TVA Board Salutes Employees for Outstanding 2002 Performance
October 30, 2002
Thanks to excellent operating performance by its employees and its power system, TVA more than doubled its debt reduction projections, cut interest expense by $204 million, and achieved significant savings through better inventory control and improved management techniques during 2002.
TVA finished the fiscal year, which ended September 30, with $73 million in net income, despite having 3 percent less operating revenue, according to unaudited year-end financial results released today. TVA reduced debt by $120 million, $70 million more than projected, for a total of $2.5 billion since 1997. Interest expense reached its lowest level in 12 years and accounted for 21 percent of revenue, down from a high of 34 percent in 1997.
“The achievements and progress we’ve made reflect your commitment to our leadership standard, which is to achieve excellence in our business performance and public service,” TVA Chairman Glenn McCullough Jr. told employees at a meeting in Knoxville, Tennessee, which was simulcast to other employees at TVA sites throughout the Tennessee Valley and in Washington, D.C. “By pursuing excellence, we improve performance and generate more value for our customers and the people we serve.”
TVA Directors Skila Harris and Bill Baxter, Chief Operating Officer Ike Zeringue, and Chief Financial Officer David Smith joined the TVA Chairman for the year-end report to TVA’s 13,467 employees. The employee meeting was followed by a media briefing, which was also simulcast to several locations.
During the year, seven TVA fossil plants set new records for continuous operation, and Browns Ferry Nuclear Plant set a worldwide record for production. The transmission system achieved 99.999 percent reliability – with an average outage time for customers that was three times better than the average for comparable utilities. The forced outage rate for TVA hydro units was 1.5 percent, compared with an industry average of 5 percent, which gave TVA another competitive edge from its lowest-cost power source.
TVA has realized cumulative savings of more than $70 million through a multi-year program to standardize equipment, better manage inventory, and improve the procurement process. Another multi-year program to reduce inventory by $100 million was completed a year ahead of schedule.
The Board thanked TVA employees for helping make 2002 a successful year and announced that employees will receive a cash award, ranging from 4 to 6 percent of their pay, for achieving performance goals set at the beginning of the year. “The numbers for fiscal year ’02 show that you achieved more with less, just as the Board asked you to do at this time last year,” McCullough said.
Harris discussed TVA’s challenge of striking a balance between providing affordable, reliable power and protecting and enhancing natural resources.
Since 1991, aquatic habitat conditions are significantly better in more than 300 miles of the Tennessee River thanks to a $44-million effort to improve the habitat in the tailwaters of TVA reservoirs, Harris said.
TVA has reduced sulfur dioxide emissions, which contribute to acid rain, by 73 percent since 1976; cut nitrogen oxide emissions, which lead to ground-level ozone, by 50 percent since 1995; and avoided emitting almost 120 million tons of carbon dioxide, a factor in global warming, since 1995.
“The Environmental Management System we are implementing across TVA is a way for us to integrate our environmental responsibilities into everything we do,” Harris said. “I am excited about how this comprehensive approach will improve TVA’s environmental performance and the quality of life for each of us.”
Baxter stressed the importance of TVA’s efforts to enhance economic development throughout the seven-state region it serves. He said TVA partnered with regional industrial development associations and local power companies to help Valley companies create or retain more than 48,200 jobs during 2002.
“During the year TVA provided technical and financial assistance to projects across the Valley that leveraged more than $855 million of new investment in the region,” Baxter said. “In 2003, we will emphasize bringing the big-ticket projects to our region, working with existing companies to help them grow, and developing innovative programs for preparing communities to take advantage of opportunities when they arrive.”
TVA is the nation’s largest public power producer, and its power system is self-financed. It provides power to large industries and 158 power distributors that serve 8.3 million consumers in seven southeastern states.
Media Contact:
John Moulton, Knoxville (865-632-8048) or TVA News Bureau, Knoxville (865-632-6000)
