Other Long-Term Liabilities

Other long-term liabilities consist primarily of liabilities related to certain derivative agreements, liabilities for environmental remediation, and liabilities under agreements related to compliance with certain environmental regulations. The table below summarizes the types and amounts of Other long-term liabilities:



Other Long-Term Liabilities
	At March 31, 2019		At September 30, 2018
Interest rate swap liabilities	$	1,330	$	1,122
Gallatin coal combustion residual facilities liability	864		862
Capital lease obligations	176		178
Currency swap liabilities	110		81
EnergyRight^® financing obligation	96		102
Paradise pipeline financing obligation⁽¹⁾	80		80
Accrued long-term service agreement⁽¹⁾	71		74
Other⁽¹⁾	187		216
Total other long-term liabilities	$	2,914	$	2,715

Note

(1) Certain amounts have been reclassified to conform with current year presentation.

Interest Rate Swap Liabilities. TVA uses interest rate swaps to fix variable short-term debt to a fixed rate. The values of these derivatives are included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. As of March 31, 2019, and September 30, 2018, the carrying amount of the interest rate swap liabilities reported in Accounts payable and accrued liabilities was approximately $78 million and $77 million, respectively. See Note 14 —Derivatives Not Receiving Hedge Accounting Treatment — Interest Rate Derivatives for information regarding the interest rate swap liabilities. As of March 31, 2019, Interest rate swap liabilities increased $208 million as compared to September 30, 2018, primarily due to large decreases in interest rates resulting in higher mark-to-market values on future expected net cash flows.

Gallatin Coal Combustion Residual Facilities Liability. The estimated cost of the potential Gallatin CCR project is approximately $900 million. The current and long-term portions of the resulting obligation are reported in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA's Consolidated Balance Sheets. As of March 31, 2019, and September 30, 2018, related liabilities of $22 million and $30 million, respectively, were recorded in Accounts payable and accrued liabilities. See Note 9 for information regarding the Gallatin CCR facilities.

EnergyRight^®Financing Obligation. TVA purchases certain loans receivable from LPCs in association with the EnergyRight^® Solutions program. The current and long-term portions of the resulting financing obligation are reported in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA's Consolidated Balance Sheets. The carrying amount of the financing obligation reported in Accounts payable and accrued liabilities for March 31, 2019, and September 30, 2018, was approximately $24 million and $25 million, respectively. See Note 6 for information regarding the associated loans receivable.

Paradise Pipeline Financing Obligation. TVA reserves firm pipeline capacity on an approximately 19 mile pipeline owned by Texas Gas, which serves TVA’s Paradise Combined Cycle Plant. The capacity contract contains a lease component due to TVA’s exclusive right to use the pipeline. TVA accounts for this lease component as a financing transaction. The current and long-term portions of the resulting financing obligation are reported in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA's Consolidated Balance Sheets. As of both March 31, 2019, and September 30, 2018, related liabilities of less than $1 million were recorded in Accounts payable and accrued liabilities.

Accrued Long-Term Service Agreement. TVA has entered into various long-term service agreements for major maintenance activities at certain of its combined cycle plants. TVA uses the direct expense method of accounting for these arrangements. TVA accrues for parts when it takes ownership and for contractor services when they are rendered. Under certain of these agreements, parts received and services rendered exceed payments made. The current and long-term portions of the resulting obligation are reported in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA's Consolidated Balance Sheets. As of March 31, 2019, and September 30, 2018, related liabilities of $15 million and $30 million, respectively, were recorded in Accounts payable and accrued liabilities.