XML 122 R17.htm IDEA: XBRL DOCUMENT
v3.19.3

Asset Retirement Obligations | 12 Months Ended
--- | ---
Sep. 30, 2019
Asset Retirement Obligation Disclosure [Abstract] |
Asset Retirement Obligations | Asset Retirement Obligations During the year ended September 30, 2019, TVA's total ARO liability increased $837 million. To estimate its decommissioning obligation related to its nuclear generating stations, TVA uses a probability-weighted, discounted cash flow model which, on a unit-by-unit basis, considers multiple outcome scenarios that include significant estimations and assumptions. Those assumptions include (1) estimates of the cost of decommissioning, (2) the method of decommissioning and the timing of the related cash flows, (3) the license period of the nuclear plant, considering the probability of license extensions, (4) cost escalation factors, and (5) the credit adjusted risk free rate to measure the obligation at the present value of the future estimated costs. TVA has ascribed probabilities to two different decommissioning methods related to its nuclear decommissioning obligation estimate: the DECON method and the SAFSTOR method. The DECON method requires radioactive contamination to be removed from a site and safely disposed of or decontaminated to a level that permits the site to be released for unrestricted use shortly after it ceases operation. The SAFSTOR method allows nuclear facilities to be placed and maintained in a condition that allows the facilities to be safely stored and subsequently decontaminated to levels that permit release for unrestricted use. TVA bases its nuclear decommissioning estimates on site-specific cost studies. The most recent study was approved and implemented in September 2017. An increase of $250 million was recorded to the nuclear AROs as a result of the updates. Site-specific cost studies are updated for each of TVA's nuclear units at least every five years. TVA also has decommissioning obligations related to its non-nuclear generating sites, ash impoundments, transmission substation and distribution assets, and certain general facilities. To estimate its decommissioning obligation related to these assets, TVA uses estimations and assumptions for the amounts and timing of future expenditures and makes judgments concerning whether or not such costs are considered a legal obligation. Those assumptions include (1) estimates of the costs of decommissioning, (2) the method of decommissioning and the timing of the related cash flows, (3) the expected retirement date of each asset, (4) cost escalation factors, and (5) the credit adjusted risk free rate to measure the obligation at the present value of the future estimated costs. TVA bases its decommissioning estimates for each asset on its identified preferred closure method. During 2019, the revisions in non-nuclear estimates increased $50 million for the year ended September 30, 2019. As a result of recent experience in completing settlements at certain facilities, costs for asbestos abatement activities across TVA's fossil fleet increased $114 million. TVA changed the preferred closure method for the Allen West Impoundment from closure-in-place to closure-by-removal, which resulted in a cost increase of $33 million. Partially offsetting these increases was a $57 million decrease in costs for Paradise closure projects, and a $44 million decrease in costs for the Allen East Impoundment closure project. Additionally, as a result of the decision in TVA's favor by the Sixth Circuit in the lawsuit brought by TSRA and TCWN, as well as the June 2019 consent order filed in the case brought by TDEC, Gallatin discounted cash flows related to CCR closure and post-closure costs of $672 million have been recorded as Asset retirement obligations. The obligation is based upon the assumptions outlined in the consent order, including a new lined facility will be permitted and constructed on the Gallatin site and existing CCR materials in the existing wet ash disposal impoundments at Gallatin will be moved to this new facility over a 20-year period. See Note 22 — Commitments and Contingencies — Legal Proceedings — Lawsuit Brought by TDEC Involving Gallatin Fossil Plant CCR Facilities and Lawsuit Brought by TSRA and TCWN Involving Gallatin Fossil Plant CCR Facilities for additional information. Additionally, during the years ended September 30, 2019 and 2018, both the nuclear and non-nuclear liabilities were increased by periodic accretion, partially offset by settlement projects that were conducted during these periods. The nuclear and non-nuclear accretion amounts were deferred as regulatory assets. During 2019, 2018, and 2017, $144 million per year of the related regulatory assets were amortized into expense as these amounts were collected in rates. See Note 8 — Regulatory Assets and Liabilities. TVA maintains investment trusts to help fund its decommissioning obligations. See Note 16 — Fair Value Measurements — Investment Funds and Note 22 — Commitments and Contingencies — Decommissioning Costs for a discussion of the trusts' objectives and the current balances of the trusts.
Asset Retirement Obligation Activity
| Nuclear |  | Non-Nuclear |  | Total
Balance at September 30, 2017 | $ | 2,859 |  |  | $ | 1,445 |  |  | $ | 4,304 |  |
Settlements | — |  |  | (106 | ) |  | (106 | ) |
Revisions in estimate | — |  |  | 430 |  |  | 430 |  |
Additional obligations | — |  |  | 1 |  |  | 1 |  |
Accretion (recorded to regulatory asset) | 130 |  |  | 35 |  |  | 165 |  |
Asset disposition | — |  |  | (15 | ) |  | (15 | ) |
Balance at September 30, 2018 | 2,989 |  |  | 1,790 |  |  | 4,779 |  | (1)
Settlements | (7 | ) |  | (82 | ) |  | (89 | ) |
Revisions in estimate | — |  |  | 50 |  |  | 50 |  |
Additional obligations | 18 |  |  | — |  |  | 18 |  |
Gallatin CCR | — |  |  | 672 |  |  | 672 |  |
Accretion (recorded to regulatory asset) | 136 |  |  | 50 |  |  | 186 |  |
Balance at September 30, 2019 | $ | 3,136 |  |  | $ | 2,480 |  |  | $ | 5,616 |  | (1)
Note (1) The current portions of the ARO liability in the amounts of $163 million a nd $115 million at September 30, 2019 and 2018, respectively, are included in Accounts payable and accrued liabilities.

X
- References No definition available. + Details
Name: | us-gaap_AssetRetirementObligationDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 410 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2175671 + Details
Name: | us-gaap_AssetRetirementObligationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration