Asset Retirement Obligations

9 Months Ended

Jun. 30, 2011

Asset Retirement Obligations [Abstract]

During the nine months ended June 30, 2011, TVA’s total ARO liability increased $145 million. The increase was comprised of $39 million of new revisions in the cost estimates related to TVA’s nuclear AROs and $118 million of ARO accretion. This increase was partially offset by ash area settlement projects that were conducted during the first nine months of 2011. The nuclear and non-nuclear accretion were deferred as regulatory assets. During the nine months ended June 30, 2011, $36 million of the related regulatory assets were amortized into expense since this amount was collected in rates.

Reconciliation of Asset Retirement Obligation Liability Nine Months Ended June 30, 2011
	Nuclear		Non-nuclear			Total


Balance at beginning of period	$	1,940	$	1,023		$	2,963

Settlements (ash storage areas)		—		(12	)		(12	)
Accretion (recorded as regulatory asset)		82		36			118
Change in nuclear estimate		39		—			39

Balance at end of period	$	2,061	$	1,047		$	3,108

- Definition

The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees.

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