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Fair Value Measurements (Tables)

12 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Valuation Techniques

The measurement of fair value results in classification into a hierarchy by the inputs used to determine the fair value as follows:

Level 1			—						Unadjusted quoted prices in active markets accessible by the reporting entity for identical assets or liabilities.  Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing.
Level 2			—						Pricing inputs other than quoted market prices included in Level 1 that are based on observable market data and that are directly or indirectly observable for substantially the full term of the asset or liability.  These include quoted market prices for similar assets or liabilities, quoted market prices for identical or similar assets in markets that are not active, adjusted quoted market prices, inputs from observable data such as interest rate and yield curves, volatilities and default rates observable at commonly quoted intervals, and inputs derived from observable market data by correlation or other means.
Level 3			—						Pricing inputs that are unobservable, or less observable, from objective sources.  Unobservable inputs are only to be used to the extent observable inputs are not available.  These inputs maintain the concept of an exit price from the perspective of a market participant and should reflect assumptions of other market participants.  An entity should consider all market participant assumptions that are available without unreasonable cost and effort.  These are given the lowest priority and are generally used in internally developed methodologies to generate management's best estimate of the fair value when no observable market data is available.

Unrealized Investment Gains (Losses)

TVA recorded unrealized gains and losses related to its equity and trading debt securities held during each period as follows:

Unrealized Investment Gains (Losses)(1) For the years ended September 30 (in millions)
Fund			Financial Statement Presentation						2023						2022
NDT			Regulatory assets(2)						$	162					$	(396)
ART			Regulatory assets(3)						96						(190)
SERP			Other income (expense)						6						(19)
DCP			Other income (expense)						1						(5)

Notes

(1) Employee contributions to the RP began in the second quarter of 2023. As of September 30, 2023, the unrealized losses for the RP were less than $1 million, and therefore were not represented in the table above.

(2) Includes $27 million of unrealized gains and $138 million of unrealized losses related to NDT equity securities (excluding commingled funds) for the years ended September 30, 2023 and 2022, respectively.

(3) Includes $13 million of unrealized gains and $44 million of unrealized losses related to ART equity securities (excluding commingled funds) for the years ended September 30, 2023 and 2022, respectively.

Fair Value Measurements

Fair Value Measurements At September 30, 2023 (in millions)
			Quoted Prices in Active  Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)						Total
Assets
Investments
Equity securities			$	608					$	—					$	—					$	608
Government debt securities(1)(2)			287						60						—						347
Corporate debt securities(3)			—						300						—						300
Mortgage and asset-backed securities			—						36						—						36
Institutional mutual funds			288						—						—						288
Forward debt securities contracts			—						11						—						11
Cash equivalents and other short-term investments(2)			104						166						—						270
Private equity funds measured at net asset value(4)			—						—						—						583
Private real asset funds measured at net asset value(4)			—						—						—						387
Private credit funds measured at net asset value(4)			—						—						—						158
Commingled funds measured at net asset value(4)			—						—						—						1,135
Total investments			1,287						573						—						4,123
Interest rate swaps			—						4						—						4
Commodity contract derivatives			—						33						—						33
Total			$	1,287					$	610					$	—					$	4,160
			Quoted Prices in Active Markets for Identical Liabilities (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)						Total
Liabilities
Currency swaps(5)			$	—					$	141					$	—					$	141
Interest rate swaps			—						662						—						662
Commodity contract derivatives			—						2						—						2
Commodity derivatives under the FHP			—						186						—						186
Total			$	—					$	991					$	—					$	991

Notes

(1) Includes securities of government-sponsored entities.

(2) There are $287 million of U.S. Treasury Securities in Level 1 Government debt securities and $104 million of U.S. Treasury Securities in Level 1 Cash equivalents and other short-term investments for a total of $391 million of U.S. Treasury securities within Level 1 of the fair value hierarchy.

(3) Includes both U.S. and foreign debt.

(4) Certain investments that are measured at fair value using the NAV or its equivalent ("alternative investments") have not been categorized in the fair value hierarchy. The inputs to these fair value measurements include underlying NAVs, discounted cash flow valuations, comparable market valuations, and adjustments for currency, credit, liquidity, and other risks. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the Consolidated Balance Sheets.

(5) TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 15 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities.

Fair Value Measurements At September 30, 2022 (in millions)
			Quoted Prices in Active  Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)						Total
Assets
Investments
Equity securities			$	534					$	—					$	—					$	534
Government debt securities(1)(2)(3)			297						35						—						332
Corporate debt securities(3)(4)			—						282						—						282
Mortgage and asset-backed securities			—						52						—						52
Institutional mutual funds			242						—						—						242
Forward debt securities contracts			—						4						—						4
Cash equivalents and other short-term investments(2)(3)			61						118						—						179
Private equity funds measured at net asset value(5)			—						—						—						487
Private real asset funds measured at net asset value(5)			—						—						—						369
Private credit funds measured at net asset value(5)			—						—						—						103
Commingled funds measured at net asset value(3)(5)			—						—						—						1,087
Total investments			1,134						491						—						3,671
Commodity contract derivatives			—						152						—						152
Commodity derivatives under the FHP			—						123						—						123
Total			$	1,134					$	766					$	—					$	3,946
			Quoted Prices in Active Markets for Identical Liabilities (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)						Total
Liabilities
Currency swaps(6)			$	—					$	240					$	—					$	240
Interest rate swaps			—						905						—						905
Commodity contract derivatives			—						7						—						7
Commodity derivatives under the FHP			—						8						—						8
Total			$	—					$	1,160					$	—					$	1,160

Notes

(1) Includes securities of government-sponsored entities.

(2) There are $297 million of U.S. Treasury Securities in Level 1 Government debt securities and $61 million of U.S. Treasury Securities in Level 1 Cash equivalents and other short-term investments for a total of $358 million of U.S. Treasury securities within Level 1 of the fair value hierarchy.

(3) At September 30, 2022, $61 million of the Level 1 Government debt securities have been reclassified to Level 1 Cash equivalents and other short-term investments. At September 30, 2022, $1 million of the Level 2 Government debt securities, $1 million of the Level 2 Corporate debt securities, and $116 million of the Commingled funds measured at net asset value have been reclassified to Level 2 Cash equivalents and other short-term investments.

(4) Includes both U.S. and foreign debt.

(5) Certain investments that are measured at fair value using the NAV or its equivalent ("alternative investments") have not been categorized in the fair value hierarchy. The inputs to these fair value measurements include underlying NAVs, discounted cash flow valuations, comparable market valuations, and adjustments for currency, credit, liquidity, and other risks. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the Consolidated Balance Sheets.

(6) TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 15 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities.

Estimated Values of Financial Instruments Not Recorded at Fair Value

The estimated values of TVA's financial instruments not recorded at fair value at September 30, 2023 and 2022, were as follows:

Estimated Values of Financial Instruments Not Recorded at Fair Value (in millions)
									At September 30, 2023												At September 30, 2022
			Valuation Classification						Carrying Amount						Fair Value						Carrying Amount						Fair Value
EnergyRight® receivables, net (including current portion)			Level 2						$	59					$	55					$	62					$	62
Loans and other long-term receivables, net (including current portion)			Level 2						104						96						105						96
EnergyRight® financing obligations (including current portion)			Level 2						69						81						72						81
Unfunded loan commitments			Level 2						—						1						—						—
Membership interests of VIEs subject to mandatory redemption (including current portion)			Level 2						18						19						20						22
Long-term outstanding power bonds, net (including current maturities)			Level 2						18,866						17,963						17,856						18,070
Long-term debt of VIEs, net (including current maturities)			Level 2						968						927						1,007						989

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- Definition

The tabular disclosure of the estimated values of financial instruments not recorded at fair value. This disclosure includes the class of financial instrument, valuation classification, carrying amount, and fair value.

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Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.

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-Name Accounting Standards Codification
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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
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