Dave Flessner

Dave Flessner from the Chattanooga Times Free Press asked for historical context on the projected $12 billion in capital spending over the next three years, its purpose, and the expected impact on future debt levels. He also inquired about the status of TVA's pension fund and the factors contributing to its 77% funding level.

Answer

Chief Financial and Strategy Officer John Thomas clarified that the $12 billion is for capital projects and will be funded through operating cash flow and power volumes. He noted the projected $4 billion annual spend is higher than the previous peak of $3 billion and will cover fleet maintenance, ash remediation, and capacity expansion. He projected debt would increase by about $1 billion annually for a few years. Regarding the pension, he attributed the rise to 77% funding to steady progress and the positive impact of higher interest rates on the discount rate for long-term liabilities.

David Flessner of the Chattanooga Times Free Press inquired about the future trajectory of the Tennessee Valley Authority's Total Financial Obligations (TFO), asking if the current $20 billion level is the new target or if further debt reduction is planned amid new technology investments.

Answer

Chief Financial and Strategy Officer John Thomas explained that the low $20 billion TFO range is considered a healthy and stable level, aligning with their 20-year partnership agreements. He anticipates that while debt will level out in the short term, it will increase slightly over the next decade to finance the energy fleet's transition without significant hikes.