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, 2021, 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 hydroelectric units, five diesel generator units, and 13 solar installations. As of September 30, 2021, 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 11 — Variable Interest Entities and Note 14 — 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 . 55 Table of Contents Net Capability The following table summarizes TVA's summer net capability in MW at September 30, 2021: SUMMER NET CAPABILITY (1) At September 30, 2021 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 Alabama 3 3,662 1974 1977 Sequoyah Tennessee 2 2,292 1981 1982 Watts Bar Tennessee 2 2,321 1996 2016 Total Nuclear 7 8,275 Coal-Fired Bull Run Tennessee 1 765 1967 1967 Cumberland Tennessee 2 2,470 1973 1973 Gallatin Tennessee 4 976 1956 1959 Kingston Tennessee 9 1,298 1954 1955 Shawnee Kentucky 9 1,071 1953 1955 Total Coal-Fired 25 6,580 Natural Gas and/or Oil-Fired (2)(3) Simple-Cycle Combustion Turbine Allen Tennessee 20 456 1971 1972 Brownsville Tennessee 4 456 1999 1999 Colbert Alabama 8 392 1972 1972 Gallatin Tennessee 8 612 1975 2000 Gleason Tennessee 3 485 2000 2000 Johnsonville Tennessee 19 1,088 1975 2000 Kemper Mississippi 4 312 2002 2002 Lagoon Creek Tennessee 12 932 2001 2002 Marshall County Kentucky 8 592 2002 2002 Subtotal Simple-Cycle Combustion Turbine 86 5,325 Combined-Cycle Combustion Turbine Ackerman (4) Mississippi 1 713 2007 2007 Allen (5) Tennessee 1 1,106 2018 2018 Caledonia (6) Mississippi 3 765 2003 2003 John Sevier (7) Tennessee 1 871 2012 2012 Lagoon Creek (8) Tennessee 1 525 2010 2010 Magnolia Mississippi 3 918 2003 2003 Paradise (9) 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 12,183 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 (10) 60 1,824 1912 1972 Pumped-Storage (11) Tennessee 4 1,635 1978 1979 Total Hydroelectric 113 5,385 Diesel Generator Meridian Mississippi 5 9 1998 1998 TVA Non-hydro Renewable Resources (12) 1 Total TVA-Operated Generating Facilities 32,433 Contract Renewable Resources (13) 326 Power Purchase and Other Agreements - Renewable (14) 2,009 Power Purchase and Other Agreements - Nonrenewable (14) 3,128 Total Summer Net Capability 37,896 56 Table of Contents 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 and does not include operational limitations such as derates. (2) 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. (3) As of September 30, 2021, 326 MW of peak firing short-term capability of simple-cycle combustion turbine units was not operational and would require additional investment for dependable use; therefore, this short-term capability is not presented in the table above. (4) Ackerman Combined Cycle Facility is a single steam cycle unit driven by two gas turbines (2x1 configuration). (5) Allen Combined Cycle Facility is a single steam cycle unit driven by two gas turbines (2x1 configuration). (6) Caledonia Combined Cycle Plant ("Caledonia CC") is currently a leased facility operated by TVA. (7) John Sevier Combined Cycle Facility ("John Sevier CCF") is a single steam cycle unit driven by three gas turbines (3x1 configuration). (8) Lagoon Creek Combined Cycle Facility is a single steam cycle unit driven by two gas turbines (2x1 configuration). (9) Paradise Combined Cycle Facility is a single steam cycle unit driven by three gas turbines (3x1 configuration). (10) Includes 86 MW of summer net capability associated with Hiwassee Hydro Unit 2. See Item 1, Business — Power Supply and Load Management Resources — Conventional Hydroelectric Dam s. (11) See Item 1, Business — Power Supply and Load Management Resources — Raccoon Mountain Pumped-Storage Plant for a discussion of Raccoon Mountain Pumped-Storage Plant. (12) TVA owns approximately 1 MW of solar capability among 13 solar installations. (13) Contract Renewable Resources is capability from various historical renewable energy programs that consist of PPAs primarily with individuals and small businesses. (14) See Item 1, Business — Power Supply and Load Management Resources — Power Purchase and Other Agreements for information on renewable and non-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, 2021: • Approximately 2,500 circuit miles of 500 kilovolt, 11,900 circuit miles of 161 kilovolt, and 2,000 circuit miles of other voltage transmission lines; • 4,048 miles of fiber optic lines; • 522 transmission substations, power switchyards, and switching stations; and • 1,325 customer connection points (customer, generation, and interconnection). At September 30, 2021, certain qualified technological equipment and software ("QTE") related to TVA's transmission system were leased to private entities and leased back to TVA under long-term leases. See Note 14 — Debt and Other Obligations — Lease/Leasebacks and Note 23 — 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. 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. TVA continues to study its real property portfolio as part of the Strategic Real Estate Plan, which is aimed at reducing cost, right-sizing the portfolio, and aligning real estate holdings with TVA's strategic direction. In addition, as TVA continues to implement mandatory telework for those who do not have to be physically present during the COVID-19 pandemic, it is also assessing and reviewing the pandemic's long-term impacts to real estate. 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; 57 Table of Contents • 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; • 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 consolidated its Knoxville area employees into the West Tower of the KOC and the Greenway Drive Transmission Service Center in 2020. Consolidation of the centralized field offices in Norris, Tennessee and additional consolidations from the Greenway Area Office are expected to be completed in early 2022.