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Fair Value Measurements (Tables)

6 Months Ended

Mar. 31, 2025

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) (in millions)
												Three Months Ended March 31												Six Months Ended March 31
Fund						Financial Statement Presentation						2025						2024						2025						2024
NDT						Regulatory assets(2)						$	8					$	54					$	(67)					$	251
ART						Regulatory assets(3)						(8)						34						(28)						123
SERP						Other income, net						—						2						(6)						9
DCP						Other income, net						(1)						1						(2)						2

Notes

(1) The unrealized gains for the RP were less than $1 million for both the three and six months ended March 31, 2025 and three and six months ended March 31, 2024, and therefore were not represented in the table above.

(2) Includes $33 million of unrealized losses and $24 million of unrealized gains related to NDT equity securities (excluding commingled funds) for the three months ended March 31, 2025 and 2024, respectively. Includes $61 million of unrealized losses and $70 million of unrealized gains related to NDT equity securities (excluding commingled funds) for the six months ended March 31, 2025 and 2024, respectively.

(3) Includes $6 million of unrealized losses and $8 million of unrealized gains related to ART equity securities (excluding commingled funds) for the three months ended March 31, 2025 and 2024, respectively. Includes $14 million of unrealized losses and $24 million of unrealized gains related to ART equity securities (excluding commingled funds) for the six months ended March 31, 2025 and 2024, respectively.

Fair Value Measurements

Fair Value Measurements At March 31, 2025 (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			$	692					$	—					$	—					$	692
Government debt securities(1)(2)			410						47						—						457
Corporate debt securities(3)			—						369						—						369
Mortgage and asset-backed securities			—						39						—						39
Institutional mutual funds			333						—						—						333
Forward debt securities contracts			—						16						—						16
Cash equivalents and other short-term investments(2)(4)			46						198						—						244
Private equity funds measured at net asset value(5)			—						—						—						762
Private real asset funds measured at net asset value(5)			—						—						—						450
Private credit funds measured at net asset value(5)			—						—						—						263
Commingled funds measured at net asset value(5)			—						—						—						1,292
Total investments			1,481						669						—						4,917
Commodity contract derivatives			—						10						—						10
Commodity derivatives under the FHP			—						106						—						106
Total			$	1,481					$	785					$	—					$	5,033
			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)			$	—					$	139					$	—					$	139
Interest rate swaps			—						707						—						707
Commodity contract derivatives			—						5						—						5
Commodity derivatives under the FHP			—						11						—						11
Total			$	—					$	862					$	—					$	862

Notes

(1) Includes obligations of government-sponsored entities.

(2) There are $410 million of U.S. Treasury securities in Level 1 Government debt securities and $46 million of U.S. Treasury securities in Level 1 Cash equivalents and other short-term investments for a total of $456 million of U.S. Treasury securities within Level 1 of the fair value hierarchy.

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

(4) Includes $62 million net payables (interest receivable, dividends receivable, receivables for investments sold, and payables for investments purchased), and $168 million of repurchase agreements in Level 2 Cash equivalents and other short-term investments.

(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 14 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities.

Fair Value Measurements At September 30, 2024 (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			$	770					$	—					$	—					$	770
Government debt securities(1)(2)			400						57						—						457
Corporate debt securities(3)			—						378						—						378
Mortgage and asset-backed securities			—						43						—						43
Institutional mutual funds			342						—						—						342
Forward debt securities contracts			—						11						—						11
Cash equivalents and other short-term investments(2)(4)			95						183						—						278
Private equity funds measured at net asset value(5)			—						—						—						738
Private real asset funds measured at net asset value(5)			—						—						—						432
Private credit funds measured at net asset value(5)			—						—						—						219
Commingled funds measured at net asset value(5)			—						—						—						1,300
Total investments			1,607						672						—						4,968
Commodity contract derivatives			—						7						—						7
Total			$	1,607					$	679					$	—					$	4,975
			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)			$	—					$	116					$	—					$	116
Interest rate swaps			—						840						—						840
Commodity contract derivatives			—						5						—						5
Commodity derivatives under the FHP			—						161						—						161
Total			$	—					$	1,122					$	—					$	1,122

Notes

(1) Includes obligations of government-sponsored entities.

(2) There are $400 million of U.S. Treasury securities in Level 1 Government debt securities and $95 million of U.S. Treasury securities in Level 1 Cash equivalents and other short-term investments for a total of $495 million of U.S. Treasury securities within Level 1 of the fair value hierarchy.

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

(4) Includes $78 million net payables (interest receivable, dividends receivable, receivables for investments sold, and payables for investments purchased), and $174 million of repurchase agreements in Level 2 Cash equivalents and other short-term investments.

(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, estimated benchmark yields, 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 14 — 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 March 31, 2025, and September 30, 2024, were as follows:

Estimated Values of Financial Instruments Not Recorded at Fair Value (in millions)
									At March 31, 2025												At September 30, 2024
			Valuation Classification						Carrying Amount						Fair Value						Carrying Amount						Fair Value
EnergyRight® receivables, net (including current portion)			Level 2						$	56					$	56					$	56					$	56
Loans and other long-term receivables, net (including current portion)			Level 2						104						97						105						99
EnergyRight® financing obligations (including current portion)			Level 2						65						73						66						74
Membership interests of VIEs subject to mandatory redemption (including current portion)			Level 2						16						18						17						19
Long-term outstanding power bonds, net (including current maturities)			Level 2						20,101						20,115						18,889						19,416
Long-term debt of VIEs, net (including current maturities)			Level 2						1,703						1,702						934						966

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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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-Topic 820
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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).

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