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<SEC-DOCUMENT>0001376986-09-000055.txt : 20090603
<SEC-HEADER>0001376986-09-000055.hdr.sgml : 20090603
<ACCEPTANCE-DATETIME>20090603104225
ACCESSION NUMBER:		0001376986-09-000055
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20090603
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20090603
DATE AS OF CHANGE:		20090603

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Tennessee Valley Authority
		CENTRAL INDEX KEY:			0001376986
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				620474417
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-52313
		FILM NUMBER:		09870191

	BUSINESS ADDRESS:	
		STREET 1:		400 WEST SUMMIT HILL DRIVE
		CITY:			KNOXVILLE
		STATE:			TN
		ZIP:			37902
		BUSINESS PHONE:		865-632-2101

	MAIL ADDRESS:	
		STREET 1:		400 WEST SUMMIT HILL DRIVE
		CITY:			KNOXVILLE
		STATE:			TN
		ZIP:			37902
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
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<DESCRIPTION>TENNESSEEVALLEYAUTHORITYTHOMASTESTIMONY
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telephone number, including area code)</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:</font></div>
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communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)</font></div>
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material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)</font></div>
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communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))</font></div>
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communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))</font></div>
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      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
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            <hr style="COLOR: black" noshade size="2">
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        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
        </div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
7.01&#160;&#160;Regulation FD Disclosure</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On June
3, 2009, John M. Thomas III, Vice President and Controller of TVA, testified
before the United States House Committee on Transportation and Infrastructure
Subcommittee on Water Resources and Environment.&#160;&#160;A copy of Mr.
Thomas&#8217;s testimony is furnished as Exhibit 99.1.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
furnished material contains forward-looking statements relating to future events
and future performance.&#160;&#160;All statements other than those that are
purely historical may be forward-looking statements.&#160;&#160;In certain
cases, forward-looking statements can be identified by the use of words such as
&#8220;may,&#8221; &#8220;will,&#8221; &#8220;should,&#8221; &#8220;expect,&#8221; &#8220;anticipate,&#8221; &#8220;believe,&#8221; &#8220;intend,&#8221; &#8220;project,&#8221;
&#8220;plan,&#8221; &#8220;predict,&#8221; &#8220;assume,&#8221; &#8220;forecast,&#8221; &#8220;estimate,&#8221; &#8220;objective,&#8221; &#8220;possible,&#8221;
&#8220;probably,&#8221; &#8220;likely,&#8221; &#8220;potential,&#8221; or other similar expressions.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Although TVA believes that the
assumptions underlying the forward-looking statements are reasonable, TVA does
not guarantee the accuracy of these statements.&#160;&#160;Numerous factors
could cause actual results to differ materially from those in the
forward-looking statements.&#160;&#160;Some of these factors are listed in the
Forward-Looking Information section in TVA&#8217;s Quarterly Report of Form 10-Q for
the quarter ended March 31, 2009.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Additionally, other risks that may
cause actual results to differ materially from the predicted results are set
forth in Item 1A, Risk Factors and Item 7, Management&#8217;s Discussion and Analysis
of Financial Condition and Results of Operations in TVA&#8217;s Annual Report on Form
10-K for the fiscal year ended September 30, 2008, and in Part I, Item 2,
Management&#8217;s Discussion and Analysis of Financial Condition and Results of
Operations, and Part II, Item 1A, Risk Factors, in TVA&#8217;s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2009.&#160;&#160;New factors emerge
from time to time, and it is not possible for management to predict all such
factors or to assess the extent to which any factor or combination of factors
may impact TVA&#8217;s business or cause results to differ materially from those
contained in any forward-looking statement.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>TVA undertakes no obligation to update
any forward-looking statement to reflect developments that occur after the
statement is made or for any other reason.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
9.01&#160;&#160;Financial Statements and Exhibits</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div>
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            <tr>
              <td align="left" valign="top" width="13%" style="BORDER-TOP: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
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      NO.</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">DESCRIPTION
      OF EXHIBIT</font></div>
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              <td valign="top" width="13%" style="BORDER-BOTTOM: black 2px solid">
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              <td align="left" valign="top" width="67%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">June
      3, 2009 Testimony of Mr. Thomas before the United States House Committee
      on Transportation and Infrastructure Subcommittee on Water Resources and
      Environment.</font></div>
              </td>
            </tr>
        </table>
      </div>
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</font></div>
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</font></div>
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Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.</font></div>
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                  <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
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      </font></td>
                  <td valign="top" width="16%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
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</font></div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
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</font></div>
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INDEX</font></div>
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Item 7.01 hereof and should not be deemed to be filed under the Exchange
Act.</font></div>
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      NO.</font></div>
              </td>
              <td valign="top" width="67%" style="BORDER-TOP: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">DESCRIPTION
      OF EXHIBIT</font></div>
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            </tr>
            <tr>
              <td valign="top" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">99.1</font></div>
              </td>
              <td align="left" valign="top" width="67%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">June
      3, 2009 Testimony of Mr. Thomas before the United States House Committee
      on Transportation and Infrastructure Subcommittee on Water Resources and
      Environment.</font></div>
              </td>
            </tr>
        </table>
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</font></div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
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<TYPE>EX-99.1
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<DESCRIPTION>TESTIMONY
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Valley Authority,</font></div>
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House Committee on Transportation and Infrastructure</font></div>
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on Water Resources and Environment</font></div>
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3, 2009</font></div>
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    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Opening
Statement</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chairwoman
Johnson, Ranking Member Boozman, and members of the Committee.&#160;&#160;I
appreciate this opportunity to discuss the operations, performance, and
priorities of the Tennessee Valley Authority (TVA).&#160;&#160;On behalf of TVA,
we appreciate the oversight and support provided by this committee and members
of Congress.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TVA&#8217;s
three-part mission, based on energy, economic development, and environmental
stewardship, is being carried out in partnership with the people and the local
and state governments in the TVA service area.&#160;&#160;The ability of TVA to
provide affordable, reliable electricity remains a basic building block for
economic progress for the region.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">About
TVA</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As a
corporate agency and instrumentality of the United States government, TVA is the
nation&#8217;s largest public power supplier.&#160;&#160;TVA is financially
self-supporting.&#160;&#160;The TVA power system has not received any federal
appropriation in 50 years, and TVA&#8217;s stewardship programs have not received
federal appropriations since 1999.&#160;&#160;In accordance with the direction
of Congress, TVA pays its own way, using power proceeds to buy fuel, pay wages,
service debt, maintain assets, and fund stewardship and economic development
activities.&#160;&#160;Since 1959, TVA has been repaying the initial
congressional appropriation investments in the power program, as well as making
annual payments on the outstanding balance at the U.S. Treasury&#8217;s current cost
of borrowing.&#160;&#160;As of the end of the 2008 fiscal year, TVA had made
total payments to the U.S. Treasury of about $3.4 billion on the federal
investment of $1.4 billion.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
partnership with 158 local utilities, TVA provides reliable, affordable
electricity to about nine&#160;million people and 650,000 businesses in
Tennessee and adjoining portions of six surrounding states.&#160;&#160;The 158
local utilities purchase power wholesale from TVA for retail sale to their
residential, commercial and industrial customers.&#160;&#160;TVA also provides
power directly to about 60 large industrial customers and federal installations,
such as Oak Ridge National Laboratory.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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stewardship responsibilities for the Tennessee Valley region&#8217;s natural
resources, including the nation&#8217;s fifth-largest river system.&#160;&#160;Under
the TVA Act, hydroelectric dams operated by TVA and other power generation
facilities are designed and operated as part of a multipurpose system to help
improve navigation, control floods, meet national defense needs and promote the
development of the Tennessee Valley region.&#160;&#160;TVA is a catalyst for
economic development throughout its 80,000-square-mile service area, working in
partnership with local governments and economic development
agencies.</font></div>
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management of an integrated river system and innovative watershed management are
recognized as national and international models for government and community
collaboration for improving and protecting water quality.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Strategic
Plan</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TVA is in
its fourth year of operations under the governance restructuring established by
the Consolidated Appropriations Act of 2005.&#160;&#160;The act expanded the TVA
Board of Directors from three members to nine and vested responsibility for
daily operations in a management structure led by TVA&#8217;s Chief Executive
Officer.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">One of
the first priorities of the expanded Board was to adopt a Strategic Plan for use
in guiding TVA&#8217;s future actions.&#160;&#160;The plan accounts for emerging
market trends, such as volatile fuel costs, a new national energy policy, and
other developments that affect the energy industry.&#160;&#160;Public comment
gathered during the process of adopting the plan highlighted the importance of
renewable energy, energy conservation, and demand-side management to our
stakeholders.&#160;&#160;The plan adopted by the Board on May&#160;31, 2007, is
a high-level document that identifies critical aspects of TVA&#8217;s business that
need to be addressed to strengthen the ability of TVA to continue generating
value for the people we serve.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Strategic Plan sets objectives to leverage TVA&#8217;s strengths in five key areas:
Customer, People, Financial, Assets, and Operations.&#160;&#160;In summary, the
plan emphasizes our obligation to provide reliable, competitively priced power
and spells out sound financial principles we will follow.&#160;&#160;It directs
us to improve our relationships with customers and develop partnerships with
them in energy efficiency, power supply, and economic development.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
significant priority is to ensure that the TVA power system has the right
balance of generating capacity and energy supply to meet the growth in customer
demand and reduce our exposure to the price volatility of the energy
markets.&#160;&#160;Specific actions to carry out the provisions of the
Strategic Plan are reflected in our annual business and performance plans and
budgets.&#160;&#160;The budget plans for Fiscal Year 2010 are aligned to the
strategic objectives.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
primary guiding financial principles for our business planning are: (1) pay debt
obligations before the assets are fully depreciated; (2) new power generation
capacity will be supported by new debt; and (3) achieve top quartile industry
ranking for our operating and maintenance costs.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fiscal
Year 2010 Proposed Budget</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Although
we are in the process of finalizing our budget for Fiscal Year 2010, our
proposed budget assumes revenue of $13.6 billion, operating expenses of $11.3
billion, and capital expenditures of $2.2 billion.&#160;&#160;A final budget
proposal will be submitted to the TVA Board for its consideration at its meeting
scheduled in August.</font></div><br>
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      </div>
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      </div>
    </div><br>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fuel for
our generating plants and purchased power is the largest expense in our
budget.&#160;&#160;While we have seen some relief from the previous steep climb
in fuel and purchased power prices during the past year, our outlay for fuel and
purchased power is budgeted to be more than 50 percent higher in 2010 than two
years ago, from $4.2 billion in 2008 to $6.5 billion in 2010.&#160;&#160;The
budget assumes TVA will increase its debt and debt-like obligations by $32
million in 2010 primarily from new capital spending for </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the Watts
Bar Unit 2 project ($681 million) and other new generating capacity ($773
million).&#160;&#160;Total capital spending for 2010 is budgeted at $2.2
billion, which in addition to new generation capacity, includes $223 million for
clean air projects and $531 million to maintain TVA&#8217;s existing
assets.&#160;&#160;TVA&#8217;s outstanding debt and debt-like obligations are
estimated to be $24.9 billion at the end of 2010.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fiscal
Year 2009</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Like
other areas, the TVA service territory is experiencing the impacts of the
economic recession, and we are adjusting our planning to account for lower power
demand.&#160;&#160;Our quarterly report filed on Form 10-Q with the Securities
and Exchange Commission for the second quarter of Fiscal Year 2009 recorded a
9.4 percent drop in power sales compared to the same three-month period in
2008.&#160;&#160;Cumulatively, power sales for first six months of the fiscal
year were down 5.6 percent compared to the same period in 2008.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
budget plan adopted last fall projected that power sales would be flat for the
year; however, we now project that power sales&#160;will be down about 6 to 8
percent by the end of the fiscal year on September 30, largely due to the impact
on the industrial sector.&#160;&#160;At the end of April, sales to the
industrial sector were 16 percent below the budget plan.&#160;&#160;The impact
of lower power sales in 2009 is expected to reduce revenues by approximately
$500 million.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A decline
in fuel oil and natural gas prices has reduced market prices for purchased power
in recent months.&#160;&#160;These price declines have allowed TVA to reduce its
quarterly Fuel Cost Adjustment to a level starting in July that effectively
rolls back all of a 17 percent increase that occurred last October at the start
of our first fiscal quarter of 2009.&#160;&#160;During the first quarter, fuel
and purchased power costs were 50 percent higher than the same quarter in
2008.&#160;&#160;The quarterly Fuel Cost Adjustment used by TVA is similar to
the mechanism used by other utilities nationwide to account for the market
volatility in fuel prices.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We are
seeing some relief from drought conditions that have prevailed across much of
service region for the past three years, especially in the eastern side of the
Valley where rainfall is critical for filling our upper tributary reservoirs for
power generation and maintaining minimum stream flows established by our
Reservoir Operating Guides to protect water quality and the health of the river
system.&#160;&#160;The severity of the drought reached its peak in 2007, which
was the driest year for the Tennessee Valley in 118 years of
record-keeping.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hydro
generation for the first six months of Fiscal year 2009 was about 60 percent
higher than the first half of 2008.&#160;&#160;Hydro generation is our most
economic source of electricity and is used to meet the daily peak demand
period.&#160;&#160;The additional hydro generation and lower power sales have
helped reduce the need to purchase more expensive generation to meet the daily
peak demand.&#160;&#160;&#160;While rainfall this year is improved, parts of the
Tennessee Valley remain under drought conditions.</font></div><br><br>
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        </div>
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        </div>
      </div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As you
know, on December 22, 2008, a dike on a large coal ash storage facility failed
at the Kingston Fossil Plant about 40 miles west of Knoxville,
Tennessee.&#160;&#160;We are making steady progress in the cleanup and recovery,
and I will provide an update later in this testimony.&#160;&#160;From a
financial standpoint, we estimate that full recovery will cost from $675 million
to $975 million, depending on the disposal methods.&#160;&#160;As of March 31,
2009, TVA has recognized a charge of $675 million for the cleanup and incurred
$77 million in actual costs.&#160;&#160;The estimate for the recovery does not
include state and federal regulatory costs, litigation, or any necessary
long-term environmental remediation.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
continue to carry out one of the most aggressive clean air programs in the
nation with the installation of emission control equipment and other measures at
TVA&#8217;s 11 fossil plants that provide about 60 percent of our power
generation.&#160;&#160;The capital investment during Fiscal Year 2009 is
expected to be $232 million.&#160;&#160;For Fiscal Year 2010, the capital
investment in clean air is budgeted to be about $223 million.&#160;&#160;TVA has
invested more than $5 billion in its clean air program since 1977, installing
controls for nitrogen oxide and sulfur dioxide.&#160;&#160;These emissions have
been reduced more than 80 percent from previous levels, and further reductions
will be achieved as controls are added to existing units.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TVA is
proceeding with work to complete the second reactor at Watts Bar Nuclear Plant,
which will help meet future power demand using zero-carbon nuclear
generation.&#160;&#160;The addition of 1,150 megawatts from the second Watts Bar
reactor scheduled for completion by 2012 will help meet TVA&#8217;s goal of having 50
percent of its power generation supplied from clean and renewable energy sources
by 2020.&#160;&#160;Currently, about 34 percent of TVA&#8217;s generation comes from
zero-carbon and clean energy sources such as hydro and nuclear power, along with
renewable methane, wind and solar energy.&#160;&#160;TVA established an Energy
Efficiency and Demand Response program in 2008 that enlists the partnership of
the region&#8217;s local utilities to encourage their residential and business
customers to use energy more wisely and help lessen the demand for building new
generating units.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Although
current economic conditions have impacted power demand, regional economic
development efforts continue to be successful in attracting new
industry.&#160;&#160;In the past year, Volkswagen America began building a
$1-billion auto assembly plant near Chattanooga, and two major manufacturers of
solar energy materials announced plans to build $1-billion plants in Tennessee.
These new industries are expected to create more than 3,000 new
jobs.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All three
new plants will be built on industrial &#8220;megasites&#8221; that were assembled by state
and local economic development officials and certified as suitable sites for
large industry through a program created by TVA in response to local economic
development groups.</font></div><br>
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    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Major
Challenges</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As we
prepare to enter the last quarter of the current fiscal year, TVA is facing some
significant financial and operational challenges that are expected to impact
this year&#8217;s financial performance and the year ahead.&#160;&#160;As stated
earlier, the national economic downturn is reflected by a reduced demand for
electricity, especially in the industrial sector; and we have seen a decline in
market performance in the TVA pension fund and the trust fund required for
future nuclear plant decommissioning.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
major challenges include additional costs to expand our renewable energy
portfolio and our energy efficiency program in advance of expected national
standards.&#160;&#160;We also anticipate additional costs for strengthened
environmental requirements for coal ash disposal, along with future carbon and
mercury control measures.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
anticipation of national renewable energy standards, we issued a Request for
Proposals this past year for up to 2,000 megawatts of renewable energy from the
marketplace.&#160;&#160;We are evaluating the responses and expect to begin
negotiating contracts for delivery of renewable energy, mainly from proposed
wind projects in Midwestern states.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
addition to these challenges, TVA planning must accommodate an expected
$1.7&#160;billion in accelerated emission control costs to comply with a federal
court-ordered timetable issued earlier this year as the result of a clean air
lawsuit brought by the State of North Carolina.&#160;&#160;We had anticipated
spending about $700 million on controls for the plants in the eastern portion of
our system through 2015; however, the court ruling will require additional
equipment and control measures three years earlier than planned.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">While
these challenges will occur in varying degrees over different time periods and
involve some legislative uncertainty, the most immediate challenge is the
cleanup and recovery of the ash spill at Kingston Fossil Plant about 40 miles
west of Knoxville, Tennessee.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kingston
Recovery Progress</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As TVA
President and Chief Executive Officer Tom Kilgore testified before this
committee on March 31, 2009, on the recovery progress at out Kingston plant, TVA
is working closely with officials from the U.S. Environmental Protection Agency
(EPA), the Tennessee Department of Environment and Conservation and local
officials to protect the health and safety of the public and TVA employees as
the clean up and recovery work progresses.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Continuous
testing of air, water and soil samples by certified laboratories remains in
place.&#160;&#160;More than 44,000 air samples and 1,300 water samples have
shown that air and drinking water continue to meet state and federal
standards.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We are
working as quickly and safely as possible.&#160;&#160;The pilot phase of
dredging operations is complete and we are transitioning to long-term dredging
operations to remove the ash from the Emory River adjacent to the failed
facility.&#160;&#160;The dredging plans <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">and the
associated river monitoring network put in place to protect the environment were
reviewed and approved by the EPA and the state before the work
began.</font></font></div><br>
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      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In early
May, TVA and the EPA signed an agreement whereas TVA will remain a lead federal
agency for the recovery work and the EPA will approve all work plans and
schedules moving forward using its expertise under the Comprehensive
Environmental Response, Compensation and Liability Act.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
Community Involvement Plan is being developed by TVA to ensure that the people
in Roane County are kept informed and involved in the decisions about the
recovery and remediation of the affected land and embayment.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
health monitoring, we have contracted with Oak Ridge Associated Universities to
provide the community with access to medical and toxicology experts who have
knowledge and experience with health effects related to the contaminants in the
ash.&#160;&#160;The organization is a consortium of 100 universities offering
expertise in public health communication and design of medical monitoring
programs.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Conclusion</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
people at TVA strive each day to look for ways to do their jobs better as they
deliver power and other services to our stakeholders.&#160;&#160;In carrying out
our business plans, we are committed to improving TVA&#8217;s financial health,
maintaining fiscal responsibility, and staying true to our mission.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We look
forward to keeping this Committee, Congress, the Administration, and all our
stakeholders informed as TVA works to continue generating value for our regional
stakeholders and the nation.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Thank
you.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
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