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Proprietary Capital
 12 Months Ended
Sep. 30, 2015
Stockholders' Equity Note [Abstract]  
Proprietary Capital
Proprietary Capital

Appropriation Investment

TVA’s power program and stewardship (nonpower) programs were originally funded primarily by appropriations from Congress.  In 1959, Congress passed an amendment to the TVA Act that required TVA’s power program to be self-financing from power revenues and proceeds from power program financings.  While TVA’s power program did not directly receive appropriated funds after it became self-financing, TVA continued to receive appropriations for certain multipurpose and other nonpower mission-related activities as well as for its stewardship activities.  TVA has not received any appropriations from Congress for any activities since 1999, and since that time, TVA has funded stewardship program activities primarily with power revenues.

The 1959 amendment to the TVA Act also required TVA, beginning in 1961, to make annual payments to the U.S. Treasury from net power proceeds as a repayment of and as a return on the Power Program Appropriation Investment until an additional $1.0 billion of the Power Program Appropriation Investment has been repaid.  TVA paid $10 million for 2014 as a repayment of the Power Program Appropriation Investment. With the 2014 payment, TVA fulfilled its requirement to repay $1.0 billion of the Power Program Appropriation Investment. The TVA Act requires TVA to continue making payments to the U.S. Treasury as a return on the remaining $258 million of the Power Program Appropriation Investment.

The table below summarizes TVA's activities related to appropriated funds.
Summary of Proprietary Capital Activity
At or for the years ended September 30
 
2015
 
2014
Appropriation Investment
Power Program
 
Nonpower
 Programs
 
Power Program
 
Nonpower
 Programs
Balance at beginning of year
$
258

 
$
4,351

 
$
268

 
$
4,351

Return of power program appropriation investment
—

 
—

 
(10
)
 
—

Balance at end of year
258

 
4,351

 
258

 
4,351

Retained Earnings
 

 
 

 
 

 
 

Balance at beginning of year
5,240

 
(3,750
)
 
4,767

 
(3,742
)
Net income (expense) for year
1,122

 
(11
)
 
477

 
(8
)
Return on power program appropriation investment
(5
)
 
—

 
(4
)
 
—

Balance at end of year
6,357

 
(3,761
)
 
5,240

 
(3,750
)
Net proprietary capital at September 30
$
6,615

 
$
590

 
$
5,498

 
$
601



Payments to the U.S. Treasury

TVA paid the U.S. Treasury $5 million in 2015, $4 million in 2014, and $7 million in 2013 as a return on the Power Program Appropriation Investment.  The amount of the return on the Power Program Appropriation Investment is based on the Power Program Appropriation Investment balance at the beginning of that year and the computed average interest rate payable by the U.S. Treasury on its total marketable public obligations at the same date.  The interest rates payable by TVA on the Power Program Appropriation Investment were 2.04 percent, 1.97 percent, and 2.10 percent for 2015, 2014, and 2013, respectively.

Accumulated Other Comprehensive Income (Loss)

The items included in Accumulated other comprehensive income (loss) consist of market valuation adjustments for certain derivative instruments.  See Note 16.

TVA records exchange rate gains and losses on debt in net income and marks its currency swap assets and liabilities to market through other comprehensive income.  TVA had unrealized gains (losses) of $(72) million and $4 million in 2015 and 2014, respectively, on the mark-to-market of currency swaps. TVA then reclassifies an amount out of accumulated other comprehensive income into net income, offsetting the gain/loss from recording the exchange gain/loss on the debt.  The amounts reclassified from other comprehensive income into net income resulted in increases (decreases) to net income of $(65) million, $2 million, and $1 million in 2015, 2014, and 2013, respectively.  These reclassifications, coupled with the recording of the exchange gain/loss on the debt, did not have an impact on net income in 2015, 2014, and 2013.  Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $14 million of losses from accumulated other comprehensive income to interest expense within the next twelve months to offset amounts anticipated to be recorded in interest expense related to exchange gain on the debt.