After seeing the mildest winter in almost five decades last year, the winter of 2018 was a very different story for the Tennessee Valley Authority.
A colder-than-normal January helped TVA set three of its top 12 winter peak demand records, as well as an all-time record for energy demand in a 24-hour period: 706 million kilowatt-hours.
The provider of electricity to more than 150 co-ops and municipal systems reported May 4 that electricity sales climbed 6 percent in the first six months of fiscal 2018. At the same time, operating costs were down 4 percent, which TVA credited to more hydro and natural gas production, along with cheaper natural gas.
TVA raised base rates 1.5 percent last October. But John Thomas, chief financial officer, said the authority was "able to more than offset" that through fleet performance and lower fuel costs.
While the base rate increased from 4.8 cents to 5 cents, the fuel rate slipped from 2.1 cents to 1.8 cents. "So the overall effective rate to our customers is lower this year for the first six months than it was last year," Thomas told a conference call.
TVA retired its Johnsonville Fossil Plant in December and its Allen Fossil Units 1-3 in March. But Bill Johnson, TVA president and CEO, made clear, "We expect coal-fired assets to continue to be part of our diverse generating mix for years to come."
"We have continued to invest in our coal fleet, which remains an important part of TVA's system," he told the call.
Still, "TVA believes a diverse portfolio will continue to provide the most consistently low rates for our customers," Johnson noted.
"One of the major changes for us is more nuclear capacity," he said. "More nuclear power is a key part of our effort to make TVA's power system cleaner and more diversified."
For the first half of fiscal 2018, TVA said net income was up 140 percent from a year ago, to $750 million. Operating revenues were $5.3 billion, an increase of 5 percent from a year earlier.