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Debt and Other Obligations | 12 Months Ended
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Sep. 30, 2015
Debt Disclosure [Abstract] |
Debt and Other Obligations | . Debt and Other Obligations General The TVA Act authorizes TVA to issue Bonds in an amount not to exceed $30.0 billion at any time. At September 30, 2015, TVA had only two types of Bonds outstanding: power bonds and discount notes. Power bonds have maturities between one and 50 years, and discount notes have maturities of less than one year. Power bonds and discount notes are both issued pursuant to Section 15d of the TVA Act and pursuant to the Basic Tennessee Valley Authority Power Bond Resolution adopted by the TVA Board on October 6, 1960, as amended on September 28, 1976, October 17, 1989, and March 25, 1992 (the "Basic Resolution"). Bonds are not obligations of the United States, and the United States does not guarantee the payments of principal or interest on Bonds. Power bonds and discount notes rank on parity and have first priority of payment from net power proceeds, which are defined as the remainder of TVA’s gross power revenues after deducting the costs of operating, maintaining, and administering its power properties and tax equivalent payments, but before deducting depreciation accruals or other charges representing the amortization of capital expenditures, plus the net proceeds from the sale or other disposition of any power facility or interest therein. TVA considers its scheduled rent payments under its leaseback transactions, as well as its scheduled payments under its lease financing arrangements involving John Sevier CCF and Southaven CCF, as costs of operating, maintaining, and administering its power properties; however, such treatment is not free from doubt. Costs of operating, maintaining, and administering TVA's power properties have priority over TVA’s payments on the Bonds. Once net power proceeds have been applied to payments on power bonds and discount notes as well as any other Bonds that TVA may issue in the future that rank on parity with or subordinate to power bonds and discount notes, Section 2.3 of the Basic Resolution provides that the remaining net power proceeds shall be used only for minimum payments into the U.S. Treasury required by the TVA Act in repayment of, and as a return on, the Power Program Appropriation Investment, investment in power assets, additional reductions of TVA’s capital obligations, and other lawful purposes related to TVA’s power program. The TVA Act and the Basic Resolution each contain two bond tests: the rate test and the bondholder protection test. Under the rate test, TVA must charge rates for power which will produce gross revenues sufficient to provide funds for, among other things, debt service on outstanding Bonds. As of September 30, 2015, TVA was in compliance with the rate test. See Note 1 — General. Under the bondholder protection test, TVA must, in successive five-year periods, use an amount of net power proceeds at least equal to the sum of (1) the depreciation accruals and other charges representing the amortization of capital expenditures and (2) the net proceeds from any disposition of power facilities for either the reduction of its capital obligations (including Bonds and the Power Program Appropriation Investment) or investment in power assets. TVA met the bondholder protection test for the five-year period ended September 30, 2015, and must next meet the bondholder protection test for the five-year period ending September 30, 2020. Secured Debt of VIEs On August 9, 2013, SCCG issued secured notes totaling $360 million that bear interest at a rate of 3.846 percent. The SCCG notes require amortizing semi-annual payments on each February 15 and August 15, and mature on August 15, 2033. Also on August 9, 2013, SCCG issued $40 million of membership interests subject to mandatory redemption. The proceeds from the secured notes issuance and the issuance of the membership interests was paid to TVA in accordance with the terms of the Southaven head lease. See Note 10 — Southaven. TVA used the proceeds from the transaction primarily to fund the acquisition of the Southaven CCF from SSSL. On January 17, 2012, JSCCG issued secured notes totaling $900 million in aggregate principal amount that bear interest at a rate of 4.626 percent. Also on January 17, 2012, Holdco issued secured notes totaling $100 million that bear interest at a rate of 7.1 percent. The JSCCG notes and the Holdco notes require amortizing semi-annual payments on each January 15 and July 15, and mature on January 15, 2042. The Holdco notes require a $10 million balloon payment upon maturity. See Note 10 — John Sevier. TVA used the proceeds from the transaction to meet its requirements under the TVA Act. Secured debt of VIEs, including current maturities, outstanding at both September 30, 2015 and 2014 totaled approximately $1.3 billion. Short-Term Debt The weighted average rates applicable to short-term debt outstanding at September 30, 2015, 2014, and 2013, were 0.055 percent, 0.002 percent, and 0.042 percent, respectively. During 2015, 2014, and 2013, the maximum month-end outstanding balances of TVA short-term borrowings held by the public were $2.6 billion, $2.4 billion, and $3.3 billion, respectively. For these same years, the average amounts (and weighted average interest rates) of TVA short-term borrowings were approximately $1.4 billion (0.051 percent), $1.7 billion (0.051 percent), and $1.9 billion (0.078 percent), respectively. Put and Call Options Bond issues of $456 million held by the public are redeemable in whole or in part, at TVA’s option, on call dates ranging from the present to 2020 and at call prices of 100 percent of the principal amount. Twelve Bond issues totaling $316 million, with maturity dates ranging from 2025 to 2043, include a “survivor’s option,” which allows for right of redemption upon the death of a beneficial owner in certain specified circumstances. These Bonds were classified as long-term as of September 30, 2015 and 2014. Additionally, TVA has two issues of Putable Automatic Rate Reset Securities ("PARRS") outstanding. After a fixed-rate period of five years, the coupon rate on the PARRS may automatically be reset downward under certain market conditions on an annual basis. The coupon rate reset on the PARRS is based on a calculation. For both series of PARRS, the coupon rate will reset downward on the reset date if the rate calculated is below the then-current coupon rate on the Bond. The calculation dates, potential reset dates, and terms of the calculation are different for each series. The coupon rate on the 1998 Series D PARRS may be reset on June 1 (annually) if the sum of the five-day average of the 30-Year Constant Maturity Treasury ("CMT") rate for the week ending the last Friday in April, plus 94 basis points, is below the then-current coupon rate. The coupon rate on the 1999 Series A PARRS may be reset on May 1 (annually) if the sum of the five-day average of the 30-Year CMT rate for the week ending the last Friday in March, plus 84 basis points, is below the then-current coupon rate. The coupon rates may only be reset downward, but investors may request to redeem their Bonds at par value in conjunction with a coupon rate reset for a limited period of time prior to the reset dates under certain circumstances. The coupon rate for the 1998 Series D PARRS, which mature in June 2028, has been reset seven times, from an initial rate of 6.750 percent to the current rate of 3.550 percent. In connection with these resets, $301 million of the Bonds have been redeemed, so that $274 million of the Bonds were outstanding at September 30, 2015. The coupon rate for the 1999 Series A PARRS, which mature in May 2029, has been reset six times, from an initial rate of 6.50 percent to the current rate of 3.360 percent. In connection with these resets, $293 million of the Bonds have been redeemed, so that $232 million of the Bonds were outstanding at September 30, 2015. Due to the contingent nature of the put option on the PARRS, TVA determines whether the PARRS should be classified as long-term debt or current maturities of long-term debt by calculating the expected reset rate for the bonds on the calculation dates, described above. If the reset rate is less than the then-current coupon rate on the PARRS, the PARRS are included in current maturities. Otherwise, the PARRS are included in long-term debt. At September 30, 2015, TVA has not determined that it is probable that the reset rate will be less than than the current coupon rate on the PARRS on the calculation dates; therefore, the par amount outstanding for each series of PARRS was classified as long-term debt. Debt Securities Activity The table below summarizes the long-term debt securities activity for the period from October 1, 2013, to September 30, 2015.
Debt Securities Activity For the years ended September 30
|  | 2015 |  | 2014
Issues |  |  |  |
2014 Series A(1) |  | — |  |  | 1,000 |
2015 Series A(2) |  | 1,000 |  |  | — |
Discount on debt issues |  | (27 | ) |  | (11 | )
Total |  | $ | 973 |  |  | $ | 989 |
Redemptions/Maturities(3) |  |  |  |
Variable interest entities |  | $ | 32 |  |  | $ | 30 |
electronotes® |  | 62 |  |  | 335 |
1998 Series D |  | 50 |  |  | — |
1999 Series A |  | 38 |  |  | — |
2005 Series B |  | 1,000 |  |  | — |
2009 Series A |  | 3 |  |  | 4 |
2009 Series B |  | 27 |  |  | 26 |
Total |  | $ | 1,212 |  |  | $ | 395 |
Notes (1) The 2014 Series A bonds were issued at 98.94 percent of par. (2) The 2015 Series A bonds were issued at 97.31 percent of par. (3) All redemptions were at 100 percent of par. Debt Outstanding Total debt outstanding at September 30, 2015, and 2014, consisted of the following:
Short-Term Debt At September 30
CUSIP or Other Identifier |  | Maturity |  | Call/(Put) Date |  | Coupon Rate |  | 2015 |  | 2014
Short-term debt, net of discounts |  |  |  |  |  |  |  | $ | 1,034 |  |  | $ | 596 |
Current maturities of long-term debt of variable interest entities issued at par |  |  |  |  |  |  |  | 33 |  |  | 32 |
Current maturities of power bonds issued at par |  |  |  |  |  |  |  |  |  |
880591EE8 |  | 11/15/2015 |  |  |  | 2.250% |  | 2 |  |  | 3 |
880591EF5 |  | 12/15/2015 |  |  |  | 3.770% |  | 27 |  |  | 26 |
880591DY5 |  | 6/15/2015 |  |  |  | 4.375% |  | — |  |  | 1,000 |
88059TEL1 |  | 11/15/2015 |  |  |  | 2.650% |  | 3 |  |  | 3 |
Total current maturities of power bonds issued at par |  |  |  |  |  |  |  | 32 |  |  | 1,032 |
Total current debt outstanding, net |  |  |  |  |  |  |  | $ | 1,099 |  |  | $ | 1,660 |
Long-Term Debt(1) At September 30
CUSIP or Other Identifier |  | Maturity |  | Coupon Rate |  | Call Date |  | 2015 Par |  | 2014 Par |  | Stock Exchange Listings
electronotes®(2) |  | 05/15/2020 - 02/15/2043 |  | 2.375 - 4.375% |  | 2/15/2015 - 02/15/2018 |  | $ | 325 |  |  | $ | 387 |  |  | None
880591EE8(3) |  | 11/15/2015 |  | 2.250% |  |  |  | — |  |  | 2 |  |  | None
880591DS8 |  | 12/15/2016 |  | 4.875% |  |  |  | 524 |  |  | 524 |  |  | New York
880591EA6 |  | 7/18/2017 |  | 5.500% |  |  |  | 1,000 |  |  | 1,000 |  |  | New York, Luxembourg
880591CU4 |  | 12/15/2017 |  | 6.250% |  |  |  | 650 |  |  | 650 |  |  | New York
880591EC2 |  | 4/1/2018 |  | 4.500% |  |  |  | 1,000 |  |  | 1,000 |  |  | New York, Luxembourg
880591EQ1 |  | 10/15/2018 |  | 1.750% |  |  |  | 1,000 |  |  | 1,000 |  |  | New York
880591EL2 |  | 2/15/2021 |  | 3.875% |  |  |  | 1,500 |  |  | 1,500 |  |  | New York
880591DC3 |  | 6/7/2021 |  | 5.805% | (4) |  |  | 303 |  |  | 324 |  |  | New York, Luxembourg
880591EN8 |  | 8/15/2022 |  | 1.875% |  |  |  | 1,000 |  |  | 1,000 |  |  | New York
880591ER9 |  | 9/15/2024 |  | 2.875% |  |  |  | 1,000 |  |  | 1,000 |  |  | New York
880591CJ9 |  | 11/1/2025 |  | 6.750% |  |  |  | 1,350 |  |  | 1,350 |  |  | New York, Hong Kong, Luxembourg, Singapore
880591300(5) |  | 6/1/2028 |  | 3.550% |  |  |  | 274 |  |  | 324 |  |  | New York
880591409(5) |  | 5/1/2029 |  | 3.360% |  |  |  | 232 |  |  | 270 |  |  | New York
880591DM1 |  | 5/1/2030 |  | 7.125% |  |  |  | 1,000 |  |  | 1,000 |  |  | New York, Luxembourg
880591DP4 |  | 6/7/2032 |  | 6.587% | (4) |  |  | 378 |  |  | 406 |  |  | New York, Luxembourg
880591DV1 |  | 7/15/2033 |  | 4.700% |  |  |  | 472 |  |  | 472 |  |  | New York, Luxembourg
880591EF5(3) |  | 6/15/2034 |  | 3.770% |  |  |  | 360 |  |  | 388 |  |  | None
880591DX7 |  | 6/15/2035 |  | 4.650% |  |  |  | 436 |  |  | 436 |  |  | New York
880591CK6 |  | 4/1/2036 |  | 5.980% |  |  |  | 121 |  |  | 121 |  |  | New York
880591CS9 |  | 4/1/2036 |  | 5.880% |  |  |  | 1,500 |  |  | 1,500 |  |  | New York
880591CP5 |  | 1/15/2038 |  | 6.150% |  |  |  | 1,000 |  |  | 1,000 |  |  | New York
880591ED0 |  | 6/15/2038 |  | 5.500% |  |  |  | 500 |  |  | 500 |  |  | New York
880591EH1 |  | 9/15/2039 |  | 5.250% |  |  |  | 2,000 |  |  | 2,000 |  |  | New York
880591EP3 |  | 12/15/2042 |  | 3.500% |  |  |  | 1,000 |  |  | 1,000 |  |  | New York
880591DU3 |  | 6/7/2043 |  | 4.962% | (4) |  |  | 227 |  |  | 243 |  |  | New York, Luxembourg
880591CF7 |  | 7/15/2045 |  | 6.235% |  | 7/15/2020 |  | 140 |  |  | 140 |  |  | New York
880591EB4 |  | 1/15/2048 |  | 4.875% |  |  |  | 500 |  |  | 500 |  |  | New York, Luxembourg
880591DZ2 |  | 4/1/2056 |  | 5.375% |  |  |  | 1,000 |  |  | 1,000 |  |  | New York
880591EJ7 |  | 9/15/2060 |  | 4.625 | % |  |  |  | 1,000 |  |  | 1,000 |  |  | New York
880591ES7 |  | 9/15/2065 |  | 4.250% |  |  |  | 1,000 |  |  | — |  |  | New York
Subtotal |  |  |  |  |  |  |  | 22,792 |  |  | 22,037 |  |  |
Unamortized discounts, premiums, and other |  |  |  |  |  |  |  | (108 | ) |  | (89 | ) |  |
Total long-term outstanding power bonds, net |  |  |  |  |  |  |  | 22,684 |  |  | 21,948 |  |  |
Long-term debt of variable interest entities |  |  |  |  |  |  |  | 1,246 |  |  | 1,279 |  |  |
Total long-term debt, net |  |  |  |  |  |  |  | $ | 23,930 |  |  | $ | 23,227 |  |  |
Notes (1) Includes net exchange gain (loss) from currency transactions of $21 million at September 30, 2015 and $(44) million at September 30, 2014. (2) Includes one electronotes® issue (88059TEL1) with partial maturities of principal for each required annual payment. (3) These Bonds include partial maturities of principal for each required annual payment. (4) The coupon rate represents TVA’s effective interest rate. (5) TVA PARRS, CUSIP numbers 880591300 and 880591409, may be redeemed under certain conditions. See Put and Call Options above.
Maturities Due in the Year Ending September 30
| 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  | Thereafter |  | Total
Long-term power bonds and long-term debt of variable interest entities including current maturities(1) | $ | 65 |  |  | $ | 1,590 |  |  | $ | 1,718 |  |  | $ | 1,070 |  |  | $ | 70 |  |  | $ | 19,611 |  |  | $ | 24,124 |
Short-term debt, net of discounts | 1,034 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,034 |
Note (1) Does not include noncash items of foreign currency exchange gain of $21 million and net discount on sale of Bonds of $108 million. Credit Facility Agreements TVA and the U.S. Treasury, pursuant to the TVA Act, have entered into a memorandum of understanding under which the U.S. Treasury provides TVA with a $150 million credit facility. This credit facility was renewed for 2016 with a maturity date of September 30, 2016. Access to this credit facility or other similar financing arrangements with the U.S. Treasury has been available to TVA since the 1960s. TVA can borrow under the U.S. Treasury credit facility only if it cannot issue Bonds in the market on reasonable terms, and TVA considers the U.S. Treasury credit facility a secondary source of liquidity. The interest rate on any borrowing under this facility is based on the average rate on outstanding marketable obligations of the United States with maturities from date of issue of one year or less. There were no outstanding borrowings under the facility at September 30, 2015. The availability of this credit facility may be impacted by how the U.S. government addresses the situation of approaching its debt limit. TVA also has funding available in the form of three long-term revolving credit facilities totaling $2.5 billion. One $500 million credit facility matures on February 1, 2020, one $1.0 billion credit facility matures on June 2, 2020, and another $1.0 billion credit facility matures on September 30, 2020. The interest rate on any borrowing under these facilities varies based on market factors and the rating of TVA's senior unsecured long-term non-credit-enhanced debt. TVA is required to pay an unused facility fee on the portion of the total $2.5 billion that TVA has not borrowed or committed under letters of credit. This fee, along with letter of credit fees, may fluctuate depending on the rating of TVA's senior unsecured long-term non-credit-enhanced debt. At September 30, 2015, and September 30, 2014, there were $1.1 billion and $1.0 billion, respectively, of letters of credit outstanding under the facilities, and there were no borrowings outstanding. See Note 16 — Other Derivative Instruments — Collateral. The following table provides additional information regarding TVA's funding available in the form of three long-term revolving credit facilities:
Summary of Long-Term Credit Facilities At September 30, 2015 (in billions)
Maturity Date | Facility Limit |  | Letters of Credit Outstanding |  | Cash Borrowings |  | Availability
February 2020 | $ | 0.5 |  |  | $ | 0.5 |  |  | $ | — |  |  | $ | — |
June 2020 | 1.0 |  |  | 0.3 |  |  | — |  |  | 0.7 |
September 2020 | 1.0 |  |  | 0.3 |  |  | — |  |  | 0.7 |
Total | $ | 2.5 |  |  | $ | 1.1 |  |  | $ | — |  |  | $ | 1.4 |
Lease/Leasebacks Prior to 2004, TVA received approximately $945 million in proceeds by entering into leaseback transactions for 24 new peaking combustion turbine units ("CTs"). TVA also received approximately $389 million in proceeds by entering into lease/leaseback transactions for qualified technological equipment and software ("QTE") in 2003. Due to TVA's continuing involvement in the operation and maintenance of the leased units and equipment and its control over the distribution of power produced by the combustion turbine facilities during the leaseback term, TVA accounted for the lease proceeds as financing obligations. At September 30, 2015, and September 30, 2014, the outstanding leaseback obligations related to CTs and QTE were $616 million and $691 million, respectively.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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