The Tennessee Valley Authority lost $240 million this spring from the extra expenses caused by tornadoes, nuclear plant shutdowns and the settlement of a decade-old environmental dispute.
The quarterly loss -- one of the biggest ever for the federal utility -- pushed TVA into the red for the first nine months of its fiscal year. In the same period a year ago, TVA earned $779 million.
In its quarterly financial report for the three months ending June 30, TVA said it suffered an estimated $139 million in equipment and power generation losses from the tornadoes that ripped through the Tennessee Valley on April 27.
TVA had to shut down its biggest nuclear power plant and replace much of its transmission grid in Alabama following the deadly twisters. Replacing the power lost when the Browns Ferry nuclear plant was idled for most of May cost TVA an unanticipated $95 million, according to TVA's quarterly financial report.
TVA Chief Financial Officer John Thomas also blamed increases in employee benefit expenses and the cost of an air pollution settlement with the U.S. Environmental Protection Agency for the quarterly loss.
Under an agreement announced in April with EPA and environmental groups, TVA agreed to idle its oldest coal power plants, pay civil penalties of $10 million and invest $290 million in energy efficiency projects, demand response projects and renewable energy projects.
While expenses grew from storms and lawsuits, TVA electricity sales were hurt this spring by unfavorably warm weather and a cooler economy, Thomas said in his report. TVA power sales were down 4.7 percent from a year ago during the most recent fiscal quarter.
TVA directors will meet Thursday in Knoxville to adopt a budget for fiscal 2012. To make up for the financial losses this year, and absorb expenses for new generation and transmission equipment, TVA is expected to propose an increase in its power rates, according to TVA officials and distributors who have met with top managers.
TVA spokesman Scott Brooks said the board will adopt a budget for next year, but he said no details have yet been released about the size of any rate increase.
Dave Flessner is the business editor for the Times Free Press. A journalist for 35 years, Dave has been business editor and projects editor for the Chattanooga Times Free Press, city editor for The Chattanooga Times, business and county reporter for the Chattanooga Times, correspondent for the Lansing State Journal and Ingham County News in Michigan, staff writer for the Hastings Daily Tribune in Nebraska, and news director for WCBN-FM in Michigan. Dave, a native ...