EX-99.1 3 tva-exhibit.htm MATERIALS USED IN MR. KILGORE'S 11/20/07 PRESENTATION

tva-exhibit.htm

Issues Impacting Fiscal Year 2008 Rates

•Fuel

•Purchased Power

•Hydro Generation

•Capacity

Cumulative Rainfall (Inches)

Hydro generation is 70.5% below
budget for the current week and
62.4% below budget for the
FYTD. This has resulted in
increased purchased power volume
of 42.8% for the FYTD. 

FY2008 Estimated Dollar Impact of Volume Variances
by Fuel Type (Actual versus Budget)

Deliverability issues
prevent transmission from
assets in Entergy to TVA.

TVA area reserve margin
includes uncommitted IPPs.

Shrinking Reserve Margins

Peaking capacity

• Low capacity factor <15%

• Low capital costs

• High variable energy costs

Risk Mitigation:

• Reduced Market exposure

• Capacity Price Stabilization

• Reserve Requirements

• Control of Reliability and Deliverability

Intermediate Capacity

• Capacity factor <15-60%

• Moderate capital costs

• Lower HR drives lower variable energy costs
but dependent on gas price

Risk Mitigation:

• Reduced Market exposure

• Capacity Price Stabilization

• Energy Price Stabilization

• Control of Reliability and Deliverability

Base Load

• Capacity factor  > 60%

• Higher capital costs

• Lower variable energy cost

Risk Mitigation:

• Reduced Market exposure

•  Energy Price Stabilization

• Control of Reliability and Deliverability

Peaking and Intermediate Capacity

Raw material price escalation is impacting equipment and finished
material supply costs.

Raw Material Cost Escalation Trends

Summary