Tennessee Valley Authority

Good morning, everyone, and welcome to the Tennessee Valley Authority's first quarter fiscal year 2025 conference call. For your information, today's call is being recorded. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. At this time, for opening remarks, I would like to turn the call over to Mr. Clifton Lowery TVA Vice President of Financial Planning and Investor Relations. Mr. Lowery, please go ahead.

Mr. Thank you, Gary. Good morning, everyone, and welcome to the Tennessee Valley Authority's first quarter fiscal year 2025 financial review. Today I have with me TVA's Chief Executive Officer, Jeff Lyash, and TVA's Chief Financial Officer, Tom Rice. Jeff will begin with a business update, then Tom will follow with a review of TVA's financial performance. After their prepared remarks, the call will be opened up to give participants the opportunity to ask questions and a few housekeeping items before we begin. Today's press release and TVA's quarterly report on Form 10-Q for the first quarter ended December 31, 2024 are available on TVA's website at tba.com. And a replay of this webcast will also be available on TVA's website for a period of one year. Today's discussion may include forward-looking statements that are subject to various risks and uncertainties, so please refer to TVA's quarterly report on Form 10-Q for the quarter ended December 31, 2024, and TVA's annual report on Form 10-K for the fiscal year ended September 30, 2024, for a discussion of these factors. With that, I'll now turn the call over to TVA's President, Chief Executive Officer Jeff Lyash.

Jeff Lyash Thank you, Clifton. Good morning, everyone. So you might have heard that last week I announced that I'm planning on retiring from TVA no later than the end of the fiscal year. For the past six years, it's been my privilege to serve with an experienced and talented team here at TVA. TVA truly is a special place. It was created more than 90 years ago to improve the quality of life for more than 10 million people across this region. That mission of service continues to be our focus today. The stability and growth of our regional economy and the lives of the people we serve depend on our commitment to delivering affordable, reliable, resilient, and sustainable energy. And I'll continue to lead TVA until the Board of Directors selects a successor and we have the time to do an orderly transition. And let me assure you, we're built for this. Over the past several years, We've been intentional about growing and developing talent across the organization. And today, we have a strong and experienced team capable of leading TVA forward. I appreciate your partnership, support, and friendship over the last six years. I also want to take a moment to extend a special congratulations to John Thomas, who's retiring from TVA after almost 20 years of service. John took the reins as Chief Financial Officer in 2010, and in his time leading our strategy and finance functions, John guided TVA to the best financial health in its 90-year history. John developed and implemented a long-range plan that cut debt to the lowest level in over 30 years, reduced cost, improved efficiency, while keeping TVA's power rates among the lowest in the country. even as we invested billions in TVA's power system. His financial leadership also put TVA in a position to help our customers and communities recover from the pandemic, providing over $670 million in relief credits when the need was the greatest. There is no question that his efforts have helped improve the quality of life in the Tennessee Valley. Now, what John would tell you he is most proud of is building a high-performing organization with financial leaders that will continue to work for all the people of this region. One of these great leaders is Tom Rice, who's been named as John's successor. Tom currently directs all of TVA's financial functions, including treasury, risk management, accounting, financial operations and performance, financial planning, and investor relations. Tom joined TVA in 2002 and has held roles of increasing responsibility across the organization. His experience positions him well to serve as the company's new chief financial officer. So thank you, John, for your service in the Tennessee Valley region, and congratulations on a well-deserved retirement. And congratulations to Tom. on your appointment as TVA's new CFO. Our ongoing work in 2025 continues to be guided by strategic priorities and core values that help TVA continue its mission of service to the Tennessee Valley region every day, just as we have for over 90 years. As we move through these winter months, TVA is staying focused on maintaining reliable and resilient power. And operational excellence is always a top priority for TVA. This is about providing power when it matters the most, like during the periods of higher demand we experienced in recent weeks. And we have a good track record. TVA has successfully dealt with extreme weather and met several demand records over just the past year. And as extreme temperatures came through our region a few weeks ago in January, Our system met the highest peak power demand in our history, estimated at 35,319 megawatts. And our power system remained stable through several days of extremely high demand like this. Also, everything we do, we do in partnership. And we appreciate the efforts of TVA and local power company employees who worked around the clock during these events. We also appreciate the partnership with all our communities, residents, and businesses who answered the call to conserve power. Working together, we were able to make history, and we were well prepared for these extremes. In fiscal year 24, TVA invested over $400 million to harden its system. which included thousands of winter readiness activities. These stem from lessons learned and best practices from previous winters, as well as robust inspections. TVA has one of the largest, most diverse power systems in the nation, and we work every day to provide energy security that's reliable, affordable, resilient, and sustainable American-made energy to 10 million people across seven states. Our region continues to grow, which means the demand for power is increasing. TVA's strong balance sheet will support capital expansion plans in the years ahead so we can continue to provide the energy security our communities expect and deserve. TVA plans to invest $16 billion over the next several years toward new generation, transmission, and environmental remediation. This includes construction of more than 3,500 megawatts of additional generation that includes solar, energy storage, combustion turbines, and combined cycle natural gas plants. Adding new gas fire capacity will help maintain reliability and support renewables expansion by providing flexibility to help manage intermittency. The decisions we're making today will set the stage for the next four decades of energy supply for the Tennessee Valley region. TVA is building an American-made energy future, and we're pursuing innovative solutions that continue to support energy security. Innovation is a part of TVA's DNA. We were created to solve complex challenges, and we're ready to lead. For example, we're leading a coalition of nuclear industry leaders in pursuing a U.S. Department of Energy grant to accelerate construction of the nation's first small modular reactor at our Clinch River site in Oak Ridge, Tennessee. Nuclear is the most reliable and efficient energy source the world has ever known. is a building block that will power America's next-generation AI and industrial technologies so that the U.S. can dominate the global economy. But developing first-of-a-kind technologies is inherently expensive. So we were very pleased last year when Congress approved funding through the U.S. Department of Energy to help deploy the first Gen 3 plus SMRs in the United States. As mentioned, We are leading a coalition of industry partners in pursuing $800 million for the development of the BWX-300 design at the Clinch River Nuclear Site here in Oak Ridge, Tennessee. We put together a strong coalition of co-applicants. This includes the state of Tennessee and representatives of the nuclear ecosystem, including other utilities and developers who are exploring SMRs, plus suppliers, construction partners, and others. Working with partners will ensure that this funding can help pave the way for the deployment of not just the first SMR at Clinch River, but also help establish a domestic supply chain and support future deployments. The benefits from this funding would reach beyond Clinch River, as TBA and our partners will share lessons and best practices that will offset costs and reduce risks while advancing nuclear technology for the entire country. Traditional nuclear energy is already a safe and secure energy source and SMRs will continue to improve safety and security. This first-of-a-kind technology must be built in the United States. There is broad bipartisan support for this. Additionally, as we recently highlighted, TVA's draft Integrated Resource Plan outlines that new capacity will be needed in any scenario and that new nuclear technologies with continued advancements can support load growth and deeper decarbonization. As you all know, TVA began exploring options for advanced reactors in 2010 and submitted an early site permit in 2016 Clinch River was the first of its kind to receive an early site permit from the U.S. Nuclear Regulatory Commission in 2019, and the TVA Board of Directors has approved up to $350 million to fund this development work. It's important to note that any TVA project would be subject to Board approval, and if awarded, the DOE funding wouldn't directly commit TVA to a project. TVA continues to use a structured planning phase decision-gate approach to safely and judiciously explore potential development of SMR technology. But the availability of DOA funding would help accelerate the early activities of the project and reduce risk and cost. We hope to have an update to share on the application soon. So now let me turn the call over to Tom Rice to discuss the financial results for the quarter. Tom?