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Revenue (Notes) | 6 Months Ended
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Mar. 31, 2023
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 91 percent of TVA's Revenue from sales of electricity for both the three and six months ended March 31, 2023, was from 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 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 credits created to support directly served customers in 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, REC sales, and certain other ancillary goods or services. Disaggregated Revenues During the three and six months ended March 31, 2023, revenues generated from TVA's electricity sales were $2.9 billion and $5.9 billion, respectively, and accounted for virtually all of TVA's revenues. TVA's operating revenues by state for the three and six months ended March 31, 2023 and 2022, are detailed in the table below:
Operating Revenues By State (in millions)
| Three Months Ended March 31 |  | Six Months Ended March 31
| 2023 |  | 2022 |  | 2023 |  | 2022
Alabama | $ | 428 |  |  | $ | 413 |  |  | $ | 856 |  |  | $ | 784 |
Georgia | 72 |  |  | 74 |  |  | 148 |  |  | 138 |
Kentucky | 192 |  |  | 190 |  |  | 390 |  |  | 361 |
Mississippi | 273 |  |  | 264 |  |  | 551 |  |  | 505 |
North Carolina | 25 |  |  | 23 |  |  | 50 |  |  | 43 |
Tennessee | 1,918 |  |  | 1,867 |  |  | 3,859 |  |  | 3,526 |
Virginia | 13 |  |  | 13 |  |  | 26 |  |  | 24 |
Subtotal | 2,921 |  |  | 2,844 |  |  | 5,880 |  |  | 5,381 |
Off-system sales | 3 |  |  | 4 |  |  | 7 |  |  | 5 |
Revenue from sales of electricity | 2,924 |  |  | 2,848 |  |  | 5,887 |  |  | 5,386 |
Other revenue | 35 |  |  | 36 |  |  | 87 |  |  | 81 |
Total operating revenues | $ | 2,959 |  |  | $ | 2,884 |  |  | $ | 5,974 |  |  | $ | 5,467 |
TVA's operating revenues by customer type for the three and six months ended March 31, 2023 and 2022, are detailed in the table below:
Operating Revenues by Customer Type (in millions)
| Three Months Ended March 31 |  | Six Months Ended March 31
| 2023 |  | 2022 |  | 2023 |  | 2022
Revenue from sales of electricity |  |  |  |  |  |  |
Local power companies | $ | 2,674 |  |  | $ | 2,608 |  |  | $ | 5,380 |  |  | $ | 4,914 |
Industries directly served | 217 |  |  | 206 |  |  | 442 |  |  | 411 |
Federal agencies and other | 33 |  |  | 34 |  |  | 65 |  |  | 61 |
Revenue from sales of electricity | 2,924 |  |  | 2,848 |  |  | 5,887 |  |  | 5,386 |
Other revenue | 35 |  |  | 36 |  |  | 87 |  |  | 81 |
Total operating revenues | $ | 2,959 |  |  | $ | 2,884 |  |  | $ | 5,974 |  |  | $ | 5,467 |
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 automatically renew each year and have a 20-year termination notice. The partnership arrangements can be terminated under certain circumstances, including TVA's failure to limit rate increases as provided for in the agreements 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 partnership agreement were $47 million and $50 million for the three months ended March 31, 2023 and 2022, respectively. The total wholesale bill credits to LPCs participating in the partnership agreement were $95 million and $93 million for the six months ended March 31, 2023 and 2022, respectively. In 2020, TVA provided participating LPCs a flexibility option, named Generation Flexibility, that allows them to locally generate or purchase up to approximately five percent of their average total hourly energy sales over a certain time period in order to meet their individual customers' needs. As of May 1, 2023, 147 LPCs had signed the partnership agreement with TVA, and 83 LPCs had signed a Power Supply Flexibility Agreement. In 2021, the TVA Board approved a 2.5 percent monthly base rate credit, the Pandemic Recovery Credit, which was effective for 2022. In 2022, the TVA Board approved a 2.5 percent monthly base rate credit, which is an extension of the Pandemic Recovery Credit, and is effective for 2023. These pandemic credits apply to service provided to TVA's LPCs, their large commercial and industrial customers, and TVA directly served customers. The 2023 credit is expected to approximate $230 million. For the three months ended March 31, 2023 and 2022, pandemic credits totaled $53 million and $55 million, respectively. For the six months ended March 31, 2023 and 2022, pandemic credits totaled $106 million and $105 million, respectively. The number of LPCs by contract arrangement, the revenues derived from such arrangements for the three and six months ended March 31, 2023, 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 March 31, 2023
Contract Arrangements(1) |  | Number of LPCs |  | Revenue from Sales of Electricity to LPCs (in millions) |  | Percentage of Total Operating Revenues
20-year termination notice |  | 147 |  |  | $ | 2,323 |  |  | 78.5 | %
5-year termination notice |  | 6 |  |  | 351 |  |  | 11.9 | %
Total |  | 153 |  |  | $ | 2,674 |  |  | 90.4 | %
Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in a contract with one of the LPCs with a five-year termination notice, 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 Six Months Ended March 31, 2023
Contract Arrangements(1) |  | Number of LPCs |  | Revenue from Sales of Electricity to LPCs (in millions) |  | Percentage of Total Operating Revenues
20-year termination notice |  | 147 |  |  | $ | 4,668 |  |  | 78.1 | %
5-year termination notice |  | 6 |  |  | 712 |  |  | 11.9 | %
Total |  | 153 |  |  | $ | 5,380 |  |  | 90.0 | %
Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in a contract with one of the LPCs with a five-year termination notice, 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 for both the six months ended March 31, 2023 and the six months ended March 31, 2022. 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 did not have any material contract assets at March 31, 2023. 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. See Economic Development Incentives below and Note 10 — Other Long-Term Liabilities — Long-Term Deferred Revenue. 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 $79 million for the three months ended March 31, 2023 and 2022, respectively. Incentives recorded as a reduction to revenue were $164 million and $168 million for the six months ended March 31, 2023 and 2022, 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 March 31, 2023, and September 30, 2022, the outstanding unpaid incentives were $188 million and $187 million, respectively. Incentives that have been paid out may be subject to claw back if the customer fails to meet certain program requirements.

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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 https://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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 + Details
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