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Revenue (Notes) | 9 Months Ended
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Jun. 30, 2021
Revenue from Contract with Customer [Abstract] |
Revenue from Contract with Customer [Text Block] | Revenue 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 for the three and nine months ended June 30, 2021 was 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, wholesale bill credits to maintain long-term partnerships with LPCs, Pandemic Relief Credits created to support LPCs and strengthen the public power response to the COVID-19 pandemic, and demand response 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, Pandemic Relief Credits created to support directly served customers and strengthen the public power response to the COVID-19 pandemic, and demand response 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 Revenues During the three and nine months ended June 30, 2021, revenues generated from TVA's electricity sales were $2.5 billion and $7.3 billion, respectively, and accounted for virtually all of TVA's revenues. TVA's operating revenues by state for the three and nine months ended June 30, 2021 and 2020, are detailed in the table below:
Operating Revenues By State (in millions)
| Three Months Ended June 30 |  | Nine Months Ended June 30
| 2021 |  | 2020 |  | 2021 |  | 2020
Alabama | $ | 359 |  |  | $ | 312 |  |  | $ | 1,072 |  |  | $ | 1,041 |
Georgia | 60 |  |  | 52 |  |  | 184 |  |  | 179 |
Kentucky | 163 |  |  | 140 |  |  | 457 |  |  | 455 |
Mississippi | 237 |  |  | 204 |  |  | 686 |  |  | 668 |
North Carolina | 15 |  |  | 13 |  |  | 49 |  |  | 50 |
Tennessee | 1,646 |  |  | 1,485 |  |  | 4,810 |  |  | 4,809 |
Virginia | 10 |  |  | 9 |  |  | 31 |  |  | 32 |
Subtotal | 2,490 |  |  | 2,215 |  |  | 7,289 |  |  | 7,234 |
Off-system sales | 1 |  |  | 1 |  |  | 5 |  |  | 3 |
Revenue from sales of electricity | 2,491 |  |  | 2,216 |  |  | 7,294 |  |  | 7,237 |
Other revenue | 36 |  |  | 35 |  |  | 109 |  |  | 113 |
Total operating revenues | $ | 2,527 |  |  | $ | 2,251 |  |  | $ | 7,403 |  |  | $ | 7,350 |
TVA's operating revenues by customer type for the three and nine months ended June 30, 2021 and 2020, are detailed in the table below:
Operating Revenues by Customer Type (in millions)
| Three Months Ended June 30 |  | Nine Months Ended June 30
| 2021 |  | 2020 |  | 2021 |  | 2020
Revenue from sales of electricity |  |  |  |  |  |  |
Local power companies | $ | 2,283 |  |  | $ | 2,058 |  |  | $ | 6,711 |  |  | $ | 6,716 |
Industries directly served | 179 |  |  | 132 |  |  | 501 |  |  | 442 |
Federal agencies and other | 29 |  |  | 26 |  |  | 82 |  |  | 79 |
Revenue from sales of electricity | 2,491 |  |  | 2,216 |  |  | 7,294 |  |  | 7,237 |
Other revenue | 36 |  |  | 35 |  |  | 109 |  |  | 113 |
Total operating revenues | $ | 2,527 |  |  | $ | 2,251 |  |  | $ | 7,403 |  |  | $ | 7,350 |
TVA and LPCs continue to work together to meet the changing needs of consumers around the Tennessee Valley. In 2019, the TVA Board approved a Partnership Agreement option that better aligns the length of LPC power contracts with TVA's long-term commitments. Under the partnership arrangement, the LPC power contracts have a 20-year termination notice provision that renews each year after their initial effective date, contingent upon certain circumstances, including limited rate increases going forward. Participating LPCs receive benefits including a 3.1 percent wholesale bill credit in exchange for their long-term commitment, which enables TVA to recover its long-term financial commitments over a commensurate period. The total wholesale bill credits to LPCs participating in the long-term Partnership Agreement were $43 million and $38 million, respectively, for the three months ended June 30, 2021 and 2020. The total wholesale bill credits to LPCs participating in the long-term Partnership Agreement were $133 million and $108 million, respectively, for the nine months ended June 30, 2021 and 2020. In June 2020, TVA provided participating LPCs a flexibility option that allows them to locally generate up to approximately five percent of average total hourly energy sales over the prior five years in order to meet their individual customers' needs. As of August 2, 2021, 143 LPCs had signed the 20-year Partnership Agreement with TVA, and 71 LPCs had signed a Flexibility Agreement. In August 2020, the TVA Board approved a Pandemic Relief Credit which became effective beginning October 2020. The 2.5 percent monthly base rate credit, expected to approximate $200 million in total for 2021, applies to service provided to TVA's LPCs, their large commercial and industrial customers, and TVA directly served customers. Pandemic Relief Credits were $52 million and $156 million, respectively, for the three and nine months ended June 30, 2021. There were no Pandemic Relief Credits for the three and nine months ended June 30, 2020. The number of LPCs by contract arrangement, the revenues derived from such arrangements for the three and nine months ended June 30, 2021, and the percentage those revenues comprised of TVA's total operating revenues for the same periods, are summarized in the tables below:
TVA Local Power Company Contracts At or for the Three Months Ended June 30, 2021
Contract Arrangements(1) |  | Number of LPCs |  | Revenue from Sales of Electricity to LPCs (in millions) |  | Percentage of Total Operating Revenues
20-year termination notice |  | 142 |  |  | $ | 1,851 |  |  | 73.2 | %
5-year termination notice |  | 11 |  |  | 432 |  |  | 17.1 | %
Total |  | 153 |  |  | $ | 2,283 |  |  | 90.3 | %
Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with two 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). Certain 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 or for the Nine Months Ended June 30, 2021
Contract Arrangements(1) |  | Number of LPCs |  | Revenue from Sales of Electricity to LPCs (in millions) |  | Percentage of Total Operating Revenues
20-year termination notice |  | 142 |  |  | $ | 5,505 |  |  | 74.4 | %
5-year termination notice |  | 11 |  |  | 1,206 |  |  | 16.3 | %
Total |  | 153 |  |  | $ | 6,711 |  |  | 90.7 | %
Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with two 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). Certain 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 20-year termination notice period, respectively. Sales to MLGW and NES each accounted for eight percent of TVA's total operating revenues during the nine months ended June 30, 2021. Sales to MLGW and NES accounted for nine percent and eight percent, respectively, of TVA's total operating revenues during the nine months ended June 30, 2020. Certain LPCs, including MLGW, are evaluating options for future energy choices. In addition, in January 2021, four LPCs accounting for four percent of TVA's total operating revenues for the nine months ended June 30, 2021, filed a complaint and petition with the Federal Energy Regulatory Commission ("FERC") asking FERC to order TVA to provide transmission and interconnection service to the LPCs or other suppliers that want to serve them. See Note 19 — Contingencies and Legal Proceedings — Legal Proceedings — Challenge to Anti-Cherrypicking Amendment. 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 at June 30, 2021. 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. Economic Development Incentives. Under certain economic development programs, TVA offers incentives to existing and potential power customers in targeted 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 $82 million and $78 million for the three months ended June 30, 2021 and 2020, respectively. Incentives recorded as a reduction to revenue were $239 million and $238 million for the nine months ended June 30, 2021 and 2020, respectively. Incentives that have been approved but have not been paid are recorded in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. At June 30, 2021, and September 30, 2020, the outstanding unpaid incentives were $178 million and $172 million, respectively. Incentives that have been paid out may be subject to claw back if the customer fails to meet certain program requirements. Additionally, in May 2020, TVA established flexibility provisions to support the continued operations and recovery of participating customers experiencing financial and operational hardships as a result of the COVID-19 pandemic and corresponding economic downturn. These provisions were made available through the December 2020 application period, which could provide flexibility to customers through 2021. The provisions have not had a material impact to TVA.

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- 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 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 + Details
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