XML 57 R24.htm IDEA: XBRL DOCUMENT
v3.19.2

Revenue (Notes) | 9 Months Ended
--- | ---
Jun. 30, 2019
Revenue from Contract with Customer [Abstract] |
Revenue from Contract with Customer [Text Block] | Revenue As described in Note 2, TVA adopted Revenue from Contracts with Customers effective October 1, 2018, using the modified retrospective method of adoption, which does not require restatement of prior year reported results. As a result of the adoption of this standard, no cumulative effect adjustment was recorded. Additionally, comparative disclosures for 2018 operating results with the previous revenue recognition rules are not applicable as TVA’s revenue recognition has not materially changed as a result of the new standard. Revenue from Sales of Electricity TVA’s revenue from contracts with customers is primarily derived from the generation and sale of electricity to its customers and is included in Revenue from sales of electricity on the Consolidated Statements of Operations. Electricity is sold primarily to LPCs for distribution to their end-use customers. In addition, TVA sells electricity to directly served industrial companies, federal agencies, and others.
LPC sales | Approximately 92 percent of TVA’s revenue from sales of electricity is to LPCs, which then distribute the power to their customers using their own distribution systems. Power is delivered to each LPC at delivery points within the LPC's service territory. TVA recognizes revenue when the customer takes possession of the power at the delivery point. For power sales, the performance obligation to deliver power is satisfied in a series over time because the sales of electricity over the term of the customer contract are a series of distinct goods that are substantially the same and have the same pattern of transfer to the customer. TVA has no continuing performance obligations subsequent to delivery. Using the output method for revenue recognition provides a faithful depiction of the transfer of electricity as customers obtain control of the power and benefit from its use at delivery. Additionally, TVA has an enforceable right to consideration for energy delivered at any discrete point in time and will recognize revenue at an amount that reflects the consideration to which TVA is entitled for the energy delivered. The amount of revenue is based on contractual prices approved by the TVA Board. Customers are invoiced monthly for power delivered as measured by meters located at the delivery points. The net transaction price is offset by certain credits available to customers that are known at the time of billing. Credits are designed to achieve objectives of the TVA Act and include items such as hydro preference credits for residential customers of LPCs, economic development credits to promote growth in the Tennessee Valley, and interruptible credits allowing TVA to reduce industrial customer usage in periods of peak demand to balance system demand. Payments are typically due within approximately one month of invoice issuance.
Directly served customers | Directly served customers, including industrial customers, federal agencies, and other customers, take power for their own consumption. Similar to LPCs, power is delivered to a delivery point, at which time the customer takes possession and TVA recognizes revenue. For all power sales, the performance obligation to deliver power is satisfied in a series over time since the sales of electricity over the term of the customer contract are a series of distinct goods that are substantially the same and have the same pattern of transfer to the customer. TVA has no continuing performance obligations subsequent to delivery. Using the output method for revenue recognition provides a faithful depiction of the transfer of electricity as customers obtain control of the power and benefit from its use at delivery. Additionally, TVA has an enforceable right to consideration for energy delivered at any discrete point in time and will recognize revenue at an amount that reflects the consideration to which TVA is entitled for the energy delivered. The amount of revenue is based on contractual prices approved by the TVA Board. Customers are invoiced monthly for power delivered as measured by meters located at the delivery points. The net transaction price is offset by certain credits available to customers that are known at the time of billing. Examples of credits include items such as economic development credits to promote growth in the Tennessee Valley and interruptible credits allowing TVA to reduce industrial customer usage in periods of peak demand to balance system demand. Payments are typically due within approximately one month of invoice issuance.
Other Revenue Other revenue consists primarily of wheeling and network transmission charges, sales of excess steam that is a by-product of power production, delivery point charges for interconnection points between TVA and the customer, and certain other ancillary goods or services. Disaggregated Revenue During the three and nine months ended June 30, 2019, revenues generated from TVA’s electricity sales were $2.6 billion and $8.0 billion, respectively, and accounted for virtually all of TVA’s revenues. TVA’s revenues by state for the three and nine months ended June 30, 2019 and 2018 are detailed in the table below:
Operating Revenues By State (in millions)
| Three Months Ended June 30 |  | Nine Months Ended June 30
| 2019 |  | 2018 |  | 2019 |  | 2018
Alabama | $ | 367 |  |  | $ | 383 |  |  | $ | 1,146 |  |  | $ | 1,152 |
Georgia | 59 |  |  | 59 |  |  | 196 |  |  | 196 |
Kentucky | 157 |  |  | 171 |  |  | 498 |  |  | 504 |
Mississippi | 250 |  |  | 258 |  |  | 751 |  |  | 746 |
North Carolina | 15 |  |  | 14 |  |  | 56 |  |  | 49 |
Tennessee | 1,705 |  |  | 1,771 |  |  | 5,273 |  |  | 5,252 |
Virginia | 10 |  |  | 11 |  |  | 35 |  |  | 37 |
Subtotal | 2,563 |  |  | 2,667 |  |  | 7,955 |  |  | 7,936 |
Off-system sales | 2 |  |  | 2 |  |  | 3 |  |  | 6 |
Revenue capitalized during pre-commercial plant operations(1) | — |  |  | — |  |  | — |  |  | (11 | )
Revenue from sales of electricity | 2,565 |  |  | 2,669 |  |  | 7,958 |  |  | 7,931 |
Other revenues | 39 |  |  | 38 |  |  | 121 |  |  | 117 |
Total operating revenues | $ | 2,604 |  |  | $ | 2,707 |  |  | $ | 8,079 |  |  | $ | 8,048 |
Note (1) Represents revenue capitalized during pre-commercial operations of less than $1 million and $11 million for the three and nine months ended June 30, 2018, respectively. See Note 1 — Pre-Commercial Plant Operations. TVA’s revenues by customer type for the three and nine months ended June 30, 2019 and 2018 are detailed in the table below:
Operating Revenues by Customer Type (in millions)
| Three Months Ended June 30 |  | Nine Months Ended June 30
| 2019 |  | 2018 |  | 2019 |  | 2018
Revenue from sales of electricity |  |  |  |  |  |  |
Local power companies | $ | 2,366 |  |  | $ | 2,464 |  |  | $ | 7,347 |  |  | $ | 7,344 |
Industries directly served | 168 |  |  | 172 |  |  | 521 |  |  | 506 |
Federal agencies and other | 31 |  |  | 33 |  |  | 90 |  |  | 92 |
Revenue capitalized during pre-commercial plant operations(1) | — |  |  | — |  |  | — |  |  | (11 | )
Revenue from sales of electricity | 2,565 |  |  | 2,669 |  |  | 7,958 |  |  | 7,931 |
Other revenues | 39 |  |  | 38 |  |  | 121 |  |  | 117 |
Total operating revenues | $ | 2,604 |  |  | $ | 2,707 |  |  | $ | 8,079 |  |  | $ | 8,048 |
Note (1) Represents revenue capitalized during pre-commercial operations of less than $1 million and $11 million for the three and nine months ended June 30, 2018, respectively. See Note 1 — Pre-Commercial Plant Operations. The number of LPCs with the contract arrangements described below, the revenues derived from such arrangements for the three and nine months ended June 30, 2019, and the percentage of TVA’s total operating revenues for the three and nine months ended June 30, 2019 represented by these revenues are summarized in the tables below:
TVA Local Power Company Contracts At June 30, 2019
Contract Arrangements(1) | Number of LPCs |  | Sales to LPCs in the Three Months Ended June 30, 2019 (in millions) |  | Percentage of Total Operating Revenues in the Three Months Ended June 30, 2019
20-year termination notice | 3 |  |  | $ | 28 |  |  | 1.1 | %
15-year termination notice | 11 |  |  | 112 |  |  | 4.3 | %
12-year termination notice | 1 |  |  | 6 |  |  | 0.2 | %
10-year termination notice | 52 |  |  | 822 |  |  | 31.6 | %
6-year termination notice | 1 |  |  | 11 |  |  | 0.4 | %
5-year termination notice | 86 |  |  | 1,387 |  |  | 53.3 | %
Total | 154 |  |  | $ | 2,366 |  |  | 90.9 | %
Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with five of the LPCs with five-year termination notices, TVA has a 10-year termination notice (which becomes a five-year termination notice if TVA loses its discretionary wholesale rate-setting authority). Two of the LPCs have five-year termination notices or a shorter period if any act of Congress, court decision, or regulatory change requires or permits that election.
TVA Local Power Company Contracts At June 30, 2019
Contract Arrangements(1) | Number of LPCs |  | Sales to LPCs in the Nine Months Ended June 30, 2019 (in millions) |  | Percentage of Total Operating Revenues in the Nine Months Ended June 30, 2019
20-year termination notice | 3 |  |  | $ | 96 |  |  | 1.2 | %
15-year termination notice | 11 |  |  | 362 |  |  | 4.5 | %
12-year termination notice | 1 |  |  | 19 |  |  | 0.2 | %
10-year termination notice | 52 |  |  | 2,536 |  |  | 31.4 | %
6-year termination notice | 1 |  |  | 36 |  |  | 0.4 | %
5-year termination notice | 86 |  |  | 4,298 |  |  | 53.2 | %
Total | 154 |  |  | $ | 7,347 |  |  | 90.9 | %
Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with five of the LPCs with five-year termination notices, TVA has a 10-year termination notice (which becomes a five-year termination notice if TVA loses its discretionary wholesale rate-setting authority). Two of the LPCs have five-year termination notices or a shorter period if any act of Congress, court decision, or regulatory change requires or permits that election. TVA’s two largest LPCs — Memphis Light, Gas and Water Division ("MLGW") and Nashville Electric Service ("NES") — have contracts with a five-year and a 10-year termination notice period, respectively. Sales to MLGW and NES each accounted for 8 percent of TVA’s total operating revenues during the nine months ended June 30, 2019. Contract Balances Contract assets represent an entity’s right to consideration in exchange for goods and services that the entity has transferred to customers. TVA does not have any material contract assets as of June 30, 2019. Contract liabilities represent an entity’s obligations to transfer goods or services to customers for which the entity has received consideration (or an amount of consideration is due) from the customers. These contract liabilities are primarily related to upfront consideration received prior to the satisfaction of the performance obligation. Energy Prepayment Obligations. In 2004, TVA and its largest customer, Memphis Light, Gas and Water Division ("MLGW"), entered into an energy prepayment agreement under which MLGW prepaid TVA $1.5 billion for the future costs of electricity to be delivered by TVA to MLGW over a period of 15 years. TVA accounted for the prepayment as unearned revenue and reported the obligation to deliver power under this arrangement as Energy prepayment obligations and Current portion of energy prepayment obligations on the September 30, 2018, Consolidated Balance Sheets. TVA recognized approximately $100 million of noncash revenue in each year of the arrangement as electricity was delivered to MLGW based on the ratio of units of kilowatt hours delivered to total units of kilowatt hours under contract. At June 30, 2019, $1.5 billion had been recognized as noncash revenue on a cumulative basis during the life of the agreement, $25 million of which was recognized as noncash revenue and a corresponding reduction in the balance of Energy prepayment obligations during the three months ended June 30, 2018. There was no recognized noncash revenue during the three months ended June 30, 2019. During the nine months ended June 30, 2019 and 2018, $10 million and $75 million, respectively, were recognized as noncash revenue and a corresponding reduction in the balance of Energy prepayment obligations. Discounts to account for the time value of money, which were recorded as a reduction to electricity sales, amounted to $12 million for the three months ended June 30, 2018. There were no discounts to account for the time value of money during the three months ended June 30, 2019. Discounts to account for the time value of money, which were recorded as a reduction to electricity sales, amounted to $4 million and $34 million for the nine months ended June 30, 2019 and 2018, respectively. Economic Development Incentives. Under certain economic development programs, TVA offers incentives to existing and potential power customers in certain business sectors that make multi-year commitments to invest in the Tennessee Valley. TVA records those incentives as reductions of revenue. Incentives recorded as a reduction to revenue were $76 million and $70 million during the three months ended June 30, 2019, and 2018, respectively. Incentives recorded as a reduction to revenue were $231 million and $206 million during the nine months ended June 30, 2019, and 2018, respectively. Incentives that have been approved but have not been paid are recorded in Accounts payable and accrued liabilities and Other long-term liabilities in the Consolidated Balance Sheets. At June 30, 2019 and September 30, 2018, the outstanding unpaid incentives were $154 million and $145 million, respectively. These incentives may be subject to clawback provisions if the customers fail to meet certain program requirements.

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

X
- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
Name: | us-gaap_RevenueFromContractWithCustomerTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration