Summary

Financial statements of the Tennessee Valley Authority (TVA) for fiscal year 1976 were examined and the results of its operations and the changes in the financial position of its several programs for the years ending on June 30, 1975 and 1976 were reviewed.

The financial statements were found to present fairly the Tennessee Valley Authority's financial position at June 30, 1976 and 1975 and the results of its operations and the changes in the financial position of its several programs for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis. TVA's operating revenue from the sale of electric energy increased 45% in fiscal year 1976 over 1975 and its net income increased 22%. Fuel and purchased power cost TVA $950 million in fiscal year 1976 and accounted for 56 cents of each revenue dollar, as compared to 33 cents 5 years ago. Coal inventory shortages increased considerably in the last 3 years. As a result of energy shortages, rising production and construction costs, and increasing environmental concerns, TVA is studying alternatives to its current rate structure. In fiscal year 1975, TVA began adjusting power rates monthly based on changes in the actual costs of fuel and purchased power. In fiscal year 1976, TVA spent $35 million on research programs which included environmental quality projects, advanced coal combustion techniques, solar energy, and the Clinch River Breeder Reactor project.