By Ray Henry/The Associated Press
ATLANTA – The Tennessee Valley Authority announced Friday that it lost $94 million in the last quarter as electricity sales slumped during an unusually warm winter and it faces an over-budget project to finish building a nuclear reactor in Tennessee.
TVA officials said they would seek to cut fewer than 1,000 positions in an effort to trim spending, but didn’t immediately offer details.
The electric supplier brought in nearly $2.6 billion in revenue during the three-month period ending in March, a drop of more than 12 percent compared to the same period last year, according to federal filings. Power sales were down about 7 percent for the quarter.
The electric supplier blamed the bulk of those losses on an unusually warm winter, which cut both the demand for electricity and the prices that TVA can charge for it. TVA officials stood by the board’s recent decision to approve adding $1.5 billion to $2 billion to the estimated cost of building a second nuclear reactor at its Watts Bar power plant in Spring City, Tenn. That brings the final cost of the project to as much as $4.5 billion.
“While we still believe that will be a low-cost option and help balance our portfolio for our fleet, the increased spending on that certainly is a hard spot,” said John Thomas, the TVA’s chief financial officer, in a conference call with reporters and analysts.
CEO Tom Kilgore said the TVA would do a better job managing the nuclear construction project at Watts Bar and measuring progress. While the price of natural gas has plummeted, Kilgore said the TVA still needs a mix of power plants — what utilities call a portfolio — because it cannot predict what various fuels will cost deep into the future.
“We think that keeping this balance with having nuclear be a base part of the portfolio is still a good decision,” Kilgore said, adding that the new Watts Bar reactor is expected to produce electricity at less than the cost of TVA’s current wholesale power rates.
TVA provides electricity to about 9 million people in Tennessee, Kentucky, Mississippi, Alabama, Georgia, North Carolina and Virginia.
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