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Leases (Table Text Block) | 12 Months Ended
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Sep. 30, 2024
Leases [Abstract] |
Amounts Recognized on Balance Sheets | The following table provides information regarding the presentation of leases on the Consolidated Balance Sheets:
Amounts Recognized on TVA's Consolidated Balance Sheets At September 30 (in millions)
|  | 2024 |  | 2023
Assets |  |  |  |
Operating | Operating lease assets, net of amortization | $ | 149 |  |  | $ | 177 |
Finance | Finance leases | 729 |  |  | 572 |
Total lease assets |  | $ | 878 |  |  | $ | 749 |
Liabilities |  |  |  |
Current |  |  |  |
Operating | Accounts payable and accrued liabilities | $ | 63 |  |  | $ | 71 |
Finance | Accounts payable and accrued liabilities | 80 |  |  | 56 |
Non-current |  |  |  |
Operating | Other long-term liabilities | 88 |  |  | 93 |
Finance | Finance lease liabilities | 700 |  |  | 576 |
Total lease liabilities |  | $ | 931 |  |  | $ | 796 |
Amounts Recognized on Statements of Cash Flows | The following table contains additional information with respect to cash and non-cash activities related to leases:
Amounts Recognized on TVA's Consolidated Statements of Cash Flows For the years ended September 30 (in millions)
| 2024 |  | 2023 |  | 2022
Operating cash flows for operating leases | $ | 78 |  |  | $ | 77 |  |  | $ | 57 |
Operating cash flows for finance leases | 37 |  |  | 43 |  |  | 42 |
Financing cash flows for finance leases | 76 |  |  | 56 |  |  | 60 |
Lease assets obtained in exchange for lease obligations (non-cash) |  |  |  |  |
Operating leases | $ | 115 |  |  | $ | 84 |  |  | $ | 43 |
Finance leases | 230 |  |  | 3 |  |  | — |
Weighted Averages | TVA has certain finance leases under PPAs under which the present value of the minimum lease payments exceeds the fair value of the related lease asset at the date of measurement. This resulted in an interest rate that was higher than TVA's incremental borrowing rate. The weighted average remaining lease terms in years and the weighted average discount rate for TVA's operating and finance leases were as follows:
Weighted Averages At September 30
| 2024 |  | 2023
Weighted average remaining lease terms |  |  |
Operating leases | 4 years |  | 3 years
Finance leases(1) | 9 years |  | 10 years
Weighted average discount rate(2) |  |  |
Operating leases | 4.3% |  | 4.1%
Finance leases | 17.6% |  | 21.6%
Note (1) One of TVA's finance leases includes an option period to extend, which TVA is reasonably certain to exercise. (2) The discount rate is calculated using the rate implicit in a lease if it is readily determinable. If the rate used by the lessor is not readily determinable, TVA uses its incremental borrowing rate as permitted by accounting guidance. The incremental borrowing rate is influenced by TVA's credit rating and lease term and as such may differ for individual leases, embedded leases, or portfolios of leased assets. .
Future Minimum Lease Payments | The following table presents maturities of lease liabilities and a reconciliation of the undiscounted cash flows to lease liabilities at September 30, 2024:
Future Minimum Lease Payments Minimum payments outstanding at September 30, 2024 (in millions)
Operating leases |
2025 | $ | 68 |
2026 | 34 |
2027 | 31 |
2028 | 18 |
2029 | 4 |
Thereafter | 8 |
Minimum annual payments | 163 |
Less: present value discount | (12) |
Operating present value of net minimum lease payments | $ | 151 |
Finance leases |
2025 | $ | 140 |
2026 | 139 |
2027 | 137 |
2028 | 133 |
2029 | 132 |
Thereafter | 452 |
Minimum annual payments | 1,133 |
Less: amount representing interest | (353) |
Finance present value of net minimum lease payments | $ | 780 |
Lease, Cost | TVA's leases consist primarily of railcars, equipment, real estate/land, power generating facilities, and gas pipelines. TVA's leases have various terms and expiration dates remaining from less than one year to 22 years. The components of lease costs were as follows:
Lease Costs For the years ended September 30 (in millions)
| 2024 |  | 2023 |  | 2022 |  |
Operating lease costs(1) | $ | 77 |  |  | $ | 69 |  |  | $ | 56 |  |  |
Variable lease costs(1)(5) | 258 |  |  | 134 |  |  | 78 |  |  |
Short-term lease costs(1) | 10 |  |  | 18 |  |  | 26 |  |  |
Finance lease costs |  |  |  |  |  |  |
Amortization of lease assets(2) | 79 |  |  | 57 |  |  | 58 |  |  |
Interest on lease liabilities(3)(4) | 37 |  |  | 43 |  |  | 42 |  |  |
Total finance lease costs | 116 |  |  | 100 |  |  | 100 |  |  |
Total lease costs | $ | 461 |  |  | $ | 321 |  |  | $ | 260 |  |  |
Notes (1) Costs are included in Operating and maintenance expense, Fuel expense, Purchased power expense, and Tax equivalents expense on the Consolidated Statements of Operations. (2) Expense is included in Depreciation and amortization expense on the Consolidated Statements of Operations. (3) Expense is included in Interest expense on the Consolidated Statements of Operations. (4) Certain finance leases receive regulatory accounting treatment and are reclassified to Fuel expense and Purchased power expense. (5) Variable lease costs include costs related to variable payments that are based on energy production levels, which are allocated to expense based on the determination of lease and non-lease components associated with the underlying agreements.

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