges Espenses Approximate and Iess I iscal Operating (Escluding Net l'ow er Extraordinary Otber Income Net Year Revenues Depreciation) Proceeds' Items and Deductions Income Otillions) 1969 ... . $403.3 $258.2 5145.1 571.6 522.8 5 50.7 1970 . ... 479.6 299.1 180.5 75.1 30.8 74.6
!?71 ...... 598.0 369.5 228.5 80.0 29.5 119.0 1972 .. 641.8 397.9 243.9 83.4 48.4 112.1 1973 ... .. 749.3 487.9 261.4 89.5 65.5 106.4 12 mos. to Dec. 31, '73 (Unaudited) 804.0 542.5 261.5 93.7 86.4 S t .4
- Not including net procce 's from disposition of power facilities, which are also available for debt sersice on llonds.
An increase in rates etTective in October 1970 produced additional revenues of about $100 million in fiscal year ended June 30,1971. This increase in power rates was the principal factor in the improved earnings that year. The operation of the adjustment prosision referred to under the third paragraph of 4
a
" Contracts and Rates" below resulted in an increase in the charges for power under existing rate schedules, effective in January 1973. This increase proJuced additional revenues of about $35 million in the fiscal year ended June 30, 1973. The decline in net income for the tweise months ended December 31, 1973, was primarily attributable to the increased cost of fuel and additional interest expense. An adjustment in rates, effectise in January 1974, is expected to proside aJJitional resenue of about $90 million in the fiscal year ending June 30,1974.
Al(EA SUPPLIED AND CUSTOMERS TVA supplies power in most of Tennessee, in northern Alabama, northeastern 51ississippi, and southwestern Kentucky, and in small portions of Georgia, North Carolina, and Virginia. The population of the area supplied is about 6,000,000. Subject to certain exceptions, TVA may not without specific authorization by Act of Congress enter into contracts which would base the eIIcct of making it or its distributors a sot.rce of power supply outside the area for which TVA or its distributors were the primary source of power supply on July 1,1957.
TVA is primarily a wholesaler of power. Its customers are composed of three major groups:
(1) d; .abutors, consisting principally of municipal and cooperative systems; (2) industries which have large or unusual loads and are accordingly served by 'IVA directly rathcr than by the distributors; and (3) Federal agencies, including the Atomic Energy Commission for its plants at Oak Ridge, Tennessee, and Paducah, Kentucky, the Marshall Space Ehpht Center of the National Aeronautics and Space Administration at IIuntsrille, Alabama, and the Air Force's Arnold Enginecting Development Center at Tullahoma, Tennessee.
CONTilACTS AND ItATES The Act delegates to the Board sole responsibility for establishing the r, which TVA charges and authori/cs it to include in power contracts such terms and conditions as in n3 judgment may be neces-sary or desirable for carrying out the purposes of the Act. In the opinion of TVA's counsel, these rates and charges are not subject to the controls, standards and criteria established for the present Federal economic stabilization program. The impact on TVA of any' applicable long-tcrm stabilization program cannot be predicted. The rates and certain characteristics of present contracts applicable to dillerent customer groups of TVA are described below.
Municipal and Cooperative Distributors Standard power contracts with the municipal and cooperative distributors are for terms of 20 years subject, in most contracts, to termination by TVA or the distributor after the first 10 years on at least four years' prior notice. The present average remaining term of all such distributor contracts is about 7 years.
'Ihe contracts contain standard provisions specifying the wholesale rates, resale rates, and condi-tions under which the power is to be distributed. The standard wholesale rate schedule includes a demand charge, an energy cha:ge, and a minimum bill charge. it also includes load density and industrial sales adjustment clauses. Under the contracts TVA determines and makes quarterly such adjustments, if any, as may be required in the demand and energy charges of the wholesale rate schedule and corresponding adjustments in other rate schedules to enable TVA to meet all requirements of the Act aad the tests and provisions of its bond resolutions. In addition, the contracts provide for agreement between the parties on general or major meditications in both the wholesale and resale rate schedules, and permit TVA, if agreement is not reached, to make changes in such schedules to meet the objectises of the Act and comply with the provisions of its bond resolutions.
The rate per kilowatt-hour paid by any distributor varies primarily with the amount and load factor of the power purchased. In the 12 months ended December 31,1973, the average rate for power sold to all distributors was 7.79 mills per kWh.
The resale rates under which the distributors serve ultimate consumers are stipulated in the power contracts betwe:n the distributors and TVA, and are revised from time to time to reflect changes in cost, including changes in the wholesale cost of power. They are designed to promote the objective 5
of an adequate supply of power at the lowest feasible rates. The average residential use by customers of TVA's municipal and cooperatise distributors for the 12 months ended December 31,1973, was 15,090 kWh. The average residential rate was 1.34 cents per kWh. Corresponding national average figures were 8,079 kWh and 2.38 cents per kWh.
Industrica Sersed Directly Contracts with industries sened directly by TVA normally are for terms of 10 years. Almost all of the power sold directly to industries is delivered under contracts which provide for the prevailing rates applied from time to time by the distributors to industries they serve. The average rate to directly sened industrial customers during the 12 months ended December 31,1973, was 6.86 mills per kWh.
Federal Agencien Power is sold to Federal agencies under long-term contracts of varying terms. For the 12 months nded December 31,1973, approximately 90 percent of these sales were made to the AEC. Between 1957 and 1970, AEC loads gradually decreased to a normal level of 1,340,000 kW with temporary reductions to 1,075,000 kW. 'lhe capacity thus released was absorbed by growth in other loads. Contractual arrangements with AEC, eticetise in 1971, revised in 1973, and extending until 1990, and automatically from year to year thereafter until 1995 unless discontinued by TVA or AEC, proside, subject to the asailability of power from scheduled new generating units, for increases in AEC loads in steps to 3,560,000 kW in 1978. Upon eight years' notice such loads may be reduced in steps in amounts not exceeding 1,000,000 kW in any period of 12 consecutive months. TVA considers that any such reduction could be readily absorbed by growth in other loads. These contractual arrangements provide for rates equivalent to prevailing rates applied from time to time to power sold to directly served industries. In the 12 months ended December 31,1973, the average rate for all powe sold to dircctly served Federal agencies was 6.28 mills per LWh.
SOUllCES OF OPEllATING HEVENUES A summary of Power Program operating revenues by sources for each of the latest five fiscal years ended June 30, and for the 12 months ended December 31, 1973, follows:
31unicipal and Ittnts l'iscal Cooperative ucctric l'ederal and Year Total Ibtributors Utilities In<!ustries Agencies
- Other (3fillions) 1969 .. $403.3 $222.2 57.3 S 92.3 $ 66.3 $ 15.2 1970 , 479.6 285.5 7.5 106.0 62.5 18.1 1971 598.0 379.1 10.1 125.0 65.0 18.7 1972 641.8 415.3 6.3 124.3 76.7 19.2 1973 749.3 476.3 0.S 144.7 107.2 20.3 12 mos. to Dec. 31, 1973 (Unaudited) 804.0 509.0 0.9 158.5 114.8 20.8
- Includes TVA use for construction and in nongwer programs.
l'OWElt SYSTEM TVA's power generating facilities in service on December 31,1973, included 29 hydro plants,12 steam plants (including the Allen Plant leased from 51emphis), and two gas turbine installations. Twelve hydro plants owned by subsidiaries of the Aluminum Company of America (Alcoa) are also operated as part of the TVA system, and 8 hydro plants of the United States Army Corps of Engineers are operated in coordination with the TVA system, 51ost of the power from the plants of the Corps of Engineers is supplied to TVA at the points of generation. All of the power from the plants of the Alcoa subsidiaries is supplied to TVA at the points of generation under contractual arrangements pursuant to which TVA supplies the power requirements both of Alcoa and of an Alcoa subsidiary which operates a distribution system in western North Carolina.
6
The following table shows the generating capacity in service and under construction or authorized un this coordinated tystem as of December 31, 1973:
Capacity in Kilowatts Under Construction In Service or Authorlied TVA Capacity Ilydro . .. . . . ..... .. ......... 3,192,630 1,530,000 Fossil Fuel-Steam . . .. ...... .... .... 17,749,585 -
Fossil Fuel-Gas turbines . . ..... . .. 1,096,800 -
Nuc! car .. ....... . ........ .. -
16,300,960 22,039,015 17,830,960 Other Capacity Alcoa hydro . . ..... ........ ............. 423,715 -
Corps of Engineers hydro . . . .... 819,666 --
1,243,381 -
Total Capacity . . . ..... .............................. 23,282,396 17,830,960 Power is delisered to the distributors, industries, and Federal installations over a transmission system of 16,600 miles of lines and 630 substations. 1 cluded are 1,500 miles of extra-high-voltage (500,000 volt) transmission lines. The system interconnects with neighboring power systems at numerous points. TVA is exchanging 2,060,000 kW of power on a seasonal basis with systems to the south, west and northwest. These systems get power from TVA to help meet peak loads during the air-conditioning season. In winter, TVA gets similar amounts of power to help meet peak demands that result from electric heating. This exchange of power on a seasonal basis climinates the need for an equivalent amount of additional generating capacity on the TVA system.
About 80% of TVA's power is generated by coal-burning plants, which presently consume about 38 million tons of coal per year. This coal is purchased under contracts ranging from a single delivery to deliveries oser many years. Although TVA has consistently had enough coal under contract to meet its need3, the amounts delisered recently hase been short of scheduled deliveries. In addition to its efforts to enter into new contracts for additional coal supplies, TVA is seeking ways to improve deliseries under its existing contracts. As of April 14, 1974 TVA had an inventory of 74 days' coal supply at the expected rate of use.
Approximately one-half of the coal purchased by TVA comes from underground mines, and the balance from smface mines. As early as the 1940's, TVA began to encourage reclamation of surface-mined lands, and since 1965 all TVA term coal purchase contracts insching surface mining have required reclamation of the land involved. Those reclamation requirements were strengthened and improsed twice after 1965, and in December 1971, TVA announced the adoption of new and still more stringent reclamation requirements to be included in all future term contracts, together with strengthened prosisons for enforcing the requirements. In addition. TVA is attempting by negotiation to incorporate these requirements into the remainder of its existing coal contracts. Al-though TVA's reclamation requirernents are designed to achieve reclamation generally equal to or greater than that which results from statutes and regulations anywhere in the United States, a suit entitled Natural Resources Defense Coimcil. Inc., et al. v. TVA et al. was brought in October 1972 by six environmental groups in the United States District Court for the Eastern District of Tennessee against TVA. its 130ard Chairman, Mr. A. J. Wagner, and four of TVA's coal supply con-tractors seeking a declaratory judgment that TVA's purchases of strip-mined coal do r.ot comply with the National Environmental Policy Act of 1969. and to enjoin, pending such compliance, the purchase of coal under four existing coal contracts and the award of new coal contracts involving the purchase of strip-mined coal. On August 13, 1973. the Court dismissed the case, holding that TVA's coal procurement program fully complies with the provisions of the National Environmental Policy Act of 1969. This decision has been appealed by the plaintifTs.
7
In recent sessions of Congress a number of bills with widely difTering provisions have been intro-duced relating to the regulation of surface mining and, in particular, to reclamation requirements. One such bill was recently passed by the Senate. TVA cannot predict the likelihood of this bill, with or without amendments, or any other such bill presently under consideration or yet to be proposed, becoming law. liowever, should any such legislation be adopted, TVA believes that a consequence could be an increase in the cost of coal to TVA, as well as to other power suppliers. An additional consequence might be some reduction in the supply of coal available to purchasers, including TVA, the extent and duration of which cannot be predicted. TVA cannot, however, predict the overall impact of any such legislation, or its consequences, upon TVA's costs and operations.
Under present conditions, gas is not available for TVA's two gas turbine installations or for the Allen Plant, a coal-fired steam plant which is also capable of using gas. TVA is operating the Allen Plant on coal. The gas turbine installations, primarily used for providing peaking capacity, can also use oil, which is more expensive than gas. Although oil has been available up to this time, the amounts and costs of oil which may be available in the future for use at these installations are urwertain.
TVA cannot predict the extent to which its revenues, its costs, or the operation of its power system may be affected as a result of tN present or any future scarcity of fuels or as a result of present or future governmental action and other measures taken in resporse to such scarcity and the energy shortage created thereby.
TVA's syst:m is the largest in the Nation in capacity and in energy production. Its size permits the construction of large facilities which help to minimize unit costs. Most of TVA's dams were completed years ago when construction costs were far below present-day levels. Because most of the dams are multipurpose, their cost is shared by navigation and flood control as well as by power; thus each purpose is served at a substantially lower cost than if the dams had been built for a single purpose. For the 12 months ended December 31, 1973, TVA steam plants had an average fuel consumption of 9,780 Btu per kWh and an overall average fuel cost of 3.62 mills per net kWh generated.
CONSTItUCTION PROGitAM TVA is adding almost 18 million kilowatts of generating capacity, most of which is in thirteen nuclear generating units of more than a million kilowatts each. Construction is under way on three units of 1,152,000 kW each for the Browns Ferry Nuclear Plant located in Limestone County, Alabama, on two units of 1,220,580 kW each for the Sequoyah Nuclear Plant located on Chicka-mauga Lake northeast of Chattanooga, Tennessee, and on two units of 1,269,900 kW each 'for the Watts Bar Nuclear Plar.t to be located near Watts Bar Dam in East Tennessee. Orders have been placed for equipment for two units of 1,332,000 kW each for the proposed Bellefonte Nuclear Plant to be located near Scottsboro, Alabama, and for four nuclear units of about 1,300,000 kW each, now being considered for location near Hartsville, Tennessee.
Commercial operation of the first Browns Ferry unit is scheduled for early 1974; the second unit for late 1974 and the third unit for 1975; the two Sequoyah units for 1976 and 1977; the two Watts Bar units for 1978 and 1979; the two Bellefonte units for 1979 and 1980. The four nuclear units now being considered for location near liartsville, Tennessee, are scheduled for commercial operation in 1980 through 1982.
Construction is under way on the Raccoon Mountain pumped storage hydroelectric project about six miles west of Chattanooga, Tennessee, with the four reversible pump-turbine units totaling about 1,530,000 kW scheduled for commercial operation in 1975. Tellico Dam, a multipurpose project on the Little Tennessee Riser, will have no power generators, but will provide additional generation at the Fort Loudoun Dam. On December 2,1971, the Environmental Defense Fund and other plaintilIs filed suit to enjoin construction of the Tellico project on various grounds, including alleged failure to comply with the National Environmental Policy Act by, among other things, not filing an Environmental Impact Statement for the project. On January 11,1972, the United States District Court for the Eastern District of Te messee issued a limited preliminary injunction, pending trial, enjoining certain phases of work on the project, but allowing other activities to go forward. Thereafter, TVA 8
filed an Environmental Impact Statement for the Tellico project, and the trial to determine the adequacy of that statement and other questions raised by the plaintitTs was held in September 1973.
On October 25,1973, the Di3trict Court ruled that TVA was in full compliance with the Ltional Environmental Policy Act and all other applicable laws, and the injunction was dissolved. This daion was allirmed by the United States Court of Appeals for the Sixth Circuit on lichruary 22, 1974 These generating plant additions are scheduled to merease system capacity to above 41 mi!! ion kW by the end of 1982. All of the above scheduled commercial operation dates are estimates which neces-sarily are subject to change due to licensin, and environmental factors as well as delays in delivery of equipment, and other delays encountered from time to time in major construction.
TVA is also expanding its netvork of extra-high-voltage (500,000 volt) transmission lines and substations and its transmission facilities of lower soltage, principally 161,000 volts.
In addition to the above construction, TVA is participating with AEC, Commonwealtn Edison Company of Chicago, Breeder Reactor Corporation, and Project Management Corporation in the construction and operation of the Nation's first large-scale demonstration Liquid Metal Fast Breeder Reactor project. The plant, which will be in the range of 350 to 400 megawatts, is presently proposed to be located on the TVA system near Oak Ridge, Tennessee. The project is estimated to cost about $700 million with pledges amountmg to about $250 million to be obtained from all segments of the utility industry, including privately, publicly, and cooperatively owned companies. Of this amount, TVA has pledged about $22 million over a ten-year period an behalf of itself and its distributors. In addition, TVA and Commonwealth Edison will cach prodde approximately $2.000,000 in non-reimbursable services to the project. TVA will also provide at no cost to the project the plant site and transmission line ConneClions.
PAYMENTS IN 1.IEU OF TAXES TVA is not subject to Federal income taxes nor to taxation by states or their subdivisions. How-cver, the Act requires payments in lieu of taxes by TVA to states and counties in which it operates in amounts equal to 5% of its gross revenues from the sale of power (exclusive of sales to Federal agencies not for resale). In addition, the municipal distributors make tax-equivalent payments, and the cooperative systems pay such taxes as are required by the various states.
PAYMENTS TO TIIE UNITED STATES TREASUIlY The Act requires TVA to make payments into the United States Treasury, beginning with the fiscal year ended June 30,1961, from Net Power Proceeds in excess of those required for debt service (1) as a return on the Appropriation Investment (the amount of power assets derived from appropriations by the Congress or transfers of property by other Federal agencies,less repayments by TVA) and (2) in reduction of such Investment. The minimum repayments required in reduction of the outstanding Appropriation Investment were $10,000,000 for each of the first five fiscal years and $15,000,000 for each of the next five fiscal years. Beginning with fiscal year 1971, the minimum annual repayment was $20,000,000 and repayments in such amount are to be made each fiscal year thereafter until a total of $ 1,000,000.000 has been repaid. The payments as a return on such Imestment are determined by applying to the Appropriation Investment outstanding as of the beginning of each fiscal year the com-puted average interest rate payable at that time by the United States Treasury on its total marketable public obligations. As of the opening of business on July 1,1973, that interest rate was 6.129%.
Payments into the Treasury may be deferred for not more than two years if, in the judgment of the Board, they cannot feasibly be made because of inadequacy of funds occasioned by drought, poor business conditions, emergency replacements, or other factors beyond the control of TVA. See notes 4 and 5 of the " Notes to Financial Statements."
Section 26 of the Act provides that at the end of each calendar year TVA shall pay into the Treasury of the United States the proceeds derived by TVA during the preceding fiscal year from all its activities, excepting such part as in the opinion of the Board is necessary in the conduct of certain of its activities including its business in generating, transmitting, and distributing electric energy, plus a continuing fund of $1,000,000. This provision is subject, however, to a further provision in the Act 9
that, notwithstandmg the provisions of Section 26 of the Act or any other provision of law, TVA may pledge and use its Net Power Proceeds for payment of the principal of and interest on its Evi-dences of Indebtedness. Under the Basic Resolution, TVA pledges to and will apply Net Power Proceeds only for the purposes therein provided.
DESCHIPTION OF NEW SERIES HONDS The New Series Bonds will be payable as to both principal and interest solely from TVA's Net Power Proceeds, which are defined as the remainder of TVA's Gross Power Revenues after deducting the costs of operating, maintaining, and administering its power properties (including multiple-purpose properties in the proportion that multiple-purpose costs are allocated to power) and payments to states and counties in lieu of taxes, but before deducting depreciation accruals or other charges representing the amortization of capital expendnures, plus the net proceeds of the sale or other disposition of any Power Facility or interest therein.
Principal of and semiannual interest ( April I and October 1) on the New Series Bonds will be payable at the principal ollices of Bankers Trust Company, New York, N. Y. (the Trustee and Registrar),
The Erst National Bank of Chicago, Chicago,111., Bank cf America N.T. & S.A., San Francisco, Calif.,
Third National Bank in Nashsille, Nashville, Tenn., and American National Bank and Trust Company, Chattanooga, Tenn.
The New Series Bonds shall be issued in the form of coupon Bonds (registrable as to principal only) in denominations of $1,000 and $5,0b0 and in the form of fully registered Bonds in denominations of $1,000 or any multiple thereof. New Series Bonds will be exchangeable, and registered Bonds will be transferable, upon payment of a charge sutlicient to reimburse TVA or the Registrar for any applicable tax or other governmental charge.
The New Series Bonds will not be subject to redemption prior to maturity.
APPLICATION OF NET POWER PROCEEDS Section 2.3 af the Basic Resolution reads as follows:
Net Power Proceeds shall be applied, and the Corporation hereby specifically pledges them for application, first to payments due as interest on Bonds, on Bond Anticipation Obligations. and on any Evidences of Indebtedness issued pursuant to Section 2.5 which rank on a parity with Bonds as to interest; to payments of the principal due on Bonds for the payment of which other provisions have not been made; and to meeting requirements of sinking funds or other analogous funds under any Supplemental Resolutions. The remaining Net Power 1. ~cds shall be used only for:
(a) Required interest payments on any Evidences of Indebtedness issued pursuant to Section 2.5 which do not rank on a parity with Bonds as to interest.
(b) Required payments of or on account of principal of any Evidences of Indebtedness other than Bonds.
(c) Minimum payments into the United States Treasury required by the Act in repay-ment of and as a return on the Appropriation Investment.
(d) Investment in Power Assets, additional reductions of the Corporation's capital obliga-tions, and other lawful purposes related to the Power Program; provided, however, that payments into the United States Treasury in any fiscal year in reduction of the Appropriation Investment in addition to the minimum am,unts required for such purpose by the Act may be made only if there is a net reduction during such year in the dollar amount of outstanding Evidences of Indebtedness issued for capital purposes, and only to such extent that the percentage of aggregate reduction in the Appropriation Investment during such year does not exceed the percentage of net reduction during the year in the dollar amount of outstanding Evidences of Indebtedness issued for capital purposes.
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RATE COVENANT Section 3.2 of the Basic Resolution reads as follows:
The Corporation shall fix, maintain, and collect rates for power sailicient to meet in each fiscal year the requirements of that portion of the present subsection (f) of section 15d of the Act which reads as follows:
The Corporation shall charge rates for power which will produce gross revenues sufficient to provide funds for operation, maintenance, and administration of its power system; payments to States and counties in lieu of taxes; debt service on outstanding bonds, including provision and maintenance of reserve funds and other funds established in connection therewith; pay-ments to the Treasury as a return on the appropriation investment pursuant to subsection (e) hereof; payment to the Treasury of the repayment sums specified in subsection (c) hereof; and such additional margin as the Board may consider desirable for investment in power system assets, retirement of outstanding bonds in advance of maturity, additional reduction of appropriation investment, and other purposes connected with the Corporation's power business, having due regard for the primary objectives of the Act, including the objectise t%t power shall be sold at rates as low as are feasible.
For purposes of this Resolution, " debt service on outstanding bonds", as used in the above provision of the Act, shall mean for any fiscal year the sum of all amounts required to be (a) paid during such fiscal year as interest on Evidences of Indebtedness, (b) accumulated in such fiscal year in any sinking or other analogous fund provided for in connection with any Evidences of Indebtedness, and (c) paid in such fiscal year on account of the principal of any Evidences of Indebtedness for the payment of which funds will not be available from sinking or other analogous funds, from the proceeds of refunding issues, or from other sources; provided, hoiverer, that for purposes of clause (c) of this definition Bond Anticipation Obligations and renewals thereof shall be deemed to mature in the proportions and at the times provided for paying or setting aside funds for the payment of the principal of the authorized Bonds in anticipation of the issuance of which such Bond Anticipation Obligations were issued.
The rates for power fixed by the Corporation shall also be sufficient so that they would cover all requirements of the above-quoted provision of subsection (f) of section 15d of the Act if, in such requirements, there were substituted for " debt service on outstanding bonds" for any fiscal year the amount which if applied annually for 35 years would retire, with interest at the rates applicable thereto, the originally issued amounts of all series of Bonds and other Evidences of Indebtedness, any part of which was outstanding on July 1 of such year.
COVENANT Folt PROTECTION OF llONDilOLDEllS' INVEST.TIENT Unoer the provisions of the last sentence of subsection (f) of Section 15d of the Act and Section 3.3 of the Basic Resolution, TVA must, in each successive five-year period beginning July 1,1960, use for the retirement of capital obligations (including Evidences of Indebtedness, and the Appropriation Investment) or investment in Power Assets an amount of Net Power Proceeds at least equal to the sum of (1) depreciation accruals and other charges representing the amortization of capital expenditures aad (2) the net proceeds from any disposition of Power Facilities.
DEPRECIATION Section 3.5 of the Basic Resolution requires TVA to accrue, in accordance with a recognized method, annual amounts for depreciation of its power properties (except land and other nondepreciable property) which will amortize their original cost less anticipa.ed net salvage value within their expected useful lives. TVA has provided allowances for depreciation of its power properties (except land and other nondepreciable property) on a straight-line basis during their expected useful lives.
ISSUANCE OF ADDITIONAL llONDS AND OTilER INDEBTEDNESS The Act presently limits the issuance of Evidences of Indebtedness by TVA to a total of
$5,000,000,000 outstanding at any one time to assist in financing TVA's Power Program (and for 11
refunding). The Basic Resolution permits the issuance of Bonds only to proside capital for TVA's Power Program, including the refunding of any Evidences of Indebtedness issued for that purpose.
Bonds, the terms and conditions of which may not be inconsistent with the Basic Resolution, must be further authorized by Supplemental Resolution filed with the Trustee.
The issuance of Bonds is limited as follows by the Basic Resolution:
Each Supplemental Resolution authorizing the issuance of Bonds must contain a finding by the Board that after the Bonds authorized thereby have been issued Gross Power Resenues will be adequate to meet the requirements of the Basic Resolution with respect to rates and the application of depreciation accruals. These requirements are described herein under the captions
" Rate Covenant" and " Covenant for Protection of Bondholders' Investment."
The amount of Bonds outstanding may not be increased unless net power income (after interest expense and depreciation charges but before payments as a return on or in reduction of the Appropriation Investment) for the latest five fiscal years has aggregated at least $200,000,000.
Moreover, that minimum requirement is increased by $15,000,000 for each % % (or major fraction thereof) over an average of 3% % for those tive years of the July 1 average interest rate payable by the United States Treasury upon its total marketable public obligations. Compliance with this requirement is established by a certificate of the Comptroller of ;he Corporation filed with the Trustee.
Pending the issuance of Bonds authorized by a Supplemental Resolution, Bond Anticipation Obliga-tions and renewals thereof (including Interim Obligations to the Secretary of the Treasury) may be issued, to be paid from the proceeds of such Bonds when issued or from other funds that may be avail-able for that purpose Evidences of Iridebtedness other than Bonds and Bond Anticipation Obligations may be issued to assist in financing TVA's Power Program. They may be payable cut of Net Power Proceeds subject to the provisions of Section 2.3 of the Basic Resolution. They may not rank on a parity with nor ahead of the Bonds as to principal nor ahead of them as to interest. Through this and other provisions of the Basic Resolution, TVA covenants to issue no securities that would have a claim on its Net Power Proceeds senior to the New Series Bonds.
MOIITGAGING AND DISPOSAL OF POWElt PI(OPEltTIES TVA may not mortgage any part of its power properties and may not dispose of all or any sub-stantial portion of such properties unless provision is made for a continuance of the interest, principal, and sinking fund payments due and to become due on all outstanding Evidences of Indebtedness, or for the retirement of such Evidences of Indebtedness.
MODIFICATIONS OF I(ESOLUTIONS AND OUTSTANDING BONDS The Basic Resolution provides for amendments to it, to any Supplemental Resolution, and to any outstanding Bonds. In summary, amendments of the respective rights and obligations of TVA and the bondholders may be made with the ' written consent of the holders of at least 66% % in principal amount of the outstanding Bonds to which the amendment applies; but changes in the maturity, principal amount, redemption premium, or rate of interest or maturity of any interest installment, with respect to ar,y Bond, or in the above referred to percentage for any such consent, cannot be made without the consent of the holder of such Bonds.
INSURANCE It is the policy of TVA not to carry disaster or public liability insurance except as may be required or appropriate under applicable laws and regulations with respect to nuclear facilities. Liability for service-connected injuries to employees is governed by the Federal Employees' Compensation Act.
MANAGEMENT AND PEIISONNEL All powers of TVA are vested in the Board, which functions on a full-time basis. The Board consists of three directors appointed by the President and confirmed by the Senate for nine-year terms, with one director's term expiring every three years.
12
The directors and certain principal executive o!!icers are:
Name Office A. J. Wagner .. . .. . .. Chairman of the Board Don hicBride . ... . Director William L. Jenkins . . . . . . . . . . . . . . . . Director Lynn Seeber . . . . . . . . . . . . . ........ General hianager J ames E. Watson . . . . . . . ........... hianager of Power and Power Financing Officer George H. Kimmons . ...... 51anager of Engineering Design and Construction Kenneth D. Hatcher . . . . . . . . . . . . . . . . . Comptroller Robert H. hiarquis General Counsel and Secretary Herbert S. Sanger, Jr. .... ....... Deputy General Counsel and Assistant Secretary All references in the Basic Resolution to the Act, unless otherwise indicated, are to the Tennessee Valley Authority Act as heretofore and hereafter amended. All summaries and explanations of the Act, Basic Resolution, and Supplemental Resolution contained herein are made subject to the fu!! texts thereof.
The Act empowers TVA to acquire real estate in the name of the United States of America by purchase or by exercise of the right of eminent domain, "and thereupon all such real estate shall be entrusted to the Corporation as the agent of the United States to accomplish the purposes of this Act."
Since nearly all of TVA's properties, including powerhouses and transmission line rights of way, con-stitute real estate, title to which is held in the name of the United States and entrusted to TVA as agent of the United States, all references in this Official Statement to "TVA properties" and the like, and to the amounts invested therein, should be read and construed in the light of this provision of the Act.
Appended hereto as a part of this Official Statement are financial statements as of June 30, 1973 and 1972, and for the years then ended, together with the report thereon of Coopers & Lybrand, inde-pendent certified public accountants. Copies, in reasonable quantity, of the Act, Basic Resolution, and Supplemental Resolution may be obtained upon request directed to Tennessee Valley Authority, Director of Information, Knoxville, Tennessee 37902, or to the office of Bankers Trust Company, Corporate Trust Division, One Battery Park Plaza,16th Floor, New York, New York 10004.
Any statements in this Official Suement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement with the purchasers of any of the New Series Ponds.
This Otficial Statement has been approved by resolution of the Board of Directors of Tennessee Valley Authority.
TENNESSEE VALLEY AUTHORITY By: w Dated April 16,1974.
A. J. WAGNER Chairman of the Board 13
COOPERS & LYBRAND CERTIF1ED PUBUC ACCOUNTANTS IN PRINCIPAL AREAS Oft THE WORLD To the Board of Directors of TENNESSEE VALLEY AUTHORITY:
We have examined the financial statements of TENNESSEE VALLEY AUTIIORITY at June 30, 1973 and 1972, and for the years then ended which appear on pages 15 to 22 herein. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting accords and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the aforementioned financial statements present fairly:
(1) the financial position of the Authority at June 30,1973 and 1972, and the results of operat%ns and changes in financial position of its several programs for the years then ended; and (2) the assets and liabilities of the Authority at June 30,1973 and 1972, relating to the power program, and the results of operations and changes in financial position of that program for the years then ended, all in conformity with generally accepted accounting principles applied on a coasistent basis.
COOPERS & LYBRAND New York, August 24,1973.
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TENNESSEE VALLEY AUTIIOlllTY
( A Corporation Wholly Owned by the United States of America)
BAIANCE SIIEET June 30,1973 aml 1972 ASSETS Power program All programs 1973 1972 1973 1972 PROPERTY. PLANT, AND EQUIPMENT, substantially all at (Thousands) original cost Completed plant Multipurpose dams; note 1 . . . . . . . . . . . . . . . . . . $ 489,435 $ 488,644 $ 1,014,358 $ 1,010.967 Single-purpose dams ... . . .. .......... 65,736 66,876 65.736 66,876 Steam production plants . . . . . . . . . . . . . . . . . . . 1,944,471 1,713,992 1.944,471 1,713,992 Other electric plant . . ........... ........ 1,320,837 1,134,849 1,320,837 1,134,849 Other plant . . . . . . . . . . . . . ................
- - 164,522 150,457 3,820,479 3,404,361 4,509,924 4,077,141 Less accumulated depre:iation and dep'etion; note 2 1,156,187 1.075,425 1,288,784 1,201,212 2,664,292 2,328,936 3,221,140 2,87 * , > 2 5 Construction and investigations in progress; note 3 . . . 1,318,645 1,294,367 1,386,808 1,359,775 Nuclear fuel in process of fabrication . 93,090 63,860 93,090 63,860 Total property, plant. and equipment 4,076,027 3,687,163 4,701.038 4,299,563 CURRENT ASSETS Cash . . .. ..... ... . ........... .......... 63,356 50,763 110,082 86.835 Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,333 61,170 79,241 70,453 Inventories, principal 9 t average cost 140,772 109,323 146,473 114.565 Total current assets . . . . . . . . . . . . . . . . 275,461 221,256 335,796 271,853 DEFERRED CHARGES Unamortized debt discount and expense; note 2 14,478 11,034 14,478 11,034 Other .. . ....... 600 647 600 647 Total deferred charges . . 15,078 11,681 15.078 11,681 Total assets . . . . . . . . . . . . . . . . . . . . . . . . $4,366,566 $3,920,100 $5,051,912 $4,583,097 LIABILITIES PROPRIETARY CAPITAL Appropriation investment; note 4 Total congressional appropriations . _ . . _ . . . . . $1,383.332 $ 1,383,558 $2,637,824 $2,573,274 Transfers of property from other Federal agencies 21,517 21,305 53,701 53,358 1,404,849 1,404,863 2,691,525 2,626,632 Less repayments to General Fund of the U. 3.
Treasury; note 5 . 370,059 350,059 411,674 391,645 Appropriation investment ............ 1,034,790 1,054,804 2,279,851 2,234,987 Retained earnings of power program; page 16 . ..... 823,686 771,050 823,686 771,050 Accumulated net expense of nonpower programs; pages 18 and 19 . .. ........................ - - 582,536* 538,136*
Total proprietary capital . . . . . . . . . . . . 1,858,476 1,825,854 _7 521,001 2,467.901 Loso-TERM DEBT; note 6 .. .. 1,775,000 1,225,000 s,775,000 1,225,000 SuoRT-TERu NOTES; note 6 .. . .... 580,000 730,000 580,000 730,000 OrnER CURRENT LIABILITIES 115,146 102.047 125,654 110,719 Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employees accrued leave . . . . . . . . . . . . . . . . . . . . . . . . 12,871 11,300 23,033 20,977 Payrolls accrued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,104 12,278 8.255 14,879 Interest accrued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,972 12.558 17,972 12,558 Total other current liabilities . . . . . . . . . 152,093 138,183 174.914 159,133 DEFERRED CREDITS Unamortized debt premium; note 2 , 96 165 96 165 CONTRIBUTIONS IN AID or CONSTRUCTION . . . . . . . . . . . . . . 901 898 901 898 CoMurrMENTS; note 3 Total liabilities . . . . . . . . . . . . . . . . . . . . . $4,366,566 $3,920,100 $5,051,912 $4,583,097
- Deduct The notes on pages 20 to 22 are an int:gral part of the financial statements.
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TENNESSEE VALLEY AUTHOIIITY POWElt PItOGRA31 NET INCOME AND itETAINED EARNINGS For the Years Emical June 30,1973 aml 1972 1973 1972 (Thousands)
OPERATING REsENUES Sales of electric energy 5!unicipalities and cooperatives $476,354 $415,349 Federal agencies 103,166 73,255 Industries 144,732 124,308 Electric utilities 791 6,250 Total outside sales 725,043 619,162 Interdisisional 3,988 3,429 Total sales of electric energy 729,031 622,591 Rents . . 20,349 19,272 Total operating revenues 749,380 641,863 OPERAl!NG EXPLNsLS Production 408,765 325,567 Transmission 18,921 17,779 Customer accounts 498 442 Demonstration of power use 1,272 1,158 Administrative and general 27,379 24,031 Payments in lieu of taxes 27,310 25,726 Social security taxes 3,816 3,210 Provision for depreciation 89,468 83,399 Total operating expenses 577,429 481,312 Operating income 171,951 160,551 OlitLR INCONil AND DI DUClioNS Interest income 25 54 Allowance for funds used (construction and nuclear fuel); note 2 73,357 52,023 Other, net 418 164*
Total other income and deductions . . 73,800 51,913 Income before interest charges 245,751 212,464 INTLREsT CilARGLS Interest on long-term debt 111,399 69,028 Other interest expense; note 2 27,642 31,140 Amoitization of long-term debt discount, expense, and premiua, net; note 2 289 172 Total interest charges 139,330 100,340 Net income .. . .. ... .......... 106,421 112,124 Payment of return on appropriation investment; note 5 . 53,785 55,810 increase in retained earnings . 52,636 56,314 Retained earnings at beginning of period ... . .. 771,050 714,736 Retained earnings at end of period $823,686 $771,050
- Deduct The notes on pages 20 to 22 are an i"egral part of the financial statements.
16
TENNESSEE VALLEY AUTIIORITY CIIANGES IN FINANCIAL POSITION For the Years Ended June 30.1973 and 1972 Power program All programs SoCRCE OF FUNos 1973 1972 1973 1972 Frogram sources (nousands)
Net power income; page 16 . .. .. ... ... $ 106,421 5 112,124 $ 106,421 $ 112,124 Add items not requiring funds; note a 16.241 31.931 16,241 31,931 Funds from power operations 122,662 144.055 122,662 144,055 Sale of power facilities .. 665 480 665 480 Funds from power program; note b . 123,327 144,535 123,327 144,535 Net expense of nonpower programs; pages 18 and 19 . 44,400* 44,008' Add items not requiring funds; note a 7,547 10,270 Funds used in nonpower operatior.s . 36,853' 33,738' Sale of nonpower facilities . 1,131 564 Funds used in nonpower programs . .. . . 35,722' 33,174*
Debt sources Long-term bonds issues . 548,069 547,034 548,069 547,034 Short-term notes issues 1,520,000 2,020,000 1,520,00d 2,020,000 Redemptions 1,670,000* 2,070,300* 1,670,000* 2,070,300*
Total debt sources 398,069 496,734 _ 398,069 496,734 Other sources Congressional appropriations . 226* 3,359 64,550 67,150 Propera transfers 212 228 343 414 Contributions in aid of construction . . . 3 117 3 117 Total source of funds . $ 521,385 $ 644,973 $ 550,570 $ 675,776 DISPOSITION OF FUNDS Expended for plant and equipment, excluding allowance ror funds used S 407,7 3 $ '38,165 $ 431,436 $ 559,033 Less salvage from plant transfers, and depreciation charged to construction and clearing accounts 2,282 2,676 4,714 5,053 405,433 535,489 426,722 553,980 Payments to U. S. Treasury; note 5 Return on appropriation investment . . .
53,785 55,810 53,785 55,810 Repayment of appropriation investment 20,000 20,000 20,029 20,034 73,785 75,810 73,814 75,844 7eferred charges, net .
. .... 1,872 1,119' I,872 1,119'
.'hanges in working capital; note c . 40,295 34,793 48,162 47,071 Total disposition of funds $ 521,385 $ ti44,973 $ 550,570 $ 675,776 Notts:
- a. Items not requiring funds: Power Nonpower Provisions for depreciation S 89,468 $ 83,399 $ 7,600 $ 6,714 Pravisions for depletion 211 104 10 14 Loss or gain
- on retirements and disposals of property, plant, and equipment, net 418* 164 63* 3,542 Amortization of deferred charges and credits, net 337 287 - -
Allowance for funds used (construction and nuclear fuel) 73.35_7' 52,023* - -
$ 16.241 $ 31.931 $ 7,g $ 10,270 b, Net power proceeds (see note 6) may be derived as follows:
Funds from power program $ 123,327 $ 144,535 Add back interest charges 139,041 100,168 Net power proceeds 5 262.368 $ 244,703
- c. Components of changes in working capital:
Cash $ 12,593 $ 29,994 $ 23,247 $ 42,853 Accounts receivable 10,163 6,634 8,788 7,810 Inventories 31,449 26,191 31,908 26,096 54.205 62,819 63,913 76,759 Less other current liabilities . 13,910 28.026 15,781 29,688
$ 40,295 $ 34,793 $ 48,162 $ 47,071
- Deduct The notes on pages 20 to 22 are an integral part of the financial statements.
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TENNESSEE VALLEY AUTIlOltlTY NONPOWElt PltOGitMIS NET EXI'ENSE AND ACCU 31CLATED NET EXi'ENSE For line Years Eruleil Jiirie 30,1973 azul 1972 1973 1972 WATER RtsocRcts DEsLLoPMENT (Thousands)
Navigation operations Studies and investigations S 975 $ 823 Operation and maintenance of facilities 4,985 4,926 Total expense of navigation operations 5,960 5,749 Flood control operations Studies end insestigations 1,166 899 Operation and maintenance of facilities 3,930 3,914 Local flood control improvements 7 68 Total expense of 11ood control operations 5,103 4,881 Recreation projects Recreation resources development 682 736 Operation and maintenance of facilities 1,785 1,498 Total expense of recreation projects 2,467 2,234 Regional water quality management 1,563 1,545 I~isheries and waterfowl resources deselopment 494 338 preliminary surveys and engineering (including in 1973, $ 2,065,000 related to abandoned projects) 2,526 547 Total expense of water resources development 18,113 15,294 FERIluztR AND MUNiiloNS DEVLLoPMENT Developmental production Cost of products distributed 26,912 23,090 General expenses Loss on retirements of manufacturing plant and equipment, net 71 3,533 1.oss or adjust.nents' on disposal of spare parts from inventory, net 41* 105 Loss or gain
- on sale of phosphate reserves, net 134* 9 Other general expenses 1,059 1,431 Total general expenses . 955 5,078 Total production expense 27,867 28,168 Less transfers and sales of products Transfers to TVA programs, at market prices Fertilizer industry demonstrations 19,748 14,974 Farm test demonstrations 345 280 Agricultural projects . 169 178 O'act . . . 61 37 20,323 15,469 Direct sales . 70 146 Total transfers and sales 20,393 15,615 Net expense of developmental production 7,474 12,553 Fertilizer introduction Fertilizer industr' demonstrauua Fertilizer, used . 19,748 14,974 Educational distribution expense 1,291 1,298
~2',039 16,272 less industry payments for fertilizer , 19,094 14,393 1,945 1,879 Farm test demonstrations outside the Valley Fertilizers used 345 280 Planning and supervision 624 503 969 783 less farmer payments for fertilizer 192 190 777 593 Net expense of fertilizer introduction. 2,722 2,472 Research and development . . . . .. .., . 5,553 5,059 Net expense of fertilizer and munitions development 15,749 20,084
~
18
TENNESSEE VALLEY AUTIIOIIITY NONPOWElt PitOGitAMS Sl;T EXPEN5E AND AEEt31tlL tTED NET EXPENSE For tlie Years Enileil June 30,1973 an<1 1972 (Continued) 1973 1972 GENLP AL RLsocacts DEVELOP!.f LNT (Thousands)
Agricultural projects Agricultural devele,rraent Fertilizers used $ 169 $ 178 Planning and supervision 909 952 1,078 1,130 Less farmer pa3 ments for fertilizer 90 114 988 1,016 Development insestigations and general expenses 509 438 Net expense of agricultural projects 1,497 1,454 I orest and wild land resources development '67 1,235 Tributary area development i 55 1,668 Regional development planning 914 558 Townlif t commurnty improvement 723 480 Demonstrations in education and manpower deMorment 803 139 Minerals projects 274 213 Environnaental quality projects 430 332 Net expense of general resources development 7,763 6,079 LAso Betwns Tiit LAKLs OPrRATIONS 2,306 1,972 VALLEY MAPPING 469 499 Onita EXPESSE, NET -
80 Net expense 44,400 44,008 Accumulated net expense at beginning of period , 538,136 494,128 Accumulated net expense at end of period $ 582,536 $ 538,136
- Deduct The notes on pages 20 to 22 are an integral part of the financial statements.
19
TENNESSEE VALLEY AUTIIORITY NOTES TO FINANCIAL STATE 31ENTS
- 1. Allocation of cost of multipurpose projects-Section 14 of the TVA Act requires TVA's Board of Directors to allocate the cost of completed multipurpose projects, subject to the approval of the President of the United States.
The cost of facilities installed exclusively for a single purpose is assigned directly to that purpose; the cost of multiple-use facilities is allocated amonp the various purposes served.
The total investment of $1,014,358,000 in completed multipurpose dams at June 30,1973, is classified as follows:
Investment Direct Multiple-use Total G housands)
Power . $312,163 $ 177.272 $ 489,435 Navigation 151,i14 136.723 287,837 Flood control 59,656 135,133 194,789 Recreation .
267 24,428 24,695 Tributary area development 20 17.582 17,602 Total . $523,220 $491,138 $ 1,014,358
- 2. Accounting policies-Straight-line depreciation is prow:d for substantially on a composite basis. Except for chemical plant, plant retirements (including original and removal costs less salvage) are charged against appropriate accumulated depreciation accounts. Because of ths. experimental nature of fertilizer and munitions development, losses on early retirements of chemical plant are included in current year operations. Rates of depreciation are derived from engineering studies of useful life and are reviewed each 3 ear. Depletion of coal land and land righu and phosphate land and mineral rights is provided on a unit of production basis.
The practice of capitalizing an allowance for funds used during construction and during the fabrication of nuclear fuels is followed in the power program. The rate is established at the beginning of each 6-month period on the basis of the cost of borrowings during the preceding 12 months. Rates used were 6.0 percent and 6.0 percent during 1973 and 5.4 percent and 5.5 percent during 1972.
Discounts, expenses, and premiums on power borrowings are amortized on a straight-line basis over the term of the related sectrities. Amortization of discount on short-term notes is charged to other interest expense.
- 3. Estimates of cost to complete major construction proj: cts, and commitments-The cost to complete the maior power projects (including nuclear fuel) inder construction or authorized for construction at June 30, 1973, is estimated to be $4,545,100,000, including commitments of $1,328,900,000 for materials and services contracted for and not delivered. The corresponding estimate for multipurpose and nonpower projects is $148,400,000, including commit-ments of $3,300,000.
TVA and the City of hfemphis, Tennessee, have entered into agreements under which (1) TVA sells to the City all the power and energy requirements of its electric distribution system, and (2) the City leases to TVA the Thomas 11. Allen steam-electric generating plant with an installed capacity of 990.000 kilowatts; each agreement is for a term of 20 years, beginning January 1, 1965. The lease agreement provides for annual sental payments of
$6,900,000 and grants TVA an option to buy the plant for $2,000,000 at the end of the lease term.
On June 22,1972, the TVA 1 oard of Directors approved a Utility Contribution Agreement with Breeder Reactor Corporation (HRC), a District of Columbia nonprofit corporation. The agreement oNigates TVA to pay to Breeder Reactor Corporation the sum of $21.7 million over a 10-year period with equal annual payments beginning December 31, 1972, and ending December 31.1981. The payment is on behalf of TVA and its distributors in support of the Nation's first commercial-scale liquid metal fast breeder reactor demonstration plant project, At June 30, 1973, the remaining commitment was $18,445,000.
- 4. Appropriation investment-Changes in appropriation investment during the years ended June 30,1973 and 1972, were as follows:
Power program All programs 1973 1972 1973 1972 (Thousands)
Congressional appropriations -._ . 5 226* $ 3,359 $ 64,550 $ 67,150 Transfers of property from other Federal agencies ........... . ............ 212 228 343 414 Less repayments to General Fund of the U. S. Treasury . . . . . . . . . . . . . . ..... 20,000 20,000 20,029 20,034 Increase or decrease
- for the period 20,014* 16,413* 44,864 47,530 Halance, beginning of period 1.054,804 1,071,217 2,234,987 2,187,457
- Balance, end of period . . . . . ... $ 1.034,790 $ 1,054,804 $2.279,851 $2,234,987
- Deduct An additional appropriation of $45,676,000 was made as of July 1,1973, by Public Law 93-97, approved August 16,1973.
20
TENN'ESSEE VALLEY AUTIIORITY NOTES TO l'INANCIAL STATEMENTS-(Camtinued)
- 5. Payments to the U. S. Trcainry -Section 15d cf the TVA Act requires the payment from net power proceeds of a return on the net appropriation 'mvestment ia power ft.cilities plus repayments of such investment, beginning with fiscal year 1961. T he amount of return payable during each year is based on the appropriation investment as of the beginning of that Scar and the computed average interest rate payabl,: by the U. S. Treasury on its total marketable public obligations as of the same date. T he repayment schedule calls for payment of not less than 510 million for each of the first five years (1961-1965), 515 milhon for each of the next five 3 ears (1966-1970), and
$20 million for each 3 ear thereafter until a total of 51 billion shall have been repaid. The pa> ments required by Section 15d may be deferred under certain circumstances for not more than two 3 ears.
Required payments have been made as follows:
Return Repayment Total (Thousands)
Total to June 30. 1972 $569,203 5165,000 $724,203 Year ended June 30, 1973 53,785 20.000 73,785
$622,958 $185,000 $507,988 For 1974, the required pay ments will be 563.422.000 as a return on the appropriation investment at the computed aserage interest rate of 6.129 percent and $20,000.000 as a repayment, a total of 583,422,000.
In addition to the pay ments from net powcr proceeds, $29.000 of nonpower proceeds was paid to the U. S.
Treasury in 1973, under the prosisions of Section 26 of the TVA Act. This brought the total payments from non-power proceeds to $41,615,000.
Prior to 1961. under then existing legislation, TVA paid to the Treasury $185,059,000 of power proceeds. In addition to the repayments indicated on page 15. 565.072.000 of bonds sold to the Treasury and Reconstruction Finance Corporation in fiscal years 1939-1941 have been fully repaid from power proceeds. Section 26 of the TVA Act provides for annual payments to the Treasury of any power or nonpower proceeds not needed for the operation of dams and reservoirs, the conduct of the power program, and the manufacture and distribution of fertilizers.
- 6. Borrowing aterhority-Section 15d of the TVA Act authorizes TVA to issue bonds, notes, and other evidences of indebtedness up to a total of 55 billion outstanding at any one time to assist in financing its power program.
Debt service on these obligations, which i, payable solcly from TVA's net power proceeds, has precedence over the pay ments to the U. S. Treasury described in note 5. Issues outstandmg on June 30,1973, consist of the following:
Long-term debt (Thousands) 4.40 % 1960 Series A, due November 15, 1985 . . . . $ 50,000 45,s % 1961 Series A, due July 1, 1986 50,000 4%% 1962 Series A, due 1 ebruary 1,1987 45,000 5.70 % 1967 Series A, due May 15, 1992 70,000 63s % 1967 Series B, duc November 1,1992 60,000 8% 1969 Series A, due June 1,1974 (to be refinance i 100,000 8ti% 1969 Series B, due October 15, 1994 100,000 9% 1970 Series A, due March 15, 1995 100,000 914 % 1970 Series B, due June 15, 1995 50,000 8%% 1970 Series C, due June 15, 1975 . . . 50,000 739 1971 Series A, due July 1,1976 ... . 100,000
- 7. 3 0 'c 1971 Series B, dae October 1,1996 150,000 79 1972 Series A due January 1,1997 . .. . 150,000 7.35 % 1972 Series B, due May 1,1997 . 150,000 7.35 % 1972 Series C, due July 1,1997 150,000 7.40 % 1972 Series D, due October 1,1997 150,000 7.35 % 1973 Series A. due January 1,1998 100,000 7.35 % 1973 Series B, due April 1,1998 150,000 Total long-term debt . .. 1,775,000 Short-term notes Payable to U. S. Treasury . . .. . . .. 100,000 Payable to public .. .... . . . .... . . .. 480,000 Total short-term notes . .... . .... 580.000
$2,355,000 An additional bond issue, 7% % 1973 Series C, due July 1,1998, in the amount of $150,005000 was sold m July 1973.
21
TENNESSEE VALLEY AUTIIOIIITY NOTES TO FINANCIAL STATEMENTS-(Continued) 7 Retirement plun-TVA has a contributory retirement plan which covers substantially all of its salaried employees. The cost of currently accruing benefits is funded currently, and the unfunded prior service cost is being amortized and funded over a period of 33 years from July 1,1972. The cost of the plan to TVA for the years ended June 30,1973 and 1972, was $18,683,000 and $16,813,000, respectively.
- 8. Litigation-On December 2,1971, the Environmental Defense Fund and other plaimiiTs filed suit to enjoin construction of the Tellico project on various grounds, incluJing alleged failure to comply with the National Environ-mental Policy Act by, among other things, not filing an Environmental Impact Statement for the project. On January 11,1972, the > nited States District Court for the Eastern District of Tennessee issued a limited preliminary injunction, pending trial, enjoir-ing certain phases of work on the project, but :J10 wing other actisities to go forward. Thereafter,
~IVA filed an Environmental Impact Statement for the Tellico project, and the trial to determine the adequacy of that statement and other questions raised by the plaintiffs is to begin on September 17, 1973. For events subsequent to August 24, 1913, see " Construction Program" on page 8.
On July 5,1972, the Environmental Defense Fund and other plaintitis filed suit to enjoin TVA from constructing the Duck River project, consisting of the Normandy and Columbia Dams, on various grounds, including alleged failure to comply with the National Ensironmental Policy Act by, among other things, filing an Environmental Impact Statement for the project which plaintitTs claimed was inadcquate. The action was filed in the United States District Court for the Eastern District of Tennessee. Northern Disision, but was transferred to the Winchester Division of that Court. TVA filed a motion to dismiss the action or in the alternative for summary judgment. The motion was granted except as to the cause of action based on an alleged violation of the National Environmental Policy Act. The case has been set for trial during January 1974. Work on the project is proceeding as scheduled.
With respect to both of the above cases, counsel for TVA believe that the National Environmental Policy Act and all other applicable laws have beer :omplied with and that the actions are witbout merit.
On May 26,1972, TVA Eed a condemnation action in the United States District Court for the Northern District of Alabama, Northeastera Disision, to acquire i,174 acres of land in Jackson County, Alabama, known as the Bellefonte site, " tor and as a part of an inventory of sites for electric generating plants." Defendants filed an answer in which they raised 34 objections and defenses to the taking. In substance they are that TVA lacks statutory and constitutional authority to acquire the property. that it is not being acquired for a public use, and that the taking is unnecessary, an abuse of discretion, and in siolation of the National Ensironmental Policy Act of 1969. TVA filed a motion to strike such defenses and objections on the ground that they are insufficient as a matter of law. No court ruling b ts been made on this motion. Counsel for TVA believe that the defenses are without merit.
22
PURCHASERS The Purchasers named below have severally agreed to purchaa from TVA the following respective principal amounts of the New Series Bonds:
Principal Purchaser Address Amount The Chase hfanhattan Bank, N.A. 1 Chase 5f anhattan Plaza, New York, N. Y.10015 $ 16,650,000 Chemical Bank 20 Pine Street, New York, N. Y.10015 12,500,000 The First National Bank of 5!emphis 165 hf adison Avenue, N1emphis, Tenn. 38101 11,500,000 Bear, Stearns & Co. I Wall Street, New York, N. Y.10005 12,500,000 Wm. E. Pollock & Co., Inc. 160 Water Street, New York, N. Y.10038 8,500,000 lialsey, Stuart & Co. Inc. 135 South La Salle Street, Chicago, Ill. 60690 11,500,000 Smith, Barney & Co. Incorporated . . .
1345 Avenue of the Americas, New York N. Y.10019 5,000,000 White, Weld & Co. Incorporated 1 Liberty Plaza New York, N. Y.10006 5,000,000 Altgelt & Company Incorporated 45 Wall Street, New Yor k, N. Y.10005 1,250,000 City National Bank of Detroit Penobscot Building, Detroit. Alichigan 48/26 1,250,000 New York IIanseatic Corporation 60 Broad Street, New York, N. Y.10004 1,250.000 Nomura Securities International. Inc. 100 Wall Street, New York, N. Y.10005 1,250,000 Third National Bank P. O. Hot 76, Nashville, Tenn. 37202 1.000,000 Craigie, Slason liagan, Inc. 616 East Slain Street, Richmond, Va. 23215 750,000 a.S. liart and Company, Inc. 44 North Second Street, Niemphis, Tenn. 38103 750,000 La Salle National Bank 135 South La Salle Street, Chicago, Ill. 60690 750,000
$1cDonald & Company 2100 Central National Bank Bldg., Cleveland, Ohio 44114 750,000 Prescott, Ball and Turben i Battery Park Plaza, New York, N. Y.10004 750,000 Simmons First National Bank of Pine Bluff P. O. Box 7009, Pine Blu!T, Ark. 71601 750,000 Stone & Youngberg One Cahfornia Strett, San Francisco, Cal. 94111 750,000 UN11C. Inc. P. O. lu 247, * ;mphis. Tenn. 38101 750,000 Equitable Securities Corporation 404 James Robotson Pkwy., Nashville, Tenn. 37219 400,000 First National Bank in St. Louis P. O. Box 267, St. Louis, 510. 63166 400,000 Stanufacturers Bank P. O. Bot 600, Los Angeles, Cal. 90055 400,000
.g.
Sterne, Agee & l.each, Ine 706 First National Bldg., Birmingham, Ala. 35203 400,000 Wachovia Bank & Trust Company, N.A. P. O. Box 3099, Winston. Salem, N. C. 27102 400,000 Deposit Guaranty National Bank P. O. Box 1200, Jackson, Sliss. 39205 300,000 51ullaney, Wells & Company 33 N.
Dearborn Street,
Chicago, Illinois 60602 300,000 The Cherokee Securities Company 95 White Bridge Road, Nash5ille, Tenn. 37205 250,000 51cAlaster, Ilutchinson & Co. 150 South Wacker Drive, Chicago, Ill. 60606 250,000 hlunicipal Securities, Incorporated 1192 Starlin Road,5!cmphis. Tenn. 38116 250,000 Raffensperger, Ilughes & Co., Inc. 20 North 51eridian Street. Indianapolis, Ind. 46204 250,000
- 51. A. Saunders & Co. 51unicipal Bonds 1205 Union Planters Bank Building, Y dis,
'lenn. 38103 250,000 Elkins, Aforris, Stroud & Co. Stock Exchange Bldg.,17th & Sansom bets, Philadelphia, Pa.19103 200,000 Rodman & Renshaw, Inc. 209 South La Salle Street, Chicago, Illinois 60604 200,000 Schmidt, Roberts & Parke, Inc. 123 South Broad Street, Philadelphia, Pa.19109 200,000 Sammers & Company, Inc. 710 Lincoln Tower, Fort Wayne, Ind. 46802 200,000 First Slid America Inc. 100 Continental Bldg., Omaha, Neb. 68102 100,000 R. J. Edwards, Inc. City National Bank Tower. Oklahoma City, Okla. 73102 100,000
$100,000,000 Through their Representatives, The Chase Manhattan Bank, N. A., Chemical Bank, The First National Bank of Memphis, Bear, Stearns & Co., Wm. E. Pollock & Co., Inc., Halsey, Stuart & Co Inc.,
Smith, Barney & Co. Incorporated and White, Weld & Co. Incorporated, the several Purchasers of the New Series Bonds have advised TVA as follows:
The Representatives, or the several Purchasers with the consent of the Representatives, may allow a selling concession of .25 of 1G of the principal amount of the New Series Bonds to certain Selected Dealers and the several Purchasers and such Selected Dealers may allow a con-concession of .125 of 1% of the principal amount of the New Series Bonds to members of the National Association of Securities Dealers, Inc. or to certain foreign dealers. After the initial public offering the public offering price and concessions may be changed, 23
,