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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

x QUARTERLY REPORT PURSUANT TO SECTION 13, 15(d), OR 37 OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~December 3031, 2025

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number 000-52313

TENNESSEE VALLEY AUTHORITY

(Exact name of registrant as specified in its charter)


A corporate agency of the United States created by an act of Congress (State or other jurisdiction of incorporation or organization)									62-0474417 (I.R.S. Employer Identification No.)

400 W. Summit Hill Drive Knoxville, Tennessee (Address of principal executive offices)									37902 (Zip Code)

(865) 632-2101

(Registrant's telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13, 15(d), or 37 of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o

Non-accelerated filer x Smaller reporting company o

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Number of shares of common stock outstanding at February 2, 2026: N/A

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Table of Contents
			Page
GLOSSARY OF COMMON ACRONYMS......................................................................................................................................			3
FORWARD-LOOKING INFORMATION.........................................................................................................................................			4
GENERAL INFORMATION............................................................................................................................................................			6
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.............................................................................................................................................			7
Consolidated Statements of Operations (Unaudited)............................................................................................................			7
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)............................................................................			7
Consolidated Balance Sheets (Unaudited)...........................................................................................................................			8
Consolidated Statements of Cash Flows (Unaudited)..........................................................................................................			10
Consolidated Statements of Changes in Proprietary Capital (Unaudited)............................................................................			11
Notes to Consolidated Financial Statements (Unaudited)....................................................................................................			12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...			4243
Executive Overview...............................................................................................................................................................			4243
Results of Operations............................................................................................................................................................			4344
Liquidity and Capital Resources............................................................................................................................................			5049
Key Initiatives and Challenges..............................................................................................................................................			5351
Environmental Matters..........................................................................................................................................................			5752
Legal Proceedings................................................................................................................................................................			5852
Critical Accounting Estimates................................................................................................................................................			5853
New Accounting Standards and Interpretations....................................................................................................................			5853
Legislative and Regulatory Matters.......................................................................................................................................			5853
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..............................................................			5953
ITEM 4. CONTROLS AND PROCEDURES..................................................................................................................................			5953
Disclosure Controls and Procedures.....................................................................................................................................			5953
Changes in Internal Control over Financial Reporting..........................................................................................................			5953
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS..................................................................................................................................................			5954
ITEM 1A. RISK FACTORS............................................................................................................................................................			5954
ITEM 5. OTHER INFORMATION..................................................................................................................................................			6054
ITEM 6. EXHIBITS........................................................................................................................................................................			6355
SIGNATURES...............................................................................................................................................................................			6456

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GLOSSARY OF COMMON ACRONYMS
Following are definitions of some of the terms or acronyms that may be used in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (the "Quarterly Report"):
Following are definitions of some of the terms or acronyms that may be used in this Quarterly Report on Form 10-Q for the quarter ended December 31, 2025 (the "Quarterly Report"):
Term or Acronym						Definition
2015 CCR Rule						2015 Coal Combustion Residuals Rule
AOCI						Accumulated other comprehensive income (loss)
ARO						Asset retirement obligation
ART						Asset Retirement Trust
Bonds						Bonds, notes, or other evidences of indebtedness
CARA						Corrective Action/Risk Assessment
CCR						Coal combustion residuals
CCRMU						CCR Management Unit
CCR Rule						2015 Coal Combustion Residual Rule
CEO						Chief Executive Officer
CT						Combustion turbine
CVA						Credit valuation adjustment
CY						Calendar year
DCP						Deferred Compensation Plan
EO(s)						Executive order(s)
ELG						Effluent limitation guidelines
EPA						Environmental Protection Agency
ETP						Enterprise Transformation Program
Exchange Act						Securities Exchange Act of 1934
FERC						Federal Energy Regulatory Commission
FHP						Financial Hedging Program
GAAP						Accounting principles generally accepted in the United States of America
GAC						Grid access charge
GEH						GE Hitachi Nuclear Energy
GVH						GE Vernova Hitachi Nuclear Energy
Holdco						John Sevier Holdco LLC
IRA						Inflation Reduction Act of 2022
JACTG						Johnsonville Aeroderivative Combustion Turbine Generation LLC
JHLLC						Johnsonville Holdco LLC
Johnsonville Facility						Johnsonville Aeroderivative Combustion Turbine Facility
JSCCG						John Sevier Combined Cycle Generation LLC
kWh						Kilowatt hours
Legacy CCR Rule						~~Final~~Legacy ~~legacy~~Coal ~~CCR~~Combustion ~~rule~~Residuals Rule
LPCs						Local power company customers
MLGW						Memphis Light, Gas and Water Division
mmBtu						Million British thermal unit(s)
Moody's						Moody's Investors Service, Inc.
MtM						Mark-to-market
NAV						Net asset value
NDT						Nuclear Decommissioning Trust
NEIL						Nuclear Electric Insurance Limited
NES						Nashville Electric Service
NOx						Nitrogen oxides
NRC						Nuclear Regulatory Commission
PPA(s)						Power Purchase Agreement(s)
RP						Restoration Plan
SCCG						Southaven Combined Cycle Generation LLC
SEC						Securities and Exchange Commission
SERP						Supplemental Executive Retirement Plan
SHLLC						Southaven Holdco LLC
SLR						Subsequent license renewal
SO2						Sulfur dioxide
TDEC						Tennessee Department of Environment and Conservation

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TVA						Tennessee Valley Authority
TVA Act						Tennessee Valley Authority Act of 1933, as amended
TVA Board						TVA Board of Directors

U.S.						United States
U.S. Treasury						United States Department of the Treasury


VIE						Variable interest entity

XBRL						eXtensible Business Reporting Language

FORWARD-LOOKING INFORMATION

This Quarterly Report contains forward-looking statements relating to future events and future performance. All statements other than those that are purely historical may be forward-looking statements. In certain cases, forward-looking statements can be identified by the use of words such as "may," "will," "should," "expect," "anticipate," "believe," "intend," "project," "plan," "predict," "assume," "forecast," "estimate," "objective," "possible," "probably," "likely," "potential," "speculate," "aim," "aspiration," "goal," "seek," "strategy," "target," the negative of such words, or other similar expressions.

Although the Tennessee Valley Authority ("TVA") believes that the assumptions underlying any forward-looking statements are reasonable, TVA does not guarantee the accuracy of these statements. Numerous factors could cause actual results to differ materially from those in any forward-looking statements. These factors include, among other things:

•Significant additional costs, ~~for~~regulatory ~~TVA~~uncertainty, toand ~~manage~~operational ~~and~~risks ~~operate~~associated ~~its~~with TVA's management of coal combustion residuals ("CCR") and compliance with evolving and unpredictable environmental and energy regulations, including closure or remediation of facilities; new or changed requirements related to air, water, or transmission; substantive and procedural costs associated with TVA's governmental status; and earlier-than-expected retirement of assets;

•The ~~cost~~impact of ~~complying with known~~existing, anticipated, or new ~~environmental~~federal ~~requirements~~or state legislation, ~~some~~regulatory ofactions, ~~which~~executive ~~could~~orders, ~~render~~or ~~continued~~litigation, ~~operation~~including oflegislative ~~many~~actions oftargeting TVA's ~~aging~~business ~~coal-fired~~model, ~~generation~~potential ~~units~~limits ~~not~~or ~~cost~~reductions to TVA's statutory authorities such as exclusive rate-~~effective~~setting, disbursement authority, or ~~result~~control inover ~~their~~assets, ~~removal~~changes ~~from~~to ~~service~~TVA's debt ceiling, ~~perhaps~~or ~~permanently~~federal action or inaction in areas such as the national debt ceiling or federal funding;

•~~Federal~~Legal, ~~legislation~~administrative, ~~aimed~~and ~~specifically~~regulatory ~~at curtailing TVA's activities~~proceedings, including ~~legislation~~those ~~that~~involving ~~may~~CCR ~~require~~facilities, ~~the~~gas ~~divestiture~~plants, ofpermitting TVA or the sale of certain of TVA's assets; restrict access to its United States Department of the Treasury ("U.S. Treasury") account; eliminate its sole authority to set rates; restrict its authority to manage the Tennessee River system; lower the debt ceiling on bondschallenges, ~~notes,~~and or other ~~evidences of indebtedness (collectively~~litigation, ~~"Bonds")~~which ~~specified~~could inlead ~~the~~to ~~Tennessee~~unanticipated ~~Valley~~costs, ~~Authority~~operational ~~Act of 1933~~changes, ~~as amended ("TVA Act");~~ or ~~limit~~modifications ~~its ability~~ to ~~pay~~TVA's ~~its~~business ~~Chief Executive Officer~~ or ~~other~~compliance ~~employees competitive salaries~~obligations;

•~~New,~~Risks ~~existing,~~from orthe ~~amended~~loss ~~laws,~~of ~~regulations,~~TVA's ~~executive~~protected ~~orders~~service ~~("EOs"),~~territory orif ~~administrative~~federal ~~orders~~action orlimits ~~interpretations,~~existing ~~including~~territorial ~~those~~protections ~~related~~or toincreases ~~climate~~competition, ~~change~~potentially ~~and~~resulting ~~other~~in ~~environmental matters, and~~ the ~~costs~~loss of ~~complying with these laws, regulations, EOs, or administrative orders or interpretations~~customers;

•~~Loss~~Significant ofcosts ~~TVA's~~or ~~protected~~operational ~~service~~complications ~~territory~~from ifcompliance ~~the~~with ~~Federal~~new ~~Energy~~or ~~Regulatory~~amended ~~Commission~~reliability ~~("FERC")~~standards ~~were~~imposed toby ~~limit~~industry ~~the application of the anti-cherrypicking provision,~~ or iffederal ~~Congress were to eliminate the anti-cherrypicking provision~~regulators, ~~without~~including ~~corresponding legislative modifications to~~ the ~~territorial~~North ~~limitations~~American ~~imposed~~Electric byReliability ~~the~~Corporation ~~fence~~("NERC");

•~~Additional~~Risks ~~federal~~to ~~reliability~~TVA's ~~standards~~ability ~~set~~to ~~forth~~implement byits ~~the~~business ~~North~~strategy ~~American~~or ~~Electric~~achieve ~~Reliability~~cost ~~Corporation~~reduction, ~~("NERC")~~efficiency, ~~and~~or ~~approved~~innovation bygoals, ~~FERC~~including ~~and~~due ~~the~~to ~~costs~~technological change, customer or industry transition, macroeconomic uncertainty, or inability of ~~complying~~LPCs ~~with~~or ~~these~~directly ~~new~~served ~~standards~~customers to pay their power bills;

•~~The~~Delays, ~~failure~~cost ~~of TVA's generation~~overruns, ~~transmission,~~or ~~navigation,~~inability ~~flood~~to ~~control,~~complete ~~and~~or ~~related~~gain ~~assets~~approval ~~and~~for ~~infrastructure~~major projects, including ~~CCR~~new ~~facilities~~generation, ~~dams~~transmission, ~~and~~or ~~spent~~infrastructure, ~~nuclear~~due ~~fuel~~to ~~storage facilities~~regulatory, ~~to operate as anticipated~~legal, ~~resulting~~supply ~~in health~~chain, ~~safety~~stakeholder, or environmental ~~problems~~challenges, ~~lost~~including ~~revenues,~~opposition ~~damages,~~from orregulators ~~other costs that are not reflected in TVA's financial statements~~ or ~~projections,~~litigation ~~including~~related ~~due~~ to ~~aging,~~environmental ~~technological issues,~~ or ~~extreme~~other ~~weather~~permitting ~~conditions~~requirements;

•~~Significant~~Operational ~~delays~~risks ~~and~~from ~~additional~~TVA's ~~costs~~aging, ~~public~~technologically ~~opposition~~complex, ~~and/~~or ~~inability~~interdependent toinfrastructure, ~~obtain~~and ~~necessary~~failures ~~regulatory~~of ~~approvals~~generation, ~~licenses~~transmission, orflood ~~permits~~control, ~~for major projects~~navigation, ~~including~~or ~~for~~related assets, ~~that~~including ~~TVA~~those ~~needs~~resulting tofrom ~~serve~~extreme ~~its~~weather, ~~existing~~deferred ~~and~~maintenance, ~~future~~or ~~load~~technical ~~and to meet its carbon reduction aspirations~~malfunctions;

•~~Risks~~Specific risks associated with ~~the~~nuclear ~~operation~~generation, ofincluding but not limited to nuclear ~~facilities~~incidents, changes in regulatory or ~~other~~insurance ~~generation~~regimes, ~~and~~increased ~~related~~decommissioning ~~facilities~~or operational costs, ~~including~~delays ~~CCR~~or ~~facilities~~restrictions in licensing, long-term waste management uncertainties, and ~~dams~~dependency on specialized supply chain and technological partners;

•~~Events~~Physical ~~at a nuclear facility~~attacks, ~~whether or not operated by or licensed to TVA~~threats, ~~which~~terrorism, ~~among other things~~wars, ~~could~~and ~~lead~~geopolitical toevents ~~increased~~targeting ~~regulation~~critical infrastructure or ~~restriction on the construction~~suppliers, ~~ownership,~~which ~~operation,~~may ordisrupt ~~decommissioning~~operations ~~of nuclear facilities~~ or onrequire ~~the~~increased ~~storage~~security ~~of spent fuel~~expenditures, ~~obligate TVA to pay retrospective insurance premiums, reduce the availability~~ and ~~affordability~~which ofcould ~~insurance,~~arise ~~increase~~from ~~the costs of operating~~ TVA's ~~existing~~governmental ~~nuclear~~status ~~units,~~ or ~~cause~~broader ~~TVA~~geopolitical ~~to forego future construction at these or other facilities~~instability;

•The inaccuracy of certain assumptions about the future, including economic forecasts, anticipated energy and commodity prices, cost estimates, construction schedules, power demand forecasts, potential regulatory environments, and the appropriate generation mix to meet demand;

•Circumstances that cause TVA to change its determinations regarding the appropriate mix of generation assets;

•Inability to continue to operate certain assets, especially nuclear facilities, including due to the inability to obtain, or loss of, regulatory approval for the operation of assets;

•Physical attacks, threats, or other interference causing damage to TVA's facilities or interfering with TVA's operations;

•Unforeseeable occurrences negatively impacting TVA assets or their supporting infrastructure;

•Events at TVA facilities, which, among other things, could result in loss of life, damage to the environment, damage to or loss of the facility, or damage to the property of others;

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•Events that negatively impact TVA's reliability, including problems at other utilities or at TVA facilities or the increase in intermittent sources of power;

•Disruption, ofdelay, ~~supplies~~or increased cost of fuel, purchased power, ~~or other~~ critical ~~items or~~ services, ~~which~~or ~~may~~supplies ~~result~~due ~~from,~~to ~~among~~supply ~~other~~chain ~~things~~difficulties, ~~economic~~labor ~~conditions~~shortages, ~~weather~~transportation ~~conditions~~constraints, ~~physical~~economic ~~or cyber attacks~~conditions, ~~political developments~~inflation, ~~international trade restrictions or~~ tariffs, ~~legal actions, mine closures~~ or ~~reduced~~other ~~mine~~trade ~~production~~restrictions, ~~increases~~force inmajeure ~~fuel exports~~events, ~~environmental~~pandemics ~~regulations affecting TVA's suppliers, transportation~~ or ~~delivery~~health ~~constraints~~emergencies, ~~shortages~~third-party ofcyber ~~raw materials~~incidents, ~~supply chain difficulties, labor shortages, force majeure events, forced outages,~~ intentional defaults, ~~strikes, inflation,~~ or ~~similar events and which may, among other things, hinder TVA's ability to operate its assets, complete projects on time and on budget, and meet its~~ contractual ~~obligations~~performance ~~to deliver power~~failures;

•Global conflicts, terrorist activities, or military actions by the United States ("U.S.") government, ~~and~~ its allies, or others;

•Cyber -attacks on TVA's assets or ~~the~~those ~~assets~~ of third parties, ~~upon~~including ~~which~~critical ~~TVA~~vendors ~~relies~~and cloud service providers, which may become more frequent and sophisticated ~~due~~as toa result of advances in artificial intelligence ("AI");

~~•The failure of TVA's information technology systems;~~4

~~•Lower~~Table future demand for electricity than TVA currently expects or is financially planning for, which would lead to unexpected revenue constraints that could negatively impact TVA's ability to meet financial obligations, including those associated with financing of ~~projects to meet the anticipated demand;~~Contents

•~~Higher~~AI ~~future~~and ~~demand~~machine ~~for~~learning ~~electricity~~risks ~~than~~including ~~TVA~~erroneous ~~can~~or ~~address~~biased ~~through~~AI ~~execution~~decision-making, ofregulatory ~~its current asset strategy~~complexity, ~~which~~compromised ~~could~~data ~~require TVA to purchase additional generation or capacity at rates higher than TVA can produce electricity itself~~integrity, ~~take~~intellectual ~~emergency~~property ~~measures to curtail load~~issues, ~~raise rates,~~ and~~/or~~ ~~waitlist~~adoption-pace ~~prospective~~disadvantages ~~industrial~~relative orto ~~commercial~~other ~~customers~~utilities;

•~~The~~Volatility ~~need~~in customer demand for ~~significant~~electricity, ~~future~~including ~~contributions~~both ~~associated~~unexpected ~~with~~increases ~~TVA's~~(driven ~~pension~~by ~~plans~~factors such as AI data centers, ~~other~~cryptocurrency ~~post-retirement~~mining, ~~benefit~~electric ~~plans~~vehicles, population growth, and new large customer loads) and unexpectedly low demand (driven by economic downturn, efficiency gains, distributed energy resources ("DER") adoption, or ~~health~~the ~~care~~loss ~~plans~~of customers), both of which could result in stranded costs, rate actions, curtailments, or a need for unplanned capital or operational adjustments;

•~~Limitations~~Financial, oncapital, ~~TVA's~~and ~~ability~~liquidity ~~to borrow money~~constraints, ~~which~~including ~~may~~limitations ~~result~~imposed ~~from,~~by ~~among~~TVA’s ~~other~~debt ~~things~~ceiling, ~~TVA's~~increasing ~~approaching~~costs or ~~substantially~~reduced ~~reaching~~availability of capital, the ~~debt~~unavailability ~~ceiling~~of funding sources, volatility or ~~TVA's~~downgrades ~~losing~~in ~~access~~credit toratings ~~the~~(including ~~debt~~as ~~markets~~a result of U.S. downgrades), and ~~which~~market ~~may~~liquidity ~~impact~~or trading risks affecting TVA'’s ~~ability~~bonds, tonotes, ~~make~~or ~~planned~~other ~~capital~~evidences ~~investments~~of indebtedness;

•~~Downgrades~~Pension, ofhealth ~~TVA's~~care, ~~credit~~and ~~ratings~~other oremployee ~~the~~benefit ~~United~~liabilities ~~States'~~and ~~sovereign~~funding ~~credit~~risks ~~ratings~~that may arise due to market conditions, ~~which~~actuarial ~~may~~or ~~negatively~~demographic ~~impact~~changes, ~~TVA~~regulatory ~~and~~amendments, ~~the~~or ~~owners~~shifts ofin ~~TVA~~plan ~~securities~~assumptions;

•~~Changes~~Risks due to changes in technology, ~~which,~~and ~~among~~TVA’s ~~other~~ability ~~things,~~(or ~~may~~inability) ~~affect~~to ~~relationships~~keep pace with ~~customers~~private ~~and~~utilities ~~require~~or customer needs, including potential disadvantages from TVA’s togovernmental ~~change~~status, ~~how~~delays itor ~~conducts~~limits ~~its~~on ~~operations~~technology adoption, and necessity for continuous innovation;

•~~Loss~~Adverse ofchanges ~~competitive~~in ~~edge~~market ~~due~~prices tofor ~~TVA's~~electricity, ~~governmental~~commodities ~~status~~(such ~~affecting~~as ~~TVA's~~fuel, ~~ability~~emissions toallowances, ~~keep~~and upconstruction ~~with~~materials), ~~technological~~liability insurance, and investments, as well as inflationary pressures and changes in interest rates and currency exchange rates, which may, among other things, impact the affordability of electricity and impede TVA’s ability to recover costs;

•~~Changes~~A inlimitation on the market ~~price~~for ofTVA ~~commodities~~securities, ~~such~~which asmay ~~purchased~~be ~~power,~~influenced ~~coal,~~by ~~uranium,~~the ~~natural~~fact ~~gas,~~that ~~fuel~~the ~~oil,~~payment ~~crude~~of ~~oil,~~principal ~~construction~~and ~~materials,~~interest ~~reagents,~~on orTVA ~~emission~~securities ~~allowances~~is not guaranteed by the U.S. government;

•ARisks ~~limitation~~from onfailure ~~the~~to ~~market~~attract ~~for~~or retain key personnel, changes in TVA's ~~Bonds~~compensation policies or practices, ~~which~~changes ~~may~~in besenior ~~influenced~~management byor ~~the~~TVA ~~fact~~Board ~~that~~membership, or the ~~payment~~absence of ~~principal~~a ~~and~~Board ~~interest~~quorum, onwhich could limit TVA's ~~securities~~ability isto ~~not~~conduct ~~guaranteed~~business byor ~~the~~adapt ~~U.S.~~strategy ~~government~~and could increase legal and regulatory risk;

•~~Failure~~Climate, weather, and catastrophic events (including wildfires, flooding, drought, storms, heat waves, pandemics, and other natural or health crises) that could impair operations, damage facilities, or otherwise require material changes to ~~attract~~TVA’s generation or ~~retain~~business anstrategies, ~~appropriately~~the ~~qualified~~frequency ~~workforce~~and severity of which may increase as a result of climate change and require significant adaptation and investment;

•~~Changes~~Risks inassociated with the ~~membership~~supply or quality of ~~the~~water ~~TVA~~from ~~Board~~the ofTennessee ~~Directors~~or ~~("TVA~~Cumberland ~~Board")~~River systems, or ~~TVA~~elsewhere, ~~senior~~including ~~management~~droughts, increased usage, or contamination, which may ~~impact~~interfere ~~how~~with ~~TVA~~power ~~operates~~generation;

•~~Inability~~Potential tofailure ~~adapt~~of internal financial controls, disclosure controls, or information technology systems to ~~meet~~prevent ~~changing~~or ~~business~~detect ~~conditions~~fraud, aserrors, acyberattacks, ~~result~~or ofdata ~~the~~losses, ~~recent~~and ~~loss~~inability ofto ~~quorum~~use ofregulatory ~~the~~accounting ~~TVA~~for ~~Board~~certain costs;

•Weather conditions, including changing weather patterns, extreme weather conditions, and other events such as flooding, droughts, wildfires, heat waves, and snow or ice storms that may result from climate change, which may hamper TVA's ability to supply power, cause customers' demand for power to exceed TVA's then-present power supply, pose health, safety, or environmental risks, or otherwise negatively impact TVA's operations or financial condition;

•Events affecting the supply or quality of water from the Tennessee River system or Cumberland River system, or elsewhere, which could interfere with TVA's ability to generate power;

•Catastrophic events, such as fires, earthquakes, explosions, solar events, electromagnetic pulses, geomagnetic disturbances, droughts, floods, hurricanes, tornadoes, polar vortexes, icing events, pipeline explosions, or other casualty events, wars, national emergencies, terrorist activities, pandemics, widespread public health crises, geopolitical events, or other destructive or disruptive events;

•Ineffectiveness of TVA's financial control system to control issues and instances of fraud or to prevent or detect errors;

•Inability to use regulatory accounting for certain costs;

•Inability of TVA to implement its business strategy successfully, including due to the increased use in the public of distributed energy resources or energy-efficiency programs;

•Inability of TVA to achieve or maintain its cost reduction goals, including pursuant to its Enterprise Transformation Program ("ETP"), which may require TVA to increase rates and/or issue more debt than planned;

•~~Failure~~Negative ofimpacts to TVA’s ~~organizational~~reputation, ~~structure~~which tomay ~~adequately~~result ~~support~~from ~~TVA’s~~operational ~~anticipated~~failures, ~~business~~litigation, ~~needs~~cybersecurity orincidents, ~~enable~~inability it to meet ~~the~~strategic ~~needs~~goals, ofcustomer ~~its~~relations ~~current~~or contractor actions, or ~~potential~~high-profile ~~customers~~negative publicity; or

•~~Inability~~Other ofunforeseeable ~~TVA~~events toor ~~adapt~~conditions ~~its~~which ~~business~~could ~~model~~materially toimpact ~~changes~~TVA’s inbusiness, ~~the~~operations, ~~utility~~financial ~~industry~~condition, ~~and~~or ~~customer~~results ~~preferences~~of ~~and to remain cost competitive;~~operations.

~~•Changes~~See also Part I, Item 1A, Risk Factors, and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in ~~commodity~~TVA's ~~prices~~Annual Report on Form 10-K for the year ended September 30, ~~investment~~2025 ~~prices~~(the "Annual Report"), ~~interest~~and ~~rates~~Part I, ~~currency~~Item ~~exchange~~2, ~~rates~~Management's Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A, Risk Factors in this Quarterly Report for a discussion of factors that could cause actual results to differ materially from those in any forward-looking statement. New factors emerge from time to time, and it is not possible for TVA to predict all such factors or ~~inflation~~to ~~rates;~~assess the extent to which any factor or combination of factors may impact TVA's business or cause results to differ materially from those contained in any forward-looking statement. TVA undertakes no obligation to update any forward-looking statement to reflect developments that occur after the statement is made, except as required by law.

•Reliability or creditworthiness of counterparties including but not limited to customers, suppliers, renewable resource providers, and financial institutions;

•Changes in the U.S. economy and volatility in financial markets;

•Ineffectiveness of TVA’s disclosure controls and procedures or its internal control over financial reporting;

•Changes in customer preferences for energy produced from cleaner generation sources;

•Increases in TVA’s financial liabilities for decommissioning its nuclear facilities and retiring other assets;

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•The requirement or decision to make additional contributions to TVA’s Nuclear Decommissioning Trust (“NDT”) or Asset Retirement Trust (“ART”);

•Events or changes involving transmission lines, dams, and other facilities not operated by TVA, including those that affect the reliability of the interstate transmission grid of which TVA’s transmission system is a part and those that increase flows across TVA’s transmission grid;

•Actions taken, or inaction, by the U.S. government relating to the national debt ceiling or automatic spending cuts in government programs;

•Inability to respond quickly enough to current or potential customer demands or needs or to act solely in the interest of ratepayers;

•Addition or loss of customers by TVA or TVA’s local power company customers (“LPCs”);

•Differences between estimates of revenues and expenses and actual revenues earned and expenses incurred;

•Changes in the market price of equity securities, debt securities, or other investments;

•An increase in TVA’s cost of capital, which may result from, among other things, changes in the market for Bonds, disruptions in the banking system or financial markets, changes in the credit rating of TVA or the U.S. government, or, potentially, an increased reliance by TVA on alternative financing should TVA approach its debt limit;

•Costs or liabilities that are not anticipated in TVA’s financial statements for third-party claims, natural resource damages, environmental cleanup activities, or fines or penalties associated with unexpected events such as failures of a facility or infrastructure;

•Adverse effects from global, national, or regional health or other emergencies;

•Negative impacts on TVA's reputation; or

•Other unforeseeable events.

See also Part I, Item 1A, Risk Factors, and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in TVA's Annual Report on Form 10-K for the year ended September 30, 2024 (the "Annual Report"), and Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A, Risk Factors in this Quarterly Report for a discussion of factors that could cause actual results to differ materially from those in any forward-looking statement. New factors emerge from time to time, and it is not possible for TVA to predict all such factors or to assess the extent to which any factor or combination of factors may impact TVA's business or cause results to differ materially from those contained in any forward-looking statement. TVA undertakes no obligation to update any forward-looking statement to reflect developments that occur after the statement is made, except as required by law.

GENERAL INFORMATION

Fiscal Year

References to years (~~2025~~2026, ~~2024~~2025, etc.) in this Quarterly Report are to TVA's fiscal years ending September 30. Years that are preceded by "CY" are references to calendar years.

Notes

References to "Notes" are to the Notes to Consolidated Financial Statements contained in Part I, Item 1, Financial Statements in this Quarterly Report.

Available Information

TVA files annual, quarterly, and current reports with the Securities and Exchange Commission ("SEC") under Section 37 of the Securities Exchange Act of 1934 (the "Exchange Act"). TVA's SEC filings are available to the public at www.tva.com, free of charge, as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC. Information contained on or accessible through TVA's website shall not be deemed to be incorporated into, or to be a part of, this Quarterly Report or any other report or document that TVA files with the SEC. All TVA SEC reports are available to the public without charge from the website maintained by the SEC at www.sec.gov.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TENNESSEE VALLEY AUTHORITY

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended December 31

(in millions)

	Three Months Ended June 30				Nine Months Ended June 30
	2025		2024
	2025		2024		2025		2024
Operating revenues
Operating revenues
Revenue from sales of electricity	$	3,001	$	2,876
Revenue from sales of electricity	$	3,261	$	2,830	$	9,613	$	8,654
Other revenue	48		44
Other revenue	45		49		145		144
Total operating revenues	3,049		2,920
Total operating revenues	3,306		2,879		9,758		8,798
Operating expenses
Operating expenses
Fuel	514		505
Fuel	589		424		1,674		1,561
Purchased power	410		394
Purchased power	550		408		1,516		1,139
Operating and maintenance	849		905
Operating and maintenance	922		915		2,771		2,671
Depreciation and amortization	571		557
Depreciation and amortization	572		542		1,691		1,593
Tax equivalents	153		146
Tax equivalents	156		131		460		405
Total operating expenses	2,497		2,507
Total operating expenses	2,789		2,420		8,112		7,369
Operating income	552		413
Operating income	517		459		1,646		1,429
Other income, net	44		17
Other income, net	29		14		58		55
Other net periodic benefit cost	21		25
Other net periodic benefit cost	27		25		79		74
Interest expense	309		280
Interest expense	307		267		880		795
Net income	$	266	$	125
Net income	$	212	$	181	$	745	$	615
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.

TENNESSEE VALLEY AUTHORITY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

Three Months Ended December 31

(in millions)

	Three Months Ended June 30				Nine Months Ended June 30
	2025		2024
	2025		2024		2025		2024
Net income	$	266	$	125
Net income	$	212	$	181	$	745	$	615
Other comprehensive income (loss)
Other comprehensive income (loss)
Net unrealized gain (loss) on cash flow hedges	13		(19)
Net unrealized gain (loss) on cash flow hedges	47		1		24		17
Net unrealized (gain) loss reclassified to earnings from cash flow hedges	1		37
Net unrealized (gain) loss reclassified to earnings from cash flow hedges	(38)		(7)		(15)		(20)
Total other comprehensive income (loss)	14		18
Total other comprehensive income (loss)	9		(6)		9		(3)
Total comprehensive income	$	280	$	143
Total comprehensive income	$	221	$	175	$	754	$	612
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.

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TENNESSEE VALLEY AUTHORITY

CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions)

ASSETS
	June 30, 2025		September 30, 2024
	December 31, 2025		September 30, 2025
Current assets
Cash and cash equivalents	$	501	$	~~502~~1,576
Accounts receivable, net	1,~~887~~927		12,~~801~~119
Inventories, net	1,~~184~~230		1,~~155~~193
Regulatory assets	~~152~~173		~~191~~127
Other current assets	~~169~~184		~~120~~162
Total current assets	34,~~893~~015		35,~~769~~177
Property, plant, and equipment
Completed plant	71,~~902~~183		7071,~~989~~574
Less accumulated depreciation	(3839,~~871~~015)		(38,~~793~~716)
Net completed plant	3332,~~031~~168		32,~~196~~858
Construction in progress	67,~~016~~157		46,~~879~~760
Nuclear fuel	1,~~231~~255		1,~~261~~185
Finance leases	~~684~~640		~~729~~663
Total property, plant, and equipment, net	4041,~~962~~220		3941,~~065~~466
Investment funds	5,~~277~~687		45,~~968~~573
Regulatory and other long-term assets
Regulatory assets	97,~~137~~985		98,~~408~~047
Operating lease assets, net of amortization	~~126~~100		~~149~~113
Other long-term assets	~~490~~508		~~344~~506
Total regulatory and other long-term assets	98,~~753~~593		98,~~901~~666
Total assets	$	59,~~885~~515	$	5760,~~703~~882
The accompanying notes are an integral part of these consolidated financial statements.

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TENNESSEE VALLEY AUTHORITY

CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions)

LIABILITIES AND PROPRIETARY CAPITAL
	June 30, 2025		September 30, 2024
	December 31, 2025		September 30, 2025
Current liabilities
Accounts payable and accrued liabilities	$	2,~~979~~772	$	23,~~910~~299
Accrued interest	~~314~~333		~~280~~348
Asset retirement obligations	~~316~~323		~~283~~313
Regulatory liabilities	~~202~~210		~~174~~228
Short-term debt, net	~~319~~1,173		~~1,167~~—
Current maturities of power bonds	~~1,370~~20		1,~~022~~370
Current maturities of long-term debt of variable interest entities	4849		3749
Total current liabilities	54,~~548~~880		5,~~873~~607
Other liabilities
Post-retirement and post-employment benefit obligations	2,~~678~~104		2,~~887~~183
Asset retirement obligations	109,~~608~~402		10,~~523~~101
Finance lease liabilities	~~670~~626		~~700~~640
Other long-term liabilities	1,~~507~~490		1,~~712~~606
Regulatory liabilities	85132		83141
Total other liabilities	1513,~~548~~754		1514,~~905~~671
Long-term debt, net
Long-term power bonds, net	1920,~~229~~465		1720,~~867~~461
Long-term debt of variable interest entities, net	1,~~651~~627		~~897~~1,632
Total long-term debt, net	2022,~~880~~092		1822,~~764~~093
Total liabilities	4140,~~976~~726		4042,~~542~~371
Contingencies and legal proceedings (Note 21)
Proprietary capital
Power program appropriation investment	258		258
Power program retained earnings	1718,~~182~~063		1617,~~437~~797
Total power program proprietary capital	1718,~~440~~321		1618,~~695~~055
Nonpower programs appropriation investment, net	~~512~~508		~~518~~510
Accumulated other comprehensive loss	(4340)		(5254)
Total proprietary capital	1718,~~909~~789		1718,~~161~~511
Total liabilities and proprietary capital	$	59,~~885~~515	$	5760,~~703~~882
The accompanying notes are an integral part of these consolidated financial statements.

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TENNESSEE VALLEY AUTHORITY

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

For the ~~Nine~~Three Months Ended ~~June~~December 3031

(in millions)

	2025		2024
Cash flows from operating activities
Net income	$	~~745~~266	$	~~615~~125
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization(1)	~~1,707~~577		~~1,610~~563
Amortization of nuclear fuel cost	~~208~~90		~~282~~75
Non-cash retirement benefit expense	~~112~~31		~~104~~36
Other regulatory amortization and deferrals	(3859)		~~(49)~~22
Changes in current assets and liabilities
Accounts receivable, net	~~(76)~~211		74116
Inventories and other current assets, net	(6769)		(~~122~~68)
Accounts payable and accrued liabilities	3(424)		(56234)
Accrued interest	31(13)		~~(19)~~12
Pension contributions	(~~235~~75)		(~~229~~75)
Settlements of asset retirement obligation	(~~190~~84)		(~~214~~73)
Other, net	(~~124~~121)		(5749)
Net cash provided by operating activities	~~2,076~~330		~~1,939~~450
Cash flows from investing activities
Construction expenditures	(31,~~442~~144)		(21,~~381~~209)
Nuclear fuel expenditures	(~~198~~141)		(~~190~~159)
Purchases of investments	(4)		(34)
Loans and other receivables
Advances	—		(4)
Repayments	1		1
Repayments	10		5
Other, net	80		(7)
Other, net	6		27
Net cash used in investing activities	(1,208)		(1,378)
Net cash used in investing activities	(3,628)		(2,546)
Cash flows from financing activities
Long-term debt
Issues of power bonds	2,722		—
Proceeds from variable interest entities	—		800
Proceeds from variable interest entities	800		—
Redemptions and repurchases of power bonds	(1,350)		(1)
Redemptions and repurchases of power bonds	(1,022)		(22)
Redemptions of debt of variable interest entities	(5)		—
Redemptions of debt of variable interest entities	(23)		(17)
Short-term debt issuance (redemptions), net	1,171		189
Short-term debt issuance (redemptions), net	(847)		678
Payments on leases and leasebacks	(13)		(12)
Payments on leases and leasebacks	(50)		(46)
Financing costs, net	—		(12)
Financing costs, net	(25)		—
Other, net	—		(6)
Other, net	(4)		14
Net cash provided by (used in) financing activities	(197)		958
Net cash provided by financing activities	1,551		607
Net change in cash, cash equivalents, and restricted cash	(1,075)		30
Net change in cash, cash equivalents, and restricted cash	(1)		—
Cash, cash equivalents, and restricted cash at beginning of period	1,597		523
Cash, cash equivalents, and restricted cash at beginning of period	523		521
Cash, cash equivalents, and restricted cash at end of period	$	522	$	553
Cash, cash equivalents, and restricted cash at end of period	$	522	$	521
Note(1) Includes amortization of debt issuance costs and premiums/discounts.
The accompanying notes are an integral part of these consolidated financial statements.

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TENNESSEE VALLEY AUTHORITY

CONSOLIDATED STATEMENTS OF CHANGES IN PROPRIETARY CAPITAL (Unaudited)

For the Three Months Ended ~~June~~December 3031, 2025 and 2024

(in millions)

	Power Program Appropriation Investment		Power Program Retained Earnings		Nonpower Programs Appropriation Investment, Net		AccumulatedOtherComprehensiveIncome (Loss)		Total
Balance at March 31, 2024	$	258	$	15,736	$	521	$	(26)	$	16,489
Balance at September 30, 2024	$	258	$	16,437	$	518	$	(52)	$	17,161
Net income (loss)	—		~~182~~127		(12)		—		~~181~~125
Total other comprehensive loss	—		—		—		(6)		(6)
Total other comprehensive income	—		—		—		18		18
Return on power program appropriation investment	—		(1)		—		—		(1)
Balance at June 30, 2024	$	258	$	15,917	$	520	$	(32)	$	16,663
Balance at March 31, 2025	$	258	$	16,970	$	514	$	(52)	$	17,690
Net income (loss)	—		214		(2)		—		212
Total other comprehensive income	—		—		—		9		9
Return on power program appropriation investment	—		(2)		—		—		(2)
Balance at June 30, 2025	$	258	$	17,182	$	512	$	(43)	$	17,909
Balance at December 31, 2024	$	258	$	16,562	$	516	$	(34)	$	17,302
Balance at September 30, 2025	$	258	$	17,797	$	510	$	(54)	$	18,511
Net income (loss)	—		268		(2)		—		266
Total other comprehensive income	—		—		—		14		14
Return on power program appropriation investment	—		(2)		—		—		(2)
Balance at December 31, 2025	$	258	$	18,063	$	508	$	(40)	$	18,789
The accompanying notes are an integral part of these consolidated financial statements.

TENNESSEE VALLEY AUTHORITY

CONSOLIDATED STATEMENTS OF CHANGES IN PROPRIETARY CAPITAL (Unaudited)

For the Nine Months Ended June 30, 2025 and 2024

(in millions)

	Power Program Appropriation Investment		Power Program Retained Earnings		Nonpower Programs Appropriation Investment, Net		AccumulatedOtherComprehensiveIncome (Loss)		Total
Balance at September 30, 2023	$	258	$	15,302	$	525	$	(29)	$	16,056
Net income (loss)	—		620		(5)		—		615
Total other comprehensive loss	—		—		—		(3)		(3)
Return on power program appropriation investment	—		(5)		—		—		(5)
Balance at June 30, 2024	$	258	$	15,917	$	520	$	(32)	$	16,663
Balance at September 30, 2024	$	258	$	16,437	$	518	$	(52)	$	17,161
Net income (loss)	—		751		(6)		—		745
Total other comprehensive income	—		—		—		9		9
Return on power program appropriation investment	—		(6)		—		—		(6)
Balance at June 30, 2025	$	258	$	17,182	$	512	$	(43)	$	17,909
The accompanying notes are an integral part of these consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions except where noted)

Note		Page
1	Summary of Significant Accounting Policies	12
2	Impact of New Accounting Standards and Interpretations	14
3	Restructuring	15
4	Accounts Receivable, Net	1516
5	Inventories, Net	1516
6	Other Current Assets	16
7	Plant Closures	1617
8	Other Long-Term Assets	17
9	Regulatory Assets and Liabilities	1819
10	Variable Interest Entities	1819
11	Other Long-Term Liabilities	2122
12	Asset Retirement Obligations	2223
13	Debt and Other Obligations	2223
14	Risk Management Activities and Derivative Transactions	24
15	Fair Value Measurements	2930
16	Revenue	3536
17	Other Income, Net	38
18	Supplemental Cash Flow Information	3839
19	Benefit Plans	3839
20	Collaborative Arrangement	39
21	Contingencies and Legal Proceedings	39
22	Segment Reporting	42

1. Summary of Significant Accounting Policies

General

The Tennessee Valley Authority ("TVA") prepares its consolidated interim financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") for consolidated interim financial information. Accordingly, TVA's consolidated interim financial statements do not include all of the information and notes required by GAAP for annual financial statements. As such, they should be read in conjunction with the audited financial statements for the year ended September 30, ~~2024~~2025, and the notes thereto, which are contained in TVA's Annual Report on Form 10-K for the year ended September 30, ~~2024~~2025 (the "Annual Report"). In the opinion of management, all adjustments (consisting of items of a normal recurring nature) considered necessary for fair presentation are included on the consolidated interim financial statements.

Fiscal Year

TVA's fiscal year ends September 30. Years (~~2025~~2026, ~~2024~~2025, etc.) refer to TVA's fiscal years unless they are preceded by "CY," in which case the references are to calendar years.

Basis of Presentation

The accompanying consolidated interim financial statements, which have been prepared in accordance with GAAP, include the accounts of TVA and variable interest entities ("VIEs") of which TVA is the primary beneficiary. See Note 10 — Variable Interest Entities. Intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements requires TVA to estimate the effects of various matters that are inherently uncertain as of the date of the consolidated financial statements. Although the consolidated financial statements are prepared in conformity with GAAP, TVA is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the amounts of revenues and expenses, reported during the reporting period. Each of these estimates varies in regard to the level of judgment involved and its potential impact on TVA's financial results. Estimates are considered critical either when a different estimate could have reasonably been used, or where

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changes in the estimate are reasonably likely to occur from period to period, and such use or change would materially impact TVA's financial condition, results of operations, or cash flows.

Cash, Cash Equivalents, and Restricted Cash

Cash includes cash on hand, non-interest bearing cash, and deposit accounts. All highly liquid investments with original maturities of three months or less are considered cash equivalents. Cash and cash equivalents that are restricted, as to withdrawal or use under the terms of certain contractual agreements, are recorded in Other long-term assets on the Consolidated Balance Sheets. Restricted cash and cash equivalents include cash held in trusts that are currently restricted for TVA economic development loans and for certain TVA environmental programs in accordance with agreements related to compliance with certain environmental regulations.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Consolidated Balance Sheets and Consolidated Statements of Cash Flows:

Cash, Cash Equivalents, and Restricted Cash(in millions)
	At June 30, 2025		At September 30, 2024
	At December 31, 2025		At September 30, 2025
Cash and cash equivalents	$	501	$	~~502~~1,576
Restricted cash and cash equivalents included in Other long-term assets	21		21
Total cash, cash equivalents, and restricted cash	$	522	$	~~523~~1,597

Allowance for Uncollectible Accounts

TVA recognizes an allowance that reflects the current estimate for credit losses expected to be incurred over the life of the financial assets based on historical experience, current conditions, and/or reasonable and supportable forecasts that affect the collectability of the reported amounts. The appropriateness of the allowance is evaluated at the end of each reporting period.

To determine the allowance for trade receivables as part of estimating expected credit losses, TVA considers historical experience and other currently available information, including events such as customer bankruptcy and/or a customer failing to fulfill payment arrangements by the due date. TVA's corporate credit department also performs an assessment of the financial condition of customers and the credit quality of the receivables. In addition, TVA ~~reviews~~assumes ~~other~~that ~~reasonable~~the ~~and~~current ~~supportable~~conditions ~~forecasts~~as toof ~~determine if~~ the ~~allowance~~balance ~~for~~sheet ~~uncollectible~~date ~~amounts~~will ~~should~~remain beunchanged ~~further~~for ~~adjusted~~the inremaining ~~accordance~~life ~~with~~of the ~~accounting~~trade ~~guidance for Current Expected Credit Losses~~receivables.

To determine the allowance for loans receivables, TVA aggregates loans into the appropriate pools based on the existence of similar risk characteristics such as collateral types and internal assessed credit risks. In situations where a loan exhibits unique risk characteristics and is no longer expected to experience similar risks to the rest of its pool, the loan will be evaluated separately. TVA derives an annual loss rate based on historical loss and then adjusts the rate to reflect TVA's consideration of available information on current conditions and reasonable and supportable future forecasts. This information may include economic and business conditions, default trends, and other internal and external factors. For periods beyond the reasonable and supportable forecast period, TVA uses the current calculated long-term average historical loss rate for the remaining life of the loan portfolio.

The allowance for uncollectible accounts was $1017 million and ~~less than~~ $114 million at ~~June~~December 3031, 2025, and September 30, ~~2024~~2025, respectively, for trade accounts receivable. At ~~June~~December 3031, 2025, the allowance for uncollectible accounts included $817 million related to one local power company customer ("LPC"). Additionally, loans receivable of $~~114~~89 million and $~~105~~86 million at ~~June~~December 3031, 2025, and September 30, ~~2024~~2025, respectively, are included in Accounts receivable, net and Other long-term assets, for the current and long-term portions, respectively. Loans receivables are reported net of allowances for uncollectible accounts of $2 million at both ~~June~~December 3031, 2025, and September 30, ~~2024~~2025.

Pre-Commercial Plant Operations

As part of the process of completing the construction of a generating unit, the electricity produced is used to serve the demands of the electric system. TVA estimates revenues earned during pre-commercial operations at the fair value of the energy delivered based on TVA's hourly incremental dispatch cost. Pre-commercial plant operations began on ~~Paradise~~Johnsonville ~~combustion~~Aeroderivative ~~turbine~~Combustion Turbine ("CT") ~~Units~~Facility ~~5-7~~during ~~in the first quarter of 2024, and the units became operational on December 29, 2023~~2025. Estimated revenue of $3less than $1 million related to this project was capitalized to offset project costs for the ~~nine months ended June 30, 2024, all of which was recognized in the~~ three months ended December 31, ~~2023~~2024. TVA also capitalized related fuel costs for this project of $3less than $1 million for the ~~nine~~three months ended ~~June 30~~December 31, 2024,. ~~all of which was recognized in the three months ended December~~

31Property, ~~2023. Pre-commercial plant operations began on Johnsonville Aeroderivative CT Units 21-30 during the nine months ended June 30~~Plant, ~~2025,~~ and ~~Units 21-25 and 27-30 became operational on May 6~~Equipment, ~~2025. Estimated revenue of $1 million~~ and ~~$3 million related to this project was capitalized to offset project costs for the three and nine months ended June 30, 2025, respectively.~~ Depreciation

Depreciation. TVA accounts for depreciation of its properties using the composite depreciation convention of accounting. Under the composite method, assets with similar economic characteristics are grouped and depreciated as one

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~~TVA~~asset. Depreciation ~~also~~is ~~capitalized~~generally ~~related~~computed ~~fuel~~on ~~costs~~a ~~for~~straight-line ~~this~~basis ~~project~~over the estimated service lives of the various classes of assets. The estimation of asset useful lives requires management judgment, supported by external depreciation studies of historical asset retirement experience. Depreciation rates are determined based on external depreciation studies that are updated approximately every five years, with the latest study implemented during the first quarter of 2022. Depreciation expense was $2483 million and $6471 million for the three ~~and nine~~ months ended ~~June 30~~December 31, 2025 and 2024, respectively. See Note 7 — Plant Closures for a discussion of the impact of plant closures.

~~Depreciation~~ TVA's policy is to adjust depreciation rates to reflect the most current assumptions, ensuring units will be fully depreciated by the applicable retirement dates. In December 2025, the Nuclear Regulatory Commission ("NRC") approved a subsequent license renewal ("SLR") application for the three units at Browns Ferry Nuclear Plant ("Browns Ferry"), which extended the useful life of the three units for an additional 20 years. The SLR is estimated to result in approximately a $45 million reduction in depreciation expense quarterly, which does not include any potential impact from additions or retirements to net completed plant. For the three months ended December 31, 2025, there was an estimated reduction in depreciation expense of $15 million due to the December 2025 Browns Ferry SLR.

~~TVA~~Government accounts for depreciation of its properties using the composite depreciation convention of accounting. Under the composite method, assets with similar economic characteristics are grouped and depreciated as one asset. Depreciation is generally computed on a straight-line basis over the estimated service lives of the various classes of assets. The estimation of asset useful lives requires management judgment, supported by external depreciation studies of historical asset retirement experience. Depreciation rates are determined based on external depreciation studies that are updated approximately every five years, with the latest study implemented during the first quarter of 2022. Depreciation expense was $484 million and $463 million for the three months ended June 30, 2025 and 2024, respectively. Depreciation expense was $1.4 billion for both the nine months ended June 30, 2025 and 2024. See Note 7 — Plant Closures for a discussion of the impact of plant closures.Grants

TVA accounts for government grants based on what the credit is intended to reimburse. Government grants related to an asset are recognized as an adjustment to the cost basis in determining the carrying amount of the asset, and government grants related to income are recognized as a deduction from the related expense. TVA records the credit when (1) there is reasonable assurance that the credit will be received, and (2) TVA complies with all conditions attached to the eligibility of the credit.

2. Impact of New Accounting Standards and Interpretations

The following accounting standards or rules have been issued but as of ~~June~~December 3031, 2025, were not effective and have not been adopted by TVA:

Improvements to Reportable Segment Disclosures
Enhancement and Standardization of Climate-Related Disclosures for Investors
Description			~~This~~In ~~guidance~~March ~~improves~~2024, ~~reportable~~the ~~segment~~Securities ~~disclosure~~and ~~requirements,~~Exchange ~~primarily~~Commission ~~through~~("SEC") ~~enhanced~~adopted ~~disclosures~~its ~~about~~climate-related ~~significant~~final ~~segment~~rule ~~expenses~~(SEC Release No. 34-99678, The ~~amendments~~Enhancement ~~require~~and aStandardization ~~public~~of ~~entity~~Climate-Related toDisclosures ~~disclose~~for Investors). In April 2024, onthe anSEC ~~annual~~voluntarily ~~and~~stayed ~~interim~~the ~~basis,~~new ~~significant~~rule ~~segment~~as ~~expenses~~a ~~that~~result ~~are~~of ~~regularly~~pending ~~provided~~legal tochallenges; in March 2025, the ~~chief~~SEC ~~operating~~withdrew ~~decision~~its ~~maker~~legal defense of the rule; and ~~included~~in ~~within~~April ~~each~~2025, ~~reported~~the ~~measure~~United States Court of ~~segment~~Appeals ~~profit~~for ~~and~~the ~~loss.~~Eighth ItCircuit ~~also~~suspended ~~requires~~the alitigation ~~public~~over ~~entity~~the ~~that~~validity ~~has~~of athe ~~single~~rule. ~~reportable~~The ~~segment~~new rule, if implemented as adopted, will require registrants to provide ~~all~~certain ofclimate-related ~~the~~information ~~disclosures~~in ~~required~~their byannual ~~the~~reports ~~amendments~~and registration statements and ~~all~~will ~~existing~~also ~~segment~~require ~~disclosures.~~the ~~The~~dollar ~~amendments~~impact ~~are~~of ~~effective~~severe ~~for~~weather ~~public~~events ~~entities~~and ~~for~~other ~~fiscal~~natural ~~years~~conditions, ~~beginning~~as ~~after~~well ~~December~~as ~~15,~~amounts ~~2023,~~related to carbon offsets and ~~interim~~renewable ~~periods~~energy credits or certificates, to be disclosed in ~~fiscal~~the ~~years~~audited ~~beginning~~financial ~~after~~statements ~~December~~in ~~15,~~certain ~~2024~~circumstances. ~~Upon~~If ~~adoption,~~the anew ~~public~~rule ~~entity~~is ~~should~~implemented ~~apply~~as adopted, the ~~amendments~~disclosure ~~retrospectively~~requirements towill ~~all~~begin ~~prior~~phasing ~~periods~~in ~~presented~~for infiscal ~~the~~years ~~financial~~beginning ~~statements~~on or after January 1, 2027, for non-accelerated filers.
Effective Date for TVA			~~Annual~~Fiscal ~~disclosures to be adopted for the fiscal~~ year ~~ending September 30, 2025 and interim period disclosures to be adopted~~ beginning October 1, ~~2025~~2027.
Effect on the Financial Statements or Other Significant Matters			TVA is currently evaluating the impact of the rule on its disclosures.
Disaggregation of Income Statement Expenses
Description			This guidance improves the disclosures about a public entity's expenses in the notes to the financial statements and requires disclosure of specified information about certain costs and expenses. The amendments require a public entity to disclose, on an annual and interim basis, purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion for each income statement line item that contains those expenses. Specified expenses, gains, or losses that are already disclosed under existing U.S. GAAP are required to be included in the disaggregated income statement expense line item disclosures, and any relevant remaining amounts need to be described qualitatively. Separate disclosures of total selling expenses and an entity’s definition of those expenses are also required. The amendments are effective for public entities for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Upon adoption, a public entity can apply the amendments prospectively or apply them retrospectively to all prior periods presented in the financial statements.
Effective Date for TVA			Fiscal year beginning October 1, 2027, and interim periods beginning October 1, 2028.
Effect on the Financial Statements or Other Significant Matters			The adoption of this standard will result in TVA including the additional required disclosures, and TVA does not expect an impact on its financial condition, results of operations, or cash flows.

Enhancement and Standardization of Climate-Related Disclosures for Investors
Description			In March 2024, the Securities and Exchange Commission ("SEC") adopted its climate-related final rule (SEC Release No. 34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors). In April 2024, the SEC voluntarily stayed the new rule as a result of pending legal challenges, in March 2025, the SEC withdrew its legal defense of the rule, and in April 2025, the United States Court of Appeals for the Eighth Circuit suspended the litigation over the validity of the rule. The new rule, if implemented as adopted, will require registrants to provide certain climate-related information in their annual reports and registration statements and will also require the dollar impact of severe weather events and other natural conditions, as well as amounts related to carbon offsets and renewable energy credits or certificates, to be disclosed in the audited financial statements in certain circumstances. If the new rule is implemented as adopted, the disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2027 for non-accelerated filers.
Effective Date for TVA			Fiscal year beginning October 1, 2027.
Effect on the Financial Statements or Other Significant Matters			TVA is currently evaluating the impact of the rule on its disclosures.
Disaggregation of Income Statement Expenses
Description			This guidance improves the disclosures about a public entity's expenses in the notes to the financial statements and requires disclosure of specified information about certain costs and expenses. The amendments require a public entity to disclose, on an annual and interim basis, purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion for each income statement line item that contains those expenses. Specified expenses, gains, or losses that are already disclosed under existing US GAAP are required to be included in the disaggregated income statement expense line item disclosures, and any relevant remaining amounts need to be described qualitatively. Separate disclosures of total selling expenses and an entity’s definition of those expenses are also required. The amendments are effective for public entities for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Upon adoption, a public entity can apply the amendments prospectively or apply them retrospectively to all prior periods presented in the financial statements.
Effective Date for TVA			Fiscal year beginning October 1, 2027, and interim periods beginning October 1, 2028.
Effect on the Financial Statements or Other Significant Matters			The adoption of this standard will result in TVA including the additional required disclosures, and TVA does not expect an impact on its financial condition, results of operations, or cash flows.

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Accounting and Disclosure of Costs Related to Internally Developed Software
Description			This guidance amends the accounting for and disclosure of costs related to internally developed software, eliminating project stages, clarifying significant development uncertainty by requiring costs to be recognized only when uncertainty is resolved, and aligning capitalization rules with those for externally sold software. Key changes include the elimination of distinct project stages for development, a redefined meaning of probable as likely, and requirements to assess significant development uncertainty for all software projects to determine when to capitalize costs. In addition, the guidance specifies that the property, plant, and equipment disclosure requirements shall be applied to all capitalized software costs. The amendments are effective for all public entities for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Upon adoption, a public entity may apply the guidance using a prospective, retrospective, or modified transition approach.
Effective Date for TVA			The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2028.
Effect on the Financial Statements or Other Significant Matters			The adoption of this standard is not expected to have a material impact on TVA’s financial condition, results of operations, cash flows, or disclosures.


Accounting for Government Grants
Description			This guidance establishes accounting recognition, measurement, and presentation of government grants received by business entities, including guidance for (1) a grant related to an asset and (2) a grant related to income. The amendments in this update require that a government grant received by a business entity not be recognized until it is probable that (a) a business entity will comply with the conditions attached to the grant and (b) the grant will be received. The amendments require that a grant related to an asset be recognized utilizing either a deferred income approach or an adjustment to the cost basis and that a grant related to income be either recognized as other income or deducted from the related expense. In addition, the amendments require, consistent with current disclosure requirements, that a business entity provide disclosures, including the nature of the government grant received, the accounting policies used to account for the grant, and significant terms and conditions of the grant. The amendments are effective for public entities for fiscal years beginning after December 15, 2028, and interim periods within those fiscal years. Upon adoption, a public entity can apply the amendments under a modified prospective approach, a modified retrospective approach, or a full retrospective approach.
Effective Date for TVA			The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2029.
Effect on the Financial Statements or Other Significant Matters			The adoption of this standard is not expected to have a material impact on TVA’s financial condition, results of operations, cash flows, or disclosures.

3. Restructuring

TVA’s demand continues to grow, driving the need for significant future capital investment. TVA must continue to drive efficiencies and cost savings across the enterprise to provide affordable, reliable electricity, while funding the capital investment needed to meet growing demand. This effort has evolved into an Enterprise Transformation Program ("ETP") focused on improving financial health, enhancing asset performance, automating processes, optimizing third-party spend through supply chain, and making the workforce more efficient. As part of these efforts, certain employees are eligible for severance payments. These amounts are recognized in Operating and maintenance expense on TVA's Consolidated ~~Statement~~Statements of Operations in the period incurred. Severance costs that have been incurred but not paid are included in Accounts payable and accrued liabilities on TVA's Consolidated Balance Sheets. The organizational design efforts associated with the ETP were complete as of September 30, 2025; however, the ETP is ongoing as TVA executes the focus areas described above. The table below summarizes the activity related to severance costs:

Severance Cost Liability Activity(in millions)
Severance Cost Liability Activity(1)(in millions)
Severance cost liability at September 30, 2024	$	—
Severance cost liability at September 30, 2025	$	11
Liabilities incurred during the period	40—
Actual costs paid during the period	(2610)
Severance cost liability at June 30, 2025	$	14
Severance cost liability at December 31, 2025	$	1

Note

(1) There was no severance cost liability activity for the three months ended December 31, 2024.

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4. Accounts Receivable, Net

Accounts receivable primarily consist of amounts due from customers for power sales. The table below summarizes the types and amounts of TVA's accounts receivable:

Accounts Receivable, Net(in millions)
	At June 30, 2025		At September 30, 2024
	At December 31, 2025		At September 30, 2025
Power receivables	$	1,~~791~~739	$	1,~~683~~908
Other receivables	~~106~~205		~~118~~225
Allowance for uncollectible accounts(1)	(1017)		—(14)
Accounts receivable, net	$	1,~~887~~927	$	12,~~801~~119

Note

(1) To determine the allowance for trade receivables, TVA considers historical experience and other currently available information, including events such as customer bankruptcy and/or a customer failing to fulfill payment arrangements by the due date, among other considerations. See Note 1 — Summary of Significant Accounting Policies — Allowance for Uncollectible Accounts. At ~~June~~December 3031, 2025, the allowance for uncollectible accounts included $817 million related to one LPC customer.

The Inflation Reduction Act of 2022 ("IRA") makes credits available to certain tax-exempt entities, including TVA, and, in 2025, TVA began applying for these credits. At December 31, 2025, and September 30, 2025, the carrying amount of the Accounts receivable, net, which is related to IRA tax credits and classified as Other receivables above, was $112 million and $72 million, respectively. TVA received $26 million during the three months ended December 31, 2025, related to these credits.

5. Inventories, Net

The table below summarizes the types and amounts of TVA's inventories:

Inventories, Net(in millions)
	At June 30, 2025		At September 30, 2024
	At December 31, 2025		At September 30, 2025
Materials and supplies inventory	$	~~980~~995	$	~~931~~986
Fuel inventory	~~280~~310		~~286~~278
Renewable energy certificates/emissions allowance inventory, net	1012		1112
Allowance for inventory obsolescence	(8687)		(7383)
Inventories, net	$	1,~~184~~230	$	1,~~155~~193

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6. Other Current Assets

Other current assets consisted of the following:

Other Current Assets (in millions)
	At June 30, 2025		At September 30, 2024
	At December 31, 2025		At September 30, 2025
Inventory work-in-progress	$	5278	$	4169
Prepaid software maintenance	3334		2225
Prepaid insurance	27		19
Current portion of prepaid long-term service agreements	25		16
Current portion of prepaid long-term service agreements	16		7
Prepaid insurance	16		16
Commodity contract derivative assets	1314		514
Prepaid fees and dues	115		67
Cloud assets	32		133
Other	1410		712
Other current assets	$	~~169~~184	$	~~120~~162

Commodity Contract Derivative Assets. See Note 14 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Contract Derivatives and — Commodity Derivatives under the FHP for a discussion of TVA's commodity contract derivatives.

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7. Plant Closures

Background

TVA must continuously evaluate all generating assets to ensure an optimal energy portfolio that provides safe, ~~clean,~~ and reliable power while maintaining flexibility and fiscal responsibility to the people of the Tennessee Valley. In January 2023, TVA issued its Record of Decision to retire ~~the~~ two coal-fired units at Cumberland Fossil Plant ("Cumberland") by the end of CY 2026 and CY 2028. In April 2024, TVA issued its Record of Decision to retire the nine coal-fired units at Kingston Fossil Plant ("Kingston") by the end of CY 2027. TVA is evaluating the impact of retiring the balance of the coal-fired fleet by 2035, and that evaluation includes environmental reviews, ~~public input,~~ and TVA Board of Directors ("TVA Board") approval. TVA is also reviewing how recent executive orders, ~~impact~~the ~~supply~~evolving regulatory environment, and ~~planning~~overall ~~needs~~system ~~related~~performance toare impacting the operation of its coal-fired fleet. An evaluation of the continued operation of coal-fired units is being conducted and will consider material condition, plant performance, system flexibility needs, environmental requirements, grid support, and other factors.

Financial Impact

TVA's policy is to adjust depreciation rates to reflect the most current assumptions, ensuring units will be fully depreciated by the applicable retirement dates. TVA's decision to retire the two units at Cumberland is estimated to result in approximately $16 million of additional depreciation quarterly, which does not include any potential impact from additions or retirements to net completed plant. The cumulative impact approximates $~~160~~192 million of additional depreciation since January 2023, related to this decision. In addition, TVA's decision to retire the nine units at Kingston is estimated to result in approximately $9 million of additional depreciation quarterly, which does not include any potential impact from additions or retirements to net completed plant. The cumulative impact approximates $4563 million of additional depreciation since April 2024, related to this decision.

TVA also recognized $12 million and $11 million in operating and maintenance expense during the nine months ended June 30, 2025 and 2024, respectively, related to additional inventory reserves and write-offs related to TVA's coal-fired fleet, including Kingston and Cumberland. Of these amounts, $4 million was recognized during both the three months ended June 30, 2025 and 2024.

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8. Other Long-Term Assets

The table below summarizes the types and amounts of TVA's other long-term assets:

Other Long-Term Assets(in millions)
	At June 30, 2025		At September 30, 2024
	At December 31, 2025		At September 30, 2025
Loans and other long-term receivables, net	$	111	$	84
Cloud assets	$	132	$	114
Cloud assets	98		35
Loans and other long-term receivables, net	84		83
Prepaid long-term service agreements	68		62
Prepaid capital assets	81		81
Prepaid capital assets	67		29
Prepaid long-term service agreements	72		89
EnergyRight® receivables, net	4446		4445
Commodity contract derivative assets	177		210
Other	8586		8884
Total other long-term assets	$	~~490~~508	$	~~344~~506

~~Loans~~Cloud ~~and Other Long-Term Receivables~~Assets. At ~~June~~December 3031, 2025, and September 30, ~~2024~~2025, the carrying amount of the ~~loans~~cloud ~~receivable,~~assets ~~net of discount,~~ reported in ~~Accounts~~Other ~~receivable,~~current ~~net~~assets was $3 2 million and $21 3 million, respectively. ~~Loans~~For ~~receivables~~the ~~are~~three ~~reported~~months ~~net~~ended ofDecember 31, ~~allowances~~2025 ~~for~~and ~~uncollectible~~2024, ~~accounts. See~~TVA ~~Note~~amortized $1 —million ~~Summary~~and of$5 ~~Significant~~million, ~~Accounting~~respectively, ~~Policies~~as —Operating ~~Allowance~~and ~~for~~maintenance ~~Uncollectible Accounts~~expense.

Loans and Other Long-Term Receivables. At December 31, 2025, and September 30, 2025, the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was $5 million and $3 million, respectively. Loans receivables are reported net of allowances for uncollectible accounts. See Note 1 — Summary of Significant Accounting Policies — Allowance for Uncollectible Accounts.

The allowance components, which consist of a collective allowance and specific loans allowance, are based on the risk characteristics of TVA's loans. Loans that share similar risk characteristics are evaluated on a collective basis in measuring credit losses, while loans that do not share similar risk characteristics with other loans are evaluated on an individual basis.

Allowance Components(in millions)
	At June 30, 2025		At September 30, 2024
	At December 31, 2025		At September 30, 2025
EnergyRight® loan reserve	$	1	$	1
Economic development loan specific loan reserve	1		1
Total allowance for loan losses	$	2	$	2

Cloud Assets. At June 30, 2025, and September 30, 2024, the carrying amount of the cloud assets reported in Other current assets was $3 million and $13 million, respectively.

Prepaid Long-Term Service Agreements. At June 30, 2025, and September 30, 2024, prepayments of $16 million and $7 million, respectively, were recorded in Other current assets.

EnergyRight® Receivables. In association with the EnergyRight® program, TVA's LPCs offer financing to end-use customers for the purchase of energy-efficient equipment. Depending on the nature of the energy-efficiency project, loans may have a maximum term of five years or 10 years. TVA purchases the resulting loans receivable from its LPCs. The loans receivable are then transferred to a third-party bank with which TVA has agreed to repay in full any loans receivable that have been in default for 180 days or more or that TVA has determined are uncollectible. Given this continuing involvement, TVA accounts for the transfer of the loans receivable as secured borrowings. The current and long-term portions of the loans receivable are reported in Accounts receivable, net and Other long-term assets, respectively, on TVA's Consolidated Balance Sheets. At both June 30, 2025, and September 30, 2024, the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was $12 million. See Note 11 — Other Long-Term Liabilities for information regarding the associated financing obligation.

Commodity Contract Derivative Assets. See Note 14 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Derivatives and — Commodity Derivatives under the FHP for a discussion of TVA's commodity contract derivatives.

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Prepaid Capital Assets. TVA makes prepayments to acquire capital assets. TVA classifies these prepayments as prepaid capital if the funds are refundable and/or TVA can receive a credit.

Prepaid Long-Term Service Agreements. At December 31, 2025, and September 30, 2025, prepayments of $25 million and $16 million, respectively, were recorded in Other current assets.

EnergyRight® Receivables. In association with the EnergyRight® program, TVA's LPCs offer financing to end-use customers for the purchase of energy-efficient equipment. Depending on the nature of the energy-efficiency project, loans may have a maximum term of five years or 10 years. TVA purchases the resulting loans receivable from its LPCs. The loans receivable are then transferred to a third-party bank with which TVA has agreed to repay in full any loans receivable that have been in default for 180 days or more or that TVA has determined are uncollectible. Given this continuing involvement, TVA accounts for the transfer of the loans receivable as secured borrowings. The current and long-term portions of the loans receivable are reported in Accounts receivable, net and Other long-term assets, respectively, on TVA's Consolidated Balance Sheets. At both December 31, 2025, and September 30, 2025, the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was $12 million. See Note 11 — Other Long-Term Liabilities for information regarding the associated financing obligation.

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9. Regulatory Assets and Liabilities

TVA records certain assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. As such, certain items that would generally be reported in earnings or that would impact the Consolidated Statements of Operations are recorded as regulatory assets or regulatory liabilities. Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. Components of regulatory assets and regulatory liabilities are summarized in the table below.

Regulatory Assets and Liabilities(in millions)
	At June 30, 2025		At September 30, 2024
	At December 31, 2025		At September 30, 2025
Current regulatory assets
Unrealized losses on commodity derivatives	$	22	$	102
Unrealized losses on commodity contract derivatives	$	69	$	59
Unrealized losses on interest rate derivatives	5157		5457
Fuel cost adjustment receivable	7936		35—
Total current regulatory assets	152		191
Other current regulatory assets	11		11
Total current regulatory assets	173		127
Non-current regulatory assets
Non-nuclear decommissioning costs	65,~~135~~554		65,~~187~~563
Retirement benefit plans deferred costs	1,~~915~~519		1,~~979~~531
Nuclear decommissioning costs	276		362
Environmental compliance and remediation costs	334		308
Unrealized losses on interest rate derivatives	~~321~~278		~~447~~316
Environmental compliance and remediation costs	313		215
Nuclear decommissioning costs	116		149
Unrealized losses on commodity derivatives	8		64
Unrealized losses on commodity contract derivatives	14		12
Other non-current regulatory assets	~~169~~170		~~154~~168
Total non-current regulatory assets	97,~~137~~985		98,~~408~~047
Total regulatory assets	$	98,~~289~~158	$	98,~~599~~174
Current regulatory liabilities
Fuel cost adjustment tax equivalents	$	~~189~~192	$	~~169~~203
Unrealized gains on commodity derivatives	13		5
Unrealized gains on commodity contract derivatives	18		14
Total current regulatory liabilities	202		174
Fuel cost adjustment payable	—		11
Total current regulatory liabilities	210		228
Non-current regulatory liabilities
Retirement benefit plans deferred credits	68125		81131
Unrealized gains on commodity derivatives	17		2
Unrealized gains on commodity contract derivatives	7		10
Total non-current regulatory liabilities	85132		83141
Total regulatory liabilities	$	~~287~~342	$	~~257~~369

10. Variable Interest Entities

A variable interest entity ("VIE") is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of owning a controlling financial interest. When TVA determines that it has a variable interest in a VIE, a qualitative evaluation is performed to assess which interest holders have the power to direct the activities that most significantly impact the economic performance of the entity and have the obligation to absorb losses or receive benefits that could be significant to the entity. The evaluation considers the purpose and design of the business, the risks that the business was designed to create and pass along to other entities, the activities of the business that can be directed and which party can direct them, and the expected relative impact of those activities on the economic performance of the business through its life. TVA has the power to direct the activities of an entity when it has the ability to make key operating and financing decisions, including, but not limited to, capital investment and the issuance of debt. Based on the evaluation of these criteria, TVA has determined it is the primary beneficiary of certain entities and as such is required to account for the VIEs on a consolidated basis.

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entity when it has the ability to make key operating and financing decisions, including, but not limited to, capital investment and the issuance of debt. Based on the evaluation of these criteria, TVA has determined it is the primary beneficiary of certain entities and as such is required to account for the VIEs on a consolidated basis.

John Sevier VIEs

In 2012, TVA entered into a $1.0 billion construction management agreement and lease financing arrangement with John Sevier Combined Cycle Generation LLC ("JSCCG") for the completion and lease by TVA of the John Sevier Combined Cycle Facility ("John Sevier CCF"). JSCCG is a special single-purpose limited liability company formed in January 2012 to finance the John Sevier CCF through a $900 million secured note issuance (the "JSCCG notes") and the issuance of $100 million of membership interests subject to mandatory redemption. The membership interests were purchased by John Sevier Holdco LLC ("Holdco"). Holdco is a special single-purpose entity, also formed in January 2012, established to acquire and hold the membership interests in JSCCG. A non-controlling interest in Holdco is held by a third -party through nominal membership interests, to which none of the income, expenses, and cash flows are allocated.

The membership interests held by Holdco in JSCCG were purchased with proceeds from the issuance of $100 million of secured notes (the "Holdco notes") and are subject to mandatory redemption pursuant to a schedule of amortizing, semi-annual payments due each January 15 and July 15, with a final payment due in January 2042. The payment dates for the mandatorily redeemable membership interests are the same as those of the Holdco notes. The sale of the JSCCG notes, the membership interests in JSCCG, and the Holdco notes closed in January 2012. The JSCCG notes are secured by TVA's lease payments, and the Holdco notes are secured by Holdco's investment in, and amounts receivable from, JSCCG. TVA's lease payments to JSCCG are equal to and payable on the same dates as JSCCG's and Holdco's semi-annual debt service payments. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by JSCCG and Holdco. Certain agreements related to this transaction contain default and acceleration provisions.

Due to its participation in the design, business activity, and credit and financial support of JSCCG and Holdco, TVA has determined that it has a variable interest in ~~both~~each of these entities. Based on its analysis, TVA has concluded that it is the primary beneficiary of JSCCG and Holdco and, as such, is required to account for the VIEs on a consolidated basis. Holdco's membership interests in JSCCG are eliminated in consolidation.

Southaven VIE

In 2013, TVA entered into a $400 million lease financing arrangement with Southaven Combined Cycle Generation LLC ("SCCG") for the lease by TVA of the Southaven Combined Cycle Facility ("Southaven CCF"). SCCG is a special single-purpose limited liability company formed in June 2013 to finance the Southaven CCF through a $360 million secured notes issuance (the "SCCG notes") and the issuance of $40 million of membership interests subject to mandatory redemption. The membership interests were purchased by Southaven Holdco LLC ("SHLLC"). SHLLC is a special single-purpose entity, also formed in June 2013, established to acquire and hold the membership interests in SCCG. A non-controlling interest in SHLLC is held by a third- party through nominal membership interests, to which none of the income, expenses, and cash flows of SHLLC are allocated.

The membership interests held by SHLLC were purchased with proceeds from the issuance of $40 million of secured notes (the "SHLLC notes") and are subject to mandatory redemption pursuant to a schedule of amortizing, semi-annual payments due each February 15 and August 15, with a final payment due on August 15, 2033. The payment dates for the mandatorily redeemable membership interests are the same as those of the SHLLC notes, and the payment amounts are sufficient to provide returns on, as well as returns of, capital until the investment has been repaid to SHLLC in full. The rate of return on investment to SHLLC is seven percent, which is reflected as interest expense in the Consolidated Statements of Operations. SHLLC is required to pay a pre-determined portion of the return on investment to Seven States Southaven, LLC on each lease payment date as agreed in SHLLC's formation documents (the "Seven States Return"). The current and long-term portions of the Membership interests of VIE subject to mandatory redemption are included in Accounts payable and accrued liabilities and Other long-term liabilities, respectively.

The payment dates for the mandatorily redeemable membership interests are the same as those of the SHLLC notes. The SCCG notes are secured by TVA's lease payments, and the SHLLC notes are secured by SHLLC's investment in, and amounts receivable from, SCCG. TVA's lease payments to SCCG are payable on the same dates as SCCG's and SHLLC's semi-annual debt service payments and are equal to the sum of (i) the amount of SCCG's semi-annual debt service payments, (ii) the amount of SHLLC's semi-annual debt service payments, and (iii) the amount of the Seven States Return. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by SCCG and SHLLC. Certain agreements related to this transaction contain default and acceleration provisions.

In the event that TVA were to choose to exercise an early buy out feature of the Southaven facility lease, in part or in whole, TVA must pay to SCCG amounts sufficient for SCCG to repay or partially repay on a pro rata basis the membership interests held by SHLLC, including any outstanding investment amount plus accrued but unpaid return. TVA also has the right, at any time and without any early redemption of the other portions of the Southaven facility lease payments due to SCCG, to fully repay SHLLC's investment, upon which repayment SHLLC will transfer the membership interests to a designee of TVA.

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TVA participated in the design, business activity, and financial support of SCCG and has determined that it has a direct variable interest in SCCG resulting from risk associated with the value of the Southaven CCF at the end of the lease term. Based on its analysis, TVA has determined that it is the primary beneficiary of SCCG and, as such, is required to account for the VIE on a consolidated basis.

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Johnsonville VIE

In October 2024, TVA entered into an $800 million construction management agreement and lease financing arrangement with Johnsonville Aeroderivative Combustion Turbine Generation LLC ("JACTG") for the completion and lease by TVA of the Johnsonville Aeroderivative Combustion Turbine Facility ("Johnsonville Facility"). JACTG is a special single-purpose limited liability company formed in September 2024 to finance the Johnsonville Facility through a $720 million secured note issuance (the "JACTG notes") and the issuance of $80 million of membership interests subject to mandatory redemption. The membership interests were purchased by Johnsonville Holdco LLC ("JHLLC"). JHLLC is a special single-purpose entity, also formed in September 2024, established to acquire and hold the membership interests in JACTG. A non-controlling interest in JHLLC is held by a third-party through nominal membership interests, to which none of the income, expenses, and cash flows are allocated.

The membership interests held by JHLLC in JACTG were purchased with proceeds from the issuance of $80 million of secured notes (the "JHLLC notes") and are subject to mandatory redemption pursuant to a schedule of amortizing, semi-annual payments due each April 1 and October 1, with a final payment due in October 2054. The payment dates for the mandatorily redeemable membership interests are the same as those of the JHLLC notes. The sale of the JACTG notes, the membership interests in JACTG, and the JHLLC notes closed in October 2024. The JACTG notes are secured by TVA's lease payments, and the JHLLC notes are secured by JHLLC's investment in, and amounts receivable from, JACTG. TVA's lease payments to JACTG are equal to and payable on the same dates as JACTG's and JHLLC's semi-annual debt service payments. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by JACTG and JHLLC. Certain agreements related to this transaction contain default and acceleration provisions.

Due to its participation in the design, business activity, and credit and financial support of JACTG and JHLLC, TVA has determined that it has a variable interest in both of these entities. Based on its analysis, TVA has concluded that it is the primary beneficiary of JACTG and JHLLC and, as such, is required to account for the VIEs on a consolidated basis. JHLLC's membership interests in JACTG are eliminated in consolidation.

Impact on Consolidated Financial Statements

The financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, SCCG, JACTG, and JHLLC at ~~June~~December 3031, 2025, and September 30, ~~2024~~2025, as reflected on the Consolidated Balance Sheets, are as follows:

Summary of Impact of VIEs on Consolidated Balance Sheets(in millions)
	At June 30, 2025		At September 30, 2024
	At December 31, 2025		At September 30, 2025
Current liabilities
Accrued interest	$	30	$	929
Accounts payable and accrued liabilities	1		1
Current maturities of long-term debt of variable interest entities	4849		3749
Total current liabilities	7980		4779
Other liabilities
Other long-term liabilities	15		1614
Long-term debt, net
Long-term debt of variable interest entities, net	1,~~651~~627		~~897~~1,632
Total liabilities	$	1,~~745~~722	$	~~960~~1,725

Interest expense of $21 million and $1222 million for the three months ended ~~June~~December 3031, 2025 and 2024, respectively, ~~and $64 million and $35 million for the nine months ended June 30, 2025 and 2024, respectively,~~ is included in the Consolidated Statements of Operations related to debt of VIEs and membership interests of VIEs subject to mandatory redemption.

Creditors of the VIEs do not have any recourse to the general credit of TVA. TVA does not have any obligations to provide financial support to the VIEs other than as prescribed in the terms of the agreements related to these transactions.

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11. Other Long-Term Liabilities

Other long-term liabilities consist primarily of liabilities related to certain derivative agreements as well as liabilities related to environmental compliance and remediation, and long-term project cost accruals. The table below summarizes the types and amounts of Other long-term liabilities:

Other Long-Term Liabilities(in millions)
	At June 30, 2025		At September 30, 2024(1)
Interest rate swap liabilities	$	622	$	792
Environmental compliance and remediation costs	272		212
Long-term project cost accruals	198		140
Currency swap liabilities	85		109
Operating lease liabilities	74		88
EnergyRight® financing obligation	52		52
Long-term deferred compensation	47		50
Long-term deferred revenue	38		48
Accrued long-term service agreements	20		7
Advances for construction	15		55
Commodity contract derivative liabilities	8		64
Other	76		95
Total other long-term liabilities	$	1,507	$	1,712

Note

(1) At September 30, 2024, $7 million previously classified as Other (a component of Other long-term liabilities) has been reclassified to Accrued long-term service agreements (a component of Other long-term liabilities) to conform with current year presentation.

Interest Rate Swap Liabilities. See Note 14 — Risk Management Activities and Derivative Transactions — Overview of Accounting Treatment and Derivatives Not Receiving Hedge Accounting Treatment — Interest Rate Derivatives for information regarding the interest rate swap liabilities.

Environmental Compliance and Remediation Costs. At June 30, 2025, and September 30, 2024, the current amount of the environmental compliance and remediation costs reported in Accounts payable and accrued liabilities was $41 million and $3 million, respectively.

Long-Term Project Cost Accruals. At June 30, 2025, and September 30, 2024, the current amount of the long-term project cost accruals reported in Accounts payable and accrued liabilities was $219 million and $124 million, respectively.

Currency Swap Liabilities. See Note 14 — Risk Management Activities and Derivative Transactions — Overview of Accounting Treatment and Cash Flow Hedging Strategy for Currency Swaps for more information regarding the currency swap liabilities.

Operating Lease Liabilities. At June 30, 2025, and September 30, 2024, the current portion of TVA's operating leases reported in Accounts payable and accrued liabilities was $56 million and $63 million, respectively.

EnergyRight® Financing Obligation. At both June 30, 2025, and September 30, 2024, the carrying amount of the financing obligation reported in Accounts payable and accrued liabilities was $13 million. See Note 8 — Other Long-Term Assets for information regarding the associated loans receivable.

Long-Term Deferred Compensation. At June 30, 2025, and September 30, 2024, the current amount of deferred compensation recorded in Accounts payable and accrued liabilities was $57 million and $74 million, respectively.

Long-Term Deferred Revenue. At June 30, 2025, and September 30, 2024, the current amount of deferred revenue recorded in Accounts payable and accrued liabilities was $42 million and $28 million, respectively.

Accrued Long-Term Service Agreements. TVA has entered into various long-term service agreements for major maintenance activities at certain of its combined cycle plants. TVA uses the direct expense method of accounting for these arrangements. TVA accrues for parts when it takes ownership and for contractor services when they are rendered. Under certain of these agreements, parts received and services rendered exceed payments made. The current and long-term portions of the resulting obligation are recorded in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA's

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~~Consolidated Balance Sheets~~11. At Other ~~June 30, 2025, and September 30, 2024, the current amount of accrued long~~Long-~~term~~Term ~~service agreements recorded in Accounts payable and accrued liabilities was $11 million and $16 million, respectively.~~Liabilities

~~Advances~~Other ~~for~~long-term ~~Construction. At~~liabilities ~~June 30,~~consist ~~2025,~~primarily ~~and~~of ~~September 30,~~liabilities ~~2024,~~related ~~the~~to ~~current~~certain ~~amount~~derivative ofagreements ~~advances~~as ~~for~~well ~~construction~~as ~~recorded~~liabilities inrelated ~~Accounts~~to ~~payable~~environmental compliance and ~~accrued~~remediation ~~liabilities~~and ~~was~~long-term ~~$127 million~~project cost accruals. The table below summarizes the types and ~~$60 million,~~amounts ~~respectively.~~of Other long-term liabilities:

Commodity Contract Derivative Liabilities. See Note 14 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Derivatives and — Commodity Derivatives under the FHP for a discussion of TVA's commodity contract derivatives.


Other Long-Term Liabilities (in millions)
	At December 31, 2025		At September 30, 2025
Interest rate swap liabilities	$	570	$	643
Environmental compliance and remediation costs	311		274
Long-term project cost accruals	166		204
Currency swap liabilities	95		108
Operating lease liabilities	58		63
Advances for construction	58		61
EnergyRight® financing obligation	53		53
Long-term deferred revenue	39		39
Long-term deferred compensation	38		54

Commodity contract derivative liabilities	14		12
Accrued long-term service agreements	12		25



Other	76		70
Total other long-term liabilities	$	1,490	$	1,606

Interest Rate Swap Liabilities. See Note 14 — Risk Management Activities and Derivative Transactions — Overview of Accounting Treatment — Derivatives Not Receiving Hedge Accounting Treatment and — Interest Rate Derivatives for information regarding the interest rate swap liabilities.

Environmental Compliance and Remediation Costs. At December 31, 2025, and September 30, 2025, the current amount of the environmental compliance and remediation costs reported in Accounts payable and accrued liabilities was $44 million and $52 million, respectively.

Long-Term Project Cost Accruals. At December 31, 2025, and September 30, 2025, the current amount of the long-term project cost accruals reported in Accounts payable and accrued liabilities was $273 million and $256 million, respectively.

Currency Swap Liabilities. See Note 14 — Risk Management Activities and Derivative Transactions — Overview of Accounting Treatment and — Cash Flow Hedging Strategy for Currency Swaps for more information regarding the currency swap liabilities.

Operating Lease Liabilities. At December 31, 2025, and September 30, 2025, the current portion of TVA's operating leases reported in Accounts payable and accrued liabilities was $44 million and $46 million, respectively.

Advances for Construction. At December 31, 2025, and September 30, 2025, the current amount of advances for construction recorded in Accounts payable and accrued liabilities was $153 million and $155 million, respectively.

EnergyRight® Financing Obligation. At both December 31, 2025, and September 30, 2025, the carrying amount of the financing obligation reported in Accounts payable and accrued liabilities was $13 million. See Note 8 — Other Long-Term Assets for information regarding the associated loans receivable.

Long-Term Deferred Revenue. At December 31, 2025, and September 30, 2025, the current amount of deferred revenue recorded in Accounts payable and accrued liabilities was $44 million and $25 million, respectively.

Long-Term Deferred Compensation. At December 31, 2025, and September 30, 2025, the current amount of deferred compensation recorded in Accounts payable and accrued liabilities was $51 million and $70 million, respectively.

Commodity Contract Derivative Liabilities. See Note 14 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Contract Derivatives and — Commodity Derivatives under the FHP for a discussion of TVA's commodity contract derivatives.

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Accrued Long-Term Service Agreements. At December 31, 2025, and September 30, 2025, the current amount of accrued long-term service agreements recorded in Accounts payable and accrued liabilities was $28 million and $17 million, respectively.

12. Asset Retirement Obligations

During the ~~nine~~three months ended ~~June~~December 3031, 2025, TVA's total asset retirement obligations ("ARO") liability ~~increased~~decreased $~~118~~689 million as a result of ~~increases~~revisions ~~from~~in ~~periodic~~estimates ~~accretion,~~to ~~partially~~nuclear ~~offset~~AROs ~~by revisions in estimate~~ and settlements related to retirement projects that were conducted during the period, partially offset by increases due to periodic accretion. The nuclear and non-nuclear accretion amounts were deferred as regulatory assets. During the ~~nine~~three months ended ~~June~~December 3031, 2025, $~~165~~55 million of the related regulatory assets were amortized into expense as these amounts were collected in rates. See Note 9 — Regulatory Assets and Liabilities. TVA maintains investment trusts to help fund its decommissioning obligations. See Note 15 — Fair Value Measurements — Investment Funds and Note 21 — Contingencies and Legal Proceedings — Contingencies — Decommissioning Costs for a discussion of the trusts' objectives and the current balances of the trusts.

Asset Retirement Obligation Activity(in millions)
	Nuclear		Non-nuclear		Total
Balance at September 30, 2024	$	3,814	$	6,992	$	10,806	(1)
Balance at September 30, 2025	$	3,976	$	6,438	$	10,414	(1)
Settlements	(94)		(~~178~~52)		(~~187~~56)
Revisions in estimate (non-cash)	2(740)		~~(24)~~—		(22740)
Accretion (recorded as regulatory asset)	~~130~~45		~~197~~62		~~327~~107
Balance at June 30, 2025	$	3,937	$	6,987	$	10,924	(1)
Balance at December 31, 2025	$	3,277	$	6,448	$	9,725	(1)

Note

(1) Includes $~~316~~323 million and $~~283~~313 million at ~~June~~December 3031, 2025, and September 30, ~~2024~~2025, respectively, in Current liabilities.

Revisions in ~~non-~~nuclear estimates decreased the liability balance by $24740 million for the ~~nine~~three months ended ~~June~~December 3031, 2025. The decrease ~~was~~resulted ~~primarily~~from ~~attributable~~the toapproval ~~a change in closure liabilities~~ of ~~$34~~a ~~million~~SLR atfor ~~Paradise~~Browns ~~Fossil~~Ferry ~~Plant~~by ~~based~~the onNRC ~~scope~~in ~~changes,~~December ~~new vendor bids, and updated cost estimates for activities associated with final closure~~2025. The ~~decrease~~SLR ~~was~~authorizes ~~partially~~each ~~offset~~of byBrowns ~~increased~~Ferry's ~~revisions~~three inunits ~~estimates~~to ofoperate ~~$16~~for ~~million~~an ~~related~~additional to20 ~~the~~years, ~~final~~resulting ~~legacy~~in ~~coal~~a ~~combustion~~total ~~residual~~operating ~~rule~~life ~~("Legacy~~of ~~CCR~~80 ~~Rule")~~years.

13. Debt and Other Obligations

Debt Outstanding

Total debt outstanding at ~~June~~December 3031, 2025, and September 30, ~~2024~~2025, consisted of the following:

Debt Outstanding (in millions)
	At June 30, 2025		At September 30, 2024
	At December 31, 2025		At September 30, 2025
Short-term debt
Short-term debt, net of discounts	$	~~319~~1,173	$	~~1,167~~—
Current maturities of power bonds issued at par	~~1,370~~20		1,~~022~~370
Current maturities of long-term debt of VIEs issued at par	4849		3749
Total current debt outstanding, net	1,~~737~~242		21,~~226~~419
Long-term debt
Long-term power bonds(1)	1920,~~389~~628		1720,~~995~~628
Long-term debt of VIEs, net	1,~~651~~627		~~897~~1,632
Unamortized discounts, premiums, issue costs, and other	(~~160~~163)		(~~128~~167)
Total long-term debt, net	2022,~~880~~092		1822,~~764~~093
Total debt outstanding	$	2223,~~617~~334	$	2023,~~990~~512

Note

(1) Includes total net exchange gain from currency transactions of $4858 million and $6259 million at ~~June~~December 3031, 2025, and September 30, ~~2024~~2025, respectively.

2223

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Debt Securities Activity

The table below summarizes the long-term debt securities activity for the period from October 1, ~~2024~~2025, to ~~June~~December 3031, 2025:

Debt Securities Activity
	Date	Amount(in millions)
Issues
Redemptions/Maturities(1) (2)
Debt of variable interest entities	October 2024	$	800
1995 E Global	November 2025	$	1,350
2025 Series A(1)	February 2025	1,250
Total redemptions/maturities of power bonds		1,350
2025 Series B(2)	May 2025	1,500
Debt of variable interest entities		5
Discount on debt issues		(28)
Total redemptions/maturities of debt		$	1,355
Total long-term debt issues		$	3,522
Redemptions/Maturities(3)
2009 Series B	December 2024	$	1
2020 Series A	May 2025	1,000
2009 Series B	June 2025	21
Total redemptions/maturities of power bonds		1,022
Debt of variable interest entities		23
Total redemptions/maturities of debt		$	1,045

Notes

(1) ~~The~~All ~~2025~~redemptions ~~Series A Bonds~~ were ~~issued~~ at ~~98.517~~100 percent of par.

(2) ~~The~~2009 ~~2025~~ Series B ~~Bonds~~redemption ~~were~~amount ~~issued~~was atless ~~99.360~~than ~~percent~~$1 million ofin ~~par~~December 2025.

(3) All redemptions were at 100 percent of par.

Credit Facility Agreements

TVA has funding available under four revolving credit facilities totaling $2.7 billion. See the table below for additional information on the four revolving credit facilities. The interest rate on any borrowing under these facilities varies based on market factors and the rating of TVA's senior unsecured, long-term, non-credit-enhanced debt. TVA is required to pay an unused facility fee on the portion of the total $2.7 billion that TVA has not borrowed or committed under letters of credit. This fee, along with letter of credit fees, may fluctuate depending on the rating of TVA's senior unsecured, long-term, non-credit-enhanced debt. At ~~June~~December 3031, 2025, and September 30, ~~2024~~2025, there were $~~517~~488 million and $~~566~~498 million, respectively, of letters of credit outstanding under these facilities, and there were no borrowings outstanding. TVA's letters of credit are primarily posted as collateral under TVA's interest rate swaps. See Note 14 — Risk Management Activities and Derivative Transactions — Other Derivative Instruments — Collateral. TVA may also post collateral for TVA's currency swaps, for commodity derivatives under the Financial Hedging Program ("FHP"), or for certain transactions with third parties that require TVA to post letters of credit.

The following table provides additional information regarding TVA's funding available under the four revolving credit facilities:

Summary of Credit FacilitiesAt June 30, 2025(in millions)
Summary of Credit FacilitiesAt December 31, 2025(in millions)
Maturity Date	Facility Limit		Letters of Credit Outstanding		Cash Borrowings		Availability
March 2026	$	150	$	38—	$	—	$	~~112~~150
September 2026	1,000		71		—		929
March 2027	1,000		135		—		865
March 2027	1,000		194		—		806
February 2028	500		214		—		286
Total	$	2,650	$	517	$	—	$	2,133
September 2030	1,000		139		—		861
Total	$	2,650	$	488	$	—	$	2,162

TVA and the United States ("U.S.") Department of the Treasury ("U.S. Treasury"), pursuant to the Tennessee Valley Authority Act of 1933, as amended ("TVA Act"), have entered into a memorandum of understanding under which the U.S. Treasury provides TVA with a $150 million credit facility. This credit facility was renewed for ~~2025~~2026 with a maturity date of September 30, ~~2025~~2026. Access to this credit facility or other similar financing arrangements with the U.S. Treasury has been available to TVA since the 1960s. TVA can borrow under the U.S. Treasury credit facility only if it cannot issue bonds, notes, or other evidences of indebtedness (collectively, "Bonds") in the market on reasonable terms, and TVA considers the U.S. Treasury credit facility a secondary source of liquidity. The interest rate on any borrowing under this facility is based on the average rate on outstanding marketable obligations of the U.S. with maturities from date of issue of 12 months or less. There were no outstanding borrowings under the facility at December 31, 2025. The availability of this credit facility may be impacted by how the U.S. government addresses the possibility of approaching its debt limit.

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available to TVA since the 1960s. TVA can borrow under the U.S. Treasury credit facility only if it cannot issue bonds, notes, or other evidences of indebtedness (collectively, "Bonds") in the market on reasonable terms, and TVA considers the U.S. Treasury credit facility a secondary source of liquidity. The interest rate on any borrowing under this facility is based on the average rate on outstanding marketable obligations of the U.S. with maturities from date of issue of 12 months or less. There were no outstanding borrowings under the facility at June 30, 2025. The availability of this credit facility may be impacted by how the U.S. government addresses the possibility of approaching its debt limit.

14. Risk Management Activities and Derivative Transactions

TVA is exposed to various risks related to commodity prices, investment prices, interest rates, currency exchange rates, and inflation as well as counterparty credit and performance risks. To help manage certain of these risks, TVA has historically entered into various derivative transactions, principally commodity option contracts, forward contracts, swaps, swaptions, futures, and options on futures.

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Overview of Accounting Treatment

TVA recognizes certain of its derivative instruments as either assets or liabilities on its Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of these instruments depends on (1) whether TVA uses regulatory accounting to defer the derivative gains and losses, (2) whether the derivative instrument has been designated and qualifies for hedge accounting treatment, and (3) if so, the type of hedge relationship (for example, cash flow hedge).

The following tables summarize the accounting treatment that certain of TVA's financial derivative transactions receive:

Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1) Amount of Mark-to-Market Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss)(in millions)
			Three Months Ended June 30				Nine Months Ended June 30
			Three Months Ended December 31
Derivatives in Cash Flow Hedging Relationship	Objective of Hedge Transaction	Accounting for DerivativeHedging Instrument	2025		2024		~~2025~~		~~2024~~
Currency swaps	To protect against changes in cash flows caused by changes in foreign currency exchange rates (exchange rate risk)	Unrealized gains and losses are recorded in Accumulated other comprehensive income (loss) ("AOCI") and reclassified to Interest expense to the extent they are offset by gains and losses on the hedged transaction	$	4713	$	1(19)	$	24	$	17

Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2)(1)Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Interest Expense(in millions)
	Three Months Ended June 30				Nine Months Ended June 30
	Three Months Ended December 31
Derivatives in Cash Flow Hedging Relationship	2025		2024		~~2025~~		~~2024~~
Currency swaps	$	38(1)	$	7(37)	$	15	$	20

Note

(1) There were no amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $15 million of ~~loss~~gains from AOCI to Interest expense within the next 12 months to offset amounts anticipated to be recorded in Interest expense related to the forecasted exchange ~~gains~~loss on the debt.


Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment Amount of Gain (Loss) Recognized in Income on Derivatives(1) (in millions)
			Three Months Ended December 31
Derivative Type	Objective of Derivative	Accounting for Derivative Instrument	2025		2024
Interest rate swaps	To fix short-term debt variable rate to a fixed rate (interest rate risk)	Mark-to-market gains and losses are recorded as regulatory liabilities and assets, respectively Realized gains and losses are recognized in Interest expense when incurred during the settlement period and are presented in operating cash flow	$	(13)	$	(10)


Commodity derivatives under the FHP	To protect against fluctuations in market prices of purchased commodities (price risk)	Mark-to-market gains and losses are recorded as regulatory liabilities and assets, respectively Realized gains and losses are recognized in Fuel expense or Purchased power expense as the contracts settle to match the delivery period of the underlying commodity(2)	(13)		(37)

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Summary of Derivative Instruments That Do Not Receive Hedge Accounting TreatmentAmount of Gain (Loss) Recognized in Income on Derivatives(1)(in millions)
			Three Months Ended June 30				Nine Months Ended June 30
Derivative Type	Objective of Derivative	Accounting for Derivative Instrument	2025		2024		2025		2024
Interest rate swaps	To fix short-term debt variable rate to a fixed rate (interest rate risk)	Mark-to-market gains and losses are recorded as regulatory liabilities and assets, respectivelyRealized gains and losses are recognized in Interest expense when incurred during the settlement period and are presented in operating cash flow	$	(11)	$	(8)	$	(33)	$	(23)
Commodity derivativesunder the FHP	To protect against fluctuations in market prices of purchased commodities (price risk)	Mark-to-market gains and losses are recorded as regulatory liabilities and assets, respectivelyRealized gains and losses are recognized in Fuel expense or Purchased power expense as the contracts settle to match the delivery period of the underlying commodity(2)	(13)		(72)		(64)		(227)

Notes

(1) All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in income but instead are deferred as regulatory assets and liabilities. As such, there were no related gains (losses) recognized in income for these unrealized gains (losses) for the three ~~and nine~~ months ended ~~June~~December 3031, 2025 and for the three ~~and nine~~ months ended ~~June~~December 3031, 2024.

(2) Of the amount recognized for the three months ended ~~June~~December 3031, 2025, $310 million and $103 million were reported in Fuel expense and Purchased power expense, respectively, and of the amount recognized for the three months ended ~~June~~December 3031, 2024, $~~59 million and $13 million were reported in Fuel expense and Purchased power expense, respectively. Of the amount recognized for the nine months ended June~~ 30, ~~2025, $12~~ million and $527 million were reported in Fuel expense and Purchased power expense, respectively~~, and of the amount recognized for the nine months ended June 30, 2024, $186 million and $41 million were reported in Fuel expense and Purchased power expense, respectively~~.

Fair Values of TVA Derivatives(in millions)

At June 30, 2025

At September 30, 2024

Derivatives That Receive Hedge Accounting Treatment:

Balance

Balance Sheet Presentation

Balance

Balance Sheet Presentation

Currency swaps

£250 million Sterling

(35)

Accounts payable and accrued liabilities $(4); Other long-term liabilities $(31)

(49)

Accounts payable and accrued liabilities $(4); Other long-term liabilities $(45)

£150 million Sterling

(56)

Accounts payable and accrued liabilities $(2); Other long-term liabilities $(54)

(67)

Accounts payable andaccrued liabilities $(3); Other long-term liabilities $(64)

Derivatives That Do Not Receive Hedge Accounting Treatment:

Balance

Balance Sheet Presentation

Balance

Balance Sheet Presentation

Interest rate swaps

$1.0 billion notional

(508)

Accounts payable andaccrued liabilities $(30); Accrued interest $(8); Other long-term liabilities$(470)

(622)

Accounts payable andaccrued liabilities $(10); Accrued interest $(26); Other long-term liabilities $(586)

$476 million notional

(165)

Accounts payable andaccrued liabilities $(12); Accrued interest $(1);Other long-term liabilities$(152)

(218)

Accounts payable andaccrued liabilities $(3); Accrued interest $(9);Other long-term liabilities$(206)

Commodity contract derivatives

Other current assets $6; Accounts payable and accrued liabilities $(3); Other long-term liabilities $(2)

Other current assets $5; Other long-term assets $2; Accounts payable and accrued liabilities $(3); Other long-term liabilities $(2)

Commodity derivatives under the FHP

(1)

Other long-term assets $17; Other current assets $7; Accounts payable and accrued liabilities $(19); Other long-term liabilities $(6)

(161)

Accounts payable and accrued liabilities $(99); Other long-term liabilities $(62)

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Fair Values of TVA Derivatives

(in millions)

At December 31, 2025

At September 30, 2025

Derivatives That Receive Hedge Accounting Treatment:

Balance

Balance Sheet Presentation

Balance

Balance Sheet Presentation

Currency swaps

£250 million Sterling

(43)

Accounts payable and accrued liabilities $(4); Other long-term liabilities $(39)

(47)

Accounts payable and accrued liabilities $(4); Other long-term liabilities $(43)

£150 million Sterling

(59)

Accounts payable and accrued liabilities $(3); Other long-term liabilities $(56)

(68)

Accounts payable and

accrued liabilities $(3); Other long-term liabilities $(65)

Derivatives That Do Not Receive Hedge Accounting Treatment:

Balance

Balance Sheet Presentation

Balance

Balance Sheet Presentation

Interest rate swaps

$1.0 billion notional

(476)

Accounts payable and

accrued liabilities $(34); Accrued interest $(8);

Other long-term liabilities

$(434)

(526)

Accounts payable and

accrued liabilities $(13); Accrued interest $(28); Other long-term liabilities $(485)

$476 million notional

(151)

Accounts payable and

accrued liabilities $(14); Accrued interest $(1);

Other long-term liabilities

$(136)

(172)

Accounts payable and

accrued liabilities $(5); Accrued interest $(9);

Other long-term liabilities

$(158)

Commodity contract derivatives

Other current assets $14; Other long-term assets $5; Accounts payable and accrued liabilities $(2); Other long-term liabilities $(4)

Other current assets $14; Other long-term assets $2; Accounts payable and accrued liabilities $(2); Other long-term liabilities $(4)

Commodity derivatives under the FHP

(71)

Accounts receivable $4; Other long-term assets $2; Accounts payable and accrued liabilities $(67); Other long-term liabilities $(10)

(57)

Other long-term assets $8; Accounts payable and accrued liabilities $(57); Other long-term liabilities $(8)

Cash Flow Hedging Strategy for Currency Swaps

To protect against exchange rate risk related to British pound sterling denominated Bond transactions, TVA entered into foreign currency hedges at the time the Bond transactions occurred. TVA had two currency swaps outstanding at ~~June~~December 3031, 2025, with total currency exposure of £400 million and expiration dates in 2032 and 2043.

When the dollar strengthens against the British pound sterling, the exchange gain on the Bond liability and related accrued interest is offset by an equal amount of loss on the swap contract that is reclassified out of AOCI. Conversely, the exchange loss on the Bond liability and related accrued interest is offset by an equal amount of gain on the swap contract that is reclassified out of AOCI. All such exchange gains or losses on the Bond liability and related accrued interest are included in Long-term debt, net and Accrued interest, respectively. The offsetting exchange losses or gains on the swap contracts are recognized in AOCI. If any gain (loss) were to be incurred as a result of the early termination of the foreign currency swap contract, the resulting income (expense) would be amortized over the remaining life of the associated Bond as a component of Interest expense. The values of the currency swap liabilities are included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets.

Derivatives Not Receiving Hedge Accounting Treatment

Interest Rate Derivatives. Generally TVA uses interest rate swaps to fix variable short-term debt to a fixed rate, and TVA uses regulatory accounting treatment to defer the mark-to-market ("MtM") gains and losses on its interest rate swaps. The net deferred unrealized gains and losses are classified as regulatory liabilities or assets on TVA's Consolidated Balance Sheets and are included in the ratemaking formula when gains or losses are realized. The values of these derivatives are included in Accounts payable and accrued liabilities, Accrued interest, and Other long-term liabilities on the Consolidated Balance Sheets, and realized gains and losses, if any, are included on TVA's Consolidated Statements of Operations. For the three months ended ~~June~~December 3031, 2025 and 2024, the changes in fair market value of the interest rate swaps resulted in the reduction in unrealized losses of $642 million and $32177 million, respectively. For the nine months ended June 30, 2025 and 2024, the changes in fair market value of the interest rate swaps resulted in the reduction in unrealized losses of $141 million and the increase in unrealized losses of $63 million, respectively. TVA may hold short-term debt balances lower than the notional amount of the interest rate swaps from time to time due to changes in business conditions and other factors. While actual ~~balances vary, TVA generally plans to maintain average balances of short-term debt equal to or in excess of the combined notional amount of the interest rate swaps.~~

Commodity Derivatives. TVA enters into certain derivative contracts for natural gas that require physical delivery of the contracted quantity of the commodity. TVA may also enter into power purchase agreements ("PPAs") that provide an option to financially settle contracted power deliveries. This option creates an embedded derivative in the hosting PPA. TVA marks to market these contracts and defers the unrealized gains (losses) as regulatory liabilities (assets). At June 30, 2025, TVA's natural gas contract derivatives had terms of up to 10 years.26

Commodity Contract Derivatives

At June 30, 2025

At September 30, 2024

Number of Contracts

Notional Amount

Fair Value (MtM)(in millions)

Number of Contracts

Notional Amount

Fair Value (MtM)(in millions)

Natural gas contract derivatives

412 million mmBtu

321 million mmBtu

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~~Commodity~~balances ~~Derivatives under the FHP. Currently~~vary, TVA isgenerally ~~hedging~~plans ~~exposure~~ to ~~the~~maintain ~~price~~average balances of ~~natural~~short-term ~~gas~~debt ~~under~~equal ~~the~~to ~~FHP. There~~or isin noexcess ~~Value~~of ~~at Risk aggregate transaction limit under~~ the ~~current~~combined ~~FHP~~notional ~~structure,~~amount ~~but the TVA Board reviews and authorizes the use~~ of ~~tolerances and measures annually. TVA's FHP policy prohibits trading financial instruments under~~ the ~~FHP~~interest ~~for~~rate ~~speculative purposes~~swaps. ~~At June 30, 2025, TVA's natural gas swap contracts under the FHP had remaining terms of up to five years.~~

Commodity Derivatives under Financial Hedging Program(1)
	At June 30, 2025					At September 30, 2024
	Number of Contracts	Notional Amount		Fair Value (MtM)(in millions)		Number of Contracts	Notional Amount		Fair Value (MtM)(in millions)
Natural gas swap contracts	210	284	million mmBtu	$	(1)	126	230	million mmBtu	$	(161)

Commodity Contract Derivatives. TVA enters into certain commodity contract derivatives for natural gas that require physical delivery of the contracted quantity. TVA may also enter into power purchase agreements ("PPAs") that provide an option to financially settle contracted power deliveries. This option creates an embedded derivative in the hosting PPA. TVA marks to market these contracts and defers the unrealized gains (losses) as regulatory liabilities (assets). At December 31, 2025, TVA's natural gas commodity contract derivatives had terms of up to 10 years.

Commodity Contract Derivatives

At December 31, 2025

At September 30, 2025

Number of Contracts

Notional Amount

Fair Value (MtM)

(in millions)

Number of Contracts

Notional Amount

Fair Value (MtM)

(in millions)

Natural gas contract derivatives

531 million mmBtu

562 million mmBtu

Commodity Derivatives under the FHP. Currently, TVA is hedging exposure to the price of natural gas under the FHP. There is no Value at Risk aggregate transaction limit under the current FHP structure, but the TVA Board reviews and authorizes the use of tolerances and measures annually. TVA's FHP policy prohibits trading financial instruments under the FHP for speculative purposes. At December 31, 2025, TVA's natural gas swap contracts under the FHP had remaining terms of up to four years.


Commodity Derivatives under Financial Hedging Program(1)
	At December 31, 2025					At September 30, 2025
	Number of Contracts	Notional Amount		Fair Value (MtM) (in millions)		Number of Contracts	Notional Amount		Fair Value (MtM) (in millions)


Natural gas swap contracts	200	281	million mmBtu	$	(71)	295	300	million mmBtu	$	(57)

Note

(1) Fair value amounts presented are based on the net commodity position with the counterparty. Notional amounts disclosed represent the net value of contractual amounts.

TVA defers all FHP unrealized gains (losses) as regulatory liabilities (assets) and records the realized gains or losses in Fuel expense and Purchased power expense to match the delivery period of the underlying commodity.

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Offsetting of Derivative Assets and Liabilities

The amounts of TVA's derivative instruments as reported on the Consolidated Balance Sheets are shown in the table below:

Derivative Assets and Liabilities(1)(in millions)
	At June 30, 2025		At September 30, 2024
	At December 31, 2025		At September 30, 2025
Assets
Commodity contract derivatives	$	619	$	716
Commodity derivatives under the FHP(2)	246		—8
Total derivatives subject to master netting or similar arrangement	$	3025	$	724
Liabilities
Currency swaps	$	91102	$	~~116~~115
Interest rate swaps(3)	~~673~~627		~~840~~698
Commodity contract derivatives	56		56
Commodity derivatives under the FHP(2)	2577		~~161~~65
Total derivatives subject to master netting or similar arrangement	$	~~794~~812	$	~~1,122~~884

Notes

(1) Offsetting amounts include counterparty netting of derivative contracts. Except as discussed below, there were no other material offsetting amounts on TVA's Consolidated Balance Sheets at either ~~June~~December 3031, 2025, or September 30, ~~2024~~2025.

(2) At ~~June~~December 3031, 2025, the gross derivative asset and gross derivative liability were $5424 million and $5595 million, respectively, with offsetting amounts for each totaling $3018 million. At September 30, ~~2024~~2025, the gross derivative asset and gross derivative liability were $428 million and $~~165~~85 million, respectively, with offsetting amounts for each totaling $420 million.

(3) Letters of credit of $411 million and $535 million were posted as collateral at June 30, 2025, and September 30, 2024, respectively, to partially secure the liability positions of one of the interest rate swaps in accordance with the collateral requirements for this derivative.27

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(3) Letters of credit of $432 million and $442 million were posted as collateral at December 31, 2025, and September 30, 2025, respectively, to partially secure the liability positions of one of the interest rate swaps in accordance with the collateral requirements for this derivative.

Other Derivative Instruments

Investment Fund Derivatives. Investment funds consist primarily of funds held in the Nuclear Decommissioning Trust ("NDT"), the Asset Retirement Trust ("ART"), the Supplemental Executive Retirement Plan ("SERP"), the Deferred Compensation Plan ("DCP"), and the Restoration Plan ("RP"). See Note 15 — Fair Value Measurements — Investment Funds for a discussion of the trusts, plans, and types of investments. The NDT and ART may invest in derivative instruments which may include swaps, futures, options, forwards, and other instruments. At ~~June~~December 3031, 2025, and September 30, ~~2024~~2025, the NDT held investments in forward contracts to purchase debt securities. The fair values of these derivatives were in net asset positions totaling $1816 million ~~and $11 million~~ at ~~June~~both December 3031, 2025, and September 30, ~~2024, respectively~~2025.

Collateral. TVA's interest rate swaps, currency swaps, and commodity derivatives under the FHP contain contract provisions that require a party to post collateral (in a form such as cash or a letter of credit) when the party's liability balance under the agreement exceeds a certain threshold. At ~~June~~December 3031, 2025, the aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a liability position was $~~794~~812 million. TVA's collateral obligations at ~~June~~December 3031, 2025, under these arrangements were $~~439~~407 million, for which TVA had posted $~~411~~432 million in letters of credit. These letters of credit reduce the available balance under the related credit facilities. TVA's assessment of the risk of its nonperformance includes a reduction in its exposure under the interest rate swap contracts as a result of this posted collateral.

For all of its derivative instruments with credit-risk related contingent features:

•If TVA remains a majority-owned U.S. government entity but S&P Global Ratings ("S&P") or Moody's Investors Service, Inc. ("Moody's") downgrades TVA's credit rating to AA or Aa2, respectively, TVA's collateral obligations would likely increase by $22 million, and

•If TVA ceases to be majority-owned by the U.S. government, TVA's credit rating would likely be downgraded and TVA would be required to post additional collateral.

Counterparty Risk

TVA may be exposed to certain risks when a counterparty has the potential to fail to meet its obligations in accordance with agreed terms. These risks may be related to credit, operational, or nonperformance matters. To mitigate certain counterparty risk, TVA analyzes the counterparty's financial condition prior to entering into an agreement, establishes credit limits, monitors the appropriateness of those limits, as well as any changes in the creditworthiness of the counterparty, on an ongoing basis, and when required, employs credit mitigation measures, such as collateral or prepayment arrangements and master purchase and sale agreements.

27Customers. TVA is exposed to counterparty credit risk associated with trade accounts receivable from delivered power sales to LPCs, and from industries and federal agencies directly served, all located in the Tennessee Valley region. Of the $1.7 billion and $1.9 billion of receivables from power sales outstanding at December 31, 2025, and September 30, 2025, respectively, nearly all of the counterparties were rated investment grade. The majority of the obligations of these customers that are not investment grade are secured by collateral. TVA is also exposed to risk from exchange power arrangements with a small number of investor-owned regional utilities related to either delivered power or the replacement of open positions of longer-term purchased power or fuel agreements. TVA believes its policies and procedures for counterparty performance risk reviews have generally protected TVA against significant exposure related to market and economic conditions. See Note 1 — Summary of Significant Accounting Policies — Allowance for Uncollectible Accounts, Note 4 — Accounts Receivable, Net, and Note 8 — Other Long-Term Assets.

~~Table~~TVA had revenue from two LPCs that collectively accounted for 16 percent of ~~Contents Draft~~total ~~4.0 07/24/~~operating revenues for both the three months ended December 31, 2025 ~~5:00~~and PMthe three months ended December 31, 2024.

~~master~~Suppliers. TVA assesses potential supplier performance risks, including procurement of fuel, purchased power, parts, and services. If suppliers are unable or unwilling to perform under TVA's existing contracts and TVA is unable to obtain similar services or supplies from other vendors in a timely manner, or if there are significant changes to tariffs impacting suppliers, TVA could experience delays, disruptions, additional costs, or other operational outcomes that may impact generation, maintenance, and capital programs. If certain fuel or purchased power suppliers fail to perform under the terms of their contract with TVA, TVA might lose the money that it paid to the supplier under the contract and have to purchase replacement fuel or power on the spot market, perhaps at a significantly higher price than TVA was entitled to pay under the contract. In addition, TVA might not be able to acquire replacement fuel or power in a timely manner and ~~sale~~thus ~~agreements~~might be unable to satisfy its own obligations to deliver power. TVA continues evaluating potential supplier performance risks and supplier impact but cannot determine or predict the duration of such risks/impacts or the extent to which such risks/impacts could affect TVA's business, operations, and financial results or cause potential business disruptions.

Customers. TVA is exposed to counterparty credit risk associated with trade accounts receivable from delivered power sales to LPCs, and from industries and federal agencies directly served, all located in the Tennessee Valley region. Of the $1.8 billion and $1.7 billion of receivables from power sales outstanding at June 30, 2025, and September 30, 2024, respectively, nearly all of the counterparties were rated investment grade. The majority of the obligations of these customers that are not investment grade are secured by collateral. TVA is also exposed to risk from exchange power arrangements with a small number of investor-owned regional utilities related to either delivered power or the replacement of open positions of longer-term purchased power or fuel agreements. TVA believes its policies and procedures for counterparty performance risk reviews have generally protected TVA against significant exposure related to market and economic conditions. See Note 1 — Summary of Significant Accounting Policies — Allowance for Uncollectible Accounts, Note 4 — Accounts Receivable, Net, and Note 8 — Other Long-Term Assets.28

~~TVA~~Table ~~had revenue from two LPCs that collectively accounted for 16 percent~~ of ~~total operating revenues for both the nine months ended June 30, 2025 and 2024.~~ Contents

~~Suppliers.~~ TVA ~~assesses~~continues ~~potential supplier performance risks, including procurement of fuel, purchased power, parts, and services. If suppliers are unable or unwilling~~ to ~~perform~~experience ~~under~~supply ~~TVA's~~chain ~~existing~~pressures ~~contracts,~~resulting ~~if TVA is unable to obtain similar services or supplies~~ from ~~other vendors~~inflation, ~~or if there are significant changes to~~ tariffs ~~impacting~~and ~~suppliers,~~other ~~TVA~~trade ~~could experience delays~~restrictions, ~~disruptions,~~material ~~additional costs~~constraints, ~~or other operational outcomes that may impact generation, maintenance,~~ and ~~capital~~labor ~~programs~~availability. IfThese ~~certain~~factors ~~fuel~~have orcontributed ~~purchased power suppliers fail~~ to ~~perform~~project ~~under~~delays, ~~the~~limited ~~terms~~availability of ~~their~~critical ~~contract with TVA~~materials, ~~TVA~~and ~~might~~increased ~~lose~~costs ~~the~~for ~~money~~both ~~that~~materials ~~it paid to the supplier under the contract~~ and ~~have to purchase replacement fuel or power on the spot market, perhaps at a significantly higher price than TVA was entitled to pay under the contract~~labor. InAlthough ~~addition,~~these ~~TVA~~challenges ~~might~~have ~~not~~been bemanaged ~~able~~with tolimited ~~acquire~~disruption ~~replacement~~to ~~fuel~~business oroperations ~~power in a timely manner and~~ thus ~~might~~far, becontinued ~~unable to satisfy its own obligations to deliver power. TVA continues evaluating potential supplier performance risks and supplier impact but cannot determine~~ or ~~predict~~escalating ~~the~~pressures ~~duration~~could ofresult ~~such~~in ~~risks/impacts~~more orsubstantial ~~the~~operational ~~extent to which such risks/~~impacts ~~could affect TVA's business, operations,~~ and ~~financial~~increased ~~results~~pressure oron ~~cause~~power ~~potential business disruptions~~rates.

TVA continues to experience impacts due to inflation, supply chain material challenges, and labor availability. This has led to project delays, limited availability, and/or price increases for supplies and labor. TVA has been able to manage these challenges with limited business disruptions at this time; however, should pressures continue long term, TVA could experience more significant disruptions and pressure to further increase power rates.

Natural Gas and Fuel Oil. TVA purchases a significant amount of its natural gas requirements through contracts with a variety of suppliers and purchases substantially all of its fuel oil requirements on the spot market. TVA delivers to its gas fleet under firm and non-firm transportation contracts on multiple interstate natural gas pipelines. TVA contracts for storage capacity that allows for operational flexibility and increased supply during peak gas demand scenarios or supply disruptions. TVA uses contracts of various lengths and terms to meet the projected natural gas needs of its natural gas fleet. TVA also maintains on-site, fuel oil backup to operate at the majority of the CT sites in the event of major supply disruptions. In the event a supplier experiences an incident that limits its ability to fulfill its firm contractual obligations to supply TVA with natural gas, TVA intends to leverage its storage and balancing services and/or replace the volume with a third party to ensure reliability of generation.

Coal. To help ~~ensure~~support a reliable ~~supply of~~ coal supply, TVA ~~had~~maintained ~~coal~~ contracts with multiple suppliers as of ~~June~~December 3031, 2025. ~~The~~These ~~contracted~~contracts ~~supply~~source of coal ~~is sourced~~ from several diverse geographic regions ofacross the U.S., ~~and~~with isdeliveries ~~delivered~~made via both barge and rail. AsCoal asuppliers ~~result~~have offaced mounting financial pressures driven by emerging technologies, ~~environmental~~evolving ~~regulations,~~regulatory ~~industry trends~~frameworks, and ~~natural~~shifting ~~gas~~ market ~~volatility~~dynamics. These ~~over~~challenges ~~the~~have ~~past~~strained ~~few~~the ~~years,~~balance between coal ~~suppliers~~demand ~~are~~and ~~facing~~available ~~increased~~supply. TVA ~~financial~~is ~~pressure,~~actively ~~which~~evaluating ~~has~~recent ~~led~~regulatory todevelopments ~~relatively~~that ~~poor~~may ~~credit~~impact ~~ratings~~its ~~and~~coal ~~bankruptcies,~~procurement ~~restructuring,~~strategy ~~mine~~and ~~closures, or other scenarios. A~~ long-term ~~continued~~generation ~~decline in demand for coal could result in more consolidations, additional bankruptcies, restructuring, mine closures, or other scenarios~~planning.

Nuclear Fuel. Nuclear fuel is obtained predominantly through long-term uranium concentrate supply contracts, contracted conversion services, contracted enrichment services, or a combination thereof, and contracted fuel fabrication services. The supply markets for uranium concentrates and certain nuclear fuel services are subject to price fluctuations and availability restrictions. Supply market conditions may make procurement contracts subject to credit risk related to the potential nonperformance of counterparties. In the event of nonperformance by these or other suppliers, TVA believes that replacement uranium concentrate and nuclear fuel services can be obtained, although at prices that may be unfavorable when compared to the prices under the current supply agreements.

Purchased Power. TVA acquires power from a variety of power producers through long-term and ~~short~~shorter-term PPAs as well as through spot market purchases. Because of the reliability risk of purchased power, TVA generally requires that the PPAs contain certain counterparty performance assurance requirements to help insure counterparty performance during the term of the agreements.

Other Suppliers. Solar supply chain constraints, commodity price increases, legislative changes, trade policy issues, and investigations into and affecting solar panel imports have created challenges for the U.S. solar industry. including TVA's ~~existing~~ solar ~~PPA~~ portfolio ~~is not immune from these challenges~~. ~~Similar to the experience of the rest of the industry, the majority of TVA's~~

28Derivative Counterparties. TVA has entered into physical and financial contracts that are classified as derivatives for hedging purposes, and TVA's NDT, ART, and qualified defined benefit plan ("pension plan") have entered into derivative contracts for investment purposes. If a counterparty to one of the physical or financial derivative transactions defaults, TVA might incur costs in connection with entering into a replacement transaction. If a counterparty to the derivative contracts into which the NDT, the ART, or the pension plan have entered for investment purposes defaults, the value of the investment could decline significantly or perhaps become worthless. TVA has concentrations of credit risk from the banking, coal, and gas industries because multiple companies in these industries serve as counterparties to TVA in various derivative transactions. At December 31, 2025, all of TVA's commodity derivatives under the FHP, currency swaps, and interest rate swaps were with counterparties whose Moody's credit ratings were A2 or higher. TVA classifies forward natural gas contracts as derivatives. At December 31, 2025, the forward natural gas contracts were with counterparties whose ratings ranged from B1 to A1.

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~~contracted~~Table ~~PPAs~~of ~~from previous requests for proposals that are not yet online have been impacted by project delays and price increases.~~Contents

Derivative Counterparties. TVA has entered into physical and financial contracts that are classified as derivatives for hedging purposes, and TVA's NDT, ART, and qualified defined benefit plan ("pension plan") have entered into derivative contracts for investment purposes. If a counterparty to one of the physical or financial derivative transactions defaults, TVA might incur costs in connection with entering into a replacement transaction. If a counterparty to the derivative contracts into which the NDT, the ART, or the pension plan have entered for investment purposes defaults, the value of the investment could decline significantly or perhaps become worthless. TVA has concentrations of credit risk from the banking, coal, and gas industries because multiple companies in these industries serve as counterparties to TVA in various derivative transactions. At June 30, 2025, all of TVA's commodity derivatives under the FHP, currency swaps, and interest rate swaps were with counterparties whose Moody's credit ratings were A2 or higher. TVA classifies forward natural gas contracts as derivatives. At June 30, 2025, the forward natural gas contracts were with counterparties whose ratings ranged from B1 to A1.

15. Fair Value Measurements

Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the asset or liability's principal market, or in the absence of a principal market, the most advantageous market for the asset or liability in an orderly transaction between market participants. TVA uses market or observable inputs as the preferred source of values, followed by assumptions based on hypothetical transactions in the absence of market inputs.

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.

A financial instrument's level within the fair value hierarchy (where Level 1 is the highest and Level 3 is the lowest) is based on the lowest level of input significant to the fair value measurement.

The following sections describe the valuation methodologies TVA uses to measure different financial instruments at fair value. Except for gains and losses on SERP, DCP, and RP assets, all changes in fair value of these assets and liabilities have been recorded as changes in regulatory assets, regulatory liabilities, or AOCI on TVA's Consolidated Balance Sheets and Consolidated Statements of Comprehensive Income (Loss). Except for gains and losses on SERP and DCP assets, there has been no impact to the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows related to these fair value measurements.

Investment Funds

At ~~June~~December 3031, 2025, Investment funds were comprised of $5.37 billion of equity securities and debt securities classified as trading measured at fair value. Equity and trading debt securities are held in the NDT, ART, SERP, DCP, and RP. The NDT holds funds for the ultimate decommissioning of TVA's nuclear power plants. The ART holds funds primarily for the costs related to the future closure and retirement of TVA's other long-lived assets. The balances in the NDT and ART were $3.58 billion and $1.68 billion, respectively, at ~~June~~December 3031, 2025.

TVA established a SERP to provide benefits to selected employees of TVA which are comparable to those provided by competing organizations. The DCP is designed to provide participants with the ability to defer compensation to future periods. The RP is a non-qualified excess 401(k) plan designed to allow certain eligible employees whose contributions to the 401(k) plan are limited by Internal Revenue Service ("IRS") rules to save additional amounts for retirement and receive non-elective and matching employer contributions. The NDT, ART, SERP, DCP, and RP funds are invested in portfolios of securities generally designed to achieve a return in line with overall equity and debt market performance.

29The NDT, ART, SERP, DCP, and RP are composed of multiple types of investments and are managed by external institutional investment managers. Most U.S. and international equities, U.S. Treasury inflation-protected securities, and real estate investment trust securities and certain derivative instruments are measured based on quoted exchange prices in active markets and are classified as Level 1 valuations. Fixed-income investments, high-yield fixed-income investments, currencies, and most derivative instruments are non-exchange traded and are classified as Level 2 valuations. These measurements are based on market and income approaches with observable market inputs. Cash equivalents and other short-term investments are highly liquid securities with maturities of less than three months and 12 months, respectively. These consist primarily of discount securities such as repurchase agreements and U.S. Treasury bills. These securities may be priced at cost, which

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~~The~~Table RP is a non-qualified excess 401(k) plan designed to allow certain eligible employees whose contributions to the 401(k) plan are limited by Internal Revenue Service ("IRS") rules to save additional amounts for retirement and receive non-elective and matching employer contributions. The NDT, ART, SERP, DCP, and RP funds are invested in portfolios of ~~securities generally designed to achieve a return in line with overall equity and debt market performance.~~Contents

The NDT, ART, SERP, DCP, and RP are composed of multiple types of investments and are managed by external institutional investment managers. Most U.S. and international equities, U.S. Treasury inflation-protected securities, and real estate investment trust securities and certain derivative instruments are measured based on quoted exchange prices in active markets and are classified as Level 1 valuations. Fixed-income investments, high-yield fixed-income investments, currencies, and most derivative instruments are non-exchange traded and are classified as Level 2 valuations. These measurements are based on market and income approaches with observable market inputs. Cash equivalents and other short-term investments are highly liquid securities with maturities of less than three months and 12 months, respectively. These consist primarily of discount securities such as repurchase agreements and U.S. Treasury bills. These securities may be priced at cost, which approximates fair value due to the short-term nature of the instruments. These securities are classified as Level 2. Active market pricing may be utilized for U.S. Treasury bills, which are classified as Level 1.

Private equity limited partnerships, private real asset investments, and private credit investments may include holdings of investments in private real estate, venture capital, buyout, mezzanine or subordinated debt, restructuring or distressed debt, and special situations through funds managed by third-party investment managers. These investments generally involve a three-to-four-year period where the investor contributes capital, followed by a period of distribution, typically over several years. The investment period is generally, at a minimum, 10 years or longer. The NDT had unfunded commitments related to private equity limited partnerships of $~~368~~422 million, private real assets of $~~128~~142 million, and private credit of $~~119~~130 million at ~~June~~December 3031, 2025. The ART had unfunded commitments related to limited partnerships in private equity of $~~143~~173 million, private real assets of $7791 million, and private credit of $5865 million at ~~June~~December 3031, 2025. These investments have no redemption or limited redemption options and may also impose restrictions on the NDT's and ART's ability to liquidate their investments. There are no readily available quoted exchange prices for these investments. The fair value of these investments is based on information provided by the investment managers. These investments are valued on a quarterly basis. ~~Private~~TVA's private equity limited partnerships, private real asset investments, and private credit investments are valued at net asset ~~value~~values ("NAV") as a practical expedient for fair value. TVA classifies its interest in these types of investments as investments measured at NAV in the fair value hierarchy.

Commingled funds represent investment funds comprising multiple individual financial instruments. The commingled funds held by the NDT, ART, SERP, DCP, and RP consist of either a single class of securities, such as equity, debt, or foreign currency securities, or multiple classes of securities. All underlying positions in these commingled funds are either exchange traded or measured using observable inputs for similar instruments. The fair value of commingled funds is based on NAV per fund share (the unit of account), derived from the prices of the underlying securities in the funds. These commingled funds can be redeemed at the measurement date NAV and are classified as Commingled funds measured at NAV in the fair value hierarchy.

Realized and unrealized gains and losses on equity and trading debt securities are recognized in current earnings and are based on average cost. The gains and losses of the NDT and ART are subsequently reclassified to a regulatory asset or liability account in accordance with TVA's regulatory accounting policy. See Note 1 — Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in the Annual Report and Note 9 — Regulatory Assets and Liabilities. 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 June 30				Nine Months Ended June 30
		Three Months Ended December 31
Fund	Financial Statement Presentation	2025		2024		~~2025~~		~~2024~~
NDT	Regulatory assets(2)	$	~~200~~54	$	(2175)	$	~~133~~	$	~~230~~
ART	Regulatory assets(3)	9726		(420)		69		~~119~~
SERP	Other income (expense), net	5(1)		—(6)		~~(1)~~		9
DCP	Other income (expense), net	2(1)		—(1)		—		2

Notes

(1) The unrealized ~~gains~~losses for the RP were less than $1 million for both the three ~~and nine~~ months ended ~~June~~December 3031, 2025 and ~~for both~~ the three ~~and nine~~ months ended ~~June~~December 3031, 2024, and therefore were not represented in the table above.

(2) Includes $415 million ~~and $7 million~~ of unrealized gains ~~related to NDT equity securities (excluding commingled funds) for the three months ended June 30, 2025~~ and ~~2024, respectively. Includes~~ $1243 million of unrealized losses ~~and $70 million of unrealized gains~~ related to NDT equity securities (excluding commingled funds) for the ~~nine~~three months ended ~~June~~December 3031, 2025 and December 31, 2024, respectively.

(3) Includes $102 million ~~and $1 million~~ of unrealized gains ~~related to ART equity securities (excluding commingled funds) for the three months ended June 30, 2025~~ and ~~2024, respectively. Includes~~ $511 million of unrealized losses ~~and $24 million of unrealized gains~~ related to ART equity securities (excluding commingled funds) for the ~~nine~~three months ended ~~June~~December 3031, 2025 and December 31, 2024, respectively.

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Currency and Interest Rate Swap Derivatives

See Note 14 — Risk Management Activities and Derivative Transactions — Cash Flow Hedging Strategy for Currency Swaps and — Derivatives Not Receiving Hedge Accounting Treatment for a discussion of the nature, purpose, and contingent features of TVA's currency swaps and interest rate swaps. These swaps are classified as Level 2 valuations and are valued based on income approaches using observable market inputs for similar instruments.

Commodity Contract Derivatives and Commodity Derivatives under the FHP

Commodity Contract Derivatives. Most of these derivative contracts are valued based on market approaches, which utilize short-term and mid-term market-quoted prices from an external industry brokerage service. These contracts are classified as Level 2 valuations.

Commodity Derivatives under the FHP. Swap contracts are valued using a pricing model based on New York Mercantile Exchange inputs and are subject to nonperformance risk outside of the exit price. These contracts are classified as Level 2 valuations.

~~See Note 14 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Derivatives and — Commodity Derivatives under the FHP.~~31

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See Note 14 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Contract Derivatives and — Commodity Derivatives under the FHP.

Nonperformance Risk

The assessment of nonperformance risk, which includes credit risk, considers changes in current market conditions, readily available information on nonperformance risk, letters of credit, collateral, other arrangements available, and the nature of master netting arrangements. TVA is a counterparty to currency swaps, interest rate swaps, commodity contracts, and other derivatives which subject TVA to nonperformance risk. Nonperformance risk on the majority of investments and certain exchange-traded instruments held by TVA is incorporated into the exit price that is derived from quoted market data that is used to mark the investment to market.

Nonperformance risk for most of TVA's derivative instruments is an adjustment to the initial asset/liability fair value. TVA adjusts for nonperformance risk, both of TVA (for liabilities) and the counterparty (for assets), by applying credit valuation adjustments ("CVAs"). TVA determines an appropriate CVA for each applicable financial instrument based on the term of the instrument and TVA's or the counterparty's credit rating as obtained from Moody's. For companies that do not have an observable credit rating, TVA uses internal analysis to assign a comparable rating to the counterparty. TVA discounts each financial instrument using the historical default rate (as reported by Moody's for CY 1983 to CY 2024) for companies with a similar credit rating over a time period consistent with the remaining term of the contract. The application of CVAs resulted in noa ~~change~~less than $1 million decrease in the fair value of assets and a ~~less than~~ $3 million decrease in the fair value of liabilities at ~~June~~December 3031, 2025.

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Fair Value Measurements

The following tables set forth by level, within the fair value hierarchy, TVA's financial assets and liabilities that were measured at fair value on a recurring basis at ~~June~~December 3031, 2025, and September 30, ~~2024~~2025. Financial assets and liabilities have been classified in their entirety based on the lowest level of input that is significant to the fair value measurement. TVA's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the determination of the fair value of the assets and liabilities and their classification in the fair value hierarchy levels.

Fair Value MeasurementsAt June 30, 2025(in millions)
Fair Value MeasurementsAt December 31, 2025(in millions)
	Quoted Prices in Active Markets forIdentical Assets(Level 1)		Significant OtherObservable Inputs(Level 2)		SignificantUnobservableInputs(Level 3)		Total
Assets
Investments
Equity securities	$	~~736~~889	$	—	$	—	$	~~736~~889
Government debt securities(1)(2)	~~408~~420		4451		—		~~452~~471
Corporate debt securities(3)	—		~~379~~406		—		~~379~~406
Mortgage and asset-backed securities	—		3542		—		3542
Institutional mutual funds	~~352~~376		—		—		~~352~~376
Forward debt securities contracts	—		1816		—		1816
Cash equivalents and other short-term investments(2)(4)	4883		~~202~~171		—		~~250~~254
Private equity funds measured at net asset value(5)	—		—		—		~~868~~892
Private real asset funds measured at net asset value(5)	—		—		—		~~474~~467
Private credit funds measured at net asset value(5)	—		—		—		~~267~~289
Commingled funds measured at net asset value(5)	—		—		—		1,~~446~~585
Total investments	1,~~544~~768		~~678~~686		—		5,~~277~~687
Commodity contract derivatives	—		619		—		619
Commodity derivatives under the FHP	—		246		—		246
Total	$	1,~~544~~768	$	~~708~~711	$	—	$	5,~~307~~712
	Quoted Prices in Active Markets forIdentical Liabilities(Level 1)		Significant OtherObservable Inputs(Level 2)		SignificantUnobservableInputs(Level 3)		Total
Liabilities
Currency swaps(6)	$	—	$	91102	$	—	$	91102
Interest rate swaps	—		~~673~~627		—		~~673~~627
Commodity contract derivatives	—		56		—		56
Commodity derivatives under the FHP	—		2577		—		2577
Total	$	—	$	~~794~~812	$	—	$	~~794~~812

Notes

(1) Includes obligations of government-sponsored entities.

(2) There are $~~408~~420 million of U.S. Treasury securities in Level 1 Government debt securities and $4883 million of U.S. Treasury securities in Level 1 Cash equivalents and other short-term investments for a total of $~~456~~503 million of U.S. Treasury securities within Level 1 of the fair value hierarchy.

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

(4) Includes $985 million of net payables (interest receivable, dividends receivable, receivables for investments sold, and payables for investments purchased), and $~~204~~77 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.

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Fair Value MeasurementsAt September 30, 2024(in millions)
Fair Value MeasurementsAt September 30, 2025(in millions)
	Quoted Prices in Active Markets forIdentical Assets(Level 1)		Significant OtherObservable Inputs(Level 2)		SignificantUnobservableInputs(Level 3)		Total
Assets
Investments
Equity securities	$	~~770~~844	$	—	$	—	$	~~770~~844
Government debt securities(1)(2)	~~400~~423		5750		—		~~457~~473
Corporate debt securities(3)	—		~~378~~411		—		~~378~~411
Mortgage and asset-backed securities	—		4340		—		4340
Institutional mutual funds	~~342~~367		—		—		~~342~~367
Forward debt securities contracts	—		1116		—		1116
Cash equivalents and other short-term investments(2)(4)	95111		~~183~~163		—		~~278~~274
Private equity funds measured at net asset value(5)	—		—		—		~~738~~875
Private real asset funds measured at net asset value(5)	—		—		—		~~432~~467
Private credit funds measured at net asset value(5)	—		—		—		~~219~~278
Commingled funds measured at net asset value(5)	—		—		—		1,~~300~~528
Total investments	1,~~607~~745		~~672~~680		—		45,~~968~~573
Commodity contract derivatives	—		716		—		716
Total	$	1,607	$	679	$	—	$	4,975
Commodity derivatives under the FHP	—		8		—		8
Total	$	1,745	$	704	$	—	$	5,597
	Quoted Prices in Active Markets forIdentical Liabilities(Level 1)		Significant OtherObservable Inputs(Level 2)		SignificantUnobservableInputs(Level 3)		Total
Liabilities
Currency swaps(6)	$	—	$	~~116~~115	$	—	$	~~116~~115
Interest rate swaps	—		~~840~~698		—		~~840~~698
Commodity contract derivatives	—		56		—		56
Commodity derivatives under the FHP	—		~~161~~65		—		~~161~~65
Total	$	—	$	~~1,122~~884	$	—	$	~~1,122~~884

Notes

(1) Includes obligations of government-sponsored entities.

(2) There are $~~400~~423 million of U.S. Treasury securities in Level 1 Government debt securities and $95111 million of U.S. Treasury securities in Level 1 Cash equivalents and other short-term investments for a total of $~~495~~534 million of U.S. Treasury securities within Level 1 of the fair value hierarchy.

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

(4) Includes $7860 million of net payables (interest receivable, dividends receivable, receivables for investments sold, and payables for investments purchased), and $~~174~~124 million of repurchase agreements in Level 2 Cash equivalents and other short-term investments.

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Other Financial Instruments Not Recorded at Fair Value

TVA uses the methods and assumptions described below to estimate the fair value of each significant class of financial instruments. The fair value of the financial instruments held at ~~June~~December 3031, 2025, and September 30, ~~2024~~2025, may not be representative of the actual gains or losses that will be recorded when these instruments mature or are called or presented for early redemption. The estimated values of TVA's financial instruments not recorded at fair value at ~~June~~December 3031, 2025, and September 30, ~~2024~~2025, were as follows:

Estimated Values of Financial Instruments Not Recorded at Fair Value(in millions)

At June 30, 2025

At September 30, 2024

At December 31, 2025

At September 30, 2025

Valuation Classification

CarryingAmount

FairValue

CarryingAmount

FairValue

EnergyRight® receivables, net (including current portion)

Level 2

5658

5657

Loans and other long-term receivables, net (including current portion)

Level 2

~~114~~89

~~108~~84

~~105~~86

9980

EnergyRight® financing obligations (including current portion)

Level 2

6566

7374

Membership interests of VIEs subject to mandatory redemption (including current portion)

Level 2

1716

1918

Long-term outstanding power bonds, net (including current maturities)

Level 2

20,~~599~~485

20,~~483~~611

1821,~~889~~831

1921,~~416~~967

Long-term debt of VIEs, net (including current maturities)

Level 2

1,~~699~~676

1,~~693~~688

~~934~~1,681

~~966~~1,696

The carrying values of Cash and cash equivalents, Restricted cash and cash equivalents, Accounts receivable, net, and Short-term debt, net approximate their fair values.

The fair value for loans and other long-term receivables is estimated by determining the present value of future cash flows using a discount rate equal to lending rates for similar loans made to borrowers with similar credit ratings and for similar remaining maturities, where applicable. The fair value of long-term debt and membership interests of VIEs subject to mandatory redemption is estimated by determining the present value of future cash flows using current market rates for similar obligations, giving effect to credit ratings and remaining maturities.

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16. 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 ~~and 92 percent~~ of TVA's Revenue from sales of electricity for both the three ~~and nine~~ months ended ~~June~~December 3031, 2025, and the three ~~and nine~~ months ended ~~June~~December 3031, 2024, respectively, 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, 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 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, Renewable Energy Certificate sales, and certain other ancillary goods or services.

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Disaggregated Revenues

During the three ~~and nine~~ months ended ~~June~~December 3031, 2025 and 2024, revenues generated from TVA's electricity sales were $3.30 billion and $92.69 billion, respectively, and accounted for virtually all of TVA's revenues. TVA's operating revenues by state for the three ~~and nine~~ months ended ~~June~~December 3031, 2025 and 2024, are detailed in the table below:

Operating Revenues By State(in millions)
	Three Months Ended June 30				Nine Months Ended June 30
	Three Months Ended December 31
	2025		2024		~~2025~~		~~2024~~
Alabama	$	~~477~~449	$	~~409~~431	$	~~1,428~~	$	~~1,274~~
Georgia	7475		6574		~~242~~		~~214~~
Kentucky	~~209~~193		~~179~~182		~~605~~		~~557~~
Mississippi	~~310~~266		~~277~~269		~~886~~		~~816~~
North Carolina	1823		1921		67		70
Tennessee	21,~~161~~981		1,~~869~~886		~~6,345~~		~~5,685~~
Virginia	1112		1012		39		35
Subtotal	32,~~260~~999		2,~~828~~875		~~9,612~~		~~8,651~~
Off-system sales	2		21		4		6
Revenue capitalized during pre-commercial plant operations(1)	(1)		—		(3)		(3)
Revenue from sales of electricity	3,001		2,876
Revenue from sales of electricity	3,261		2,830		9,613		8,654
Other revenue	48		44
Other revenue	45		49		145		144
Total operating revenues	$	3,049	$	2,920
Total operating revenues	$	3,306	$	2,879	$	9,758	$	8,798

TVA's operating revenues by customer type for the three months ended December 31, 2025 and 2024, are detailed in the table below:


Operating Revenues by Customer Type (in millions)
	Three Months Ended December 31
	2025		2024
Revenue from sales of electricity
Local power companies	$	2,736	$	2,616
Industries directly served	236		230
Federal agencies and other	29		30

Revenue from sales of electricity	3,001		2,876
Other revenue	48		44
Total operating revenues	$	3,049	$	2,920

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 to no more than 10 percent during any consecutive five-fiscal-year period, as more specifically described in the agreements. 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 $54 million and $50 million for the three months ended December 31, 2025 and 2024, 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. Revised flexibility agreements were made available to LPCs in August 2023 which permit projects to be located anywhere in TVA's service area, either connected to the LPC distribution system or TVA's transmission system, and make it easier for LPCs to partner in projects. As of December 31, 2025, 148 LPCs had signed the Partnership Agreement with TVA, and 109 LPCs had signed a Power Supply Flexibility Agreement.

The number of LPCs by contract arrangement, the revenues derived from such arrangements for the three months ended December 31, 2025, and the percentage those revenues comprised of TVA's total operating revenues for the same period, are summarized in the table below:

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TVA Local Power Company Contracts At or for the Three Months Ended December 31, 2025
Contract Arrangements(1)	Number of LPCs	Revenue from Sales of Electricity to LPCs (in millions)		Percentage of Total Operating Revenues
20-year termination notice	148	$	2,370	77.7	%




5-year termination notice	5	366		12.0	%
Total	153	$	2,736	89.7	%

Note

(1) Represents revenue capitalized during pre-commercial operations at Johnsonville Aeroderivative CT Units 21-30 in the three and nine months ended June 30, 2025 and Paradise CT Units 5-7 in the nine months ended June 30, 2024, all of which was recognized in the three months ended December 31, 2023.

TVA's operating revenues by customer type for the three and nine months ended June 30, 2025 and 2024, are detailed in the table below:

Operating Revenues by Customer Type(in millions)
	Three Months Ended June 30				Nine Months Ended June 30
	2025		2024		2025		2024
Revenue from sales of electricity
Local power companies	$	2,967	$	2,596	$	8,782	$	7,925
Industries directly served	259		205		734		642
Federal agencies and other	36		29		100		90
Revenue capitalized during pre-commercial plant operations(1)	(1)		—		(3)		(3)
Revenue from sales of electricity	3,261		2,830		9,613		8,654
Other revenue	45		49		145		144
Total operating revenues	$	3,306	$	2,879	$	9,758	$	8,798

Note

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 to no more than 10 percent during any consecutive five-fiscal-year period, as more specifically described in the agreements. 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 $53 million and $51 million for the three months ended June 30, 2025 and 2024, respectively. The total wholesale bill credits to LPCs participating in the Partnership Agreement were $164 million and $152 million for the nine months ended June 30, 2025 and 2024, respectively. In 2020, TVA

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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. Revised flexibility agreements were made available to LPCs in 2023 which permit projects to be located anywhere in TVA's service area, either connected to the LPC distribution system or TVA's transmission system, and make it easier for LPCs to partner in projects. As of June 30, 2025, 148 LPCs had signed the Partnership Agreement with TVA, and 107 LPCs had signed a Power Supply Flexibility Agreement.

The number of LPCs by contract arrangement, the revenues derived from such arrangements for the three and nine months ended June 30, 2025, and the percentage those revenues comprised of TVA's total operating revenues for the same period, are summarized in the tables below:

TVA Local Power Company ContractsAt or for the Three Months Ended June 30, 2025
Contract Arrangements(1)	Number of LPCs	Revenue from Sales of Electricity to LPCs(in millions)		Percentage of Total Operating Revenues
20-year termination notice	148	$	2,541	76.9	%
5-year termination notice	5	426		12.9	%
Total	153	$	2,967	89.8	%

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 ContractsAt or for the Nine Months Ended June 30, 2025
Contract Arrangements(1)	Number of LPCs	Revenue from Sales of Electricity to LPCs(in millions)		Percentage of Total Operating Revenues
20-year termination notice	148	$	7,612	78.0	%
5-year termination notice	5	1,170		12.0	%
Total	153	$	8,782	90.0	%

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 three months ended December 31, 2025 and the three months ended December 31, 2024.

Note

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 nine months ended June 30, 2025 and the nine months ended June 30, 2024.

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 ~~June~~December 3031, 2025.

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 11 — 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 $8071 million ~~for both the three months ended June 30, 2025~~ and ~~2024. Incentives recorded as a reduction to revenue were~~ $~~248~~ 85 million ~~and $233 million~~ for the ~~nine~~three months ended ~~June~~December 3031, 2025 and 2024, 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 ~~June~~December 3031, 2025, and September 30, ~~2024~~2025, the outstanding unpaid incentives were $~~197~~188 million and $~~187~~193 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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17. Other Income, Net

Income and expenses not related to TVA's operating activities are summarized in the following table:

Other Income, Net(in millions)
	Three Months Ended June 30				Nine Months Ended June 30
	Three Months Ended December 31
	2025		2024		~~2025~~		~~2024~~
Interest income	$	1014	$	10	$	31	$	30
External services	85		49		22		12
Gains on investments	10		2		8		16
Gains (losses) on investments	3		(2)
Miscellaneous	122		~~(2)~~—		~~(3)~~		~~(3)~~
Total other income, net	$	2944	$	1417	$	58	$	55

Other income, net increased $27 million as compared to the same period of the prior year, driven by a $25 million gain related to insurance proceeds received for the Sequoyah Nuclear Plant Unit 2 main generator failure, which was partially offset by other expenses.

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18. Supplemental Cash Flow Information

Construction in progress and nuclear fuel expenditures included in Accounts payable and accrued liabilities at ~~June~~December 3031, 2025 and 2024, were $~~961~~997 million and $~~703~~1.0 ~~million~~billion, respectively, and are excluded from the Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~June~~December 3031, 2025 and 2024, as non-cash investing activities. ARO project accruals included in Accounts payable and accrued liabilities at ~~June~~December 3031, 2025 and 2024, were $4130 million and $4640 million, respectively, and are excluded from the Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~June~~December 3031, 2025 and 2024, as non-cash operating activities.

Cash flows from swap contracts that are accounted for as hedges are classified in the same category as the item being

hedged or on a basis consistent with the nature of the instrument.

19. Benefit Plans

TVA sponsors a pension plan that covers most of its full-time employees hired before July 1, 2014, a qualified defined contribution plan ("401(k) plan") that covers most of its full-time employees, two unfunded post-retirement health care plans that provide for non-vested contributions toward the cost of eligible retirees' medical coverage, other post-employment benefits, such as workers' compensation, the SERP, and the RP. The pension plan and the 401(k) plan are administered by a separate legal entity, the TVA Retirement System ("TVARS"), which is governed by its own board of directors.

The components of net periodic benefit cost for the three ~~and nine~~ months ended ~~June~~December 3031, 2025 and 2024, were as follows:

Components of Net Periodic Benefit Cost(1)(in millions)
	For the Three Months Ended June 30								For the Nine Months Ended June 30
	For the Three Months Ended December 31
	Pension Benefits				Other Post-Retirement Benefits				~~Pension Benefits~~				~~Other Post-Retirement Benefits~~
	2025		2024		2025		2024		~~2025~~		~~2024~~		~~2025~~		~~2024~~
Service cost	$	87	$	78	$	3	$	3	$	24	$	22	$	9	$	8
Interest cost	~~131~~135		~~145~~131		34		4		~~394~~		~~434~~		12		15
Expected return on plan assets	(~~126~~124)		(~~123~~126)		—		—		~~(379)~~		~~(370)~~		—		—
Amortization of prior service credit	(22)		(22)		(4)		(4)		~~(67)~~		~~(67)~~		~~(13)~~		~~(13)~~
Recognized net actuarial loss	44		25		—		—		131		75		—		—
Recognized net actuarial loss (gain)	34		42		(2)		—
Total net periodic benefit cost	35$	30	32$	33	2$	1	3$	3	~~103~~		94		8		10
Special/contractual termination benefits(2)	—		—		1		—		—		—		1		—
Total benefit cost	$	35	$	32	$	3	$	3	$	103	$	94	$	9	$	10

Note

(1) The components of Total net periodic benefit cost other than ~~the~~Service ~~service~~ cost ~~component~~ are included in Other net periodic benefit cost on the Consolidated Statements of Operations.

TVA's minimum required pension plan contribution for 2026 is $300 million. TVA contributes $25 million per month to TVARS and as of December 31, 2025, had contributed $75 million. The remaining $225 million will be contributed by September 30, 2026. For the three months ended December 31, 2025, TVA also contributed $7 million (net of $2 million in rebates) ~~Special/contractual~~ ~~termination~~to ~~benefits~~the ~~for~~other ~~certain~~post-retirement ~~eligible~~plans. TVA ~~employees~~expects ~~related~~to contribute $9 million to ~~TVA's~~the ~~restructuring~~SERP ~~activities~~in 2026. ~~See~~In ~~Note~~addition, 3TVA —recognized ~~Restructuring~~401(k) contribution costs of $35 million for the three months ended December 31, 2025.

TVA's minimum required pension plan contribution for 2025 is $300 million. TVA contributes $25 million per month to TVARS and as of June 30, 2025, had contributed $225 million. The remaining $75 million will be contributed by September 30, 2025. For the nine months ended June 30, 2025, TVA also contributed $19 million (net of $4 million in rebates) to the other post-retirement plans and $10 million to the SERP. In addition, TVA recognized 401(k) contribution costs of $95 million for the nine months ended June 30, 2025.

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20. Collaborative Arrangement

In 2023, TVA, Ontario Power Generation, BWRX TCA sp. z.o.o., and GE Vernova Hitachi Nuclear Energy ("~~GEH~~GVH") entered into a multi-party collaborative arrangement to advance the global deployment of the ~~GEH~~GVH BWRX-300 small modular reactor. ~~GEH~~GVH is responsible for standard design development. Under the agreement, TVA will contribute up to $93 million for design costs incurred by ~~GEH~~GVH through 2026. At the time feasibility is determined, TVA will have the right to use the design and may receive additional economic benefits.

Payments pursuant to the agreement are recorded as research and development expense, which is reflected as Operating and maintenance expense on TVA's Consolidated ~~Statement~~Statements of Operations in the period incurred. TVA recorded ~~no expenses related to this agreement for the three months ended June 30, 2025 and~~ $121 million ~~of expenses for the three months ended June 30, 2024. TVA recorded $10 million~~ and $297 million of expenses related to this agreement for the ~~nine~~three months ended ~~June~~December 3031, 2025 and 2024, respectively. TVA also had a $6 million letter of credit posted under this arrangement at ~~June~~December 3031, 2025.

21. Contingencies and Legal Proceedings

Contingencies

Nuclear Insurance. Section 170 of the Atomic Energy Act, commonly known as the Price-Anderson Act, provides a layered framework of financial protection to compensate for liability claims of members of the public for personal injury and property damages arising from a nuclear incident in the U.S. This financial protection consists of two layers of coverage. The primary level is private insurance underwritten by American Nuclear Insurers and provides public liability insurance coverage of $500 million for each nuclear power plant licensed to operate. If this amount is not sufficient to cover claims arising from a nuclear incident, the second level, Secondary Financial Protection, applies. Within the Secondary Financial Protection level, the licensee of each nuclear reactor has a contingent obligation to pay a retrospective premium, equal to its proportionate share of the loss in excess of the primary level, regardless of proximity to the incident of fault, up to a maximum of approximately $166 million per reactor per incident. With TVA's seven reactors, the maximum total contingent obligation per incident is $1.2 billion. This retrospective premium is payable at a maximum rate currently set at approximately $25 million per year per nuclear incident per reactor. Currently, 95 reactors are participating in the Secondary Financial Protection program.

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property damages arising from a nuclear incident in the U.S. This financial protection consists of two layers of coverage. The primary level is private insurance underwritten by American Nuclear Insurers and provides public liability insurance coverage of $500 million for each nuclear power plant licensed to operate. If this amount is not sufficient to cover claims arising from a nuclear incident, the second level, Secondary Financial Protection, applies. Within the Secondary Financial Protection level, the licensee of each nuclear reactor has a contingent obligation to pay a retrospective premium, equal to its proportionate share of the loss in excess of the primary level, regardless of proximity to the incident of fault, up to a maximum of approximately $166 million per reactor per incident. With TVA's seven reactors, the maximum total contingent obligation per incident is $1.2 billion. This retrospective premium is payable at a maximum rate currently set at approximately $25 million per year per nuclear incident per reactor. Currently, 95 reactors are participating in the Secondary Financial Protection program.

In the event that a nuclear incident results in public liability claims, the primary level provided by American Nuclear Insurers combined with the Secondary Financial Protection should provide up to $16.3 billion in coverage.

Federal law requires that each ~~Nuclear Regulatory Commission ("~~NRC") power reactor licensee obtain property insurance from private sources to cover the cost of stabilizing and decontaminating a reactor and its station site after an accident. TVA carries property, decommissioning liability, and decontamination liability insurance from Nuclear Electric Insurance Limited ("NEIL") and European Mutual Association for Nuclear Insurance. The limits available for a loss are up to $2.1 billion for two of TVA's nuclear sites and up to $2.8 billion for the remaining site. Some of this insurance may require the payment of retrospective premiums up to a maximum of approximately $122 million.

TVA purchases accidental outage (business interruption) insurance for TVA's nuclear sites from NEIL. In the event that an accident covered by this policy takes a nuclear unit offline or keeps a nuclear unit offline, NEIL will pay TVA, after a waiting period, an indemnity (a set dollar amount per week) with a maximum indemnity of $490 million per unit. This insurance policy may require the payment of retrospective premiums up to a maximum of approximately $50 million, but only to the extent the retrospective premium is deemed necessary by the NEIL Board of Directors to pay losses unable to be covered by NEIL's surplus.

Decommissioning Costs. TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets related primarily to nuclear generating plants, coal-fired generating plants, hydroelectric generating plants/dams, transmission structures, and other property-related assets. See Note 12 — Asset Retirement Obligations.

Nuclear Decommissioning. Provision for decommissioning costs of nuclear generating units is based on options authorized by the NRC procedures to dismantle and decontaminate the facilities to meet the NRC criteria for license termination. At ~~June~~December 3031, 2025, $3.93 billion, representing the discounted value of future estimated nuclear decommissioning costs, was included in nuclear AROs. The actual decommissioning costs may vary from the derived estimates because of, among other things, changes in current assumptions, such as the assumed dates of decommissioning, changes in regulatory requirements, changes in technology, and changes in the cost of labor, materials, and equipment. Utilities that own and operate nuclear plants are required to use different procedures in calculating nuclear decommissioning costs under GAAP than those that are used in calculating nuclear decommissioning costs when reporting to the NRC. The two sets of procedures produce different estimates for the costs of decommissioning primarily because of differences in the underlying assumptions. TVA bases its nuclear decommissioning estimates on site-specific cost studies. The most recent study was approved and implemented in September 2022. Site-specific cost studies are updated for each of TVA's nuclear units at least every five years.

39TVA maintains an NDT to provide funding for the ultimate decommissioning of its nuclear power plants. See Note 15 — Fair Value Measurements — Investment Funds. TVA monitors the value of its NDT and believes that, over the long term and before cessation of nuclear plant operations and commencement of decommissioning activities, adequate funds from investments and additional contributions, if necessary, will be available to support decommissioning. TVA's operating nuclear power units are licensed through various dates between 2035 - 2056, depending on the unit. In December 2025, TVA extended the operating life of three units at the Browns Ferry. It may also be possible to extend the operating life of other nuclear units with approval from the NRC. See Note 9 — Regulatory Assets and Liabilities and Note 12 — Asset Retirement Obligations.

~~Table~~Non-nuclear ofDecommissioning. At ~~Contents Draft~~December 31, 2025, $6.4 billion, representing the discounted value of future estimated non-nuclear decommissioning costs, was included in non-nuclear AROs.~~0 07/24/2025~~ This ~~5:00~~decommissioning PMcost estimate involves estimating the amount and timing of future expenditures and making judgments concerning whether or not such costs are considered a legal obligation. Estimating the amount and timing of future expenditures includes, among other things, making projections of the timing and duration of the asset retirement process and how costs will escalate with inflation. The actual decommissioning costs may vary from the derived estimates because of changes in current assumptions, such as the assumed dates of decommissioning, changes in regulatory requirements, changes in technology, and changes in the cost of labor, materials, and equipment. TVA updates its underlying assumptions for non-nuclear decommissioning AROs at least every five years. However, material changes in underlying assumptions that impact the amount and timing of undiscounted cash flows are continuously monitored and incorporated into ARO balances in the period identified.

TVA maintains an ~~NDT~~ART to ~~provide~~help ~~funding~~fund ~~for~~ the ultimate decommissioning of its non-nuclear power ~~plants~~assets. See Note 15 — Fair Value Measurements — Investment Funds. ~~TVA~~Estimates ~~monitors~~involved ~~the~~in ~~value~~determining ofif ~~its NDT and believes that, over the long term and before cessation of nuclear plant operations and commencement of decommissioning activities, adequate funds from investments and~~ additional ~~contributions,~~funding ~~if necessary,~~ will be ~~available~~made to ~~support decommissioning. TVA's operating nuclear power units are licensed through various dates between 2033 - 2055, depending on~~ the ~~unit. It~~ART ~~may be possible to extend the operating life of some of the units with approval from the NRC. See Note 9 — Regulatory Assets and Liabilities and Note 12 — Asset Retirement Obligations.~~

Non-nuclear Decommissioning. At June 30, 2025, $7.0 billion, representing the discounted value of future estimated non-nuclear decommissioning costs, was included in non-nuclear AROs. This decommissioning cost estimate involves estimating the amount and timing of future expenditures and making judgments concerning whether or not such costs are considered a legal obligation. Estimating the amount and timing of future expenditures includes, among other things, making projections of the timing and duration of the asset retirement process and how costs will escalate with inflation. The actual decommissioning costs may vary from the derived estimates because of changes in current assumptions, such as the assumed dates of decommissioning, changes in regulatory requirements, changes in technology, and changes in the cost of labor, materials, and equipment. TVA updates its underlying assumptions for non-nuclear decommissioning AROs at least every five years. However, material changes in underlying assumptions that impact the amount and timing of undiscounted cash flows are continuously monitored and incorporated into ARO balances in the period identified.40

~~TVA~~Table ~~maintains an ART to help fund the ultimate decommissioning~~ of its non-nuclear power assets. See Note 15 — Fair Value Measurements — Investment Funds. Estimates involved in determining if additional funding will be made to the ART include inflation rate, rate of return projections on the fund investments, and the planned use of other sources to fund decommissioning costs. See Note 9 — Regulatory Assets and Liabilities and Note 12 — Asset Retirement Obligations.Contents

~~Environmental~~include ~~Matters. TVA's~~inflation ~~generation activities~~rate, ~~like~~rate ~~those~~of ~~across~~return ~~the~~projections ~~utility~~on ~~industry~~the ~~and~~fund ~~in other industrial sectors~~investments, ~~are subject to federal, state,~~ and ~~local~~the ~~environmental~~planned ~~laws~~use ~~and regulations. Major areas~~ of ~~regulation~~other ~~affecting~~sources ~~TVA's~~to ~~activities~~fund ~~include~~decommissioning ~~air~~costs. See ~~quality~~Note ~~control,~~9 ~~greenhouse~~— ~~gas~~Regulatory ~~("GHG")~~Assets ~~emissions, water quality control,~~ and ~~management~~Liabilities and ~~disposal~~Note of12 ~~solid~~— ~~and~~Asset ~~hazardous~~Retirement ~~wastes~~Obligations. ~~Regulations in these major areas have become more stringent in recent years and have had a particular emphasis on climate change, renewable generation, and energy efficiency.~~

Environmental Matters. TVA's generation activities, like those across the utility industry and in other industrial sectors, are subject to federal, state, and local environmental laws and regulations. Major areas of regulation affecting TVA's activities include air quality control, greenhouse gas ("GHG") emissions, water quality control, and management and disposal of solid and hazardous wastes. Regulations in these major areas continue to evolve.

TVA has incurred, and expects to continue to incur, substantial capital and operating and maintenance costs to comply with evolving environmental requirements primarily associated with, but not limited to, the operation of TVA's coal-fired and natural gas-fired generating units in general and emissions of pollutants from those units. Failure to comply with environmental and safety requirements can result in enforcement actions and litigation, which can lead to the imposition of significant civil liability, including fines and penalties, criminal sanctions, and/or temporary or permanent closure of non-compliant facilities. Historical non-compliance can also lead to difficulty in renewing existing permits, as well as difficulty in obtaining permits to bring new generation facilities online. Other obstacles to renewal or permitting of new facilities include a proliferation of non-government organizations seeking to use litigation tools to drive up costs associated with, and delay or prevent permitting of, new fossil fuel facilities and related infrastructure in favor of renewable energy projects.

Compliance with the Environmental Protection Agency's ("EPA") 2015 CCR Rule, as revised ("2015 CCR Rule") required implementation of a groundwater monitoring program, additional engineering, evaluation of authorized closure methods, coordination with certain state authorities, and ongoing analysis at each TVA CCR unit. As further analyses are performed, including evaluation of monitoring results, there is the potential for additional costs for investigation and/or remediation. In addition, on May 8, 2024, EPA published its Legacy Coal Combustion Residuals Rule ("Legacy CCR Rule"), which expands the scope of the existing regulatory requirements of the 2015 CCR Rule to include two additional classes of CCR units: Legacy Surface Impoundments and Coal Combustion ~~Residual~~Residuals Management Units. As a result of the enactment of the final rule, during 2024, TVA recorded additional estimated AROs and recorded a corresponding regulatory asset due to AROs being associated with closed sites and asset retirement costs having been fully depreciated. However, the amounts recorded are subject to various uncertainties, and actual amounts may differ materially based upon a number of factors, including, but not limited to, the outcome of legal challenges to the Legacy CCR Rule, ongoing evaluations of the number and scope of newly regulated units, determinations on final closure requirements and performance standards, and possible changes to the Legacy CCR Rule by EPA. See Note 12 — Asset Retirement Obligations.

In May 2024, EPA also published (1) a final rule that establishes more stringent technology-based effluent limitations for four wastewater streams from coal-fired plants, (2) a rule that strengthens and updates the Mercury and Air Toxics Standards for electric generating units to reflect recent developments in control technologies, and (3) a rule that establishes GHG emission guidelines for existing coal-fired plants and GHG performance standards for new natural gas-fired power plants. These rules are all currently being reconsidered by EPA and are also all subject to legal challenges. If these rules move forward as written and the challenges are not successful, TVA would incur substantial costs to comply with the rules.

On March 12, 2025, the EPA Administrator announced that EPA will reconsider 31 rules, including (1) regulations on power plants, (2) Mercury and Air Toxics Standards, (3) steam electric effluent limitation guidelines (“ELG”), (4) National Ambient Air Quality Standards for particulate matter, (5) regulations regarding regional haze, (6) the Good Neighbor Plan, and (7) CCR regulations. TVA cannot predict the outcome of ~~such~~proposed reevaluations or their impact on TVA's financial results or operations. ~~See~~ ~~Part I, Item 1, Business — Environmental Matters in the Annual Report.~~

40On December 31, 2025, EPA published a final ELG rule that extends certain compliance deadlines in the 2024 ELG rule and provides authority to state permitting authorities to extend other compliance deadlines in the 2020 and 2024 ELG rules. This rule provides TVA with greater flexibility with its coal-fired plants to meet future generation and reliability requirements.

~~Table~~Liability for releases, natural resource damages, and required cleanup of ~~Contents Draft~~hazardous 4substances is primarily regulated by the federal Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), the Resource Conservation and Recovery Act ("RCRA"), and other federal and parallel state statutes.~~0 07/24/~~ In a manner similar to many other governmental entities, industries, and power systems, TVA has generated or used hazardous substances over the years. TVA operations at some facilities have resulted in releases of contaminants that TVA has addressed or is addressing consistent with state and federal requirements. At both December 31, 2025, ~~5:00~~and PMSeptember 30, 2025, TVA's estimated liability for required cleanup and similar environmental work for those sites for which sufficient information is available to develop a cost estimate was $8 million on a non-discounted basis and was included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. Additionally, the potential inclusion of new hazardous substances under CERCLA and RCRA jurisdiction could significantly affect TVA's future liability for remediating historical releases.

~~Liability~~In ~~for~~August ~~releases~~2015, ~~natural~~the ~~resource~~Tennessee ~~damages,~~Department ~~and required cleanup~~ of ~~hazardous~~Environment ~~substances is primarily regulated by the federal Comprehensive Environmental Response, Compensation,~~ and ~~Liability~~Conservation ~~Act~~ ("~~CERCLA~~TDEC"), ~~the~~issued ~~Resource~~an ~~Conservation~~order ~~and~~that ~~Recovery~~includes ~~Act~~an ~~("RCRA"),~~iterative ~~and~~process ~~other~~through ~~federal~~which TVA and ~~parallel~~TDEC ~~state~~will ~~statutes. In~~identify aand ~~manner~~evaluate ~~similar~~any toCCR ~~many~~contamination ~~other~~risks ~~governmental entities~~and, ~~industries,~~if ~~and power systems~~necessary, ~~TVA~~respond ~~has~~to ~~generated~~such ~~or used hazardous substances over the years~~risks. TVA ~~operations~~is atalso ~~some~~following ~~facilities~~a ~~have~~similar ~~resulted~~process inpursuant ~~releases~~to ofa ~~contaminants~~consent ~~that TVA has addressed or is addressing consistent with state and federal requirements~~order. At ~~June~~December 3031, 2025, and September 30, ~~2024~~2025, TVA's estimated liability for ~~required~~costs ~~cleanup~~associated ~~and~~with ~~similar~~ environmental ~~work~~remediation activities for ~~those~~the sites covered by these orders for which sufficient information is available to develop a cost estimate was ~~$10~~approximately $348 million and $15319 million, respectively, on a non-discounted basis, and was included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. Additionally, the potential inclusion of new hazardous substances under CERCLA and RCRA jurisdiction could significantly affect TVA's future liability for remediating historical releases.

In August 2015, the Tennessee Department of Environment and Conservation ("TDEC") issued an order that includes an iterative process through which TVA and TDEC will identify and evaluate any CCR contamination risks and, if necessary, respond to such risks. TVA is also following a similar process pursuant to a consent order. At June 30, 2025, and September 30, 2024, TVA's estimated liability for costs associated with environmental remediation activities for the sites covered by these orders for which sufficient information is available to develop a cost estimate was approximately $313 million and $215 million, respectively, on a non-discounted basis and was included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. The current estimated time frame for work related to these remediation activities for which TVA has a cost estimate is through 2044.

Legal Proceedings

From time to time, TVA is party to or otherwise involved in lawsuits, claims, proceedings, investigations, and other legal matters ("Legal Proceedings") that have arisen in the ordinary course of conducting TVA's activities. There have been no material changes to the Legal Proceedings described in Note 22 — Commitments and Contingencies — Legal Proceedings of the Annual Report, except as described below.

Case Involving Johnsonville Aeroderivative Combustion Turbine Project. On December 22, 2022, the Southern Environmental Law Center filed a lawsuit in the U.S. District Court for the Middle District of Tennessee on behalf of the Sierra Club, alleging that TVA violated the National Environmental Policy Act ("NEPA") in deciding to build a new aeroderivative combustion turbine project at its Johnsonville facility. Both parties moved for summary judgment, and on September 30, 2024, the court granted TVA's motion for summary judgment and dismissed the lawsuit. The Sierra Club did not file an appeal within 60 days from the date of the decision, so this litigation has now ended. See Note 22 — Commitments and Contingencies — Legal Proceedings — Case Involving Johnsonville Aeroderivative Combustion Turbine Project in the Annual Report.

Case Involving Kingston Gas-Fired Plant. On October 10, 2024, Appalachian Voices, the Center for Biological Diversity, and the Sierra Club filed a lawsuit in the U.S. District Court for the Eastern District of Tennessee alleging that TVA violated NEPA and TVA's least-cost planning obligations in deciding to build a gas plant at its Kingston Facility. TVA filed its answer on December 16, 2024. The plaintiffs filed a motion to compete the administrative record on June 30, 2025. TVA cannot predict the outcome of this litigation. See Note 22 — Commitments and Contingencies — Legal Proceedings — Case Involving Kingston Gas-Fired Plant in the Annual Report.

Challenge to Kingston Construction Permit. On December 16, 2024, the Southern Environmental Law Center filed an appeal on behalf of Appalachian Voices challenging the construction permit that the Technical Secretary acting on behalf of the Tennessee Air Pollution Control Board issued to TVA on November 15, 2024, for the construction of natural gas generation at Kingston. Appalachian Voices alleges that TDEC unlawfully issued a construction permit that would allow TVA to construct the plant without meeting the requirements set forth in the Tennessee Air Quality Act's and Federal Clean Air Act’s Prevention of Significant Deterioration program. Among other things, Appalachian Voices is requesting that the Tennessee Air Pollution Control Board stay the effectiveness of the permit and order TDEC to revoke the permit. On January 7, 2025, TVA filed a petition to intervene in the administrative proceeding, which was granted on January 15, 2025. The parties filed competing motions for summary judgement on March 14, 2025, and oral argument on these motions was held on June 24, 2025. TVA cannot predict the outcome of this litigation.

Challenge to Certificate for Cumberland Pipeline. On April 29, 2024, the Southern Environmental Law Center, on behalf of the Sierra Club and Appalachian Voices, filed a petition with the United States Court of Appeals for the District of Columbia Circuit ("D.C. Circuit") challenging the Federal Energy Regulatory Commission's ("FERC’s") issuance of a certificate of public convenience for the pipeline that will need to be constructed in order for TVA to operate the Cumberland Combined Cycle Plant (the “Cumberland Pipeline”). The petitioners allege that they and their members have been and will be aggrieved by the approval, construction, and operation of the Cumberland Pipeline and are asking the D.C. Circuit to review and set aside FERC’s order approving the pipeline. The D.C. Circuit heard oral arguments on the merits on March 4, 2025, but has not yet issued a ruling. TVA, the Tennessee Valley Public Power Association, and Tennessee Gas Pipeline Company, L.L.C., which has contracted with TVA to build and operate the pipeline, have intervened in the proceeding. TVA cannot predict the outcome of this litigation.

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term liabilities on the Consolidated Balance Sheets. The current estimated time frame for work related to these remediation activities for which TVA has a cost estimate is through 2046.

Legal Proceedings

From time to time, TVA is party to or otherwise involved in lawsuits, claims, proceedings, investigations, and other legal matters ("Legal Proceedings") that have arisen in the ordinary course of conducting TVA's activities. There have been no material changes to the Legal Proceedings described in Note 23 — Commitments and Contingencies — Legal Proceedings of the Annual Report, except as described below.

Case Involving Kingston Gas-Fired Plant. On October 10, 2024, Appalachian Voices, the Center for Biological Diversity, and the Sierra Club filed a lawsuit in the United States District Court for the Eastern District of Tennessee alleging that TVA violated the National Environmental Policy Act and TVA’s least-cost planning obligations in deciding to build a gas plant at its Kingston site. On November 13, 2025, the court ordered TVA to supplement the administrative record, and TVA has provided the supplemental information to the plaintiffs in accordance with the court's order. On January 23, 2026, the plaintiffs filed a motion for summary judgment. TVA cannot predict the outcome of this litigation.

Challenge to Kingston Construction Permit. On December 16, 2024, the Southern Environmental Law Center filed an appeal on behalf of Appalachian Voices challenging the construction permit that the Technical Secretary acting on behalf of the Tennessee Air Pollution Control Board issued to TVA on November 15, 2024, for the construction of natural gas generation at Kingston. On August 20, 2025, the administrative law judge issued an order upholding the construction permit and denying Appalachian Voices' petition challenging the permit. Appalachian Voices did not appeal the initial order to the Tennessee Air Pollution Control Board by the deadline of September 19, 2025, so the order became final. On November 18, 2025, Appalachian Voices filed a petition for judicial review of the final order in the Chancery Court of Davidson County, Tennessee, naming the Tennessee Air Pollution Control Board, TDEC, and TVA as the respondents. TVA removed the matter to the U.S. District Court for the Middle District of Tennessee on December 18, 2025. The plaintiffs subsequently filed a motion asking the district court to remand the case to state court. TVA plans to file a response in opposition on or before February 3, 2026. TVA cannot predict the outcome of this litigation.

22. Segment Reporting

TVA operates as a single reportable segment that includes the generation, transmission, and sale of electricity throughout the Tennessee Valley. Revenue is primarily derived from wholesale electricity sales to LPCs and directly served customers. TVA's Chief Executive Officer ("CEO") serves as the CODM. The CODM uses net income in the annual planning process and to monitor budget versus actual results on a monthly basis in assessing financial performance and in determining how to allocate resources.

The following table includes operating revenues, expenses, and net income as regularly provided to the CODM, which align directly to the amounts presented in TVA’s Consolidated Statements of Operations. As the segment measure used by the CODM is net income, no reconciliation is necessary.


1	Three Months Ended December 31
	2025		2024(2)

Base revenue	$	2,197	$	2,045
Fuel revenue	802		830
Other revenue	48		44
Off-system sales	2		1
Total operating revenue	3,049		2,920

Fuel	514		505
Purchased power	410		394
Operating and maintenance	849		905
Depreciation and amortization	571		557
Interest expense	309		280
Tax equivalents	153		146
Other segment items(1)	(23)		8
Total expenses, net	2,783		2,795
Net income	$	266	$	125

Notes

(1) Other segment items include non-utility related miscellaneous income and expenses, pension and post-retirement benefit costs, and interest income.

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(2) Prior period amounts have been reclassified to conform to the current period presentation resulting from the retrospective adoption of ASU 2023-07, Segment Reporting. Expanded segment disclosures were not required in the comparative periods presented because the company operated, and continues to operate, as a single reportable segment for which detailed segment expense disclosures were not previously required.

Segment asset information is not presented, as it is not regularly reviewed by the CODM. The CODM evaluates capital planning and resource allocation on a consolidated basis which is presented in TVA's Consolidated Balance Sheet.

Capital expenditures were $1.1 billion and $1.5 billion for the three months ended December 31, 2025 and 2024, respectively.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") explains the results of operations and general financial condition of the Tennessee Valley Authority ("TVA"). The MD&A should be read in conjunction with the accompanying unaudited consolidated financial statements and TVA's Annual Report on Form 10-K for the year ended September 30, ~~2024~~2025 (the "Annual Report").

Executive Overview

TVA's operating revenues were $93.80 billion and $82.89 billion for the ~~nine~~three months ended ~~June~~December 3031, 2025 and 2024, respectively. Operating revenues increased for the ~~nine~~three months ended ~~June~~December 3031, 2025, as compared to the same period of the prior year, primarily as a result of higher ~~effective~~sales ~~fuel rates~~volume, ~~higher~~partially ~~effective~~offset ~~base~~by ~~rates,~~lower ~~and~~fuel ~~increased~~cost ~~sales~~recovery ~~volume~~rates. ~~Higher~~The ~~effective~~increased ~~fuel~~sales ~~rates~~volume ~~were~~was ~~due~~ primarily todriven ~~using~~by ~~higher~~closer ~~cost coal and natural gas generation due~~ to ~~less~~normal ~~availability~~weather ofimpacts ~~nuclear generation~~ as compared to the same period of the prior year~~. Effective~~ ~~base~~and ~~rates were~~ higher ~~primarily~~sales ~~due~~within to the ~~TVA~~data ~~Board~~processing, ofhosting, ~~Directors~~and ~~("TVA~~related ~~Board")~~services ~~action to approve a 5~~sector.25 Lower ~~percent~~fuel ~~wholesale~~cost ~~base~~recovery ~~rate~~rates ~~increase~~were ~~effective~~due ~~October 1, 2024. The increased sales volume was~~ primarily ~~driven by higher sales~~ to ~~residential~~more ~~and~~availability ~~small~~of ~~commercial~~nuclear ~~and~~generation ~~industrial customers~~ as ~~well~~compared asto ~~increases within~~ the ~~data~~same ~~processing,~~period ~~hosting,~~of ~~and~~the ~~related~~prior ~~services sector, partially offset by a decrease in cooling degree days~~year.

Total operating expenses ~~increased~~decreased $~~743~~10 million for the ~~nine~~three months ended ~~June~~December 3031, 2025, as compared to the ~~nine~~three months ended ~~June~~December 3031, 2024. ~~Fuel~~Operating and ~~purchased~~maintenance ~~power~~ expense ~~increased~~decreased $~~490~~56 million for the ~~nine~~three months ended ~~June~~December 3031, 2025, as compared to the same period of the prior year, primarily due to ~~higher~~IRA ~~demand~~tax ~~for~~credits ~~purchased~~recorded ~~power~~in asthe athree ~~result~~months ofended ~~less~~December ~~availability~~31, of2025. Partially ~~nuclear~~offsetting ~~generation~~this ~~and~~decrease ~~higher effective fuel rates. There~~ was a $~~100~~25 million increase in ~~Operating~~fuel and ~~maintenance~~purchased power expense. This increase was primarily due to ~~increases~~higher inpurchased ~~payroll~~power market prices and ~~benefit~~higher ~~costs~~demand ~~related~~for energy as compared to ~~severance~~the ~~costs~~same ~~associated~~period ~~with~~of ~~Enterprise~~the ~~Transformation~~prior ~~Program~~year, ~~("ETP")~~partially ~~efforts~~offset ~~and~~by ~~labor~~decreases ~~escalation~~related ~~for~~to ~~cost~~the deferral of ~~living~~unplanned ~~increases~~energy demand and anpurchased ~~increase~~power inexpenses ~~nuclear~~as ~~outage~~well ~~days~~as higher availability of nuclear generation. In addition, Depreciation and amortization expense increased by $9814 million primarily asdue ato ~~result of~~ increases in ~~the~~depreciation ~~amortization~~ expense as a result of ~~finance~~additions ~~leases~~to ~~and~~net ~~amortization~~completed ~~expense~~plant, ofpartially ~~decommissioning~~offset ~~costs~~by ~~recovered~~a decrease in ~~rates,~~depreciation ~~the~~expense ~~decision~~due to ~~retire~~the ~~Kingston~~Browns ~~Fossil~~Ferry Nuclear Plant ("~~Kingston~~Browns Ferry") subsequent license renewal ("SLR"). In December 2025, ~~and~~the ~~additions~~Nuclear toRegulatory ~~net~~Commission ~~completed~~("NRC") ~~plant~~approved a SLR application for the three units at Browns Ferry which extended the useful life of the three nuclear units for an additional 20 years.

Pre-commercial plant operations began on Johnsonville Aeroderivative combustion turbine ("CT") Units 25-28 in the first quarter of 2025 and began on Units 21-24 and 29-30 in the second quarter of 2025. Units 21-25 and 27-30 became operational on May 6, 2025.43

OnTable ~~January 22, 2025, TVA reached an all-time record high peak power demand~~ of ~~approximately 35,430 megawatts ("MW"). This peak was over 800 MW greater than TVA's previous all-time peak set in January 2024.~~Contents

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Results of Operations

Sales of Electricity

Sales of electricity were 39,~~751~~577 million and 3938,~~342~~031 million kilowatt hours ("kWh") for the three months ended ~~June~~December 3031, 2025 and 2024, respectively. ~~Sales of electricity were 120,527 million and 117,313 million kWh for the nine months ended June 30, 2025 and 2024, respectively.~~ The total sales of electricity during the ~~nine~~three months ended ~~June~~December 3031, ~~2025~~2024 included 948 thousand kWh of pre-commercial generation at Johnsonville Aeroderivative CTCombustion ~~Units~~Turbine 21-30, of which 35 thousand kWh was recognized in the three months ended June 30, 2025. The total sales of electricity during the nine months ended June 30, 2024 included 137 thousand kWh of pre-commercial generation at Paradise ("CT") ~~Units 5-7, all of which was recognized in the three months ended December 31, 2023~~Facility. TVA sells power at wholesale rates to local power company customers ("LPCs") that then resell the power to their customers at retail rates. TVA also sells power to directly served customers, consisting primarily of federal agencies and customers with large or nonstandard loads. In addition, power exceeding TVA's system needs is sold under exchange power arrangements with certain other power systems.

The following ~~charts~~chart ~~compare~~compares TVA's sales of electricity by customer type for the periods indicated:

The following charts show a breakdown of TVA's energy load:

Note

Information included in the charts above was derived from energy usage of directly served customers and customers served by LPCs during calendar year ("CY") 2024, and these graphs will continue to be updated on a CY basis.

4344

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Weather affects both the demand for TVA power and the price for that power. TVA uses degree days to measure the impact of weather on its power operations. Degree days measure the extent to which the TVA system 23-station average temperatures vary from 65 degrees Fahrenheit.

	Degree Days
	Variation from Normal								Change from Prior Period
	2025	Normal	Percent Variation		2024	Normal	Percent Variation		Change	Percent Change
Heating Degree Days
Three Months Ended June 30	144	191	(24.6)	%	124	191	(35.1)	%	20	16.1	%
Three Months Ended December 31	1,150	1,243	(7.5)	%	983	1,243	(20.9)	%	167	17.0	%
Nine Months Ended June 30	2,888	3,123	(7.5)	%	2,801	3,143	(10.9)	%	87	3.1	%
Cooling Degree Days
Three Months Ended June 30	611	595	2.7	%	698	595	17.3	%	(87)	(12.5)	%
Three Months Ended December 31	70	61	14.8	%	89	61	45.9	%	(19)	(21.3)	%
Nine Months Ended June 30	712	666	6.9	%	776	666	16.5	%	(64)	(8.2)	%

Sales of electricity increased ~~one~~four percent for the three months ended ~~June~~December 3031, 2025, as compared to the same period of the prior year. ~~The~~For ~~increased~~the ~~sales~~three ~~volume~~months ~~was~~ended ~~primarily~~December ~~driven~~31, by2025, ~~higher~~weather ~~sales~~impacts towere ~~residential~~closer ~~and~~to ~~small~~normal ~~commercial~~as ~~and~~compared ~~industrial~~to ~~customers~~the assame ~~well~~period asof ~~increases within~~ the ~~data~~prior ~~processing~~year, ~~hosting,~~which ~~and~~resulted ~~related~~in ~~services~~a ~~sector. Partially~~17 ~~offsetting~~percent ~~the~~increase ~~increased~~in ~~sales~~heating ~~volume~~degree ~~was a 12~~days.5 In ~~percent~~addition, ~~decrease~~sales involume ~~cooling~~increased ~~degree~~due ~~days~~to ~~compared~~higher tosales within the ~~same~~data ~~period~~processing, ofhosting, ~~the~~and ~~prior~~related ~~year.~~services sector.

Sales of electricity increased three percent for the nine months ended June 30, 2025, as compared to the same period of the prior year. The increased sales volume was primarily driven by higher sales to residential and small commercial and industrial customers as well as increases within the data processing, hosting, and related services sector. Partially offsetting the increased sales volume was an 8.2 percent decrease in cooling degree days compared to the same period of the prior year.

Financial Results

The following table compares operating results for the three ~~and nine~~ months ended ~~June~~December 3031, 2025 and 2024:

Summary Consolidated Statements of Operations(in millions)
	Three Months Ended June 30								Nine Months Ended June 30
	Three Months Ended December 31
	2025		2024		Change		Percent Change		~~2025~~		~~2024~~		~~Change~~		~~Percent Change~~
Operating revenues	$	3,~~306~~049	$	2,~~879~~920	$	~~427~~129	144.84	%	$	~~9,758~~	$	~~8,798~~	$	~~960~~	~~10.9~~	%
Operating expenses	2,~~789~~497		2,~~420~~507		~~369~~(10)		15(0.24)	%	~~8,112~~		~~7,369~~		~~743~~		~~10.1~~	%
Operating income	~~517~~552		~~459~~413		58139		1233.67	%	~~1,646~~		~~1,429~~		~~217~~		~~15.2~~	%
Other income, net	2944		1417		1527		~~107~~158.18	%	58		55		3		~~5.5~~	%
Other net periodic benefit cost	2721		25		2(4)		8(16.0)	%	79		74		5		~~6.8~~	%
Interest expense	~~307~~309		~~267~~280		4029		1510.04	%	~~880~~		~~795~~		85		~~10.7~~	%
Net income	$	~~212~~266	$	~~181~~125	$	31141	17112.18	%	$	~~745~~	$	~~615~~	$	~~130~~	~~21.1~~	%

44Operating Revenues. Operating revenues for the three months ended December 31, 2025 and 2024, were $3.0 billion and $2.9 billion, respectively. The following table compares TVA's operating revenues for the periods indicated:

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Operating Revenues by Customer Type (in millions)
	Three Months Ended December 31
	2025		2024		Change		Percent Change
Operating revenues
Local power company customers	$	2,736	$	2,616	$	120	4.6	%
Industries directly served	236		230		6		2.6	%
Federal agencies and other	29		30		(1)		(3.3)	%

Other revenue	48		44		4		9.1	%
Total operating revenues	$	3,049	$	2,920	$	129	4.4	%

~~Operating~~TVA's ~~Revenues. Operating~~two ~~revenues~~largest ~~for~~LPCs ~~the~~— ~~three~~Memphis ~~months ended June 30~~Light, ~~2025~~Gas and ~~2024,~~Water ~~were~~Division ~~$3.3~~("MLGW") ~~billion~~ and ~~$2.9~~Nashville ~~billion,~~Electric ~~respectively. Operating~~Service ~~revenues~~("NES") ~~for~~— ~~the~~have ~~nine~~contracts ~~months~~with ~~ended~~a ~~June~~five-year ~~30,~~and ~~2025~~a ~~and~~20-year ~~2024,~~termination ~~were~~notice $9period, respectively.8 Sales ~~billion~~to both MLGW and ~~$8.8~~NES ~~billion,~~accounted ~~respectively. The~~for ~~following~~eight ~~table~~percent ~~compares~~of TVA's total operating revenues for both the ~~periods~~three ~~indicated:~~months ended December 31, 2025 and the three months ended December 31, 2024.

Operating Revenues by Customer Type(in millions)
	Three Months Ended June 30								Nine Months Ended June 30
	2025		2024		Change		Percent Change		2025		2024		Change		Percent Change
Operating revenues
Local power company customers	$	2,967	$	2,596	$	371	14.3	%	$	8,782	$	7,925	$	857	10.8	%
Industries directly served	259		205		54		26.3	%	734		642		92		14.3	%
Federal agencies and other	36		29		7		24.1	%	100		90		10		11.1	%
Revenue capitalized during pre-commercial plant operations(1)	(1)		—		(1)		—	%	(3)		(3)		—		—	%
Other revenue	45		49		(4)		(8.2)	%	145		144		1		0.7	%
Total operating revenues	$	3,306	$	2,879	$	427	14.8	%	$	9,758	$	8,798	$	960	10.9	%

~~Note~~Table of Contents

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 both MLGW and NES accounted for eight percent of TVA's total operating revenues for both the nine months ended June 30, 2025 and the nine months ended June 30, 2024.

TVA's rate structure uses pricing signals to indicate seasons and hours of higher cost to serve its customers and to capture a portion of TVA's fixed costs in fixed charges. The structure includes three base revenue components: time of use demand charges, time of use energy charges, and a grid access charge ("GAC"). The demand charges are based upon the customer's peak monthly usage. The energy charges are based on time differentiated kWh used by the customer. Both of these components can be significantly impacted by weather. The GAC captures a portion of fixed costs and is offset by a corresponding reduction to the energy rates. The GAC also reduces the impact of weather variability to the overall rate structure.

TVA has 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 to no more than 10 percent during any consecutive five-fiscal-year period, as more specifically described in the

agreements. 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. As of ~~June~~December 3031, 2025, 148 LPCs had signed the 20-year Partnership Agreement with TVA.

In addition to base revenues, the rate structure includes a separate fuel rate that includes the costs of natural gas, fuel oil, purchased power, coal, emission allowances, nuclear fuel, and other fuel-related commodities; realized gains and losses on derivatives purchased to hedge the costs of such commodities; and payments to states and counties in lieu of taxes ("tax equivalents") associated with the fuel cost adjustments.

TVA is required to charge rates for power that will produce gross revenues sufficient to cover various costs as discussed in Part I, Item I, Business — Rates of the Annual Report. In August 2024, the TVA Board approved a 5.25 percent wholesale base rate increase (excluding fuel) effective October 1, 2024, primarily due to additional capacity needs and rising costs. This rate adjustment is estimated to produce an additional $495 million of revenue during 2025.

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The changes in revenue components are summarized below:

Changes in Revenue Components(in millions)
	Three Months Ended June 30						Nine Months Ended June 30
	Three Months Ended December 31
	2025		2024		Change		~~2025~~		~~2024~~		~~Change~~
Base revenue
Energy revenue	$	1,~~264~~237	$	1,~~195~~188	$	6949	$	~~3,855~~	$	~~3,570~~	$	~~285~~
Demand revenue	1,~~009~~011		~~930~~905		79106		~~3,034~~		~~2,765~~		~~269~~
Grid access charge	~~161~~162		~~155~~162		6—		~~485~~		~~466~~		19
Long-term partnership credits for LPCs	(5354)		(5150)		(24)		~~(164)~~		~~(152)~~		~~(12)~~
Other charges and credits(1)	(~~166~~159)		(~~144~~160)		~~(22)~~1		~~(522)~~		~~(453)~~		~~(69)~~
Total base revenue	2,~~215~~197		2,~~085~~045		~~130~~152		~~6,688~~		~~6,196~~		~~492~~
Fuel cost recovery	~~1,045~~802		~~743~~830		~~302~~(28)		~~2,924~~		~~2,455~~		~~469~~
Off-system sales	2		21		—1		4		6		~~(2)~~
Pre-commercial operations(2)	(1)		—		(1)		(3)		(3)		—
Revenue from sales of electricity	3,001		2,876		125
Revenue from sales of electricity	3,261		2,830		431		9,613		8,654		959
Other revenue	48		44		4
Other revenue	45		49		(4)		145		144		1
Total operating revenues	$	3,049	$	2,920	$	129
Total operating revenues	$	3,306	$	2,879	$	427	$	9,758	$	8,798	$	960

Notes

(1) Includes economic development credits to promote growth in the Tennessee Valley, hydro preference credits for residential customers of LPCs, and demand response credits allowing TVA to reduce industrial customer usage in periods of peak demand to balance system demand. See Note 16 — Revenue.

~~(2) Represents~~Operating ~~revenue~~revenues ~~capitalized~~increased ~~during~~$129 ~~pre-commercial~~million ~~operations~~for atthe ~~Johnsonville~~three ~~Aeroderivative~~months CTended ~~Units~~December ~~21-30~~31, in2025, as compared to the ~~three~~same ~~and~~period ~~nine~~of ~~months~~the ~~ended~~prior ~~June 30~~year, ~~2025~~primarily ~~and~~due ~~Paradise~~to CTa ~~Units~~$152 ~~5-7~~million increase in base revenue driven by a $124 million increase attributable to higher sales volume and a $28 million increase attributable to higher effective base rates. Higher sales volume was driven by closer to normal weather impacts as compared to the ~~nine~~same ~~months~~period ~~ended~~of ~~June~~the 30prior year, ~~2024~~which resulted in a 17 percent increase in heating degree days, ~~all~~and ofhigher ~~which~~sales within the data processing, hosting, and related services sector. In addition, there was ~~recognized~~a $28 million decrease in ~~the~~fuel ~~three~~cost ~~months~~recovery ~~ended~~revenue. The ~~December~~$28 31million decrease in fuel cost recovery revenue was driven by a $61 million decrease attributable to lower fuel cost recovery rates, ~~2023~~partially offset by a $33 million increase attributable to higher sales volume. The lower fuel cost recovery rates were due primarily to more availability of nuclear generation as compared to the same period of the prior year.

Operating revenues increased $427 million for the three months ended June 30, 2025, as compared to the same period of the prior year, primarily due to a $302 million increase in fuel cost recovery revenue. The $302 million increase in fuel cost recovery revenue was driven by a $296 million increase attributable to higher effective fuel rates and a $6 million increase attributable to higher sales volume. The higher effective fuel rates were due primarily to using higher cost coal and natural gas generation due to less availability of nuclear generation as compared to the same period of the prior year. In addition, there was a $130 million increase in base revenue driven by a $104 million increase attributable to higher effective base rates and a $26 million increase attributable to higher sales volume. The increase in effective base rates was primarily due to the TVA Board action to approve a 5.25 percent wholesale base rate increase effective October 1, 2024. The higher sales volume was driven primarily by higher sales to residential and small commercial and industrial customers as well as increases within the data processing, hosting, and related services sector, partially offset by a decrease in cooling degree days.

Operating revenues increased $960 million for the nine months ended June 30, 2025, as compared to the same

period of the prior year, primarily due to a $492 million increase in base revenue. The $492 million increase in base revenue was driven by a $262 million increase attributable to higher effective base rates and a $230 million increase attributable to higher sales volume. The increase in effective base rates was primarily due to the TVA Board action to approve a 5.25 percent wholesale base rate increase effective October 1, 2024. The higher sales volume was driven primarily by higher sales to residential and small commercial and industrial customers as well as increases within the data processing, hosting, and related services sector, partially offset by a decrease in cooling degree days. In addition, there was a $469 million increase in fuel cost recovery revenue driven by a $401 million increase attributable to higher effective fuel rates and a $68 million increase attributable to higher sales volume. The higher effective fuel rates were due primarily to using higher cost coal and natural gas generation due to less availability of nuclear generation as compared to the same period of the prior year.

See Sales of Electricity above for further discussion of the change in the volume of sales of electricity and Operating Expenses below for further discussion of the change in fuel expense.

Operating Expenses. Operating expense components as a percentage of total operating expenses for the three and nine months ended June 30, 2025 and 2024, consisted of the following:

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Operating Expenses(in millions)
	Three Months Ended June 30								Nine Months Ended June 30
	2025		2024		Change		Percent Change		2025		2024		Change		Percent Change
Operating expenses
Fuel	$	589	$	424	$	165	38.9	%	$	1,674	$	1,561	$	113	7.2	%
Purchased power	550		408		142		34.8	%	1,516		1,139		377		33.1	%
Operating and maintenance	922		915		7		0.8	%	2,771		2,671		100		3.7	%
Depreciation and amortization	572		542		30		5.5	%	1,691		1,593		98		6.2	%
Tax equivalents	156		131		25		19.1	%	460		405		55		13.6	%
Total operating expenses	$	2,789	$	2,420	$	369	15.2	%	$	8,112	$	7,369	$	743	10.1	%

Operating Expenses. Operating expense components as a percentage of total operating expenses for the three months ended December 31, 2025 and 2024, consisted of the following:

Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024


Operating Expenses (in millions)
	Three Months Ended December 31
	2025		2024		Change		Percent Change
Operating expenses
Fuel	$	514	$	505	$	9	1.8	%
Purchased power	410		394		16		4.1	%
Operating and maintenance	849		905		(56)		(6.2)	%
Depreciation and amortization	571		557		14		2.5	%
Tax equivalents	153		146		7		4.8	%
Total operating expenses	$	2,497	$	2,507	$	(10)	(0.4)	%

Fuel expense increased $~~165~~9 million for the three months ended ~~June~~December 3031, 2025, as compared to the same period of the prior year. This increase was primarily ~~driven~~due byto an increase ~~in fuel cost recovery~~ of $~~127~~30 million ~~due~~in ~~to the collection of significant~~ fuel ~~costs~~expense ~~from the previous quarter that were the result of higher than expected coal and natural gas prices~~ due to ~~colder~~higher ~~than~~demand ~~average~~for ~~temperatures~~energy. Additionally, ~~fuel~~there ~~expense~~was ~~increased~~an increase of $5318 million ~~primarily~~ due to higher effective fuel rates ~~related~~primarily toas ~~using~~a ~~higher~~result ~~cost~~of ~~coal~~higher ~~and~~ natural gas ~~generation due to less availability of nuclear generation as compared to the same period of the prior year~~prices. Partially offsetting ~~this~~these ~~increase~~increases was a decrease of $1539 million ~~due~~related to ~~less availability of nuclear generation and more availability of hydro generation as compared to~~ the ~~same~~deferral ~~period~~ of ~~the~~unplanned ~~prior~~energy ~~year~~demand.

Purchased power expense increased $~~142~~16 million for the three months ended ~~June~~December 3031, 2025, as compared to the same period of the prior year. This increase was primarily due to ~~an increase of $82 million from~~ higher purchased power market prices compared to the same period of the prior year~~. Additionally,~~ ~~purchased~~resulting ~~power~~in ~~expense~~an ~~increased~~increase of $5274 million. Partially ~~due~~offsetting tothis ~~higher~~increase ~~demand~~was ~~for~~a ~~energy~~decrease ~~with~~of ~~less~~$34 ~~availability~~million related to the deferral of ~~TVA~~unplanned ~~nuclear~~purchased ~~generation~~power expenses. ~~Purchased~~Additionally, ~~power~~there ~~expense~~was ~~also~~a ~~increased~~decrease of $824 million related to higher availability of TVA nuclear generation assets.

Operating and maintenance expense decreased $56 million for the three months ended December 31, 2025, as compared to the same period of the prior year. This decrease was primarily due to IRA tax credits recorded in the three months ended December 31, 2025, which contributed $62 million to the overall decrease. These credits were recognized as a reduction in Operating and maintenance expense based on what the credits were intended to reimburse. See Note 1 — Summary of Significant Accounting Policies — Government Grants.

Depreciation and amortization expense increased $14 million for the three months ended December 31, 2025, as compared to the same period of the prior year. This increase was primarily driven by an increase in depreciation expense due to additions of net completed plant. Partially offsetting this increase was a $15 million decrease in depreciation expense due to the December 2025 Browns Ferry SLR, which extended the useful life of the three nuclear units for an additional 20 years.

Tax equivalents expense increased $7 million for the three months ended December 31, 2025, as compared to the same period of the prior year. This change is primarily driven by an increase in TVA's revenue from sales of electricity in 2025, which is used as the basis for calculating tax equivalent expense.

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due to the recovery of purchased power costs from the previous quarter that were the result of higher than expected purchased power prices due to colder than average temperatures.

Operating and maintenance expense increased $7 million for the three months ended June 30, 2025, as compared to the same period of the prior year. This increase was primarily due to a $19 million increase in outage expense primarily due to an increase in nuclear outage days.

Depreciation and amortization expense increased $30 million for the three months ended June 30, 2025, as compared to the same period of the prior year. The increase was primarily driven by a $9 million increase in amortization expense of finance leases and amortization expense of decommissioning costs recovered in rates, as well as an increase due to depreciation of additions to net completed plant.

Tax equivalents expense increased $25 million for the three months ended June 30, 2025, as compared to the same period of the prior year. This change is primarily driven by an increase in TVA's revenue from sales of electricity in 2024, which is used as the basis for calculating tax equivalent expense.

Nine Months Ended June 30, 2025, Compared to Nine Months Ended June 30, 2024

Fuel expense increased $113 million for the nine months ended June 30, 2025, as compared to the same period of the prior year. An increase of $192 million was due primarily to higher effective fuel rates related to using higher cost coal and natural gas generation due to less availability of nuclear generation as compared to the same period of the prior year. Partially offsetting this increase was a decrease of $42 million due to less availability of nuclear generation and more availability of hydro generation as compared to the same period of the prior year. Additionally, fuel expense decreased $37 million related to the deferral of unplanned coal and gas costs due to less availability of nuclear generation.

Purchased power expense increased $377 million for the nine months ended June 30, 2025, as compared to the same period of the prior year. This increase was primarily due to higher demand for energy and less availability of TVA nuclear generation, resulting in an increase of $358 million.

Operating and maintenance expense increased $100 million for the nine months ended June 30, 2025, as compared to the same period of the prior year. This increase was primarily due to $113 million of increased payroll and benefit costs primarily due to severance costs associated with ETP efforts and labor escalation for cost of living increases. In addition, there was a $36 million increase in outage expense primarily due to an increase in nuclear outage days. Partially offsetting these increases was a $27 million decrease in expenditures related to project contract labor primarily due to higher power operations performance activities and other natural gas project work in the prior year.

Depreciation and amortization expense increased $98 million for the nine months ended June 30, 2025, as compared to the same period of the prior year. The increase was primarily driven by an increase of $33 million related to amortization expense of finance leases and amortization expense of decommissioning costs recovered in rates and an increase in depreciation expense of $18 million related to the decision in April 2024 to retire Kingston. Additionally, there was an increase due to depreciation of additions to net completed plant.

Tax equivalents expense increased $55 million for the nine months ended June 30, 2025, as compared to the same period of the prior year. This change is primarily driven by an increase in TVA's revenue from sales of electricity in 2024, which is used as the basis for calculating tax equivalent expense.

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Generating Sources. The following tables show TVA's generation and purchased power by generating source as a percentage of all electrical power generated and purchased (based on kWh) for the periods indicated.

Total Power Supply by Generating SourceFor the three months ended June 30(millions of kWh)
Total Power Supply by Generating SourceFor the three months ended December 31(millions of kWh)
	2025			2024
Nuclear	1216,~~683~~648	3141	%	1613,~~627~~990	4136	%
Natural gas and/or oil-fired(1)	98,~~301~~720	2322	%	8,~~876~~862	2223	%
Coal-fired	65,~~196~~440	1514	%	45,~~791~~336	1214	%
Hydroelectric	32,~~537~~661	97	%	23,~~510~~359	68	%
Total TVA-operated generation facilities(2)(3)	3133,~~717~~469	7884	%	3231,~~804~~547	81	%
Purchased power (natural gas and/or oil-fired)(4)	43,~~067~~153	108	%	4,~~365~~041	11	%
Purchased power (other renewables)(5)	~~1,846~~753	52	%	~~1,720~~581	41	%
Purchased power (coal-fired)	1,~~617~~399	43	%	~~530~~934	12	%
Purchased power (hydroelectric)	1,171	3	%	1,014	3	%
Purchased power (wind)(6)	907	2	%	1,024	3	%
Total purchased power(3)	8,701	22	%	7,629	19	%
Purchased power (hydroelectric)	573	1	%	657	2	%
Total power supply	40,418	100	%	40,433	100	%
Total purchased power(3)	6,785	16	%	7,237	19	%
Total power supply	40,254	100	%	38,784	100	%

Notes

(1) The generation for the three months ended ~~June~~December 3031, ~~2025~~2024 ~~includes~~included 358 thousand kWh of pre-commercial generation at Johnsonville Aeroderivative CT ~~Units 21-30~~. ~~The generation for the three months ended June 30, 2024 includes no kWh of pre-commercial generation at Paradise CT Units 5-7.~~

(2) Generation from TVA-owned renewable resources (non-hydroelectric) is less than one percent for all periods shown and therefore is not represented in the table above.

(3) Raccoon Mountain Pumped-Storage Plant net generation is allocated against each TVA-operated generation facility and purchased power type for both the three months ended ~~June~~December 3031, 2025, and the three months ended December 31, 2024. See Part I, Item 1, Business — Power Supply and Load Management Resources — Hydroelectric Pumped-Storage in the Annual Report for a discussion of Raccoon Mountain Pumped-Storage Plant.

(4) Purchased power (natural gas and/or oil-fired) includes generation from Caledonia Combined Cycle Plant ("Caledonia CC"), which is currently a leased facility operated by TVA. Generation from Caledonia CC was 1,~~484~~020 million kWh and 1,~~364~~238 million kWh for the three months ended ~~June~~December 3031, 2025, and 2024, respectively.

(5) Purchased power (other renewables) includes purchased power from the following renewable sources: solar, ~~wind,~~ biomass, and renewable cogeneration. TVA acquires Renewable Energy Certificates ("RECs") in connection with certain purchased power transactions and sells some of these RECs to customers.

Total Power Supply by Generating SourceFor the nine months ended June 30(millions of kWh)
	2025			2024
Nuclear	38,584	31	%	50,933	43	%
Natural gas and/or oil-fired(1)	30,525	25	%	25,048	21	%
Coal-fired	17,814	15	%	14,734	12	%
Hydroelectric	10,783	9	%	9,741	8	%
Total TVA-operated generation facilities(2)(3)	97,706	80	%	100,456	84	%
Purchased power (natural gas and/or oil-fired)(4)	12,897	11	%	10,647	9	%
Purchased power (other renewables)(5)	5,213	4	%	4,649	4	%
Purchased power (coal-fired)	3,978	3	%	1,544	1	%
Purchased power (hydroelectric)	2,884	2	%	2,224	2	%
Total purchased power(3)	24,972	20	%	19,064	16	%
Total power supply	122,678	100	%	119,520	100	%

(6) At December 31, 2024, 1,024 megawatts ("MWs") previously classified as Purchased power (other renewables) has been reclassified to Purchased power (wind) to conform to current year presentation.

In addition to power supply sources included here, TVA offers energy efficiency programs that effectively reduce energy needs. In 2026, TVA expects to invest $133 million on its energy efficiency programs and anticipates approximately 400 gigawatt hours of net incremental energy efficiency savings. During the three months ended December 31, 2025, TVA invested $27 million on energy efficiency programs.

Interest Expense. Interest expense and interest rates for the three months ended December 31, 2025, and the three months ended December 31, 2024, were as follows:


Interest Expense and Rates (in millions)
	Three Months Ended December 31
		2025			2024			Percent Change
Interest expense(1)		$	309		$	280		10.4	%

Average blended debt balance(2)		$	23,406		$	21,509		8.8	%

Average blended interest rate(3)		5.09		%	4.99		%	2.0	%

Notes

(1) The generation for the nine months ended June 30, 2025 includes 94 thousand kWh of pre-commercial generation at Johnsonville Aeroderivative CT Units 21-30. The generation for the nine months ended June 30, 2024 includes 137 thousand kWh of pre-commercial generation at Paradise CT Units 5-7, all of which was recognized in the three months ended December 31, 2023.

(2) Generation from TVA-owned renewable resources (non-hydroelectric) is less than one percent for all periods shown and therefore is not represented in the table above.

(3) Raccoon Mountain Pumped-Storage Plant net generation is allocated against each TVA-operated generation facility and purchased power type for both the nine months ended June 30, 2025, and 2024. See Part I, Item 1, Business — Power Supply and Load Management Resources — Hydroelectric Pumped-Storage in the Annual Report for a discussion of Raccoon Mountain Pumped-Storage Plant.

(4) Purchased power (natural gas and/or oil-fired) includes generation from Caledonia Combined Cycle Plant ("Caledonia CC"), which is currently a leased facility operated by TVA. Generation from Caledonia CC was 3,958 million kWh and 3,240 million kWh for the nine months ended June 30, 2025, and 2024, respectively.

(5) Purchased power (other renewables) includes purchased power from the following renewable sources: solar, wind, biomass, and renewable cogeneration. TVA acquires RECs in connection with certain purchased power transactions and sells some of these RECs to customers.

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In addition to power supply sources included here, TVA offers energy efficiency programs that effectively reduce energy needs. In 2025, TVA expects to invest $99 million on its energy efficiency programs and anticipates approximately 289 gigawatt hours of net incremental energy efficiency savings.

Interest Expense. Interest expense and interest rates for the three and nine months ended June 30, 2025, and the three and nine months ended June 30, 2024, were as follows:

Interest Expense and Rates(in millions)
	Three Months Ended June 30								Nine Months Ended June 30
	2025			2024			Percent Change		2025			2024			Percent Change
Interest expense(1)	$	307		$	267		15.0	%	$	880		$	795		10.7	%
Average blended debt balance(2)	$	22,775		$	21,020		8.3	%	$	22,270		$	20,862		6.7	%
Average blended interest rate(3)	5.11		%	4.91		%	4.1	%	5.03		%	4.90		%	2.7	%

Notes

(1) Includes amortization of debt discounts, issuance, and reacquisition costs, net.

(2) Includes average balances of long-term power bonds, debt of variable interest entities ("VIEs"), and discount notes.

(3) Includes interest on long-term power bonds, debt of ~~VIE~~VIEs, and discount notes.

Total interest expense increased $4029 million for the three months ended ~~June~~December 3031, 2025, as compared to the same period of the prior year. This increase was primarily driven by a $3233 million increase from higher average balances and rates on long-term debt~~, and a $17 million increase in interest on other financing leases, primarily the new lease financing arrangement with Johnsonville Aeroderivative Combustion Turbine Generation LLC ("JACTG")~~. This increase was partially offset by a $93 million decrease in interest on short-term debt primarily due to lower average balances and rates. as well as a $1 million decrease from lower other interest expense.

Total interest expense increased $85 million for the nine months ended June 30, 2025, as compared to the same period of the prior year. This increase was primarily driven by a $54 million increase from higher average balances and rates on long-term debt, and a $41 million increase in interest on other financing leases, primarily the new lease financing arrangement with JACTG. This increase was partially offset by a $10 million decrease in interest on short-term debt primarily due to lower average balances and rates.48

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Liquidity and Capital Resources

Sources of Liquidity

TVA depends on various sources of liquidity to meet cash needs and contingencies. TVA's primary sources of liquidity are cash from operations and proceeds from the issuance of short-term debt in the form of discount notes, along with periodic issuances of long-term debt. TVA's balance of short-term debt typically changes frequently as TVA issues discount notes to meet short-term cash needs and pay scheduled maturities of discount notes and long-term debt. TVA’s next significant power bond maturity is $1.40 billion in ~~November~~February ~~2025~~2027. The periodic amounts of short-term debt issued are determined by near-term expectations for cash receipts, cash expenditures, and funding needs, while seeking to maintain a target range of cash and cash equivalents on hand. TVA may hold higher cash balances from time to time in response to potential market volatility or other business conditions. In addition, cash balances may include collateral received from counterparties.

In addition to cash from operations and proceeds from the issuance of short-term and long-term debt, TVA's other sources of potential liquidity include four revolving credit facilities totaling $2.7 billion, a $150 million credit facility with the United States Department of the Treasury ("U.S. Treasury"), and proceeds from other financings. See Note 13 — Debt and Other Obligations — Credit Facility Agreements. The TVA Board of Directors ("TVA Board") authorized TVA to issue power bonds and enter into other financing arrangements in an aggregate amount not to exceed $43.0 billion during ~~2025~~2026. ~~In the second quarter of 2025, TVA issued $1.25 billion of power bonds maturing in February 2055. In the third quarter of 2025, TVA issued $1.5 billion of power bonds maturing in May 2035.~~ Other financing arrangements may include, but are not limited to, lease financings, transactions supported by certain PPAs, energy prepayments from customers, and other similar agreements. TVA may also engage from time to time in other alternative forms of financing such as sales of receivables, or loans~~, from time to time~~.

The Tennessee Valley Authority Act of 1933, as amended ("TVA Act"), authorizes TVA to issue bonds, notes, or other evidences of indebtedness (collectively, "Bonds") in an amount not to exceed $30.0 billion outstanding at any time. Bonds outstanding, excluding unamortized discounts and premiums and net exchange gains from foreign currency transactions, at ~~June~~December 3031, 2025, were $21.19 billion (including current maturities). The balance of Bonds outstanding directly affects TVA's capacity to meet operational liquidity needs and to strategically use Bonds to fund certain capital investments as management and the TVA Board may deem desirable. Other options for financing not subject to the limit on Bonds, ~~including lease financings,~~ could provide supplementary funding if needed. Currently, TVA expects to utilize a combination of Bonds, other financings, or potentially additional power revenues through power rate increases to meet its ongoing operational liquidity needs while making planned capital investments. TVA may also receive funding by filing for credits available under the Inflation Reduction Act of 2022 ("IRA"), by applying for grants or other funding available under the Bipartisan Infrastructure Law ("BIL"), from other federal funding opportunities, or from other third-party financing arrangements. See Lease Financings below, Key Initiatives and Challenges — Funding Opportunities, Note 10 — Variable Interest Entities, and Note 13 — Debt and Other Obligations for additional information.

50TVA may from time to time seek to retire or purchase its outstanding debt through cash purchases and/or exchanges for securities, in open market purchases, in privately negotiated transactions, or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, TVA's liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material.

~~Table~~Debt Securities. TVA's Bonds are not obligations of ~~Contents Draft~~the U.S., and the U.S. does not guarantee the payments of principal or interest on Bonds. TVA's Bonds consist of power bonds and discount notes. Power bonds have maturities of between one and 50 years. At December 31, 2025, the average maturity of long-term power bonds was 14.47 years, and the weighted average interest rate was 4.~~0 07/24/~~74 percent. Discount notes have maturities of less than one year. Power bonds and discount notes have a first priority and equal claim of payment out of net power proceeds. Net power proceeds are defined as the remainder of TVA's gross power revenues after deducting the costs of operating, maintaining, and administering its power properties and tax equivalents, but before deducting depreciation accruals or other charges representing the amortization of capital expenditures, plus the net proceeds from the sale or other disposition of any power facility or interest therein. In addition to power bonds and discount notes, TVA had long-term debt associated with certain VIEs outstanding at December 31, 2025. See ~~5:00~~Lease PMFinancings below, Note 10 — Variable Interest Entities, and Note 13 — Debt and Other Obligations for additional information.

potentially additional power revenues through power rate increases to meet its ongoing operational liquidity needs while making planned capital investments through the decade. TVA may also utilize available funding through the Inflation Reduction Act of 2022 ("IRA") and the Bipartisan Infrastructure Law ("BIL"), other federal funding opportunities, or other third-party financing arrangements. See Lease Financings below, Key Initiatives and Challenges — Executive Actions, Note 10 — Variable Interest Entities, and Note 13 — Debt and Other Obligations for additional information. 49

~~TVA~~Table ~~may~~of from time to time seek to retire or purchase its outstanding debt through cash purchases and/or exchanges for securities, in open market purchases, privately negotiated transactions, or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, TVA's liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material. Contents

Debt Securities. TVA's Bonds are not obligations of the U.S., and the U.S. does not guarantee the payments of principal or interest on Bonds. TVA's Bonds consist of power bonds and discount notes. Power bonds have maturities of between one and 50 years. At June 30, 2025, the average maturity of long-term power bonds was 14.62 years, and the weighted average interest rate was 4.92 percent. Discount notes have maturities of less than one year. Power bonds and discount notes have a first priority and equal claim of payment out of net power proceeds. Net power proceeds are defined as the remainder of TVA's gross power revenues after deducting the costs of operating, maintaining, and administering its power properties and tax equivalents, but before deducting depreciation accruals or other charges representing the amortization of capital expenditures, plus the net proceeds from the sale or other disposition of any power facility or interest therein. In addition to power bonds and discount notes, TVA had long-term debt associated with certain VIEs outstanding at June 30, 2025. See Lease Financings below, Note 10 — Variable Interest Entities, and Note 13 — Debt and Other Obligations for additional information.

The following table provides additional information regarding TVA's short-term borrowings:

Short-Term Borrowings(in millions)

At June 30, 2025

Three Months Ended June 30, 2025

Nine Months Ended June 30, 2025

At June 30, 2024

Three Months Ended June 30, 2024

Nine Months Ended June 30, 2024

At December 31, 2025

Three Months Ended December 31, 2025

At December 31, 2024

Three Months Ended December 31, 2024

Gross Amount Outstanding (at End of Period) or Average Gross Amount Outstanding (During Period)

Discount notes

$~~319~~1,175

$~~394~~558

~~$638~~

$1,~~114~~359

$~~965~~683

~~$786~~

Maximum Month-End Gross Amount Outstanding (During Period)

Discount notes

N/A

$~~461~~1,175

~~$1,541~~

N/A

$1,~~153~~359

~~$1,153~~

Weighted Average Interest Rate

Discount notes

43.2063%

43.3794%

~~4.38%~~

54.2733%

54.3968%

~~5.37%~~

TVA's rated senior unsecured Bonds are currently rated Aa1, AA+, and AA+, by Moody's Investors Service, Inc. ("Moody's"), Fitch Ratings, Inc. ("Fitch"), and S&P Global Ratings ("S&P"), respectively. TVA's short-term discount notes are not rated. TVA and the owners of TVA securities could be impacted by any downgrades of TVA's credit ratings. TVA Bonds are not obligations of the U.S.; however, because TVA is a wholly-owned corporate agency and instrumentality of the U.S. government, TVA's ratings may be impacted if the sovereign credit ratings of the U.S. are downgraded. On November 10, 2023, Moody's revised the outlook on the U.S. government's credit ratings from stable to negative, and subsequently determined on November 13, 2023, to revise the outlook on TVA's ratings from stable to negative due to the change in the government rating outlook. On May 16, 2025, Moody's downgraded the U.S. government's credit rating from Aaa to Aa1, and on May 19, 2025, Moody's subsequently downgraded TVA's rating from Aaa to Aa1, and the outlook was revised to stable. TVA was not required to post additional collateral due to the downgrade. The outlook on the ratings of TVA is also currently stable with Fitch and S&P. See Part I, Item 1A, Risk Factors — Financial, Economic, and Market Risks — TVA, together with owners of TVA securities, may be impacted by downgrades of TVA's credit ratings in the Annual Report.

Lease Financings. TVA has entered into certain leasing transactions with special purpose entities ("SPEs") to obtain third-party financing for its facilities. These SPEs are sometimes identified as VIEs of which TVA is determined to be the primary beneficiary. TVA is required to account for these VIEs on a consolidated basis. See Note 10 — Variable Interest Entities.

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Summary Cash Flows

A major source of TVA's liquidity is operating cash flows resulting from the generation and sale of electricity. Cash, cash equivalents, and restricted cash totaled $522 million and $~~521~~553 million at ~~June~~December 3031, 2025 and 2024, respectively. A summary of cash flow components for the ~~nine~~three months ended ~~June~~December 3031, 2025 and 2024, follows:

Cash provided by (used in):

Operating Activities. TVA's cash flows from operations are primarily driven by sales of electricity, fuel expense, and operating and maintenance expense. The timing and level of cash flows from operations can be affected by the weather, changes in working capital, commodity price fluctuations, outages, and other project expenses.

Net cash flows provided by operating activities ~~increased~~decreased $~~137~~120 million for the ~~nine~~three months ended ~~June~~December 3031, 2025, as compared to the same period of the prior year. The ~~increase~~decrease was primarily due to ~~higher~~the ~~revenue~~timing ~~collections. Revenue~~of ~~collections~~vendor ~~increased~~payments ~~primarily~~and ~~due~~higher tofuel ~~the~~and ~~increase~~purchased inpower ~~the~~payments ~~2025~~as ~~wholesale~~compared ~~base rate in addition~~ to ~~higher~~the ~~sales~~same ~~volume~~period ~~and~~of ~~higher~~the ~~effective~~prior ~~fuel rates~~year. This ~~increase~~decrease was partially offset by ~~higher~~an ~~payroll~~increase ~~and~~in ~~benefit-related~~revenue ~~payments~~collection indriven ~~addition~~by to higher ~~fuel~~sales ~~and purchased power payments as compared to the same period of the prior year~~volume.

Investing Activities. The majority of TVA's investing cash flows are due to investments to acquire, upgrade, or maintain generating and transmission assets, including environmental projects and the purchase of nuclear fuel.

Net cash flows used in investing activities increased $1.1 billion for the nine months ended June 30, 2025, as compared to the same period of the prior year, driven by increased expenditures for capacity expansion projects, primarily related to natural gas plant builds and upgrades to the nuclear fleet. 50

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Net cash flows used in investing activities decreased $170 million for the three months ended December 31, 2025, as compared to the same period of the prior year. The decrease was driven by less spend related to capacity expansion projects, primarily related to the Cumberland natural gas project nearing completion and higher spend on the Kingston natural gas project in the prior year. In addition, during the three months ended December 31, 2025, TVA received cash related to insurance proceeds for property recovery and IRA tax credits related to capital assets.

Financing Activities. TVA's cash flows provided by or used in financing activities are primarily driven by the timing and level of cash flows provided by operating activities, cash flows used in investing activities, and net issuance and redemption of debt instruments to maintain a strategic balance of cash on hand.

Net cash provided by financing activities ~~increased~~decreased $~~944~~1.2 ~~million~~billion for the ~~nine~~three months ended ~~June~~December 3031, 2025, as compared to the same period of the prior year,. The decrease is primarily due to ~~higher~~the ~~debt~~timing ~~issuances~~of ~~and proceeds from~~ debt ofmaturities ~~variable~~related ~~interest~~to ~~entities. Higher~~power ~~net~~bond ~~cash~~redemptions, ~~flows~~combined ~~provided~~with bylower ~~operating~~proceeds ~~activities~~from ~~were~~debt ~~offset~~of byvariable ~~higher~~interest ~~net~~entities, ~~cash~~along ~~used~~with ~~in investing activities which resulted in~~ the ~~need~~use ~~for~~of ~~net~~cash ~~debt~~on ~~issuances~~hand to ~~maintain~~pay ~~targeted~~bond ~~cash balance levels during the period~~maturities. TVA anticipates a need to increase debt in the coming years as it continues to invest in power system assets, which may result in positive net cash flows provided by financing activities in future periods.

Contractual Obligations

TVA has certain obligations and commitments to make future payments under contracts. TVA's contractual obligations are discussed in the Annual Report in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources, and Note 89 — Leases, Note 1012 — Variable Interest Entities, Note 1415 — Debt and Other Obligations, Note 2021 — Benefit Plans, and Note 2223 — Commitments and Contingencies~~. During~~ the nine months ended June 30, 2025, TVA’s fuel purchase obligations increased $862 million primarily due to new and/or extended contracts for natural gas, natural gas storage, coal, and nuclear fuel. Natural gas commitments increased $145 million as a result of ~~entering into multiple natural gas contracts with new commitments from 2025 to 2035, of which $120 million is estimated to be paid during~~ the ~~remainder~~Notes of 2025. Natural gas storage commitments increased $285 million as a result of entering into three new contracts and extending three contracts, which increased commitments from 2025 through 2034, of which $7 million is estimated to ~~be paid during~~ the ~~remainder~~Consolidated ofFinancial ~~2025. Coal~~Statements ~~commitments~~in ~~increased by $369 million due primarily to entering into three new coal contracts with new commitments from 2025 through 2029, of which $64 million is estimated to be paid during~~ the ~~remainder~~Annual ~~of 2025~~Report. ~~Nuclear fuel commitments increased $118 million due primarily to three new~~

52In December 2025, TVA signed an agreement for a battery energy storage system which is expected to commence by June 2029. The term of the agreement is 20 years and capacity payments over the term of the agreement are expected to total over $500 million. This agreement includes a lease component.

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nuclear fuel contracts with new commitments from 2028 through 2035. In addition, TVA entered into a new power purchase agreement ("PPA") totaling $293 million with commitments from 2025 to 2028, of which $23 million is estimated to be paid during the remainder of 2025, and three new long-term service agreements totaling $200 million with commitments from 2025 to 2045, of which less than $1 million is estimated to be paid during the remainder of 2025.

Key Initiatives and Challenges

There have been no material changes to the key initiatives and challenges described in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges of the Annual Report, except as described below.

~~Cost Reduction Initiatives~~Capacity

~~TVA’s~~Natural ~~demand~~Gas ~~continues~~Fired ~~to grow, driving the need for significant capital investments in its power system~~Units. TVA ~~must~~is ~~continue~~constructing toa ~~drive~~200 ~~efficiencies~~MW ~~and~~aeroderivative ~~cost~~CT ~~savings~~project ~~across~~at ~~the enterprise to provide low-cost, reliable power, while funding the capital investment needed to meet growing demand.~~ TVA's ~~has~~Allen ~~undertaken a cost optimization initiative designed to reduce planned cost increases by approximately $950 million during the three-year period from 2024 to 2026~~site. ~~TVA~~An ~~met~~approved ~~its~~construction ~~reduction~~air ~~target~~permit ~~for~~was ~~2024~~received ~~and~~in ~~has~~December ~~plans to meet the targets set for~~ 2025 ~~and 2026~~. ~~See~~As ~~Part~~of IIDecember 31, ~~Item 7~~2025, ~~Management's~~TVA ~~Discussion~~had ~~and~~spent ~~Analysis~~$240 ofmillion ~~Financial~~on ~~Condition~~the ~~and~~project ~~Results~~at ofAllen ~~Operations — Key Initiatives~~ and ~~Challenges~~could ~~— Optimum~~spend ~~Energy~~up ~~Portfolio~~to inan ~~the~~additional ~~Annual~~$123 ~~Report~~million.

~~This~~TVA ~~effort~~is ~~has~~constructing ~~evolved~~a ~~into~~350 anMW ~~Enterprise~~project ~~Transformation~~at ~~Program ("ETP") designed to enable~~ TVA's toLagoon ~~deliver~~Creek atsite ~~least~~for ~~$500~~four ~~million~~additional ofCTs. TVA ~~sustainable~~completed ~~reductions~~an toEIS ~~planned~~for ~~cost~~16 ~~increases~~units inat ~~2026~~the ~~and~~site ~~beyond~~prior to ~~support~~construction ~~future~~of ~~fleet~~the ~~investments~~currently ~~needed~~operational to12 ~~meet growing demand. TVA's ETP is focused on improving financial health~~units, ~~enhancing~~and ~~asset~~in ~~performance,~~December ~~automating processes~~2025, ~~optimizing~~TVA ~~third-party~~deemed ~~spend~~that ~~through supply chain, and making~~ the ~~workforce~~existing ~~more~~EIS ~~efficient. As~~fulfilled ~~part~~National ofEnvironmental ~~these~~Policy ~~efforts,~~Act ~~certain~~("NEPA") ~~employees~~requirements ~~will be eligible~~ for ~~severance~~the ~~payments~~additional CTs. As of ~~June~~December 3031, 2025, TVA had ~~accrued~~spent $142 million ~~related~~on tothe ~~estimated~~project ~~future~~at ~~severance~~Lagoon ~~payments. The~~Creek ~~ETP is ongoing,~~ and ~~any~~could ~~potential~~spend ~~future~~up ~~severances~~to ~~costs~~an ~~are~~additional ~~uncertain~~$668 ~~at this time~~million.

~~Optimum~~As ~~Energy~~of ~~Portfolio~~September 30, 2025, TVA had 10 idled units at Johnsonville Combustion Turbine Facility (Units 1-10). In the first quarter of 2026, TVA made the decision to continue operating these units, with a total summer net capability of 500 MWs. The continued operation of these units is subject to real-time bulk electrical system operating constraints including transmission line loading limitations, fuel availability such as coal and gas, seasonal river reservoir levels, fuel blend, severe weather events, environmental and/or other regulatory constraints, transmission system outages, generator outages, or generator derates.

~~Additional load growth for the foreseeable future is expected, and new capacity will be needed to support this load growth and replace retiring and expiring capacity~~Nuclear. InAmid ~~April~~growth ~~of 2025, TVA released a request for proposals for up to 2,250 MW of new build energy resources for potential PPAs. Energy resources that may participate~~ in ~~this RFP are utility~~energy-~~scale~~intensive ~~natural gas~~sectors, ~~battery~~including ~~energy~~artificial ~~storage~~intelligence ~~systems~~and ~~("BESS"),~~data ~~solar plus BESS~~centers, ~~and solar generation that demonstrate the ability to be commercially operable by CY 2031.~~ TVA is ~~currently~~exploring ~~evaluating these proposals.~~a

~~TVA~~diverse ~~worked~~range ~~with~~of ~~stakeholders~~nuclear ~~and~~technologies ~~the~~to ~~public~~help onshape the ~~2025~~most ~~Integrated~~effective, ~~Resource Plan ("IRP")~~scalable, aand ~~comprehensive~~secure ~~plan~~solutions ~~that~~for ~~will~~the ~~help shape TVA~~region's ~~energy system through 2050. The final IRP was expected to be published in 2025; however, publication of the final IRP has been delayed.~~

~~Natural~~growing ~~Gas-Fired Units~~economy. ~~TVA continues to evaluate adding flexible lower carbon-emitting gas plants as a strategy~~

toNuclear ~~maintain~~Fleet ~~reliability~~License Extensions. ~~Pre-commercial~~Subject ~~plant~~to ~~operations~~the ~~began~~completion onof ~~Johnsonville~~all ~~Aeroderivative~~appropriate CTenvironmental ~~Units~~reviews, ~~25-28~~TVA inis ~~the~~seeking ~~first~~to ~~quarter~~renew ofall ~~2025~~nuclear ~~and~~generation ~~began~~units' onlicenses ~~Units~~for ~~21-24~~an ~~and~~additional ~~29-30~~20 years. A license renewal application was submitted to the NRC in January 2024 for the ~~second~~three ~~quarter~~units ofat ~~2025. Units~~Browns ~~21-25~~Ferry, and ~~27-30~~the ~~became~~renewal ~~operational~~was onapproved ~~May~~by 6,the NRC in December 2025.

~~TVA~~Hydroelectric isPumped-Storage. New ~~replacing~~hydroelectric ~~generation~~pumped-storage ~~for~~is one ~~unit~~of atseveral ~~Cumberland~~technologies ~~Fossil~~that ~~Plant~~TVA ~~with~~is aexploring ~~1,450~~to MWhelp ~~combined~~meet ~~cycle~~peak ~~plant~~demands ~~that~~and isallow ~~expected~~more tobaseload begeneration ~~operational~~while byensuring the ~~end~~reliability and resiliency of CYthe ~~2026~~grid. AsIn ~~of June 30~~2023, ~~2025,~~ TVA ~~had~~announced ~~spent~~sites ~~$1.7 billion~~for ona ~~this~~potential ~~project~~future pumped-storage facility. ~~See~~In ~~Part~~May II2025, ~~Item~~a 7,draft ~~Management's~~Environmental ~~Discussion~~Impact ~~and~~Statement ~~Analysis~~("EIS") ofwas ~~Financial~~made ~~Condition~~available ~~and~~for ~~Results~~public ofcomment ~~Operations — Key Initiatives~~ and ~~Challenges~~the —final ~~Natural~~EIS ~~Gas-Fired~~was ~~Units~~published in ~~the~~November ~~Annual Report~~2025.

To operate the Cumberland Combined Cycle Plant, TVA has contracted for the transportation of gas from a gas pipeline that will need to be constructed. To construct the pipeline, the pipeline company, Tennessee Gas Pipeline Company, L.L.C. (“Tennessee Gas”), obtained permits from various state and federal agencies and a certificate of public convenience and necessity from the Federal Energy Regulatory Commission (“FERC”). Challenges to two permits were brought in the United States Court of Appeals for the Sixth Circuit ("Sixth Circuit"), and on October 11, 2024, the Sixth Circuit issued orders staying the permits until the court could review the merits of these cases. On April 4, 2025, the Sixth Circuit denied the petitions for review in both cases, and on April 15, 2025, the Sixth Circuit lifted the temporary stay. A challenge to the FERC certificate is pending before the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”). The D.C. Circuit heard oral arguments on the merits on March 4, 2025, but has not yet issued a ruling. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Natural Gas-Fired Units in the Annual Report and Note 21 — Contingencies and Legal Proceedings — Legal Proceedings — Challenge to Certificate for Cumberland Pipeline in this Quarterly Report.51

~~TVA~~Table ~~is constructing 1,500 MW~~ of natural gas generation at TVA's Kingston site that is expected to be operational by the end of CY 2027. As of June 30, 2025, TVA had spent $1.5 billion on this project. In addition, in March 2025, TVA issued a Contents

53Battery Energy Storage. In December 2025, TVA signed an agreement for a battery energy storage system which is expected to commence by June 2029. Capacity payments are expected to total over $500 million.

~~Table~~Funding ~~of Contents Draft 4.0 07/24/2025 5:00 PM~~Opportunities

~~request~~TVA ~~for~~continues ~~proposal~~to ~~for~~evaluate ~~battery~~and ~~storage~~pursue ~~related~~funding toopportunities under the ~~Kingston~~IRA ~~energy~~and ~~complex. See~~the ~~Part~~BIL ~~II,~~to ~~Item~~help 7,offset ~~Management's~~the ~~Discussion~~cost ~~and Analysis~~ of ~~Financial~~qualifying ~~Condition~~projects. The ~~and~~IRA ~~Results~~makes ofcertain ~~Operations~~tax-exempt —entities, ~~Key~~including ~~Initiatives~~TVA, ~~and~~eligible ~~Challenges~~for —a ~~Natural Gas~~direct-~~Fired~~pay ~~Units~~option infor ~~the~~certain ~~Annual~~tax ~~Report~~credits for ~~additional~~zero-emission ~~information~~energy ~~regarding~~projects ~~this~~or ~~project~~generation. As ~~and~~of ~~Note~~December 31, 212025, —TVA ~~Contingencies~~had ~~and~~recorded ~~Legal~~$112 ~~Proceedings~~million —in ~~Legal~~Accounts ~~Proceedings~~receivable, —net ~~Challenge~~related to ~~Kingston~~these ~~Construction~~tax ~~Permit~~credits. In inaddition, ~~this~~TVA ~~Quarterly~~received ~~Report~~$26 ~~for~~million ~~information~~during ~~about~~the athree ~~challenge~~months toended ~~the~~December 31, ~~Kingston~~2025, ~~construction~~related ~~permit~~to these credits.

In ~~2024~~January 2025, TVA ~~made~~and ~~available to the public~~ a ~~draft~~consortium ~~environmental~~of ~~impact~~co-applicants ~~statement~~ ("~~EIS~~consortium") toapplied ~~assess~~for ~~the~~a ~~impacts~~U.S. ~~associated~~DOE ~~with~~grant to support the ~~construction~~potential ~~and~~future ~~operation~~deployment of a ~~500~~small MWmodular ~~simple~~reactor ~~cycle~~("SMR") CT at ~~New~~TVA’s ~~Caledonia~~Clinch onRiver ~~TVA land~~site. ~~The~~In ~~final~~December ~~EIS was published in January~~ 2025, ~~and~~ TVA ~~documented~~and ~~its~~the ~~final~~consortium ~~decision~~were ~~with~~selected by the ~~Record~~DOE ofto ~~Decision~~enter onnegotiations ~~February~~for ~~13,~~an ~~2025. As~~approximate of$400 ~~June~~million ~~30,~~grant ~~2025,~~to ~~TVA~~accelerate ~~had~~the ~~spent~~deployment ~~$214~~of ~~million~~SMRs. The onupcoming ~~the~~phase ~~New~~will ~~Caledonia~~focus ~~project~~on ~~and~~fund ~~could~~allocation ~~spend~~in upaddition to anestablishing ~~additional~~terms ~~$648~~and ~~million~~conditions.

TVA is also exploring a 200 MW aeroderivative CT project at TVA's Allen site, and the draft EIS was made available for public comment in March 2025. In addition, TVA is exploring a 350 MW CT project at TVA's Lagoon Creek site. As of June 30, 2025, TVA had spent less than $1 million on the project at Lagoon Creek and could spend up to an additional $670 million. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Natural Gas-Fired Units in the Annual Report.

Hydroelectric Pumped-Storage. TVA is exploring alternatives for a potential future pumped-storage facility, and the draft EIS was made available for public comment in May 2025.

Renewable Power Purchase Agreements. TVA issued a carbon-free RFP in 2022, and in the second quarter of 2025, TVA signed one power purchase agreement for 150 MW of solar generation. In total, TVA signed seven power purchase agreements totaling 1,141 MW of solar generation and 220 MW of battery storage capacity from the carbon-free RFP which are expected to come online by the end of CY 2028. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Renewable Power Purchase Agreements in the Annual Report.

Self-Directed Solar. TVA has elected to pursue a competitive selection process with third parties for the development of a photovoltaic solar facility and plans to enter into a long-term PPA to purchase the energy generated by the facility. An RFP was issued to this effect in 2024, and selection of the awardee is anticipated by the end of CY 2025. In addition, a draft EIS was made available for public comment in January 2025. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Self-Directed Solar in the Annual Report.

Small Modular Reactors. In January 2025, TVA and a consortium of co-applicants applied for a U.S. Department of Energy ("DOE") grant to support the potential development and future deployment of a small modular reactor (“SMR”) at TVA’s Clinch River site. The potential development and any future deployment of an SMR at the Clinch River site are subject to TVA Board approval. TVA is following a structured planning process that advances the Clinch River project in phases at which the TVA Board will evaluate and consider approving any next steps. This funding could support not only the deployment of this first-of-a-kind technology, but also help establish the supply chain for advanced nuclear and support future deployment of the reactor across the United States. In April 2025, TVA and the consortium of co-applicants submitted a revised application to address new DOE guidance regarding the grant.

In the second quarter of 2025, TVA requested public comment on a draft Supplemental Environmental Impact Statement that addresses the potential environmental effects associated with site preparation, construction, operation, and decommissioning of one SMR, the GE Hitachi Nuclear Energy BWRX-300, at the Clinch River site. In the third quarter of 2025, TVA submitted a construction permit application to the Nuclear Regulatory Commission ("NRC") for a BWRX-300 reactor at the Clinch River Nuclear Site. In July 2025, the NRC completed the acceptance review of the application and accepted the application. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Small Modular Reactors in the Annual Report.

Automated Energy Exchange Platform. In July 2023, the D.C. Circuit remanded FERC’s approval of the Southeast Energy Exchange Market (“SEEM”), sending the matter back to FERC for additional proceedings. On March 14, 2025, after further review of the record, FERC affirmed its approval of SEEM. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Automated Energy Exchange Platform in the Annual Report.

Extreme Flooding Preparedness

Since 2009, TVA has performed further hydrology modeling of portions of the TVA watershed using updated modeling tools. TVA submitted updated hydrology models to the NRC incorporating an approved methodology for Watts Bar Nuclear Plant Units 1 and 2 in December 2023. The new hydrologic analysis was approved by the NRC in May 2025.

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Sequoyah Nuclear Plant Unit 2

Sequoyah Unit 2 tripped on July 30, 2024, due to failure of the main generator. As a result, the project to restack and rewind the main generator was pulled forward in the Nuclear Life Extension plan. In June 2025, the unit returned to service and, as of June 30, 2025, TVA had spent $133 million related to this project and expects to spend an additional $8 million. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Sequoyah Nuclear Plant Unit 2 in the Annual Report.

Hurricane Helene

In late September 2024, Hurricane Helene caused significant damage in communities in East Tennessee and Western

North Carolina. TVA completed inspections at numerous dams, finding no substantial impacts. In July 2025, TVA completed debris cleanup at Douglas Reservoir to aid major disaster declarations with the Federal Emergency Management Agency ("FEMA"). TVA is receiving reimbursement from FEMA for this work. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Hurricane Helene in the Annual Report.

Coal Combustion Residuals

TVA is pursuing a programmatic approach to address environmental impacts related to the previous storage and disposal of its CCR in accordance with applicable law (“CCR Program”). Under the CCR Program, TVA performed stability remediation of all at-risk facilities, completed the conversion of all operational coal-fired plants to dry CCR storage, and ceased operation of wet CCR storage facilities.

As of June 30, 2025, TVA had spent approximately $3.3 billion on its CCR Program. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Coal Combustion Residuals in the Annual Report.

Real Property Portfolio

TVA engages in ongoing Tennessee Valley-wide real property portfolio evaluations of buildings, structures, and land as

part of the strategic real estate program, which focuses on reducing cost, right-sizing the portfolio, and aligning real estate

holdings with TVA's strategic direction. In February 2025, the TVA Board voted to surplus the Missionary Ridge and Blue Ridge buildings at the Chattanooga Office Complex, subject to Chief Executive Officer ("CEO") determination of disposal. Subject to such further CEO determination, these buildings will remain in operation until the system operations center becomes fully operational, which is expected in CY 2026. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Real Property Portfolio in the Annual Report.

Corporate Governance

Board. ~~The~~In ~~terms~~January of2026, ~~Beth~~Jeff H.Hagood, ~~Harwell~~Arthur ~~and~~Graham, ~~Brian~~Mitch E.Graves, ~~Noland~~and asRandall ~~members~~Jones oftook ~~the~~their ~~TVA~~oath ~~Board~~of ~~ended~~office ~~January~~and 3,began ~~2025,~~their ~~with~~service ~~the~~as ~~adjournment~~members of the ~~most~~TVA ~~recent session of Congress~~Board. ~~Although~~With ~~their~~these ~~terms~~new ofBoard ~~office expired May 18~~members, ~~2024,~~ the TVA ~~Act~~Board ~~permitted~~now ~~them~~has toa ~~continue to serve as Directors until the end of this session of Congress~~quorum.

L. Michelle Moore's, Joe H. Ritch's, and Beth P. Geer's appointments as members of the TVA Board ended March 27, 2025, April 1, 2025, and June 10, 2025, respectively, at the direction of the President of the United States. With the departure of Mr. Ritch in April, Director William J. Renick assumed the role of Board Chair pursuant to the TVA Board's decision on February 13, 2025, nominating Mr. Renick as chair-elect of the TVA Board.

The TVA Board now has three members and, thus, is without a quorum. The TVA Board continues to have all authorities as described in Section 1.6 of the TVA Bylaws to "continue to exercise those powers of the Board which are necessary to assure continuity of operations of [TVA] along the lines established while [TVA] was guided by a quorum of the Board, but shall not have the authority to direct [TVA] into new areas of activity, to embark on new programs, or to change [TVA's] existing direction" ("Section 1.6 Authority"). On July 15, 2025, the TVA Board delegated its Section 1.6 Authority to the CEO, provided that the delegation will become effective only in the event the TVA Board ceases to have any members and, once effective, will extend until the TVA Board regains at least one member, and provided further that the CEO will not have any authority to make decisions affecting the compensation of the CEO.

Management. On January 13, 2025, TVA announced that Thomas C. Rice had been appointed as TVA’s new Senior Vice President and Chief Financial Officer, effective January 27, 2025. In his new position, Mr. Rice is responsible for directing all of TVA’s financial functions, including treasury, risk management, accounting, financial operations and performance, financial planning, and investor relations. He succeeded John M. Thomas, III, who, on December 2, 2024, announced his retirement from TVA effective March 7, 2025. Until his retirement, Mr. Thomas served as Executive Vice President and Advisor to the CEO and assisted with the transition of his responsibilities. Mr. Rice's title changed to Executive Vice President and Chief Financial Officer, effective July 28, 2025.

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On January 29, 2025, Jeffrey J. Lyash, TVA's President and CEO, notified his executive leadership team, and the TVA Board, of his intention to retire no later than October 2, 2025. On March 31, 2025, TVA announced that Donald A. Moul had been appointed as TVA’s new President and CEO, effective April 9, 2025. Mr. Lyash continued to serve until April 30, 2025, to support the transition.

In his new position, Mr. Moul will be entitled to the compensation set forth in his offer letter accepted as of March 25, 2025, and the most significant elements of his compensation are described below.

•Mr. Moul’s salary will increase from $844,052 to $1,200,000.

•Mr. Moul will continue to be a participant in TVA’s Executive Annual Incentive Plan (“EAIP”), and his target annual incentive opportunity will increase from 80 percent to 110 percent of his annual salary. For the year ending September 30, 2025, Mr. Moul’s EAIP award will be prorated based on time spent in his two roles. The EAIP award is contingent upon continued employment through September 30, 2025, and is subject to achievement of performance goals.

•Mr. Moul will continue to be a participant in TVA’s Long-Term Incentive Plan (“LTIP”).

–Under the long-term performance (“LTP”) component of the LTIP, Mr. Moul’s target grant opportunity for the performance cycle ending on September 30, 2025, will remain $1,425,000, and his target grant opportunity for the performance cycle ending on September 30, 2026 will be $2,450,000. Except as described below in Item 5, LTP awards will vest upon the completion of the three-year performance cycles, contingent upon continued employment through the vesting dates and subject to achievement of performance goals.

–Under the long-term retention component of the LTIP, Mr. Moul’s aggregate grant opportunity for the year ending on September 30, 2025, will be $961,667, and his aggregate grant opportunity for the year ending on September 30, 2026 will be $1,050,000. Except as described below in Item 5, Mr. Moul will receive these amounts if he remains employed by TVA through the end of the retention periods.

Effective April 2, 2025, David B. Fountain’s tenure as TVA’s Executive Vice President, General Counsel and Corporate Secretary ended. Mr. Fountain’s no-fault separation from TVA was finalized on April 7, 2025.

On July 14, 2025, Tim Rausch, TVA's Executive Vice President and Chief Nuclear Officer, informed TVA's CEO of his intention to separate from service no later than March 1, 2026, and executed a separation and release agreement.

Executive Actions

On January 20, 2025, President Trump issued an executive order (“EO”) that revoked a number of EOs, including several EOs relating to environmental matters. See Environmental Matters — General below. See also Environmental Matters — Clean Air Act Programs and Regulations — Mercury and Air Toxics Standards for Electric Utility Units for a discussion of a proclamation issued on April 8, 2025. On January 20, 2025, President Trump also issued EO 14154, “Unleashing American Energy,” which in part instructed agencies to pause the disbursement of funds appropriated under the IRA and BIL. On January 21, 2025, the Office of Management and Budget issued Memorandum M-25-11, which clarified that EO 14154 requires agencies to pause disbursement of funds appropriated under the IRA or the BIL only for programs that are inconsistent with the policy of section 2 of EO 14154, related to the Green New Deal, including consumer mandates on electric vehicles and appliances. While the IRA and BIL funding freeze under EO 14154 likely does not apply to funding that TVA is seeking, other governmental actions and funding restrictions may delay any award of grants for which TVA has applied under these acts. Furthermore, President Trump and the Administration have taken a number of other actions that may impact TVA, and multiple court decisions may affect the implementation of these actions. TVA is currently reviewing these actions and related court decisions to evaluate the impact to TVA and is updating its policies and programs as appropriate.

On July 4, 2025, the President signed into law the budget reconciliation bill referred to as the One Big Beautiful Bill Act ("Act"). Among other things, the Act introduces significant changes to a range of federal tax credit programs under the IRA, many of which are directly relevant to TVA’s ongoing and planned energy initiatives. These changes include terminations, modifications, and new restrictions on various clean energy and efficiency credits and could directly affect the financial viability of clean-energy alternatives and the cost or availability of power acquired through solar PPAs. TVA continues to evaluate its energy portfolio to actively develop long-term plans to take into consideration these changes, which may impact future decisions related to the mix of energy sources TVA utilizes. TVA is currently evaluating the impact of these legislative changes.

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Environmental Matters

There have been no material changes to the environmental matters described in Part I, Item 1, Business — Environmental Matters of the Annual Report, except as described below.

~~General~~Water Quality Control Developments

Steam-Electric Effluent Guidelines. On ~~January~~December 2031, 2025, ~~President~~EPA ~~Trump~~published ~~issued~~a anfinal EOeffluent ~~that~~limitation ~~revoked~~guidelines a(“ELG”) ~~number~~rule ofthat ~~EOs,~~extends ~~including~~certain ~~the~~compliance ~~following~~deadlines ~~EOs~~in ~~discussed~~the in2024 ~~Part~~ELG I,rule ~~Item~~and 1,provides ~~Business~~authority —to ~~Environmental~~state ~~Matters~~permitting —authorities ~~Climate~~to ~~Change~~extend —other ~~Executive~~compliance ~~Actions~~deadlines in the ~~Annual~~2020 ~~Report:~~and ~~(1)~~2024 EOELG ~~13990,~~rules. TVA ~~"Protecting~~plans ~~Public~~to ~~Health~~request ~~and~~modifications to the ~~Environment~~National ~~and~~Pollutant ~~Restoring~~Discharge ~~Science~~Elimination ToSystem ~~Tackle~~permits ~~the~~for ~~Climate~~applicable ~~Crisis";~~facilities ~~(2)~~to EOincorporate ~~14008,~~the ~~"Tackling~~requirements of the ~~Climate~~rule. This ~~Crisis~~rule atprovides ~~Home~~TVA ~~and~~with ~~Abroad”;~~greater ~~(3)~~flexibility EOwith ~~14030,~~its ~~“Climate~~coal-~~Related~~fired ~~Financial~~plants ~~Risk”;~~to ~~(4)~~meet EOfuture ~~14057,~~generation ~~"Catalyzing Clean Energy Industries~~ and ~~Jobs~~reliability ~~Through~~requirements. See ~~Federal~~Part ~~Sustainability";~~I, ~~(5)~~Item ~~EO 14082~~1, ~~“Implementation~~Business of– ~~the~~Environmental ~~Energy~~Matters ~~and~~– ~~Infrastructure~~Water ~~Provisions~~Quality ofControl ~~the~~Developments ~~Inflation~~– ~~Reduction~~Steam-Electric ~~Act~~Effluent ofGuidelines ~~2022”;~~in ~~and~~the ~~(6)~~Annual ~~EO 14096, “Revitalizing Our Nation's Commitment to Environmental Justice for All~~Report.”

On March 12, 2025, the Environmental Protection Agency ("EPA") Administrator announced that EPA will reconsider 31 rules, including (1) regulations on power plants, (2) Mercury and Air Toxics Standards, (3) steam electric effluent limitation guidelines, (4) National Ambient Air Quality Standards for particulate matter, (5) regulations regarding regional haze, (6) the Good Neighbor Plan, and (7) CCR regulations. TVA cannot predict the outcome of such reevaluations or their impact on TVA's financial results or operations. See Part I, Item 1, Business — Environmental Matters in the Annual Report.

Clean Air Act Programs and Regulations

Regional Haze Program. In February 2025, the TVA Board approved funding of $233 million to construct scrubbers at two additional units at Shawnee Fossil Plant by the end of 2028. Inclusive of the costs for these two scrubbers, at June 30, 2025, TVA’s estimated potential expenditures on Clean Air Act control projects are $48 million, $98 million, and $216 million for the remainder of 2025, 2026, and 2027 - 2029, respectively.

Mercury and Air Toxics Standards for Electric Utility Units. On April 8, 2025, the President issued a proclamation exempting certain coal-fired power plants for two years from compliance with the updated Mercury and Air Toxics Standards that EPA published in May 2024. The President has exempted TVA's Cumberland, Gallatin, Kingston, and Shawnee fossil plants for the period beginning July 8, 2027 and concluding July 8, 2029. These plants must continue to comply with the Mercury and Air Toxics Standards that were in effect prior to the May 2024 update. These exemptions are currently subject to legal challenge.

Climate Change

Emissions. Emissions of nitrogen oxides ("NOx") and sulfur dioxide ("SO2") began being regulated in 1995 and 1977, respectively. Emissions of NOx and SO2 have been reduced by 97 percent and 99 percent, respectively, since their initial year of regulation.

Emissions and Intensity Rates (1)	CY 2024	CY 2023
Nitrogen Oxides (NOx)(2)
Total NOx Emissions (MT)	14,743	13,221
Total NOx Emissions Intensity (MT/Net MWh)	0.000107	0.000098
Sulfur Dioxide (SO2)(2)
Total SO2 Emissions (MT)	19,992	17,736
Total SO2 Emissions Intensity (MT/Net MWh)	0.000145	0.000131
Mercury (Hg)
Total Hg Emissions (kg)	49.1	47.4
Total Hg Emissions Intensity (kg/Net MWh)	0.0000004	0.0000004

Notes

(1) Intensity rates are calculated based on generation from TVA's most recent fiscal year for years indicated and emissions data from the most recent CYs.

(2) Emissions data is consistent with Edison Electric Institute Environmental, Social, Governance, and Sustainability Report standards, which are based on metric tons ("MTs"), whereas overall CO2 emission rates and baseline reductions from historical levels are based on short tons.

For CY 2024, TVA's emissions of carbon dioxide ("CO2") from its owned and operated units, including purchased power and Renewable Energy Certificate retirement adjustments which reduce the reportable CO2 emissions, were 54 million tons, resulting in a TVA system average, as delivered, CO2 emission rate of 680 lbs/MWh. This represents a 53 percent and 49 percent reduction in mass carbon emissions and TVA's carbon emission rate, respectively, from 2005 levels.

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Cleanup of Solid and Hazardous Wastes

Coal Combustion Residuals. In August 2015, TDEC issued an order that includes an iterative process through which TVA and TDEC will investigate, assess, and remediate any unacceptable risks resulting from ~~coal~~Coal ~~combustion~~Combustion ~~residuals~~Residuals (“"CCR”") management and disposal at TVA's ~~CCR~~current and former coal-fired generating units in the State of Tennessee. As part of this process, TVA ~~has~~ submitted environmental assessment reports (“EARs”) to TDEC, and after the EARs ~~are~~were approved, TVA ~~will~~submitted ~~submit~~ Corrective Action/Risk Assessment (“CARA”) Plans that ~~will~~identified ~~identify~~ the unacceptable risks and all associated TVA's ~~proposed~~actions ~~remediation~~to remediate those risks. TDEC will review the CARA Plans and provide comments, and TVA will make revisions to address TDEC's comments until TDEC approves a final CARA Plan for each site. The public also will have an opportunity to review and comment on each CARA Plan prior to TDEC's approval of the final plan. ~~TDEC~~On ~~approved the EAR for Bull Run Fossil Plant ("Bull Run") on~~ November 1514, ~~2024, and TVA submitted the initial draft of the Bull Run CARA Plan to TDEC in January~~ 2025~~. TDEC approved the EAR for Johnsonville Fossil Plant ("Johnsonville") on March 31~~, ~~2025, and TVA submitted the initial draft of the Johnsonville CARA Plan to~~ TDEC ~~in May 2025. In July 2025, TDEC~~ approved the final CARA ~~plan~~Plan for ~~John~~Allen ~~Sevier~~ Fossil Plant. ~~See Part I, Item I, Business — Environmental Matters — Cleanup of Solid and Hazardous Wastes — Coal Combustion Residuals in the Annual Report.~~

OnNEPA July 22, 2025, EPA issued a direct final rule that extends deadlines for CCR management unit ("CCRMU") requirements. The rule allows the two parts of the CCRMU facility evaluation reports to be prepared concurrently so long as both reports are submitted no later than February 8, 2027. In addition, the rule extends the deadline for owners or operators of CCRMU to comply with the groundwater monitoring provisions by 15 months, to no later than August 8, 2029. Since the facility evaluation reports and groundwater monitoring requirements are prerequisites for other CCRMU requirements, the rule also makes conforming changes to the remaining CCRMU compliance deadlines. TVA is still evaluating the rule and its potential impact on TVA's operations. See Part I, Item I, Business — Environmental Matters — Cleanup of Solid and Hazardous Wastes — Coal Combustion Residuals in the Annual Report.Procedures

On January 21, 2026, TVA published revised NEPA procedures in response to recent amendments to NEPA, the Council on Environmental Quality’s rescission of its NEPA implementing regulations, the Supreme Court’s recent decision in Seven County Infrastructure Coalition v. Eagle County, Colorado, and Executive Order 14154, Unleashing American Energy. The revised NEPA procedures will streamline TVA’s environmental review of its proposed actions.

Legal Proceedings

From time to time, TVA is party to or otherwise involved in lawsuits, claims, proceedings, investigations, and other legal matters ("Legal Proceedings") that have arisen in the ordinary course of conducting its activities. As of ~~June~~December 3031, 2025, TVA had accrued $109 million with respect to Legal Proceedings. No assurance can be given that TVA will not be subject to significant additional claims and liabilities. If actual liabilities significantly exceed the estimates made, TVA's results of operations, liquidity, and financial condition could be materially adversely affected.

For a discussion of certain current material Legal Proceedings, see Note 21 — Contingencies and Legal Proceedings — Legal Proceedings, which discussions are incorporated into this Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations.

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Critical Accounting Estimates

The preparation of financial statements requires TVA to estimate the effects of various matters that are inherently uncertain as of the date of the financial statements. Although the financial statements are prepared in conformity with accounting principles generally accepted in the U.S., TVA is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the amounts of revenues and expenses reported during the reporting period. Each of these estimates varies in regard to the level of judgment involved and its potential impact on TVA's financial results. Estimates are deemed critical either when a different estimate could have reasonably been used, or where changes in the estimate are reasonably likely to occur from period to period, and such use or change would materially impact TVA's financial condition, results of operations, or cash flows. TVA's critical accounting estimates and policies are discussed in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates and Note 1 — Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in the Annual Report.

New Accounting Standards and Interpretations

For a discussion of new accounting standards and interpretations, see Note 2 — Impact of New Accounting Standards and Interpretations, which discussion is incorporated into this Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations.

Legislative and Regulatory Matters

For additional discussion on legislative and regulatory matters, including a discussion of environmental legislation and regulation, see Environmental Matters and Key Initiatives and Challenges above. ~~Also,~~See ~~see~~ Part I, Item 1, Business — Environmental Matters and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges of the Annual Report.

TVA does not engage, and does not control any entity that is engaged, in any activity listed under Section 13(r) of the Securities Exchange Act of 1934 (the "Exchange Act"), which requires certain issuers to disclose certain activities relating to Iran involving the issuer and its affiliates. Based on information supplied by each such person, none of TVA's directors and executive officers are involved in any such activities. While TVA is an agency and instrumentality of the U.S., TVA does not believe its disclosure obligations, if any, under Section 13(r) extend to the activities of any other departments, divisions, or agencies of the U.S.

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officers are involved in any such activities. While TVA is an agency and instrumentality of the U.S., TVA does not believe its disclosure obligations, if any, under Section 13(r) extend to the activities of any other departments, divisions, or agencies of the U.S.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There are no material changes related to market risks disclosed under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Activities in the Annual Report. See Note 14 — Risk Management Activities and Derivative Transactions for additional information regarding TVA's derivative transactions and risk management activities.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

TVA maintains disclosure controls and procedures designed to ensure that information required to be disclosed by TVA in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to TVA’s management, as appropriate, to allow timely decisions regarding required disclosure. TVA's management, including the President and CEO, the ~~Senior~~Executive Vice President and Chief Financial Officer, and members of the Disclosure Control Committee, including the Vice President and Controller (Principal Accounting Officer) (collectively "management"), evaluated the effectiveness of TVA's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of ~~June~~December 3031, 2025. Based on this evaluation, management concluded that TVA's disclosure controls and procedures were effective as of ~~June~~December 3031, 2025.

Changes in Internal Control over Financial Reporting

During the quarter ended ~~June~~December 3031, 2025, there were no changes in TVA's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, TVA's internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Tennessee Valley Authority ("TVA") is party to or otherwise involved in lawsuits, claims, proceedings, investigations, and other legal matters ("Legal Proceedings") that have arisen in the ordinary course of conducting its activities. While the outcome of the Legal Proceedings to which TVA is a party cannot be predicted with certainty, any adverse outcome to a Legal Proceeding involving TVA may have a material adverse effect on TVA's financial condition, results of operations, and cash flows.

For a discussion of certain current material Legal Proceedings, see Note 21 — Contingencies and Legal Proceedings — Legal Proceedings, which discussions are incorporated by reference into this Part II, Item 1, Legal Proceedings.

ITEM 1A. RISK FACTORS

There are no material changes related to risk factors from the risk factors disclosed in Part I, Item 1A, Risk Factors in the Annual Report, except as described below.

~~The~~A ~~recent~~ loss of a quorum of the TVA Board of Directors could limit TVA's ability to adapt to changing business conditions.

Under the TVA Act, a quorum of the TVA Board ~~of Directors ("TVA Board")~~ is five members. OnIn ~~April~~January 12026, ~~2025,~~ the TVA Board ~~lost~~regained a quorum, and it currently has ~~three~~seven members. Becoming a member of the TVA Board requires confirmation by the U.S. Senate following appointment by the President, and this process may be lengthy. In addition, the President may remove TVA Board members, and TVA Board members may resign or otherwise leave office before a successor is commissioned. Without a quorum, the TVA Board may not have authority to direct TVA into new areas of activity, to embark on new programs, or to change TVA's existing direction. As such, the loss of a quorum for an extended period of time may have a negative impact on TVA's ability to change the rates TVA charges for power, change long-term objectives, plans, and policies, and respond to significant changes in technology, the regulatory environment, or the industry overall and, in turn, negatively affect TVA's cash flows, results of operations, financial condition, and reputation. TVA believes that the actions taken by the TVA Board since April 1, 2025, are authorized under its bylaws or otherwise. Becoming a member of the TVA Board requires confirmation by the U.S. Senate following appointment by the President. This process has been and could again in the future be subject to extended delays. TVA cannot predict when the TVA Board will again have a quorum or whether any challenges will arise associated with its operations in the interim and any consequences as a result. See Part I, Item 1A, Risk Factors — Human Capital and Management Risks — Loss of a quorum of the TVA Board could limit TVA's ability to adapt to changing business conditions in the Annual Report.

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ITEM 5. OTHER INFORMATION

Insider Trading Arrangements and Policies

During the three months ended ~~June~~December 3031, 2025, no director or officer of TVA notified TVA of the adoption or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

~~Compensation Actions~~54

OnTable July 23, 2025, the TVA Board took several actions related to compensation. The TVA Board (1) established 2026 performance measures and goals for the Enterprise Scorecard for the Winning Performance Team Incentive Plan (“WPTIP”) and Executive Annual Incentive Plan (“EAIP”) and (2) established performance measures and goals for the 2026 – 2028 performance cycle under the Long-Term Incentive Plan (“LTIP”). Each of ~~these items is discussed in more detail below.~~Contents

2026 Enterprise Scorecard for WPTIP and EAIP

The Board established the following performance measures and goals for the Enterprise Scorecard for both the WPTIP and the EAIP for 2026:

Performance Measure	Weight	Threshold	Target	Stretch
SBU Controllable O&M and Base Capital Spend (1)	40%	2% SBU O&M /4% Capital Over Budget	2026 Budget	2% SBU O&M /4% Capital Under Budget
Serious Injury Incident Rate (2)	15%	0.03	0.01	0.00
Transmission Performance Indicator (3)	15%	50	100	200
Generation Performance Indicator (4)	15%	50	100	200
Nuclear Performance Indicator (5)	15%	Equidistant from Target	2%	Comparable Fleet Top Quartile 24-month average as of September 2025

Notes

(1) Strategic Business Unit ("SBU") Controllable Operating & Maintenance ("O&M") and Base Capital Spend equals the total Non-Fuel O&M and Base Capital expenses for corporate and operational SBU organizations (excludes Board of Directors).

(2) The Serious Injury Incident Rate is a mathematical calculation used by Edison Electric Institute that quantifies the extent of injury for serious injuries and fatalities from events within the control of the employee and/or the employer.

(3) Transmission Performance Indicator is an aggregate measure of the overall reliability of TVA's transmission system.

(4) The Generation Performance Indicator is an aggregate measure of the overall reliability of TVA's power operations generation fleet based on key performance measures in Gas, Hydro, and Coal that are intended to ensure that TVA's fleet of power operations generation assets are available and reliable to meet system demand.

(5) The Nuclear Performance Indicator is the Annualized Online Reliability Loss Factor, which is the 12-month ratio of all generation losses minus refueling outage ("RFO") and exempt losses to reference energy generation minus RFO and exempt losses in a normal fuel cycle period, per standard industry guidelines. This measure monitors performance between refueling outages to obtain high unit and energy production reliability.

Transmission Performance Indicator	Weight	Threshold	Target	Stretch
Load Not Served (1)	60%	4.4	3.7	3.0
Outages per Hundred Miles per Year (2)	20%	2.87	2.61	2.35
Connection Point Interruption Frequency (3)	20%	0.64	0.53	0.42

Notes

(1) Load Not Served ("LNS") is a measure of the magnitude and duration of transmission system outages that affect TVA customers expressed in system minutes. TVA manages this critical indicator to reduce the impact of customer outages. An automatic customer interruption with a duration of one minute or greater is tracked as an LNS event. LNS events caused by TVA on a distributor system will also count as a TVA event even if the TVA system remains energized. LNS excludes interruptions due to declared major events, variances, verified tornadoes, gunfire, vandalism, ice formation, and foreign object/vehicle (DUI, DWI, hit and run, or suicide).

(2) Outages per Hundred Miles per Year ("OHMY") is the number of automatic interruptions (sustained and momentary) to lines greater than or equal to 100-kV per 100 miles of transmission line per year. OHMY excludes interruptions due to declared major events, variances, verified tornadoes, gunfire, vandalism, ice formation, foreign object/vehicle (DUI, DWI, hit and run, or suicide), and nested interruptions.

(3) Connection Point Interruption Frequency ("CPIF") measures reliability from the customer's perspective. CPIF tracks interruptions of power, including momentary interruptions, at connection points caused by the transmission system. CPIF includes automatic and emergency forced outages and excludes prearranged (scheduled or planned) and operational outages as well as interruptions due to declared major events, variances, verified tornadoes, gunfire, vandalism, ice formation, and foreign object/vehicle (DUI, DWI, hit and run, or suicide).

Generation Performance Indicator	Weight	Threshold	Target	Stretch
Combined Cycle Equivalent Forced Outage Rate (1)	45%	4.5%	3.8%	2.0%
Hydro Equivalent Forced Outage Rate (2)	25%	5.7%	4.2%	2.0%
Coal Equivalent Forced Outage Rate (3)	25%	11.9%	10.3%	8.7%
Combustion Turbine Economic Starting Reliability (4)	5%	99.0%	99.3%	99.6%

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Notes

(1) Combined Cycle Equivalent Forced Outage Rate (“EFOR”) measures the generation lost due to forced events as a percentage of time the unit would have been scheduled to run for TVA-operated combined cycle generating assets, based on Generating Availability Data System (“GADS”) event reporting guidelines for megawatt hour losses. Combined Cycle EFOR excludes GADS events classified as outside management control and variances.

(2) Hydro EFOR reflects the percentage of time over a given period that a generating unit is in forced outage. This measure includes startup failures and is based on GADS event reporting guidelines for megawatt hour losses. Hydro EFOR excludes GADS events classified as outside management control and variances.

(3) Coal EFOR reflects the percentage of time over a given period that a generating unit is in forced outage. This measure includes startup failures and is based on GADS event reporting guidelines for megawatt hour losses. Coal EFOR excludes GADS events classified as outside management control and variances.

(4) Combustion Turbine ("CT") Economic Starting Reliability reflects the percentage of successful attempts to start up a unit for generation, performance testing, or black start over a given period that a generating unit was available for TVA-operated CT assets. Total unit performance tests demonstrate that a unit will start and perform as intended. Black start tests demonstrate that a unit will start without relying on external power and perform as intended. CT Economic Starting Reliability excludes GADS events classified as outside management control and variances.

LTIP Performance Measures and Goals for the 2026 - 2028 Performance Cycle

The Board approved LTIP performance measures and goals for the 2026 - 2028 performance cycle. These performance measures, along with their associated weights and goals, are as follows:

Long-Term Incentive Measures	Weight	Threshold	Target	Stretch
Total Spend (1)	60%	2% Non-Fuel O&M, Inventory, and Cloud Spend / 4% Capital Spend Over Budget	2026 - 2028 Cumulative Total Spend Based on the 2026 Budget	2% Non-Fuel O&M, Inventory, and Cloud Spend / 4% Capital Spend Under Budget
Carbon-Free Performance Indicator (2)	20%	50	100	200
Powerful Partnerships Survey (3)	20%	75	79	83

Notes

(1) Total Spend represents total Non-Fuel O&M, Capital, Non-Fuel Inventory, and Cloud Implementation expenses for corporate and operational SBU organizations (excluding the Board of Directors). This measure will support the overall TVA goal of maintaining costs and managing rates based on spending levels approved by TVA management and the Board.

(2) Carbon-Free Performance Indicator measures renewable MW added to the TVA system, energy program savings GWh and capacity MW provided by energy programs, and the ability to meet TVA's operational needs through demand response event performance. This measure supports the evolution of TVA's reliable and clean energy supply into the energy system of the future as well as helps manage the impact of TVA's identified enterprise risk related to planning and execution of the power system.

(3) The Powerful Partnerships Survey is conducted among customers, elected officials, business/economic development leaders, and the general public in the TVA service area to assess the strength of various stakeholder relationships with TVA. This measure supports the effective management of TVA's reputation and ability to achieve desired outcomes and deliver on strategic priorities with stakeholders.

Carbon-Free Performance Indicator	Weight	Threshold	Target	Stretch
Renewable and Storage MW Added (1)	30%	918	1,224	1,530
Demand Response Event Performance % (2)	25%	81%	90%	99%
Energy Program MW (3)	20%	1,429	1,906	2,382
Energy Program GWh (4)	15%	620	826	1,033
Traditional Carbon-Free MW Added (5)	10%	60% of 2026 Budget Power Supply Plan Target MW	80% of 2026 Budget Power Supply Plan Target MW	100% of 2026 Budget Power Supply Plan Target MW

Notes

(1) Renewable and Storage MW Added tracks the number of renewable and storage MW that come on-line in accordance with delivered PPAs, partner flexibility, and TVA-builds.

(2) Demand Response Event Performance Percentage calculates the performance of demand response programs by determining a 12-month rolling average of the portfolio's actual demand reduction to the expected demand reduction and contractual requirements percentage for demand response events.

(3) Energy Program MW tracks the amount of MW to be reduced from the system from active demand response program contracts, demand response participant load reductions since the last power supply plan submission, and energy efficiency projects and their cumulative peak demand reductions.

(4) Energy Program GWh tracks the amount of GWh reduced from the system from TVA-influenced energy efficiency projects and the energy reductions achieved during demand response events.

(5) Traditional Carbon-Free MW Added represents the incremental MW added through planned carbon-free generation asset additions and upgrades or uprates for existing carbon-free generation assets in the TVA fleet.

Compensation Adjustments

Chief Financial Officer ("CFO")

On July 24, 2025, Chief Executive Officer ("CEO") Don Moul notified Tom Rice that his title would be changing to Executive Vice President and CFO effective July 28, 2025, and that he would be entitled to the following compensation in connection with this change:

•Mr. Rice’s annual salary will be $705,000.

•Mr. Rice’s target annual incentive opportunity under the EAIP will remain unchanged at 75 percent of his annual salary.

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•Mr. Rice will continue to be a participant in TVA’s LTIP.

–Under the long-term performance (“LTP”) component of the LTIP, Mr. Rice will receive a LTP grant of $1,302,000 for the three-year performance cycle ending on September 30, 2026, and a LTP grant of $1,302,000 for the three-year performance cycle ending on September 30, 2027. These grants will replace the grants that were previously awarded to Mr. Rice for these performance cycles. Mr. Rice’s LTP grant for the three-year performance cycle ending on September 30, 2025, will remain unchanged.

–Under the long-term retention (“LTR”) component of the LTIP, Mr. Rice will receive an LTR grant in the amount of $393,666 for the three-year period ending on September 30, 2026, and an LTR grant in the amount of $558,000 for the three-year period ending on September 30, 2027. These grants will replace the grants that were previously awarded to Mr. Rice for these periods. Mr. Rice’s LTR grant for the three-year period ending on September 30, 2025, will remain unchanged.

CEO

On July 25, 2025, the TVA Board approved the following as a supplement to the terms of Don Moul’s March 25, 2025, appointment to serve as TVA’s President and CEO, as necessary to reflect the Board’s intent at the time it made the initial appointment decision on March 25, 2025. Mr. Moul will receive some severance benefits, without regard to meeting the Retirement requirements as defined in TVA's LTIP, so long as he experiences a Separation from Service due to (1) a termination of service by TVA, other than due to Gross Misconduct or as a result of death or disability, or (2) a resignation due to Good Reason; unless otherwise noted, all capitalized terms used in this paragraph shall have the meaning given to those terms in TVA’s Executive Severance Plan, as last amended on April 3, 2025.

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ITEM 6. EXHIBITS

Exhibit No.			Description
3.1			Tennessee Valley Authority Act of 1933, as amended, 16 U.S.C. §§ 831-831ee (Incorporated by reference to Exhibit 3.1 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2016, File No. 000-52313)
3.2			Bylaws of the Tennessee Valley Authority Approved by the TVA Board on May 18, 2006, as amended on April 3, 2008, May 19, 2008, June 10, 2010, February 13, 2014, August 21, 2014, and November 6, 2014 (Incorporated by reference to Exhibit 3.2 to TVA's Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)
10.1			Amended and Restated Supplemental Executive ~~Annual~~Retirement ~~Incentive~~ Plan Approved ason ofOctober ~~April 3~~1, 2025 (Incorporated by reference to Exhibit 10.329 to TVA's ~~Quarterly~~Annual Report on Form 10-QK for the ~~quarter~~year ended ~~March~~September 3130, 2025, File No. 000-52313)
10.2			Amended and Restated ~~Long-Term~~Restoration ~~Incentive~~ Plan Approved ason ofOctober ~~April 3~~1, 2025 (Incorporated by reference to Exhibit 10.434 to TVA's ~~Quarterly~~Annual Report on Form 10-QK for the ~~quarter~~year ended ~~March~~September 3130, 2025, File No. 000-52313)
10.3			Amended and Restated ~~Executive~~Restoration ~~Severance~~ Plan Approved ason ofNovember ~~April 3~~6, 2025 (Incorporated by reference to Exhibit 10.535 to TVA's ~~Quarterly~~Annual Report on Form 10-QK for the ~~quarter~~year ended ~~March~~September 3130, 2025, File No. 000-52313)
10.4*			No-Fault Separation Agreement Between TVA and David Fountain Dated as of April 7, 2025
10.4			Amended and Restated Long-Term Incentive Plan Approved on November 6, 2025 (Incorporated by reference to Exhibit 10.32 to TVA's Annual Report on Form 10-K for the year ended September 30, 2025, File No. 000-52313)
31.1			Rule 13a-14(a)/15d-14(a) Certification Executed by the Chief Executive Officer
31.2			Rule 13a-14(a)/15d-14(a) Certification Executed by the Chief Financial Officer
32.1			Section 1350 Certification Executed by the Chief Executive Officer
32.2			Section 1350 Certification Executed by the Chief Financial Officer
101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH			Inline XBRL Taxonomy Extension Schema
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase
104			Cover Page Interactive Data File - formatted in Inline XBRL and contained in Exhibit 101

* Certain attachments have been omitted. TVA hereby undertakes to furnish copies of the omitted attachments upon request by the Securities and Exchange Commission.55

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:	~~July~~February 282, ~~2025~~2026		TENNESSEE VALLEY AUTHORITY
			(Registrant)
		By:	/s/ Donald A. Moul
			Donald A. Moul
			President and Chief Executive Officer(Principal Executive Officer)
		By:	/s/ Thomas C. Rice
			Thomas C. Rice
			Executive Vice President and Chief Financial Officer(Principal Financial Officer)

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