Tennessee Valley Authority 10-K

ITEM 2. PROPERTIES TVA holds personal property in its own name but holds real property as agent for the U.S. TVA may acquire real property as an agent of the U.S. by negotiated purchase or by eminent domain. Generating Properties At September 30, 2020, TVA-operated generating assets consisted of seven nuclear units, 25 active coal-fired units, 86 simple-cycle units, one cogeneration unit, 14 combined-cycle power blocks, 109 conventional hydroelectric units, four pumped-storage units, five diesel generator units, and 14 solar sites. As of September 30, 2020, eight of the simple-cycle combustion turbine units and four of the combined-cycle power blocks were leased to special purpose entities ("SPEs") and leased back to TVA under long-term leases. See Note 10 — Variable Interest Entities and Note 13 — Debt and Other Obligations — Lease/Leasebacks . In addition, TVA is leasing the three Caledonia combined-cycle power blocks under a long-term lease. For a discussion of these assets, see Item 1, Business — Power Supply and Load Management Resources . 45 Table of Contents Net Capability The following table summarizes TVA's summer net capability in MW at September 30, 2020: SUMMER NET CAPABILITY (1) At September 30, 2020 Source of Capability Location Number of Units Summer Net Capability (MW) Date First Unit Placed in Service (CY) Date Last Unit Placed in Service (CY) TVA-Operated Generating Facilities Nuclear Browns Ferry (2) Alabama 3 3,309 1974 1977 Sequoyah Tennessee 2 2,292 1981 1982 Watts Bar Tennessee 2 2,321 1996 2016 Total Nuclear 7 7,922 Coal-Fired Bull Run Tennessee 1 865 1967 1967 Cumberland Tennessee 2 2,470 1973 1973 Gallatin Tennessee 4 976 1956 1959 Kingston Tennessee 9 1,398 1954 1955 Shawnee Kentucky 9 1,206 1953 1955 Total Coal-Fired 25 6,915 Natural Gas and/or Oil-Fired (3)(4) Simple-Cycle Combustion Turbine Allen Tennessee 20 456 1971 1972 Brownsville Tennessee 4 468 1999 1999 Colbert Alabama 8 392 1972 1972 Gallatin Tennessee 8 642 1975 2000 Gleason Tennessee 3 500 2000 2000 Johnsonville Tennessee 19 1,189 1975 2000 Kemper Mississippi 4 348 2002 2002 Lagoon Creek Tennessee 12 1,048 2001 2002 Marshall County Kentucky 8 608 2002 2002 Subtotal Simple-Cycle Combustion Turbine 86 5,651 Combined-Cycle Combustion Turbine Ackerman (5) Mississippi 1 713 2007 2007 Allen (6) Tennessee 1 1,106 2018 2018 Caledonia (7) Mississippi 3 765 2003 2003 John Sevier (8) Tennessee 1 871 2012 2012 Lagoon Creek (9) Tennessee 1 525 2010 2010 Magnolia Mississippi 3 918 2003 2003 Paradise (10) Kentucky 1 1,100 2017 2017 Southaven Mississippi 3 780 2003 2003 Subtotal Combined-Cycle Combustion Turbine 14 6,778 Co-Generation Johnsonville Tennessee 1 80 1975 2000 Total Natural Gas and/or Oil-Fired 101 12,509 Hydroelectric Conventional Plants Alabama 36 1,176 1925 1962 Georgia 2 35 1931 1956 Kentucky 5 223 1944 1948 North Carolina 6 492 1940 1956 Tennessee 60 1,833 1912 1972 Pumped-Storage (11) Tennessee 4 1,635 1978 1979 Total Hydroelectric 113 5,394 Diesel Generator Meridian Mississippi 5 9 1998 1998 TVA Non-hydro Renewable Resources (12) 1 Total TVA-Operated Generating Facilities 32,750 Contract Renewable Resources (13) 324 Power Purchase and Other Agreements (14) 3,863 Total Summer Net Capability 36,937 Notes (1) Net capability is defined as the ability of an electric system, generating unit, or other system component to carry or generate power for a specified time period 46 Table of Contents and does not include operational limitations such as derates. (2) The summer net capability for Browns Ferry excludes the impact of the EPU project. The generating capability is expected to increase by an estimated 465 MW after sufficient run time to validate the new capacity upon issuance of the engineering memos. (3) See Generating Properties above for a discussion of TVA-operated natural gas and/or oil-fired facilities subject to leaseback and long-term lease arrangements. (4) Peak firing of simple-cycle combustion turbine units accounts for 326 MW of short-term capability. (5) Ackerman Combined Cycle Facility is a single steam cycle unit driven by two gas turbines (2x1 configuration). (6) Allen Combined Cycle Facility is a single steam cycle unit driven by two gas turbines (2x1 configuration). (7) Caledonia Combined Cycle Plant is currently a leased facility operated by TVA. (8) John Sevier Combined Cycle Facility is a single steam cycle unit driven by three gas turbines (3x1 configuration). (9) Lagoon Creek Combined Cycle Facility is a single steam cycle unit driven by two gas turbines (2x1 configuration). (10) Paradise Combined Cycle Facility is a single steam cycle unit driven by three gas turbines (3x1 configuration). (11) See Item 1, Business — Power Supply and Load Management Resources — Hiwassee Hydro Unit 2 for a discussion of Hiwassee Hydro Unit 2. (12) TVA owns approximately 1 MW of solar installations at 14 solar sites. (13) Contract Renewable Resources include capability from various renewable energy programs established by TVA to encourage the development of solar, wind, biomass, and low-impact hydroelectric generation systems across the Tennessee Valley. (14) Power Purchase and Other Agreements includes renewable resources. See Item 1, Business — Power Supply and Load Management Resources — Power Purchase and Other Agreements for information on renewable energy power purchase contracts. Transmission Properties TVA's transmission system interconnects with systems of surrounding utilities and consisted primarily of the following assets at September 30, 2020: • Approximately 2,500 circuit miles of 500 kilovolt, 11,800 circuit miles of 161 kilovolt, 2,000 circuit miles of other voltage transmission lines, and 3,900 miles of fiber optic lines; • 517 transmission substations, power switchyards, and switching stations; and • 1,322 customer connection points (customer, generation, and interconnection). At September 30, 2020, certain qualified technological equipment and other software related to TVA's transmission system were leased to private entities and leased back to TVA under long-term leases. See Note 13 — Debt and Other Obligations — Lease/Leasebacks and Note 22 — Commitments and Contingencies — Commitments — Leasebacks . Natural Resource Stewardship Properties TVA operates and maintains 49 dams and manages the following natural resource stewardship properties: • Approximately 11,000 miles of reservoir shoreline; • Approximately 293,000 acres of reservoir land; • Approximately 650,000 surface acres of reservoir water; and • Approximately 100 public recreation areas throughout the Tennessee Valley, including campgrounds, day-use areas, and boat launching ramps. Additionally, TVA manages over 170 agreements for commercial recreation (such as campgrounds and marinas). As part of its stewardship responsibilities, TVA approval is required to be obtained before any obstruction affecting navigation, flood control, or public lands can be constructed in or along the Tennessee River and its tributaries. These public lands and waters managed by TVA provide both conservation and responsible recreation, and serve as a driver for nearly $12.0 billion dollars of annual economic activity across the Tennessee Valley each year. Buildings TVA has a variety of buildings and structures located throughout its service area including generation and transmission facilities, corporate offices, customer service centers, power service centers, warehouses, visitor centers, and crew quarters. Two significant buildings are its Knoxville Office Complex ("KOC") and the Chattanooga Office Complex in Tennessee. In 2013, TVA initiated a study of its real estate portfolio for the purpose of reducing cost, right-sizing the portfolio, and aligning its real estate with TVA's strategic direction over the next 10 to 20 years. As part of this effort, TVA completed a comprehensive assessment of its real estate holdings in the Knoxville region in 2016. For a discussion of these real estate holdings, see Disposal of Property — Knoxville Property below. Disposal of Property TVA has broad authority to dispose of personal property but only limited authority to dispose of real property. TVA's primary, but not exclusive, authority to dispose of real property is briefly described below: • TVA has authority to dispose of surplus real property at a public auction; • TVA may dispose of real property for certain specified purposes, including providing replacement lands for certain entities whose lands were flooded or destroyed by dam or reservoir construction, providing real property for recreational use, and granting easements and rights-of-way upon which are located transmission or distribution lines; 47 Table of Contents • TVA can dispose of real property in connection with the construction of generating plants or other facilities under certain circumstances; and • TVA has authority to grant easements for rights-of-way and other purposes. The Basic Tennessee Valley Authority Power Bond Resolution adopted by the TVA Board on October 6, 1960, as amended on September 28, 1976, October 17, 1989, and March 25, 1992 (the "Basic Resolution") prohibits TVA from mortgaging any part of its power properties and from disposing of all or any substantial portion of these properties unless TVA provides for a continuance of the interest, principal, and sinking fund payments due and to become due on all outstanding Bonds, or for the retirement of such Bonds. Knoxville Property. In 2016, TVA completed a comprehensive assessment of its real estate holdings in the Knoxville, Tennessee region including the KOC and adjacent Summer Place Complex ("SPC"). As a result of this study and a subsequent Environmental Assessment in 2017, TVA has consolidated its Knoxville area employees into the West Tower of the KOC and the Greenway Drive Transmission Service Center, and is completing the centralized field offices in Norris, Tennessee. As part of this consolidation effort, TVA approved the conveyance of the SPC and the East Tower of the KOC and the transaction closed in August 2020.