Asset Retirement Obligations

9 Months Ended

Jun. 30, 2021

Asset Retirement Obligation Disclosure [Abstract]

During the nine months ended June 30, 2021, TVA's total asset retirement obligations ("ARO") liability increased $167 million as a result of periodic accretion, revisions in estimate, and recording a new obligation, partially offset by settlement projects that were conducted during the period. The nuclear and non-nuclear accretion amounts were deferred as regulatory assets. During the nine months ended June 30, 2021, $54 million of the related regulatory assets were amortized into expense as these amounts were collected in rates. See Note 7 — Regulatory Assets and Liabilities. TVA maintains investment trusts to help fund its decommissioning obligations. See Note 14 — Fair Value Measurements — Investment Funds and Note 19 — Contingencies and Legal Proceedings — Contingencies — Decommissioning Costs for disclosure of the current balances of the trusts and a discussion of the trusts' objectives.


Asset Retirement Obligation Activity
	Nuclear		Non-Nuclear		Total
Balance at September 30, 2020	$	3,278	$	3,507	$	6,785	(1)
Settlements	(5)		(135)		(140)
Revisions in estimate	12		107		119
Additional obligation	—		30		30

Accretion (recorded as regulatory asset)	111		47		158

Balance at June 30, 2021	$	3,396	$	3,556	$	6,952	(1)

Note

(1) Includes $306 million and $345 million at June 30, 2021, and September 30, 2020, respectively, in Current liabilities.

The revisions in non-nuclear estimates increased the liability balance by $107 million for the nine months ended June 30, 2021. These increases were primarily driven by revisions of certain coal combustion residuals ("CCR") closure liabilities at Shawnee Fossil Plant ("Shawnee"), Paradise, and Colbert Fossil Plant ("Colbert"), resulting from revised engineering estimates for construction costs, new vendor bids, modified closure designs, and expected costs associated with post-closure care of the closed areas. In addition, TVA's use of a new CCR landfill at Shawnee resulted in a new obligation of $30 million.