Other Long-Term Liabilities

3 Months Ended

Dec. 31, 2020

Other Liabilities, Noncurrent [Abstract]

Other long-term liabilities consist primarily of liabilities related to certain derivative agreements, as well as for environmental remediation liabilities and liabilities under agreements related to compliance with certain environmental regulations. See Note 10 — Asset Retirement Obligations and Note 13 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Interest Rate Derivatives. The table below summarizes the types and amounts of Other long-term liabilities:


Other Long-Term Liabilities (in millions)
	At December 31, 2020		At September 30, 2020
Interest rate swap liabilities	$	1,754	$	1,927

Operating lease liabilities	159		171
Currency swap liabilities	41		123





EnergyRight® financing obligations	75		78

Accrued long-term service agreements	49		56
Other	192		193
Total other long-term liabilities	$	2,270	$	2,548

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. At December 31, 2020, and September 30, 2020, the carrying amount of the interest rate swap liabilities reported in Accounts payable and accrued liabilities and Accrued interest was $115 million and $114 million, respectively. See Note 13 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Interest Rate Derivatives for information regarding the interest rate swap liabilities. As of December 31, 2020, interest rate swap liabilities decreased $172 million as compared to September 30, 2020, due to an increase in both market interest rates since September 30, 2020, and settlement payments during the three months ended December 31, 2020.

EnergyRight® Financing Obligations. TVA purchases certain loans receivable from its LPCs in association with the EnergyRight® 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. At both December 31, 2020, and September 30, 2020, the carrying amount of the financing obligations reported in Accounts payable and accrued liabilities was $19 million. See Note 6 — Other Long-Term Assets for information regarding the associated loans receivable.

In response to the COVID-19 pandemic, customers experiencing financial hardship could request a deferral of EnergyRight® loan payments for a period of up to six months. This deferral option began in April 2020 and ended October 31, 2020. Deferred loans did not accrue interest during the deferral months and totaled less than $1 million.

Accrued Long-Term Service Agreements. 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. At both December 31, 2020 and September 30, 2020, related liabilities of $15 million were recorded in Accounts payable and accrued liabilities.