TVA Files First Quarterly Report on Form 10-Q with SEC

February 15, 2007

TVA filed its first-ever quarterly report on Form 10-Q with the Securities and Exchange Commission, reporting that total sales of electricity during the first quarter of TVA’s 2007 fiscal year were down 4.7 percent from the first quarter a year ago mainly due to mild winter weather in the Tennessee Valley.

TVA reported net income of $51 million for the first quarter, which ended Dec. 31, 2006, compared to a $53 million net loss during the first quarter a year ago. The net loss a year ago resulted primarily from high fuel and purchased power costs. Higher rates that capture the higher fuel costs contributed to the increase in net income for the first quarter of fiscal year 2007.

“Although our financial results for the first quarter compare favorably with results of the first quarter last year, our operating revenue and net income are lower than planned, primarily because of the mild weather and lower than expected hydro generation,” said TVA President and CEO Tom Kilgore.

During the first quarter of the 2007 fiscal year, TVA had 9.3 percent fewer heating degree days and 47.1 percent fewer cooling degree days than the same three-month period a year ago. TVA uses heating and cooling degree days to measure the impact of weather on power operations. The calculations are based on how much the temperature deviates from 65 degrees Fahrenheit in the five largest cities served by TVA.

Total operating revenues for the first quarter were $2.1 billion, an increase of 2.5 percent from the same period last year. Total operating expenses were nearly $1.8 billion, a 2.1-percent decrease from the first quarter of the 2006 fiscal year.

TVA’s 2007 fiscal year begins Oct. 1, 2006 and ends Sept. 30, 2007.

The Consolidated Appropriations Act that restructured the TVA Board to nine members also requires TVA to file certain financial reports with the SEC beginning with its fiscal year 2006 annual report on Form 10-K, which was filed Dec. 15, 2006.

Investors are encouraged to read the first quarter report, which includes financial, operational and descriptive information, including financial statements for the quarter. The quarterly report may be read along with the annual report and current reports on Form 8-K that TVA has filed with the SEC. The public may read reports or other information that TVA files with the SEC at the SEC’s Public Reference Room at 100 F St., N.E., Washington, D.C. 20549. TVA’s SEC reports are also available to the public on the SEC’s website at www.sec.gov, on TVA’s website at www.tva.com or by calling TVA toll-free at (888) 882-4975.

TVA is the nation’s largest public power provider and is completely self financed. TVA provides power to large industries and 158 power distributors that serve approximately 8.7 million consumers in seven southeastern states. TVA also manages the Tennessee River and its tributaries to provide multiple benefits, including flood damage reduction, navigation, water quality and recreation.

Media Contact

TVA News Bureau, Knoxville, (865) 632-6000

TVA Newsroom

(This release and TVA’s quarterly report may contain forward-looking statements relating to future events and future performance. Although TVA believes that the assumptions underlying the forward- looking statements are reasonable, numerous factors could cause actual results to differ materially from those in the forward-looking statements. Some of these factors are discussed on pages 3 and 4 of TVA’s quarterly report filed with the SEC.)