Tennessee Valley Authority

John J. McCormick

Sr. Vice President, River Operations and Renewables

• Established by U. S. Congress in 1933• Electricity for >9 Million People – Parts of 7 States• Covering >80,000 Square Miles• 115 Power Distributors – 56 Direct Served• Manage the Nations 7th Largest River System• 15,900 Circuit Miles of Transmission Lines• 102,200 Line Structures• Diverse Portfolio of Generation• 37,000 Megawatts of TVA-Operated Generation

Facts About the Tennessee Valley Authority (TVA)

Plants/Units First/Last in Service Capacity* Capacity/Energy

(MW) (percent)Hydro & Pump Storage

TVA’s Diverse Generating Mix Total: 37,300 MW

30/113 1912/1979 5,443 15/7 15/7

Coal

11/53 1951/1973 13,807 37/44

37/44

Nuclear

3/6 1974/1996 6,691 18/29

Gas & CT/CC

12/98 1971/2010 8,224 22/4

22/4

Other

Contracts /Diesels / Renewable 3,135

Purchases 22/4

8/16

* Summer Net Capability

• Integrated Resource Plan provides flexibility for changing conditions

• Also calls for a balanced portfolio of assets

• Provides greater flexibility to use sources currently most economical

Building More Balanced Portfolio

4

Gas Price SensitivityAnnual Generation (GWh)

Henry Hub Spot Price $/MMBtu

5

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

$1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00

Gas

Coal

25th percentile gas forecast for FY2013

Baseline gas forecast for FY2013

25th percentile coal forecast for FY2013

Baseline coal forecast for FY2013

Note: The expected range of gas prices will require operational flexibility in both TVA’s gas and coal

portfolios

6

TVA Faces Significant Challenges Ahead…

• Condition of aging fleet

• Managing coal idling and flexibility

• Environmental requirements

• Raccoon Mountain return to service

• Construction projects for environmental equipment

• Managing dynamic fuel and power markets