TVA Reports First Quarter FY2014 Results
KNOXVILLE, Tenn. ― The Tennessee Valley Authority reported Tuesday that operating expenses declined and its bottom line results improved in the first quarter of fiscal year 2014 compared with the same quarter a year ago.
“Our efforts to keep rates low and reliability high for our customers by working more efficiently helped to offset lower sales and revenues reported in the first quarter of 2014,” TVA President and CEO Bill Johnson said.
TVA reported a $67 million net loss on operating revenues of $2.38 billion in the first quarter of 2014, an improvement over a $245 million loss on revenues of $2.58 billion for the same period last year.
TVA’s first-quarter filing to the U.S. Securities and Exchange Commission covered the three months ended Dec. 31, 2013, a period between summer and winter when lower demand for electricity typically results in a net loss.
Compared with last year, operating and maintenance expenses were down $112 million, or 12 percent, in the first quarter of 2014. This was driven by a $91 million decrease in expenses from planned outages, projects and scheduled maintenance, and a reduction in contract labor through cost-saving initiatives. A $10 million increase in coal-fired operation outages partially offset the O&M savings.
“We continued to see positive results from our efforts to achieve sustainable operating and maintenance cost reductions during the first quarter,” Chief Financial Officer John Thomas said. “The actions we are taking now help position TVA to remain financially healthy and meet our goal of reliable, low-cost and cleaner energy for the people of the Valley.”
Total operating expenses were 14 percent lower than the same period last year, driven primarily by a 32 percent decrease in fuel expenses. TVA’s nuclear and hydroelectric generation increased 29 percent and 30 percent, respectively, compared to the first quarter of last year, helping to drive the lower fuel costs. A 2 percent increase in purchased power expense also partially offset higher gas prices.
Operating revenues, impacted by lower fuel recovery costs, were $197 million lower compared with last year’s first quarter. TVA’s use of less-expensive nuclear and hydroelectric generation helped reduce fuel costs recovered through rates by $255 million, a decrease partially offset by a $60 million increase in base revenue.
“We were pleased to see such strong performance from our nuclear and hydro power assets and our entire fleet during the quarter, helping us provide low-cost reliable power,” said Johnson. “This demonstrates the value and flexibility of TVA’s well-diversified power system.”
Total electricity sales were down 3 percent for the quarter, primarily due to the loss of TVA’s largest directly served customer. But sales to local power companies were 7 percent higher as a result of cooler weather than a year ago and some growth in electric demand.
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Last Update on September 04, 2015 07:33 GMT
ECONOMY-THE DAY AHEAD
WASHINGTON (AP) -- Today's Labor Department jobs report for August, a key gauge of how the U.S. economy is doing, could play a big role in guiding an upcoming decision by the Federal Reserve. The Fed will decide this month whether it will raise U.S. interest rates for the first time since the financial crisis.
While chances of a September interest rate increase have diminished because of signs of weakening global growth and a sell-off in Chinese stocks, many believe the growing U.S. economy may be ready to withstand higher interest rates.
Economists are forecasting that employers created 220,000 jobs last month and that the unemployment rate fell to 5.2 percent.
The Fed's two-day meeting begins Sept. 16.
STAR WARS MARKETING
NEW YORK (AP) -- The release of the new Star Wars movie may still be months off, but Disney is unleashing its full marketing "Force" behind the launch of hundreds of toys and other items related to the film.
The massive marketing blitz, which Disney has named "Force Friday," spans all kinds of media and included an 18-hour global "unboxing" streamed live on YouTube. Meanwhile, major toy retailers planned to be open and hold special events when the toys first became available just after midnight Friday.
The marketing push behind "Star Wars: Episode VII - The Force Awakens," is unique because it's so far ahead of the movie's U.S. release, 116 days to be exact. But analysts say it can work because Star Wars is such a popular franchise.
KRAFT HEINZ-EXPANDED RECALL
NEW YORK (AP) -- Kraft Heinz is expanding a recall of Kraft Singles products, saying a problem with the packaging film affects 10 times as many cases as it first thought.
The company recalled 335,000 cases Thursday because a thin strip of packaging film may stick to the slice after the wrapper has been taken off, creating a choking hazard. Kraft Heinz took 36,000 cases off the market July 31 for the same reason.
The privately-held company said it's received two new reports of customers choking. It disclosed three such reports in July.
The recall covers 1-, 3- and 4-pound Kraft Singles American and White American cheese product sold in the U.S., Puerto Rico, and 10 other countries and territories. The cases have "Best When Used by Dates" from Dec. 29 through Jan. 4.
HIDDEN GULF SPILL
NEW ORLEANS (AP) -- Environmental groups have signed a settlement agreement to resolve their lawsuit against a New Orleans company that has failed to end a decade-old oil leak in the Gulf of Mexico.
The agreement was filed Thursday in federal court. Taylor Energy Company announced details of the pact in a news release last week, before it was finalized.
The New York-based Waterkeeper Alliance says the company will release more information about its efforts to stop oil from leaking at the site where one of its offshore platforms toppled during Hurricane Ivan in 2004.
Taylor Energy also agreed to donate $300,000 to a Louisiana marine research consortium and pay an additional $100,000 for research on the ecological effects of Gulf oil pollution.
The alliance sued the company in 2012 over its secretive response.
DALLAS (AP) -- Southwest Airlines says it has reached an agreement with union negotiators on terms for a new contract with pilots, whose approval would be needed before it takes effect.
Terms weren't disclosed on Thursday.
Leaders of the Southwest Airlines Pilots' Association are expected to meet later this month to decide whether to hold a ratification vote. Southwest Vice President Craig Drew says the process is far from complete but the company is pleased to have this agreement.
Southwest has about 8,000 pilots. It's the nation's fourth-biggest airline, and 83 percent of its workers are represented by unions, according to a recent regulatory filing.
Shares of Dallas-based Southwest Airlines Co. fell 29 cents to close at $37.43. They have fallen 12 percent this year.
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