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Other Long-Term Assets | 6 Months Ended
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Mar. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] |
Other Long-Term Assets | Other Long-Term Assets The table below summarizes the types and amounts of TVA's other long-term assets:
Other Long-Term Assets (in millions)
| At March 31, 2021 |  | At September 30, 2020
Loans and other long-term receivables, net | $ | 109 |  |  | $ | 100 |
EnergyRight® receivables, net | 62 |  |  | 69 |
Prepaid long-term service agreements | 54 |  |  | 42 |
Commodity contract derivative assets | 5 |  |  | 23 |
Restricted cash and cash equivalents | 19 |  |  | 21 |
Prepaid capacity payments | 8 |  |  | 11 |
Other | 61 |  |  | 59 |
Total other long-term assets | $ | 318 |  |  | $ | 325 |
EnergyRight® Receivables, Net. In association with the EnergyRight® program, TVA's LPCs offer financing to end-use customers for the purchase of energy-efficient equipment. Depending on the nature of the energy-efficiency project, loans may have a maximum term of five years or 10 years. TVA purchases the resulting loans receivable from its LPCs. The loans receivable are then transferred to a third-party bank with which TVA has agreed to repay in full any loans receivable that have been in default for 180 days or more or that TVA has determined are uncollectible. Given this continuing involvement, TVA accounts for the transfer of the loans receivable as secured borrowings. The current and long-term portions of the loans receivable are reported in Accounts receivable, net and Other long-term assets, respectively, on TVA's Consolidated Balance Sheets. At March 31, 2021, and September 30, 2020, the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was approximately $16 million and $18 million, respectively. See Note 9 — Other Long-Term Liabilities for information regarding the associated financing obligation. 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. The deferral option began in April 2020 and ended October 31, 2020. As of March 31, 2021, all EnergyRight® loans approved for the deferral period had resumed payments. The deferred loans did not accrue interest during the deferral months and totaled less than $1 million. Allowance for Loan Losses. As described in Note 2 — Impact of New Accounting Standards and Interpretations, TVA adopted CECL on October 1, 2020 to determine its allowance for loan loss. The allowance for loan loss is an estimate of expected credit losses, measured over the estimated life of the loan receivables, that considers reasonable and supportable forecasts of future economic conditions in addition to information about historical experience and current conditions. See Note 1 — Summary of Significant Accounting Policies — Allowance for Uncollectible Accounts. The allowance components, which consist of a collective allowance and specific loans allowance, are based on the risk characteristics of TVA's loans. Loans that share similar risk characteristics are evaluated on a collective basis in measuring credit losses, while loans that do not share similar risk characteristics with other loans are evaluated on an individual basis.
Allowance Components (in millions)
| At March 31, 2021
EneryRight® loan reserve | $ | 2 |
Economic development loan collective reserve | 1 |
Economic development loan specific loan reserve | 2 |
Total allowance for loan losses | $ | 5 |
Prepaid 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, payments made exceed the value of parts received and services rendered. The current and long-term portions of the resulting prepayments are reported in Other current assets and Other long-term assets, respectively, on TVA's Consolidated Balance Sheets. At March 31, 2021, and September 30, 2020, prepayments of $11 million and $3 million, respectively, were recorded in Other current assets.

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