What changed in this filing

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Item 1. Business

2025-11-13 compared with 2024-11-14 · 309 added, 401 removed, 760 unchanged (48% of the section changed)

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TVA's mission focuses on three key areas:

• Energy — Delivering reliable, low cost, clean energy;

• Energy — Delivering reliable and low cost energy;

• Environment — Caring for the region's natural resources;

• Economic Development — Creating sustainable economic growth.

TVA's Strategic Priorities

While TVA's mission has not changed since it was established in 1933, the climate in which TVA operates continues to evolve.

To continue to deliver its mission of service while evolving for future success, TVA must realize five strategic priorities:

• People Advantage — Amplifying the energy, passion, and creativity within each TVA employee;

• Operational Excellence — Building on TVA's best-in-class reputation for reliable service and competitively priced power;

• Financial Strength — Investing in the future, while keeping energy costs as low as possible;

• Powerful Partnerships — Promoting progress through the shared success of TVA's customers and stakeholders;

• Igniting Innovation — Pursuing innovative solutions for TVA and its customers and communities.

For more than 90 years, TVA has worked to make life better across the Tennessee Valley region.

TVA and its partners continue working to build tomorrow together and creating the future of American energy.

TVA's service area, the area in which it sells power, is defined by the Tennessee Valley Authority Act of 1933, as amended ("TVA Act").

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This provision is referred to as the "fence" because it bounds TVA's sales activities, essentially limiting TVA to power sales within a defined service area.

(1) TVA Locations shown here are in service as of September 30, 2024 .

(1) TVA locations shown here were in service as of September 30, 2025.

(2) In addition to the locations above, TVA owns approximately one megawatt ("MW") of nameplate capacity among nine operating solar installations across the Tennessee Valley region with six installations in Tennessee, two in Alabama, and one in Mississippi.

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however, Power Supply Flexibility Agreements available to LPCs that have executed long-term Partnership Agreements with TVA allow LPCs to locally generate or purchase up to approximately five percent of their average total hourly energy sales over a certain time period in order to meet their individual customers' needs.

Revised flexibility agreements were made available to LPCs in August 2023.

Revised flexibility agreements were made available to LPCs in 2023.

These revised agreements permit projects to be located anywhere in TVA's service area, connected either to the LPC distribution system or to TVA's transmission system, and make it easier for LPCs to partner on projects.

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These rates are revised from time to time, subject to TVA approval, to reflect changes in costs, including changes in the wholesale cost of power.

TVA also regulates LPC policies for customer deposits, termination of service for non-payment, providing information to consumers, and billing through a service practice policy framework.

TVA also regulates LPC policies for customer deposits, termination of service for non-payment, provision of information to consumers, and billing through a service practice policy framework.

TVA's regulatory framework provides for consistent regulatory policy for ratepayers across the Tennessee Valley, while recognizing local considerations.

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Other Customers

Revenues from directly served industrial customers accounted for approximately seven percent of TVA's total operating revenues in 2024.

Revenues from directly served industrial customers accounted for approximately eight percent of TVA's total operating revenues in 2025.

Contracts with these customers are subject to termination by the customer or TVA upon a minimum notice period that varies according to a number of factors, including the customer's contract demand and the period of time service has been provided.

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Other revenue consists primarily of wheeling and network transmission charges, sales of excess steam that is a by-product of power production, delivery point charges for interconnection points between TVA and the customer, Renewable Energy Certificate ("REC") sales, and certain other ancillary goods or services.

Other revenue accounted for approximately two percent of TVA's total operating revenues in 2024.

Other revenue accounted for approximately one percent of TVA's total operating revenues in 2025.

Rate Authority

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Power Supply and Load Management Resources

TVA is focused on building an American energy future — one that provides energy security and national security.

TVA seeks to balance production capabilities with power supply requirements by promoting the conservation and efficient use of electricity and, when necessary, buying, building, or leasing assets or entering into power purchase agreements ("PPAs").

TVA also seeks to employ a diverse mix of energy generating sources and works toward obtaining greater amounts of its power supply from clean (low or zero carbon-emitting) resources.

Currently, TVA is working with stakeholders and the public on the 2025 Integrated Resource Plan ("IRP"), a comprehensive plan that will help shape TVA's energy system through 2050.

The IRP is expected to be TVA’s compass for power generation decisions as well as for long-term operational and financial planning.

TVA is making investments in its generating portfolio and infrastructure to both help meet the growing demand for electricity and modernize the fleet while also allowing TVA to maintain competitive rates and high reliability and work toward an increasingly clean power system.

As TVA continues to evaluate the impact of retiring its coal-fired fleet by 2035 and works to accelerate the growth of renewables, it also continues to evaluate adding flexible lower carbon-emitting gas plants as a strategy

to maintain reliability.

Commercial operations began on Paradise Combustion Turbine Units ("CTs") 5-7 on December 29, 2023.

TVA also has ongoing natural gas projects at its Johnsonville, Cumberland, and Kingston sites and is evaluating natural gas projects for the replacement generation for the second unit at Cumberland, a new Caledonia CT plant on TVA land, and an aeroderivative CT project at TVA's Allen site.

TVA is committed to investing in the future of nuclear with the evaluation of emerging advanced nuclear technologies, such as small modular reactors ("SMRs"), while also investing in its existing nuclear assets and working to renew its nuclear generation fleet licenses.

TVA has been implementing the Hydro Life Extension Program with a focus on improving the availability and flexibility of the hydroelectric fleet and exploring new hydroelectric pumped-storage power to support the grid.

It is also investing in research and development for technology around hydrogen fuel and carbon capture, utilization, and storage.

In addition, the Inflation Reduction Act of 2022 ("Inflation Reduction Act") makes certain tax-exempt entities, including TVA, eligible for a direct-pay option for certain tax credits that encourage investment in clean energy, in some circumstances.

TVA is currently exploring funding opportunities of various types, including opportunities involving pumped-storage, solar, carbon capture, hydrogen, energy efficiency, and transmission, among others;

however, this exploration does not guarantee that TVA or its partners will receive funds.

See Research and Development below, Item 1A, Risk Factors — Operational Risks , and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio.

TVA also seeks to employ a diverse mix of energy generating sources, which enables TVA to better meet changing market conditions, including load growth, while ensuring affordable, reliable, and resilient electricity for its customers.

To accomplish this, TVA is making investments in its generating portfolio and infrastructure.

TVA continues to evaluate adding flexible gas plants as a strategy to maintain reliability.

TVA is also reviewing how recent executive orders ("EOs"), the evolving regulatory environment, and overall system performance are impacting the operation of its coal-fired fleet.

Commercial operations began on Johnsonville Aeroderivative Combustion Turbine Units ("CTs") 21-30 in 2025, and TVA has ongoing natural gas projects at its Cumberland Fossil Plant ("Cumberland") site and its Kingston Fossil Plant ("Kingston") site, an aeroderivative CT project at TVA's Allen CT site, and a new Caledonia simple cycle CT project on TVA land.

TVA is also evaluating natural gas

projects for the replacement generation for the second unit at Cumberland and a new CT project at TVA's Lagoon Creek site.

TVA is committed to investing in the future of nuclear with the evaluation of emerging advanced nuclear technologies, such as small modular reactors ("SMRs"), while working to renew its existing nuclear generation fleet licenses.

TVA has been implementing the Hydro Life Extension Program and exploring new hydroelectric pumped-storage power.

In addition, the Inflation Reduction Act of 2022 ("IRA") makes certain tax-exempt entities, including TVA, eligible for a direct-pay option for certain energy tax credits.

TVA is currently pursuing funding opportunities of various types;

however, this does not guarantee that TVA or its partners will receive funds.

Power generating facilities operated by TVA at September 30, 2025, included three nuclear sites, 18 natural gas and/or oil-fired sites, four coal-fired sites, 29 conventional hydroelectric sites, one pumped-storage hydroelectric site, one diesel generator site, and nine operating solar installations.

See Item 2, Properties — Generating Properties — Net Capability for a discussion of the units at these facilities.

TVA also acquires power under PPAs of varying durations, including short-term contracts of less than 24-hours in duration.

TVA also acquires power under PPAs of varying durations, including short-term contracts.

See Power Purchase and Other Agreements below.

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TVA acquires RECs in connection with certain purchased power transactions and sells some of these RECs to customers.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Renewable Power Purchase Agreements.

While TVA continues down the path of lowering emissions, including GHG emissions, there will be fluctuations in usage due to electricity demands.

Also, TVA continues to make operational decisions to keep the system reliable and to deliver low-cost energy .

At September 30, 2025, TVA had three nuclear sites consisting of seven units in operation.

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The first license renewal application was submitted to the Nuclear Regulatory Commission ("NRC") in January 2024 for the three units at Browns Ferry.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Nuclear Fleet License Extensions.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Capacity — Nuclear — Nuclear Fleet License Extensions.

Other Nuclear Initiatives .

TVA has an Early Site Permit to potentially construct and operate SMRs at TVA's Clinch River Nuclear Site in Oak Ridge, Tennessee, and in 2022, the TVA Board approved a programmatic approach to exploring advanced nuclear technology (the "New Nuclear Program").

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Small Modular Reactors .

TVA has an Early Site Permit to potentially construct and operate SMRs at TVA's Clinch River Nuclear Site in Oak Ridge, Tennessee.

TVA has requested public comment on a draft Supplemental Environmental Impact Statement ("EIS") that addresses potential environmental effects associated with site preparation, construction, operation, and decommissioning of the GE Vernova Hitachi Nuclear Energy BWRX-300 SMR at the Clinch River Nuclear Site.

TVA also submitted a construction permit application to the Nuclear Regulatory Commission ("NRC") for a BWRX-300 reactor at the Clinch River Nuclear Site.

The application was accepted for review by the NRC in July 2025.

See Part II, Item 7, Management's

Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Capacity — Nuclear — Small Modular Reactors .

Other Nuclear Matters.

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See Fuel Supply — Nuclear Fuel below for a discussion of spent nuclear fuel and low-level radioactive waste and Note 23 — Commitments and Contingencies — Contingencies for a discussion of TVA's nuclear decommissioning liabilities and the related trust and nuclear insurance, which discussions are incorporated herein by reference.

TVA's Sequoyah Unit 2 tripped on July 30, 2024, due to failure of the main generator.

As a result, the project to restack and rewind the main generator was pulled forward in the Nuclear Life Extension ("NLE") plan.

The unit will remain offline until project completion, which is expected in spring 2025.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Sequoyah Nuclear Plant Unit 2 .

Natural Gas and/or Oil-Fired

At September 30, 2024, TVA's natural gas and oil-fired fleet consisted of 85 combustion turbine power blocks (68 simple-cycle units, one cogeneration unit, and 14 combined-cycle power units, accounting for 12,656 MW of summer net capability, and two idled units at Allen Combustion Turbine Facility:

Units 17 and 18).

In 2024, Allen CTs 1-16 and Johnsonville CTs 11-16 were retired.

Fifty-three of the simple-cycle units are currently capable of quick-start response allowing full generation capability in approximately 10 minutes.

At September 30, 2025, TVA's natural gas and oil-fired fleet consisted of 93 combustion turbine power blocks (68 simple-cycle units, one cogeneration unit, 10 aeroderivative units, and 14 combined-cycle power units), accounting for 12,643 MW of summer net capability.

Forty-nine of the simple-cycle units are currently capable of quick-start response allowing full generation capability in approximately 10 minutes.

The economic dispatch of natural gas-fired plants depends on both the day-to-day price of natural gas and the price of other available intermediate resources such as coal-fired plants.

TVA uses simple-cycle units to meet peaking or backup power needs.

As TVA evaluates the retirement of its coal-fired fleet and works to accelerate the growth of renewables, it also continues to evaluate adding flexible lower carbon-emitting gas plants as a strategy to maintain reliability.

The natural gas-fired fleet supports renewable expansion by providing reliability across all hours, as well as the flexibility to help manage ramping and intermittency.

Commercial operations began on Paradise CTs 5-7 on December 29, 2023.

The natural gas-fired fleet supports reliability across all hours, as well as the flexibility to help manage ramping and intermittency.

Commercial operations began on Johnsonville Aeroderivative CT Units 21-30 in 2025.

TVA has ongoing natural gas projects at its Cumberland site and its Kingston site, an aeroderivative CT project at TVA's Allen CT site, and a new Caledonia simple cycle CT project on TVA land.

TVA is also evaluating natural gas projects for the replacement generation for the second unit at Cumberland and a new CT project at TVA's Lagoon Creek site.

TVA may decide to make further strategic investments in natural gas-fired facilities in the future by purchase, construction, or lease, to help support portfolio diversification and system reliability.

See Item 2, Properties — Generating Properties, Note 8 —Leases, and Note 14 — Debt and Other Obligations for a discussion of lease arrangements into which TVA has entered in connection with certain combined cycle facilities.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Natural Gas-Fired Units for a discussion of ongoing projects at certain natural gas-fired facilities .

See Item 2, Properties — Generating Properties, Note 9 —Leases, and Note 15 — Debt and Other Obligations for a discussion of lease arrangements into which TVA has entered in connection with certain natural gas-fired facilities.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Capacity — Natural Gas-Fired Units for a discussion of ongoing projects at certain natural gas-fired facilities .

At September 30, 2025, TVA had four coal-fired plants consisting of 24 active units, accounting for 5,815 MW of summer net capability.

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Coal-fired plants have been subject to increasingly stringent regulatory requirements over the last few decades, including those under the Clean Air Act ("CAA"), the Clean Water Act ("CWA"), and the Resource Conservation and Recovery Act ("RCRA").

There have also been recent executive actions regarding these acts.

See Environmental Matters below.

TVA is pursuing a programmatic approach for the evaluation of its sites where coal combustion residuals ("CCR") are stored to meet all applicable state and federal regulations.

TVA continues to work toward a balanced generation plan with greater reliance on lower-cost and cleaner energy generation technologies.

Since September 30, 2010, TVA has reduced its summer net capability of coal-fired units by 8,418 MW.

TVA is evaluating the impact of retiring the balance of the coal-fired fleet by 2035, and that evaluation includes environmental review, public input, and TVA Board approval.

TVA is evaluating the impact of retiring the balance of the coal-fired fleet by 2035, and that evaluation includes environmental reviews and TVA Board approval.

TVA is also reviewing how recent EOs, the evolving regulatory environment, and overall system performance are impacting the operation of its coal-fired fleet.

An evaluation of the continued operation of coal-fired units is being conducted and will consider material condition, plant performance, system flexibility needs, environmental requirements, grid support, and other factors.

In January 2023, TVA issued its Record of Decision to retire the two coal-fired units at Cumberland by the end of calendar year ("CY") 2026 and CY 2028.

In April 2024, TVA issued its Record of Decision to retire the nine coal-fired units at Kingston by CY 2027.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio .

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Capacity — Coal-Fired Fleet.

Diesel Generators

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Then, during periods of high or peak demand, the water is released and the pumps reverse to work as power generating turbines.

New hydroelectric pumped-storage is one of several technologies that TVA is exploring to ensure the reliability and resiliency of the grid, particularly as intermittent renewables like solar continue to be added to the generation mix.

In 2023, TVA announced sites for a potential future pumped-storage facility.

After completing an Environmental Impact Statement ("EIS"), TVA will select a site based on a wide range of environmental, social, and technical factors.

Exploratory drilling is occurring.

TVA is also exploring new hydroelectric pumped-storage to meet peak demands and allow more baseload generation while ensuring the reliability and resiliency of the grid.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Capacity — Hydroelectric Pumped-Storage.

Renewable Energy Resources

As more consumers and businesses are seeking cleaner energy, the utility industry is evolving to meet those needs.

As TVA also evolves, it will see impacts to the way it does business through the pricing of products, transmission of energy, and development of new products and services for its customers in support of changing customer preferences.

Many companies are focusing on sustainability and requiring more energy efficiency and renewable energy options.

In addition, TVA seeks to obtain greater amounts of its power supply from clean resources to work towards carbon emission reductions.

As a result, TVA is working to increase its renewable energy portfolio by investing in existing hydroelectric assets through the Hydro Life Extension Program, securing renewable PPAs, and exploring Self-Directed Solar projects.

TVA also encourages renewable power and offers renewable resources through various current programs and offerings, including the Green Invest Program, which matches customer demand with renewable supply and is designed to meet the needs of customers at scale.

See Power Purchase and Other Agreements for information on TVA’s PPAs, including renewable agreements, and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Renewable Power Purchase Agreements for a discussion of TVA's RFPs.

The utility industry is evolving in support of changing customer preferences.

As TVA evolves, it will see impacts to the way it does business through the pricing of products, transmission of energy, and development of new products and services.

TVA is investing in existing hydroelectric assets through the Hydro Life Extension Program and exploring solar projects.

TVA also supports various programs and offerings, including the Green Invest Program, which matches customer demand with renewable supply and is designed to meet the needs of customers.

Conventional Hydroelectric Dams.

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At September 30, 2025, Hiwassee Hydro Unit 2 accounted for 86 MW of the conventional hydroelectric summer net capability.

TVA has a Hydro Life Extension Program which focuses on recovering and preserving TVA's extensive hydroelectric fleet, improving efficiency and flexibility, and ensuring long-term reliability of this vital clean energy asset.

As part of this program, TVA is working to add additional carbon free capacity to some of its existing hydroelectric units.

As part of this program, TVA is working to add additional capacity to some of its existing hydroelectric units.

In a separate effort, TVA is working to improve transmission system reliability by upgrading or adding synchronous condensing capability to several of the conventional hydro units in the fleet.

Hydroelectric generation is an important part of TVA's energy mix in the future.

It plays a vital role in carbon reduction initiatives, the ability to integrate other renewables into the power portfolio, and TVA's ability to meet changing customer preferences for cleaner energy sources.

In 2023, TVA signed a Memorandum of Understanding ("MOU") with the DOE to enhance collaboration on hydropower technology development.

Joint efforts are focusing on evaluating and demonstrating different approaches for operating hydropower plants to meet the electricity grid's changing needs.

Dam Safety Assurance Program.

TVA has an established dam safety program, which includes procedures based on the Federal Guidelines for Dam Safety, with the objective of reducing the risk of a dam safety event.

The program analyzes, evaluates, and manages risks through a systematic and thorough process that facilitates decision-making for the safety of a structure, identifying necessary actions to reduce risk, including remediation projects, and prioritization of actions for TVA's river

Prioritization is driven by reducing risk to the public and asset preservation.

TVA also continues to provide routine care of the dams as part of the dam safety program through inspections, monitoring, and maintenance, among other activities.

Self-Directed Solar.

During 2019, the TVA Board approved the opportunity for TVA to explore being directly involved in the development of a utility-scale solar project, contingent on the successful completion of environmental reviews under the National Environmental Policy Act ("NEPA") and other applicable laws.

In 2021, TVA purchased land for this development, and in 2022, environmental reviews were completed.

The challenges affecting the U.S.

solar industry are also being seen in TVA's Self-Directed Solar project.

The project has experienced delays and cost increases due to escalations from supply chain limitations.

TVA has elected to pursue a competitive selection process with third parties for the development of the photovoltaic ("PV") solar facility to be located on the site.

TVA plans to enter into a long-term PPA to purchase the energy generated by the facility.

An RFP has been issued to this effect, and selection of the awardee is anticipated in early CY 2025.

In November 2022, the TVA Board approved the opportunity for TVA to explore the development of an additional utility-scale solar project, contingent on successfully completing environmental reviews under NEPA and other applicable laws and obtaining the necessary state permits.

The project would utilize TVA land, deploying a solar cap system on the closed CCR facility at the TVA Shawnee Fossil Plant in Paducah, Kentucky.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Self-Directed Solar .

TVA owns nine operating solar installations that account for approximately one MW of nameplate capacity.

In November 2022, the TVA Board approved the opportunity for TVA to explore the development of a utility-scale solar project, contingent on successfully completing environmental reviews under NEPA and other applicable laws and obtaining the necessary state permits.

The project would utilize TVA land, deploying a solar cap system on the closed CCR facility at the TVA Shawnee Fossil Plant ("Shawnee") in Paducah, Kentucky.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Capacity — Solar .

During 2019, the TVA Board approved the opportunity for TVA to explore being directly involved in the development of a utility-scale solar project.

The project experienced delays and cost increases;

therefore, in 2024, TVA elected to pursue a competitive selection process with third parties and planned to enter into a long-term PPA to purchase the energy generated by the facility.

However, in the fourth quarter of 2025, TVA decided to not move forward with this solar project.

As a result, TVA recognized $25 million in Operating and maintenance expense related to project write-offs, including $19 million related to a down payment for solar panels.

Other Renewable Energy Resources.

In addition to the hydroelectric units above, TVA owns nine operating solar installations that account for approximately one MW of nameplate capacity.

Other renewable energy resources also include renewable energy purchases, a majority associated with TVA renewable programs.

Other renewable energy resources include renewable energy purchases, a majority associated with TVA renewable programs, which are described below.

See Power Purchase and Other Agreements for information on renewable PPAs.

TVA's current renewable programs and offerings include:

Small-scale Solutions .

The Green Connect Program connects residential customers who are interested in on-site solar PV and/or battery storage systems with qualified solar and battery storage installers who agree to install to Green

Connect Program Standards.

These qualified installers, who are members of TVA's Quality Contractor Network, are insured and

licensed and have also completed special training on TVA guidelines.

Participants have access to objective information and the benefit of installation verifications with regard to whether their solar PV system has met the Green Connect Program Standards.

Utility-scale Solutions .

The Green Invest Program matches customer demand with renewable supply through a Green Invest Agreement.

The goal of the Green Invest Program is to meet the long-term sustainability needs of customers at scale.

The goal of the Green Invest Program is to meet the long-term sustainability needs of customers.

TVA procures the needed renewable supply through a diversified approach, which could include a competitive procurement process, strategic partnerships, or construction of renewable facilities to meet these needs.

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See Note 18 — Revenue .

Other Renewable Solutions.

The Green Switch Program allows customers to support solar renewable resources through purchasing renewable solar energy generated in the Tennessee Valley.

The Green Switch Program allows customers to support solar resources through purchasing solar energy generated in the Tennessee Valley.

The product is sold in blocks of 200 kWh or matches 100 percent of a customer's electricity usage (available through select LPCs).

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The RECs, which each represent one megawatt-hour ("MWh") of renewable energy generation, are principally associated with wind, solar, biomass, and low-impact hydroelectric.

TVA continues to evaluate ways to adjust to customer preferences and requirements for cleaner and greener energy, including the acquisition of RECs from renewable purchased power that can be sold to customers to meet their needs.

TVA continues to evaluate ways to adjust to customer preferences, including the acquisition of RECs from renewable purchased power that can be sold to customers to meet their needs.

Overall, TVA will procure needed renewable supply through a diversified approach, which could include a competitive procurement process, strategic partnerships, or construction of renewable facilities to meet these needs.

Total Renewable Energy Resources .

As of September 30, 2024, TVA's total renewable energy resources amounted to 9,766 MW.

Of this amount, 6,964 MW are operating while 2,802 MW are contracted but not yet online.

In addition, TVA has 299 MW from Self-Directed Solar projects currently under development, which are not represented in the table below.

As of September 30, 2025, TVA had 7,252 MW of operating renewable energy resources and 2,528 MW of contracted renewable resources not yet online.

In addition, TVA has a self-directed solar project currently under development, which is not represented in the table below.

See Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Solar.

(1) Contracted resources are executed PPAs expected to come online at a future date.

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(3) TVA acquires RECs in connection with certain purchased power transactions and sells some of these RECs to customers.

TVA's operating renewables by location and by source are detailed below:

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(3) TVA acquires RECs in connection with certain purchased power transactions and sells some of these RECs to customers.

Distributed Energy Resources

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The new fiber optic lines will also improve the reliability and resiliency of the generation and transmission system.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Fiber Optic Network.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Fiber Optic Network.

New energy management systems and energy storage technologies present opportunities for more sophisticated and integrated operation of the entire grid.

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Implementation of these technologies in conjunction with two-way communication to the site creates the potential for more efficient usage of other DER on the grid.

TVA is partnering with LPCs and others to support the electrification of transportation in the Tennessee Valley in a multi-year EV initiative.

The initiative focuses on reducing or eliminating EV market barriers with EV policies, improving charging infrastructure availability, expanding EV availability and offerings, and spreading EV consumer awareness.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Electric Vehicles.

On-site energy management technologies and the proliferation of companies interested in providing services to support and aggregate the impacts of such systems provide another DER opportunity.

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In 2025, TVA invested $242 million in its energy efficiency and demand response programs.

As of September 30, 2024, TVA has 1,444 MW of demand response peak season portfolio capacity and effectively reduced 2024 energy needs by approximately 205 gigawatt hours of net incremental energy efficiency savings.

As of September 30, 2025, TVA had 1,693 MW of demand response peak season portfolio capacity and effectively reduced 2025 energy needs by approximately 257 gigawatt hours of net incremental energy efficiency savings.

TVA's community energy portfolio consists of programs aimed at balancing system needs by lowering costs, shaping energy usage, increasing capacity, and decarbonizing the grid, all through the participation of end-use consumers.

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TVA also has energy programming focused on expanding partnerships, improving program access, and catalyzing investment in communities where all individuals can benefit from TVA's resources.

TVA's Community Energy Efficiency Programs, a component of the community energy portfolio, include (1) the Home Uplift Program, which completes home evaluations and makes high-impact home energy upgrades for qualifying homeowners at no cost to the homeowners, (2) the School Uplift Program, which assists schools with adopting strategic energy management practices, and (3) the Small Business Uplift Program, which assists small businesses located within underserved communities with energy evaluations and energy improvement investments provided by TVA at no cost to the small business.

TVA anticipates additional community energy programs to be developed over the coming years to grow the community energy portfolio.

TVA's Uplift Programs, a component of the community energy portfolio, include (1) the Home Uplift Program, which completes home evaluations and makes high-impact home energy upgrades for qualifying homeowners at no cost to the homeowners, (2) the School Uplift Program, which assists schools with adopting strategic energy management practices, and (3) the Small Business Uplift Program, which assists small businesses located within underserved communities with energy evaluations and energy improvement investments provided by TVA at no cost to the small business.

TVA anticipates additional community energy portfolio programs to be developed over the coming years to grow the community energy portfolio.

See Distributed Energy Resources above for further discussion on demand response systems.

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TVA acquires power from a variety of power producers generally through long-term and short-term PPAs as well as through spot market purchases.

During 2024, TVA acquired approximately 98 percent of the power that it purchased through the long-term PPAs described below, including agreements for long-term renewable generation resources, and approximately two percent on the spot market.

During 2023, TVA acquired approximately 92 percent of the power that it purchased through long-term PPAs, approximately six percent through short-term PPAs, and approximately two percent on the spot market.

During 2025, TVA acquired approximately 95 percent of the power that it purchased through the long-term PPAs described below, including agreements for long-term renewable generation resources, approximately three percent on the spot market, and approximately two percent through short-term PPAs.

During 2024, TVA acquired approximately 98 percent of the power that it purchased through long-term PPAs, and approximately two percent on the spot market.

TVA's capability provided by PPAs is primarily provided under contracts that expire through 2045 and are described in the table below.

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Contract Termination Date

Renewable PPAs

Solar Tennessee 8 430 2032 - 2044

Georgia 1 250 2026

Mississippi 1 500 2026

Lignite Mississippi 1 440 2032

Total Operating Coal 3 1,190

Natural Gas Alabama 4 1,788 2026 - 2033

Natural Gas Georgia 3 692 2026 - 2028

Natural Gas Illinois 1 479 2028

Natural Gas (4)

Missouri 1 50 2026

Natural Gas (4)

North Carolina 1 100 2026

Natural Gas Pennsylvania 1 500 2028

Total Operating Natural Gas 11 3,609

Diesel Alabama 1 10 2035

Diesel Mississippi 2 46 2028

Diesel Tennessee 4 59 2028 - 2032

Total Operating Diesel 7 115

Solar Alabama 2 302 2037 - 2041

Solar Kentucky 1 173 2045

Solar Mississippi 2 350 2044 - 2045

Solar Tennessee 10 613 2032 - 2045

Total Operating Solar 15 1,438

Wind Tennessee 1 25 2025

Wind Iowa 2 159 2030 - 2031

Wind Kansas 2 366 2032 - 2033

Wind Illinois 3 450 2032 - 2033

Wind Kansas 2 311 2032 - 2033

Total Operating Wind 7 920

Biomass Tennessee 1 5 2031

Biomass Mississippi 1 25 2028

Total Operating Biomass 2 30

Hydroelectric Tennessee, Kentucky, and North Carolina 2 779 2035 and upon three years' notice

Landfill Gas Tennessee 1 5 2031

Battery Storage Mississippi 2 100 2044 - 2045

Subtotal Operating 49 8,181

Contract Renewable Resources (5)

Total Renewable Operating PPAs 3,206

Contracted (not yet online)

Total Renewable Contracted PPAs 21 2,802

Nonrenewable PPAs

Diesel Tennessee 4 59 2028 - 2032

Diesel Alabama 1 10 2035

Diesel Mississippi 2 46 2028

Total Operating Diesel 7 115

Natural Gas (5)

Alabama 3 2,068 2024 - 2033

Natural Gas (5)

Georgia 3 646 2024-2025

Natural Gas Illinois 1 479 2028

Natural Gas Missouri 1 50 2025

Natural Gas Pennsylvania 1 500 2028

Total Operating Natural Gas 9 3,743

Coal Georgia 1 250 2026

Coal Mississippi 1 500 2026

Lignite Mississippi 1 440 2032

Total Operating Coal 3 1,190

Battery Storage Mississippi 1 50 2044

Total Nonrenewable Operating PPAs 20 5,098

Total Operating PPAs 8,482

Contracted (not yet online)

Battery Storage (4)

Total Nonrenewable Contracted PPAs 5 334

Solar 31 2,528

Battery 3 270

Total Contracted (not yet online) PPAs 35 2,848

(1) TVA acquires RECs in connection with certain purchased power transactions and sells some of these RECs to customers.

(2) Represents capability specified in TVA's PPA contracts.

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Nameplate capacity does not account for real-time operating constraints, such as intermittency of renewable resources associated with weather, delivery mechanisms, or other factors.

(3) Included in the table above is 250 MW of power delivery in Georgia and 500 MW of power delivery in Mississippi that expire on November 30, 2025.

contracts were replaced with one natural gas contract for 670 MW in Georgia and Mississippi that commences on December 1, 2025.

The new contract is not reported in the table above.

(4) Included in the table above is 50 MW of power delivery in Missouri and 100 MW of power delivery in North Carolina that expire on November 30, 2025 and December 31, 2025, respectively.

The Missouri and North Carolina contracts were replaced with 200 MW and 75 MW of natural gas contracts, respectively, which commence on December 1, 2025 and January 1, 2026, respectively.

The two new contracts are not reported in the table above.

(5) Contract Renewable Resources is capability from various historical renewable energy programs that consist of PPAs primarily with individuals and small businesses.

(4) See challenges associated with contracted PPAs not yet online in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Renewable Power Purchase Agreements .

(5) Included in the table above is 500 MW of power delivery in Alabama and 250 MW of power delivery in Georgia that expired on September 30, 2024.

Under federal law, TVA is required to purchase energy from qualifying facilities (cogenerators and small power producers) at TVA's avoided cost of either generating this energy itself or purchasing this energy from another source.

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TVA plans to continue using contracts of various products, lengths, and terms as well as inventory to meet the projected nuclear fuel needs of its nuclear fleet.

The net book value of TVA's nuclear fuel was $1.3 billion at both September 30, 2024 and 2023.

On May 13, 2024, President Biden signed the Prohibiting Russian Uranium Imports Act into law.

Further restrictions on

working with, and sanctions against, Russia or Russian entities may be forthcoming.

TVA's currently contracted supply on

nuclear fuel will not be impacted by the new law or future sanctions or restrictions related to Russia.

TVA's nuclear fuel is

supplied primarily by U.S., Canadian, Australian, and European Union sources, and TVA has existing physical inventories located

in the United States and Canada sufficient to fuel its reactors for many years.

Further, existing federal law already prohibited

TVA from purchasing Russian or Chinese nuclear fuel.

TVA is not contracted to purchase any Russian or Chinese origin nuclear

fuel, and has no Russian or Chinese origin nuclear fuel in inventory for use in its reactors.

TVA could be impacted by higher market prices as a result of general market impacts resulting from the new law and other potential trade restrictions;

The net book value of TVA's nuclear fuel was $1.2 billion and $1.3 billion at September 30, 2025 and 2024, respectively.

TVA's nuclear fuel is supplied primarily by U.S., Canadian, Australian, and European Union sources, and TVA has existing physical inventories located in the United States and Canada sufficient to fuel its reactors for many years.

TVA is not contracted to purchase any Russian or Chinese origin nuclear fuel, and has no Russian or Chinese origin nuclear fuel in inventory for use in its reactors.

TVA could be impacted by higher market prices as a result of general market impacts resulting from potential trade restrictions;

however, at this time TVA's nuclear fuel is obtained predominantly through long-term contracts.

TVA, the DOE, and certain nuclear fuel contractors have entered into agreements, referred to as the Down-blend Offering for Tritium ("DBOT"), that provide for the production, processing, and storage of low-enriched uranium that is to be made using surplus DOE highly enriched uranium and other uranium.

Low-enriched uranium can be fabricated into fuel for use in a nuclear power plant.

Production of the low-enriched uranium began in 2019 and is contracted to continue through September 2027.

Contract activity after that date will consist of storage and flag management.

Flag management ensures that the uranium is unencumbered by policy restrictions, so that it can be used in connection with the production of tritium.

Under the terms of the interagency agreement between the DOE and TVA, the DOE will reimburse TVA for a portion of the costs of converting the highly enriched uranium to low-enriched uranium.

See Note 1 — Summary of Significant Accounting Policies — Down-blend Offering for Tritium for a more detailed discussion of the DBOT project.

TVA and the DOE are parties to an interagency agreement (referred to as the Down-blend Offering for Tritium), under which surplus DOE highly-enriched and other uranium is processed by third-party contractors into low-enriched uranium, which is then fabricated into fuel for use in TVA's nuclear power plants.

Production of the low-enriched uranium began in 2019 and will continue through the end of the interagency agreement term in September 2027.

After that date, any remaining uranium in storage will be managed to ensure that the uranium is unencumbered by policy restrictions, so that it can be used in connection with the production of tritium.

Under the terms of the interagency agreement, the DOE reimburses TVA for a portion of the costs of converting the highly enriched uranium to low-enriched uranium.

See Note 1 — Summary of Significant Accounting Policies — Down-blend Offering for Tritium for a more detailed discussion of the Down-blend Offering for Tritium project.

Low-Level Radioactive Waste.

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Tritium-Related Services.

TVA and the DOE are engaged in a long-term interagency agreement under which TVA will, at the DOE's request, irradiate tritium-producing burnable absorber rods ("TPBARs") to assist the DOE in producing tritium for

the Department of Defense ("DOD").

This agreement, which ends in 2040, requires the DOE to reimburse TVA for the costs that TVA incurs in connection with providing irradiation services and to pay TVA an irradiation services fee at a specified rate per TPBAR over the period when irradiation occurs.

TVA and the DOE are engaged in a long-term interagency agreement under which TVA, at the DOE's request, irradiates tritium-producing burnable absorber rods ("TPBARs") to assist the DOE in producing tritium for the Department of Defense, which is also known as the Department of War.

This interagency agreement requires the DOE to reimburse TVA for the costs that TVA incurs in connection with providing irradiation services and to pay TVA an irradiation services fee at the specified rate per TPBAR over the period when irradiation occurs.

This interagency agreement terminates in 2036.

In general, TPBARs are irradiated for one operating cycle, which lasts about 18 months.

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TVA has provided irradiation services using Watts Bar Unit 1 since 2003 and Watts Bar Unit 2 since 2021.

TVA has increased its production to within currently licensed limits for Watts Bar Unit 1 and expects to be within licensed limits for Watts Bar Unit 2 in April 2025.

The DOE notified TVA of future increased needs for tritium, and TVA submitted a License Amendment Request in 2023 to fulfill this request.

This request was approved by the NRC in April 2024.

The DOE's decision also allows for irradiation of TPBARs at Sequoyah in the future;

This request was approved by the NRC in 2024 and allows for irradiation of TPBARs at Sequoyah in the future;

however, TVA does not have plans to employ Sequoyah units for tritium production in the near term.

Natural Gas and Fuel Oil

During 2024, TVA purchased a significant amount of its natural gas requirements from a variety of suppliers under contracts with terms of up to five years and purchased substantially all of its fuel oil requirements on the spot market .

During 2025, TVA purchased a significant amount of its natural gas requirements from a variety of suppliers under contracts with terms of up to 10 years and purchased substantially all of its fuel oil requirements on the spot market .

The net book value of TVA's natural gas inventory was $33 million and $23 million at September 30, 2025 and 2024, respectively.

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During 2025, TVA maintained a total of approximately 1,941,833 million British thermal unit(s) ("mmBtu") per day of firm transportation capacity on eight major pipelines, with approximately 63 percent of total firm transportation capacity being maintained on two pipelines.

TVA utilizes natural gas storage services at eight facilities with a total capacity of 7.8 billion per cubic feet ("Bcf") of firm service and 7.3 Bcf of interruptible service to manage the daily balancing requirements of the eight pipelines used by TVA, with approximately 52 percent of the total storage capacity being maintained at two facilities.

During 2024, storage levels were generally maintained at between 40 and 80 percent of the maximum contracted capacity at each facility.

TVA utilizes natural gas storage services at eight facilities with a total capacity of 8.3 billion cubic feet ("Bcf") of firm service and 6.5 Bcf of interruptible service to manage the daily balancing requirements of the eight pipelines used by TVA, with approximately 56 percent of the total storage capacity being maintained at two facilities.

During 2025, storage levels were generally maintained between 40 and 80 percent of the maximum contracted capacity at each facility.

As TVA's natural gas requirements grow, it is anticipated that additional storage capacity may need to be acquired to meet the needs of the generating assets.

In 2025, TVA expects to increase its storage portfolio by approximately three percent.

Coal consumption at TVA's coal-fired generating facilities during both 2024 and 2023 was approximately 12 million tons.

Coal consumption at TVA's coal-fired generating facilities during 2025 and 2024 was approximately 14 million tons and 12 million tons, respectively.

At September 30, 2025 and 2024, TVA had 33 days and 28 days of system-wide coal supply at full burn rate, respectively, with net book values of $171 million and $191 million, respectively.

TVA utilizes both short-term and long-term coal contracts.

During 2024, long-term contracts made up 94 percent of coal purchases, and short-term contracts accounted for the remaining six percent.

During 2025, long-term contracts made up 100 percent of coal purchases.

TVA plans to continue using contracts of various lengths, terms, and coal quality to meet its expected consumption and inventory requirements.

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The following charts present the proportion of each delivery method TVA utilizes for its coal supply for the periods indicated:

Coal inventory decreased at September 30, 2024 as compared to September 30, 2023.

Coal supply availability and transportation performance continued to improve in 2023 and 2024.

Throughout 2024, TVA was able to meet burn and increase inventory stockpiles due to current market conditions reflecting an approximate balance between demand and available supply, weaker export markets, and stable natural gas prices.

TVA also invested in additional multi-year coal supply contracts to help provide stability in coal supply availability.

These investments are expected to support fuel resilience with TVA's overall coal supply.

Coal inventory levels at September 30, 2025 remained consistent with those at September 30, 2024.

In 2025, coal supply availability and transportation logistics stabilized, enabling TVA to reliably meet generation needs during a period of increased domestic coal consumption.

Despite these improvements, the evolving regulatory environment and corresponding market dynamics continue to challenge the balance between coal demand and available supply.

In response, TVA has secured additional multi-year coal supply agreements to enhance supply stability.

These strategic investments are expected to strengthen TVA's overall fuel resilience and help ensure continued reliability of coal-fired generation.

The TVA transmission system is one of the largest high-voltage transmission systems in North America.

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Pursuant to its Transmission Service Guidelines, TVA offers transmission services to eligible customers to transmit wholesale power in a manner that is comparable to TVA's own use of the transmission system.

TVA has also adopted and operates in accordance with its published Transmission Standards of Conduct and separates its transmission function from its

power marketing function.

As a Balancing Authority, Distribution Provider, Generator Owner, Generator Operator, Planning Coordinator, Reliability Coordinator, Resource Planner, Transmission Owner, Transmission Operator, Transmission Planner, and Transmission Service Provider, as those terms are defined for purposes of North American Electric Reliability Corporation ("NERC") regulations, TVA is also subject to federal reliability standards that are set forth by the NERC and approved by FERC.

TVA has also adopted and operates in accordance with its published Transmission Standards of Conduct and separates its transmission function from its power marketing function.

See Regulation .

In October 2021, an automated energy exchange, the Southeast Energy Exchange Market ("SEEM"), took effect.

The exchange was created to facilitate more short-term power exchanges and is an enhancement to the existing market.

TVA completed the appropriate environmental reviews, and during the third quarter of 2022, the TVA Board approved the creation of a zero-cost, non-firm transmission service to allow TVA to participate in SEEM.

In November 2022, the SEEM market began transacting.

In July 2023, the United States Court of Appeals for the District of Columbia Circuit ("D.C.

Circuit") remanded the FERC's approval of SEEM, sending the matter back to FERC for additional proceedings.

On March 14, 2025, after further review of the record, FERC affirmed its approval of SEEM.

Additional transmission upgrades may be required to maintain reliability.

Upgrades may include enhancements to existing lines and substations or new installations as necessary to provide adequate power transmission capacity, maintain voltage support, and ensure generating plant and transmission system stability.

In addition to upgrades to maintain reliability, TVA’s Grid of Tomorrow initiative aims to increase grid flexibility to enable greater use of renewable resources such as solar, wind, and other forms of distributed generation and includes making data and communications upgrades as demonstrated by investments in the new system operations center, energy management system, and fiber optic network.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio.

In recognition of the challenges of integrating intermittent and inverter-based resources to the power system, TVA established the Future Grid Performance initiative.

The primary goal is to maintain a stable and reliable grid while fostering the evolution of the energy system of the future, one of TVA's strategic elements of Operational Excellence.

Secondary goals include improving processes to facilitate an evolving resource mix with new technologies, optimizing approaches and tools to ensure system stability and performance in the future grid, and evaluating and adopting new grid technologies.

This initiative seeks to address grid needs to keep the grid reliable and stable as TVA transitions to an energy system that has a greater share of intermittent and inverter-based resources, such as renewables and battery storage, connected to the transmission system.

In addition, TVA is working on various projects with universities, Electric Power Research Institute ("EPRI"), and others to help enable a dynamic and multi-directional grid.

TVA is collaborating on several grid-supporting technology projects that are expected to help transmit power more efficiently, provide more flexibility and transmission capacity, and reduce the need to build new transmission lines including procurement of new rights of way.

These include converting the retired Bull Run Fossil Plant ("Bull Run") into a synchronous condenser to help regulate voltage and improve stability, utilizing advanced transmission line conductors to support increased capacity, and conducting a pilot to utilize Dynamic Line Rating technologies to provide transmission ratings that reflect real-time conditions.

In addition, TVA is working on various projects with universities, Electric Power Research Institute, national labs, and others to help enable a dynamic and multi-directional grid.

TVA is also working in partnership with LPCs to modernize their distribution systems by developing a shared vision and roadmap for transforming the Tennessee Valley’s transmission and distribution systems into an integrated regional grid.

These initiatives support TVA’s decarbonization efforts while helping ensure TVA continues to achieve its mission to deliver reliable power at the lowest feasible rate.

Investments in a modernized grid will help enable enhanced monitoring and control of TVA’s transmission and generation portfolio.

These initiatives help ensure TVA continues to achieve its mission to deliver reliable power at the lowest feasible rate.

Investments in a modernized grid will help enable capacity increases as well as enhanced monitoring and control of TVA’s transmission and generation portfolio.

Weather and Seasonality

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Revised flexibility agreements were made available to LPCs in August 2023.

Revised flexibility agreements were made available to LPCs in 2023.

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Improvements in energy efficiency technologies, smart technologies, and energy storage technologies may reduce the demand for centrally provided power.

The growing interest by customers in generating their own power through DER has the potential to lead to a reduction in the load served by TVA as well as cause TVA to re-evaluate how it operates the overall grid system to continue to provide highly reliable power at affordable

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Fiber Optic Network.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Fiber Optic Network.

Finally, TVA and other utility companies are facing an evolving marketplace of increased competition driven by customer choice and behavior.

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Research and Development

Investments in TVA's research portfolio are supported through partnership and collaboration with LPCs, EPRI, the DOE, federal agencies, peer utilities, universities, and industry vendors and through participation in professional societies and other research consortiums.

Annual investments made in science and technological innovation help meet future business and operational challenges.

Each year, TVA's annual research portfolio is updated based on a broad range of operational and industry drivers to assess key technology gaps, performance issues, or other significant issues, addressed through research and development.

Core research activities directly support optimization of TVA's generation and transmission assets, air and water quality, energy utilization, and distributed/clean energy integration.

TVA also provides research and development services on behalf of LPCs by helping optimize their distribution systems and helping minimize technology gaps in energy utilization and consumer technologies.

TVA places a high priority on providing innovation and research efforts to close gaps and develop the energy system of the future which are organized around its transformative innovation initiatives:

advanced nuclear solutions, decarbonization options, storage integration, regional grid transformation, electric vehicles evolution, connected communities, and the newest - Future Grid Performance.

TVA has placed an emphasis on research leading to the understanding and application of clean resources to support the reduction of carbon emissions from its power supply.

This research supports both TVA and national strategic interests to reduce carbon emissions and is designed to both catalyze and support TVA’s decarbonization initiative.

TVA is committed to investing in the future of nuclear and continues to evaluate the licensing and design of emerging nuclear technologies, such as advanced light water SMRs and advanced non-light water reactors, as part of technology innovation efforts aimed at developing the energy system of the future, one of TVA's strategic elements of Operational Excellence.

Core research activities directly support optimization of TVA's generation and transmission assets, air and water quality, energy utilization, load forecasting and management, and distributed/clean energy integration.

TVA also collaborates in research and development programs and activities that help optimize distribution systems and close technology gaps in energy utilization and consumer technologies.

Investments in TVA's research portfolio are supported through partnership and collaboration with LPCs, Electric Power Research Institute, the DOE and other federal agencies, peer utilities, universities, and industry vendors and through participation in professional societies and other research consortiums.

TVA places a high priority on innovation and research efforts to close gaps and strengthen energy system capabilities.

TVA emphasizes research leading to faster addition of generation capacity, additional flexibility through energy storage, increased transmission efficiency through grid supporting technologies, and co-optimization of distribution energy solutions.

Key research and development priorities include advanced nuclear solutions, storage integration, and regional grid transformation.

This research supports both TVA and national strategic interests to help enable growing economic development especially in domestic manufacturing and artificial intelligence.

TVA continues to evaluate the licensing and design of emerging nuclear technologies, such as advanced light water SMRs, advanced non-light water reactors, and fusion technology, as part of technology innovation efforts aimed at developing the energy system of the future, one of TVA's strategic elements of Operational Excellence.

In December 2019, TVA became the first utility in the nation to successfully obtain approval for an early site permit from the NRC to potentially construct and operate SMRs at its Clinch River Site.

TVA has entered into memorandums of understanding and agreements that allow for mutual collaboration to explore advanced reactor designs as a next-generation nuclear technology while leveraging the expertise of federally funded research and development centers, utilities, vendors, and academic institutions.

These contractual relationships are important steps in the early stages of evaluation as TVA considers the economic feasibility of advanced nuclear reactors.

These contractual relationships are also intended to leverage innovations to improve advanced nuclear designs, streamline licensing pathways, find efficiencies in construction methods, and optimize operating expenses.

For example, TVA has entered into a multi-party collaborative arrangement to advance the global development of the GE Hitachi Nuclear Energy BWRX-300 SMR.

See Note 21 — Collaborative Arrangement for additional information on the multi-party collaboration arrangement.

TVA currently believes that this advanced nuclear reactor technology is most readily available for deployment with the fewest risks;

as such, TVA is evaluating this technology in greater detail, while still considering other advanced reactor technologies.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Small Modular Reactors for additional discussion and total costs related to SMR work.

TVA is also partnering on the exploration of fusion technology.

TVA is a founding member of the Low Carbon Resources Initiative ("LCRI"), which is a coalition of utilities and researchers led by EPRI and the Gas Technology Institute.

The LCRI's purpose is to engage, inform, support, and accelerate global low-carbon solutions creating pathways to advance carbon reducing technologies for large scale utility deployment.

The initial five-year initiative from 2020 to 2024 will extend into 2027 and includes foundational technical research and demonstration projects support creating resource options, such as alternative fuels (hydrogen, ammonia, and methanized derivatives), carbon capture, electrification, and utilization of clean DER as part of the overall low-carbon resource mix.

TVA plans to continue involvement with LCRI to support demonstrations of technologies itself and gain knowledge from other demonstrations which can support pathways to decarbonization.

TVA has made progress understanding regional geology and carbon capture technologies and is evaluating both with an emphasis on the potential for carbon capture in TVA's future.

To support this initiative, in 2023 TVA entered into an MOU to study the development, construction, and operation of carbon capture, utilization, transportation, and sequestration infrastructure at or near TVA’s Ackerman and Paradise Combined Cycle Plants.

In May 2025, TVA submitted a construction permit application to the NRC for an SMR at the Clinch River Site, and the NRC accepted the application for review in July 2025.

TVA also has entered into memorandums of understanding and agreements with federally funded research and development centers, utilities, vendors, and academic institutions, under which the parties can collaborate to explore advance reactor designs as a next-generation nuclear technology.

These relationships are important steps in the early stages of evaluation as TVA considers the economic feasibility of advanced nuclear reactors and seeks to leverage innovations to improve advanced nuclear designs, streamline licensing pathways, find efficiencies in construction methods, and optimize operating expenses.

For example, TVA has entered into a multi-party collaborative arrangement to advance the global development of the GE Vernova Hitachi Nuclear Energy BWRX-300 SMR ("BWRX-300").

See Note 22 — Collaborative Arrangement for additional information.

TVA is engaging with GVH and the other contributors and will continue to evaluate the BWRX-300 standard design and technology as they mature.

TVA also will continue to evaluate other advanced reactor technologies.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Nuclear — Small Modular Reactors for additional discussion and total costs related to SMR work.

TVA is also supporting the development of Type One Energy's stellarator fusion reactor at TVA's former Bull Run Fossil Plant.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Nuclear — Other Nuclear for additional information.

At the forefront of the energy storage initiative is deploying grid-scale battery energy storage technology to optimize the existing TVA generation assets and improve the resiliency of the transmission system.

In 2020, TVA launched its first TVA-owned, grid scale, lithium-ion demonstration battery project, and in 2023, TVA began construction near Vonore, Tennessee.

The 20 MW battery system was installed in the first quarter of 2024, and the site is progressing toward construction completion with the expectation to begin testing and commissioning by the first quarter of 2025.

TVA is also evaluating a battery energy storage system utilizing grid-forming inverters.

Additionally, TVA is contracting for several battery energy storage systems to be deployed in the region by third-party developers who will make their systems available for TVA dispatch as described in Part II, Item 7,

Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Renewable Power Purchase Agreements.

TVA is also evaluating battery energy storage systems utilizing grid-forming inverters.

Additionally, TVA is contracting for several battery energy storage systems to be deployed in the region by third-party developers who will make their systems available for TVA dispatch.

The system integration lessons learned from these projects will guide future application of battery storage as part of the evolving bulk power system in the region.

TVA is studying the optimal siting and design for another pumped-storage plant as described in Power Supply and Load Management Resources — Hydroelectric Pumped-Storage .

TVA is studying the optimal siting and design for another pumped-storage plant as described in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Capacity — Hydroelectric Pumped-Storage .

TVA is also evaluating the potential of short duration battery alternatives to lithium-ion and long duration storage alternatives to pumped-storage.

TVA continues to develop potential electrification programs, in addition to the Fast Charge Network, that improve resource use and reduce environmental impacts in the transportation sector.

TVA programs are based on previous assessments, which included a multi-stakeholder vision and roadmap effort aimed at identifying the path forward for electric vehicles in Tennessee.

The approach provides for broad engagement from industry, government, and utilities that could be applied in other states in the TVA service territory.

In addition, TVA is continuing its evaluation of potential electric vehicle adoption strategies through coordination of activities with EPRI and state and industry stakeholders related to operational fleet requirements.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Electric Vehicles.

TVA has 23 Connected Communities pilot projects with many different stakeholders across four focus areas:

Broadband and Digital Literacy, Economic Empowerment, Energy and Environmental Justice, and Enhanced Community Resiliency.

Connected Communities pilot projects are aimed at addressing today’s challenges with community-driven information and technology solutions for a modernized energy system.

Connected Communities has ten community partnerships to provide consulting services to test a framework for engaging communities to help set goals, scope projects, and apply for funding.

Research will continue to identify best practices, better understand challenges in the Tennessee Valley, and scale up learnings from the projects to broader applications throughout the Tennessee Valley.

TVA and LPCs are engaged in several initiatives related to regional grid transformation.

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See Power Supply and Load Management Resources — Distributed Energy Resources and Transmission .

Finally, in 2023, TVA began an initiative called Future Grid Performance.

See Transmission above for more information on this initiative.

As part of its recent organizational transformation, TVA decided to sunset its Connected Communities program beginning in August 2025.

TVA will continue to support existing partnerships and pilot projects through their scheduled completion, with all activities sunsetting by December 2026.

Flood Control Activities

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The Tennessee Valley experienced just above normal rainfall at 109 percent of normal and runoff at 98 percent of normal during 2025.

Although runoff for 2024 was below normal due to fewer significant rain events, the winter and spring timing of above normal rainfall during the period supported TVA's objective to generate low-cost hydroelectric power while also meeting its river system commitments, including flood mitigation, which is estimated to have prevented damages across the Tennessee Valley of approximately $406 million in 2024 and $10.1 billion over TVA's recorded history.

Although runoff for 2025 was below normal due to fewer significant rain events, the winter and spring timing of above normal rainfall during the period supported TVA's objective to generate low-cost hydroelectric power while also meeting

its river system commitments, including flood mitigation, which is estimated to have prevented damages across the Tennessee Valley of approximately $90 million in 2025 and $10.2 billion over TVA's recorded history.

Environmental Stewardship Activities

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The reservoir system provides approximately 800 miles of commercially navigable waterways and also provides significant flood reduction benefits both within the Tennessee River system and downstream on the lower Ohio and Mississippi Rivers.

reservoir system also provides a water supply for residential and industrial customers, as well as cooling water for TVA's coal-fired plants, combined cycle plants, and nuclear power plants.

The reservoir system also provides a water supply for residential and industrial customers, as well as cooling water for TVA's coal-fired plants, combined cycle plants, and nuclear power plants.

TVA's Environmental Policy provides objectives for an integrated approach related to providing reliable, affordable, and increasingly clean energy;

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The plan aligns TVA's mission with the stewardship strategy and includes ten focus areas that provide a comprehensive view of resource stewardship efforts.

Sustainability continues to be a focus in support of TVA's mission to deliver affordable and reliable energy, steward the environment, and create sustainable economic growth.

TVA leverages industry-accepted standards and frameworks to inform sustainability strategic planning, decisions, and disclosures.

TVA publishes an Environmental, Social, and Governance Sustainability Report, which uses a utility-focused and investor-driven reporting template developed by the Edison Electric Institute.

Economic Development Activities

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(2) "New jobs" in the TVA fiscal year are newly created, paid positions at a facility of a TVA customer.

“Positions” are calculated by adding (1) the number of full-time, on-site employees and/or independent contractors at the facility, (2) the total number of full-time work-from-home employees and independent contractors who reside in the TVA service territory and who spend 100% of their work time on facility-related matters, and (3) the total hours worked on facility-related matters by (a) full-time and part-time on-site employees at the facility and (b) full-time and part-time work-from-home employees who reside in the TVA service territory and who spend less than 100% of their work time on facility-related matters, divided by the number of work hours of such employees based on a 40 hour work week.

“Positions” are calculated by adding (1) the number of full-time,

on-site employees and/or independent contractors at the facility, (2) the total number of full-time work-from-home employees and independent contractors who reside in the TVA service territory and who spend 100% of their work time on facility-related matters, and (3) the total hours worked on facility-related matters by (a) full-time and part-time on-site employees at the facility and (b) full-time and part-time work-from-home employees who reside in the TVA service territory and who spend less than 100% of their work time on facility-related matters, divided by the number of work hours of such employees based on a 40 hour work week.

A “TVA customer” means an entity that purchases power from TVA or a distributor of TVA power.

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Since TVA is an agency and instrumentality of the U.S., securities issued or guaranteed by TVA are "exempted securities" under the Securities Act of 1933, as amended (the "Securities Act"), and may be offered and sold without registration under the Securities Act.

In addition, securities issued or guaranteed by TVA are "exempted securities" and "government

securities" under the Exchange Act.

In addition, securities issued or guaranteed by TVA are "exempted securities" and "government securities" under the Exchange Act.

TVA is also exempt from Sections 14(a)-(d) and 14(f)-(h) of the Exchange Act (which address proxy solicitations) insofar as those sections relate to securities issued by TVA, and transactions in TVA securities are exempt from rules governing tender offers under Regulation 14E of the Exchange Act.

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(3) to investigate electric industry practices, including TVA's operations that are subject to FERC's jurisdiction;

and (4) to impose civil penalties of up to $1 million per day for each violation of the provisions of the FPA discussed in the prior paragraph that are applicable to TVA.

and (4) to impose civil penalties of up to $1 million per day for each violation of

the provisions of the FPA discussed in the prior paragraph that are applicable to TVA.

Criminal penalties may also result from such violations.

Furthermore, while not required to do so, TVA has elected to implement various FERC orders and regulations pertaining to public utilities on a voluntary basis to the extent that they are consistent with TVA's obligations under the TVA Act.

Finally, on July 28, 2023, FERC issued Order No.

Finally, in 2023, FERC issued Order No.

The order updates the procedures for interconnecting generating facilities and is intended to address interconnection queue backlogs, improve certainty in the interconnection process, and encourage the evaluation of alternative transmission technologies.

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In addition, if TVA fails to comply with requirements promulgated by the NRC, the NRC has the authority to impose fines, shut down units, or modify, suspend, or revoke TVA's operating licenses.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Operational Challenges.

Environmental Protection Agency

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The environmental laws and regulations that have the largest impact on TVA's operations and financial condition are discussed below.

On March 12, 2025, the EPA Administrator announced EPA's intention to take a variety of actions, including deregulatory actions, to implement the Administration's environmental and energy policies.

Such actions include reconsideration of regulations on power plants, Mercury and Air Toxics Standards ("MATS"), steam electric

effluent limitation guidelines, National Ambient Air Quality Standards ("NAAQS") for particulate matter, regional haze, the Good Neighbor Plan, and CCR regulations.

While any such changes to the foregoing or other regulations would likely impact many of the matters discussed below, TVA is unable to predict any specific changes or to speculate regarding related impacts.

Clean Air Act Programs and Regulations

National Ambient Air Quality Standards.

The CAA requires EPA to set National Ambient Air Quality Standards ("NAAQS") for certain air pollutants.

The CAA requires EPA to set NAAQS for certain air pollutants.

EPA has set NAAQS for ozone, particulate matter, sulfur dioxide ("SO 2 "), nitrogen oxides ("NO x "), carbon monoxide, and lead.

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TVA could incur significant costs associated with upgrades to facilities if such facilities are in areas that are redesignated as being in non-attainment.

The more stringent NAAQS are currently subject to a legal challenge seeking to overturn the standards.

The more stringent NAAQS are currently subject to a legal challenge seeking to overturn the standards, but the challenge is currently being held in abeyance.

On March 12, 2025, EPA announced that it would be reconsidering the NAAQS for particulate matter and that it would release guidance to increase flexibility on NAAQS implementation, reforms to New Source Review, and direction on permitting obligations.

TVA is currently unable to predict any specific changes or how such changes, if any, may impact its operations.

Revised Cross-State Air Pollution Rule.

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To comply with CSAPR, TVA power plants must obtain one NO x allowance for every ton of NO x emitted during the ozone season.

Under a revised version of CSAPR (the "Revised CSAPR Update Rule"), the Shawnee Fossil Plant ("Shawnee") facility is subject to reduced ozone-season NO x allowances and has been required to use most of its allowance inventory.

Under a revised version of CSAPR (the "Revised CSAPR Update Rule"), the Shawnee facility is subject to reduced ozone-season NO x allowances and has been required to use most of its allowance inventory.

In 2025, TVA monitored forecasted needs and utilized purchased allowances for the Shawnee facility.

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TVA has obtained approval from the State of Kentucky for construction of seven selective catalytic reduction systems ("SCRs") at the Shawnee facility.

In 2024, TVA constructed an SCR on Shawnee Unit 7 and is constructing SCRs at three additional Shawnee Units by the end of 2025.

As of September 30, 2024, TVA had spent $189 million and expects to spend an additional $51 million.

TVA is evaluating plans for the remaining units.

In 2025, TVA constructed an SCR on each of Shawnee Units 2, 3, and 8.

In addition, TVA plans to install sulfur dioxide ("SO 2 ") controls at five Shawnee units.

Federal Implementation Plan Addressing Regional Ozone Transport for the 2015 Ozone NAAQS.

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With the Good Neighbor Plan, EPA issued its Federal Implementation Plan ("FIP") that covers 23 states, including Alabama, Kentucky, and Mississippi, to reduce the interstate transport of NO x .

Under the rule, beginning with the 2023 ozone season, power plants in 22 states, including Alabama, Kentucky, and Mississippi, are required to participate in a NO x

trading program.

Under the rule, beginning with the 2023 ozone season, power plants in 22 states, including Alabama, Kentucky, and Mississippi, are required to participate in a NO x trading program.

Over time, the emission budgets will decline based on the level of reductions achievable through phased installation of emissions controls at power plants starting in 2024.

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The stay prevents EPA from applying the Good Neighbor Plan in 23 affected states, including Alabama, Kentucky, and Mississippi, pending the disposition of the petition for review.

TVA cannot predict the outcome of the litigation or how it may impact its operations.

On November 6, 2024, EPA published an interim final rule that administratively stayed the effectiveness of the Good Neighbor Plan's requirements for all sources in the states covered by that rule, as promulgated, where an administrative stay was not already in place.

The litigation is currently being held in abeyance, and TVA cannot predict the outcome of the litigation or how it may impact its operations.

On March 12, 2025, EPA announced that it would seek to reconsider the Good Neighbor Plan.

TVA is currently unable to predict any specific changes or how such changes, if any, may impact its operations.

Mercury and Air Toxics Standards for Electric Utility Units .

On May 7, 2024, EPA published a final rule that strengthens and updates the Mercury and Air Toxics Standards (“MATS”) for electric generating units ("EGUs") to reflect recent developments in control technologies.

On May 7, 2024, EPA published a final rule that strengthens and updates the MATS for electric generating units ("EGUs") to reflect recent developments in control technologies.

The rule lowers the emission standard for filterable particulate matter ("PM") from 0.030 lbs/MMBtu to 0.010 lbs/MMBtu, with compliance to be demonstrated solely through the use of PM Continuous Emission Monitoring Systems.

The rule is subject to legal challenges.

The rule is subject to legal challenges, but the challenges are currently being held in abeyance.

If the challenges are not successful, the rule could require TVA to refurbish existing pollution control equipment at some of its coal-fired units, and the cost of such refurbishments could be substantial.

In April 2025, the President issued a proclamation exempting certain coal-fired plants, including Cumberland,

Gallatin Fossil Plant ("Gallatin"), Kingston, and Shawnee, for two years (from July 8, 2027, to July 8, 2029) from compliance with the updated MATS published in May 2024.

These plants must continue to comply with the MATS that were in effect prior to the May 2024 update.

These exemptions are currently subject to legal challenge, but the challenge is currently being held in abeyance.

On June 11, 2025, EPA proposed amendments to the 2024 MATS rule that would revert the filterable particulate matter emission standard for existing coal-fired power plants to the 2012 standard, restore options for EGU owners and operators to use quarterly stack testing or continuous parametric monitoring systems as alternatives instead of continuous emissions monitoring systems, and revert to the 2012 limit for mercury emission limits for lignite-fired EGUs.

TVA is currently evaluating how such changes would impact its operations.

Environmental Agreements.

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On June 4, 2024, the Kentucky Division of Air Quality made Kentucky's Regional Haze SIP available for public comments and expects to submit the final SIP to EPA after consideration of those public comments.

In February 2025, the TVA Board approved funding of $233 million to construct scrubbers at two Shawnee units by the end of 2028.

See Revised Cross-State Air Pollution Rule above for additional information regarding TVA’s plans to control the Shawnee units.

EPA has announced that it plans to restructure the Regional Haze Program through the development of new regulations and issued an advance notice of proposed rulemaking on October 2, 2025.

TVA is currently unable to predict any specific changes or how such changes, if any, may impact its operations.

Start Up, Shutdown, and Malfunctions.

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Under some conditions, retrofitting a unit with additional equipment to better control SO 2 and NO x emissions can adversely affect opacity emissions, and TVA and other utilities have addressed this issue.

The evaluation of utilities' compliance with opacity requirements is coming under increased scrutiny, especially during periods of startup, shutdown, and malfunction ("SSM").

The evaluation of utilities' compliance with opacity requirements has come under increased scrutiny, especially during periods of startup, shutdown, and malfunction ("SSM").

Historically, SIPs developed under the CAA typically excluded periods of SSM, but in June 2015, EPA finalized a rule to eliminate such exclusions ("2015 Rule").

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Circuit determined that EPA exceeded its authority in removing the SSM exemptions from SIPs without showing the exemptions impede compliance with the CAA.

In response, on November 15, 2024, EPA withdrew two final actions finding the several states and/or local air pollution control agencies failed to submit SIP revisions, including Alabama.

TVA cannot predict the outcome of future SIP submittals in responding to the March 2024 decision of the D.C Circuit.

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Circuit for judicial review of EPA's denial of the petition, and in July 2020, the D.C.

Circuit vacated EPA's denial of the petition and remanded the petition to EPA for reconsideration.

Circuit vacated EPA's

denial of the petition and remanded the petition to EPA for reconsideration.

Specific impacts to TVA cannot be determined until EPA takes further action on the petition.

GHG Emissions.

On May 9, 2024, EPA published a final rule that (1) repeals the Affordable Clean Energy Rule addressing GHG emissions from existing fossil fuel-fired electric generation units (“EGUs”), (2) establishes guidelines for GHG emissions from existing fossil-fuel fired steam generating EGUs, (3) finalizes revisions to the New Source Performance Standards (“NSPS”) for GHG emissions from new and reconstructed fossil fuel-fired stationary combustion turbine EGUs, and (4) finalizes revisions to the NSPS for GHG emissions from fossil fuel-fired steam generating EGUs that undertake a large modification.

On May 9, 2024, EPA published a final rule that (1) repealed the Affordable Clean Energy Rule addressing GHG emissions from existing fossil fuel-fired electric generation units (“EGUs”), (2) established guidelines for GHG emissions from existing fossil-fuel fired steam generating EGUs, (3) finalized revisions to the New Source Performance Standards (“NSPS”) for GHG emissions from new and reconstructed fossil fuel-fired stationary combustion turbine EGUs, and (4) finalized revisions to the NSPS for GHG emissions from fossil fuel-fired steam generating EGUs that undertake a large modification.

The degree of GHG emission reduction would depend on the EGU’s retirement date, and the cost of such reductions would likely be substantial.

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EPA did not finalize guidelines for GHG emissions from existing fossil fuel-fired stationary combustion turbine EGUs in this rulemaking.

The rule is subject to legal challenges.

The rule is subject to legal challenges, but the challenges are currently being held in abeyance.

Under the new rule, TVA would be required to reduce GHG emissions from any coal-fired units that it continues to operate beyond January 1, 2032.

On June 17, 2025, EPA published a proposed rule titled "Repeal of Greenhouse Gas Emissions Standards for Fossil Fuel-Fired Electric Generating Units," which includes a primary proposal and an alternative proposal.

In the primary proposal, EPA is proposing to repeal all GHG emissions standards for fossil fuel-fired power plants.

In the alternative proposal, EPA is proposing to repeal a narrower set of requirements that includes the emission guidelines for existing fossil fuel-fired steam generating units, the carbon capture and sequestration/storage standards for coal-fired steam generating units undertaking a large modification, and the carbon capture and sequestration/storage standards for new base load stationary combustion turbines.

On August 1, 2025, EPA published a proposal to repeal the 2009 "Endangerment Finding" whereby EPA determined that greenhouse gases threaten public health and welfare.

The Endangerment Finding, among other things, provides a basis for regulating GHGs under the CAA, so rescinding the finding could potentially impact the regulation of GHG emissions from EGUs.

TVA is currently unable to predict any specific changes or how such changes, if any, may impact operations.

Climate Change

Though many of TVA's facilities continue to emit air pollutants, emissions from all TVA-owned and operated units (including small CTs of less than 25 MW) have been reduced from historic peaks.

Emissions of NO x and SO 2 began being regulated in 1995 and 1977, respectively.

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(1) Intensity rates are calculated based on generation from TVA's most recent fiscal year for years indicated and emissions data from the most recent CYs.

(2) Emissions data is consistent with Edison Electric Institute Environmental, Social, Governance, and Sustainability Report standards, which are based on metric tons ("MTs"), whereas overall CO 2 emission rates and baseline reductions from historical levels are based on short tons.

For CY 2023, TVA's emissions of carbon dioxide ("CO 2 ") from its owned and operated units, including purchased power and REC retirement adjustments which reduce the reportable CO 2 emissions, were 49 million tons, resulting in a TVA system average, as delivered, CO 2 emission rate of 625 lbs/MWh.

(2) Emissions data is consistent with Edison Electric Institute Environmental, Social, Governance, and Sustainability Report standards, which are based on metric tons ("MTs"), whereas overall carbon dioxide ("CO 2 ") emission rates and baseline reductions from historical levels are based on short tons.

For CY 2024, TVA's emissions of CO 2 from its owned and operated units, including purchased power and REC retirement adjustments which reduce the reportable CO 2 emissions, were 54 million tons, resulting in a TVA system average, as delivered, CO 2 emission rate of 680 lbs/MWh.

This represents a 53 percent and 49 percent reduction in mass carbon emissions and TVA's carbon emission rate, respectively, from 2005 levels.

While TVA continues down the path of lowering emissions, including GHG emissions, there will be fluctuations in TVA's emission numbers as a result of various factors, including electricity usage in the Tennessee Valley and changes in the power supply mix, as TVA continues to make operational decisions to keep the system reliable and deliver low-cost energy.

The achievement of TVA's carbon reduction efforts, and its ability to maintain system reliability during the transition to cleaner forms of energy, is subject to numerous risks.

See Forward-Looking Information , and Item 1A, Risk Factors — Operational Risks — TVA may not be able to meet its carbon reduction aspirations, which may result in additional capital expenditures or higher operating expense.

Report on Climate-Related Risks .

On December 30, 2022, the Government Accountability Office ("GAO") publicly released a report entitled Tennessee Valley Authority:

Additional Steps Are Needed to Better Manage Climate-Related Risks .

This report examines climate-related risks to TVA's operations and steps TVA has taken to manage climate-related risks as well

as additional steps needed.

In the report, GAO made recommendations, including that TVA conduct an inventory of assets and operations vulnerable to climate change and develop a resilience plan that identifies and prioritizes resilience measures.

TVA provided a response to GAO in June 2023 outlining completed and planned TVA actions to address the recommendations.

To strengthen TVA’s climate resiliency, TVA has established new priority actions in TVA’s Climate Adaptation Plan.

Based on the information provided and the release of the 2024 Climate Adaptation Plan, GAO agreed to close all the recommendations on August 14, 2024.

Executive Actions .

President Biden has taken several executive actions relating to climate change.

• On January 20, 2021, President Biden issued EO 13990, "Protecting Public Health and the Environment and Restoring Science To Tackle the Climate Crisis." EO 13990 directs federal agencies to review and revise regulations consistent with broad policy goals to improve public health and the environment, reduce GHG emissions, and prioritize environmental justice.

In addition, EO 13990 re-established an Interagency Working Group and tasked it with identifying areas and other key decisions where agencies should consider the social cost of GHG, which is a modeled metric used to estimate damages that GHG causes across society.

On September 21, 2023, President Biden announced that he approved recommendations from the Interagency Working Group on the expanded use of the social costs of GHG for budgeting, procurement, and other agency decisions, including reaffirming its use for environmental reviews where appropriate.

• On January 27, 2021, President Biden issued EO 14008, "Executive Order on Tackling the Climate Crisis at Home and Abroad." EO 14008 seeks to promote safe global temperatures, increase climate resilience, and support low greenhouse gas emissions and climate-resilient development by, among other things, (1) using federal procurement authorities to achieve or facilitate (a) a carbon pollution-free electricity sector no later than 2035 and (b) clean and zero-emission vehicles for federal, state, local, and tribal government fleets, (2) putting the U.S.

on a path to achieve net-zero emissions, economy-wide, by no later than 2050, and (3) establishing the Justice40 Initiative, instructing federal agencies to direct 40 percent of the benefit from eligible projects toward disadvantaged communities.

• On May 20, 2021, President Biden issued EO 14030, “Climate-Related Financial Risk,” which calls for a governmental-wide strategy on the disclosure of climate-related financial risk that includes, among other things, the measurement, assessment, mitigation, and disclosure of climate-related financial risk to federal government programs, assets, and liabilities in order to increase the long-term stability of federal operations.

• On December 8, 2021, President Biden issued EO 14057, "Executive Order on Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability," which details the administration’s policy to take a whole-of-government approach to lead by example to achieve a carbon pollution-free electricity sector by 2035 and net-zero emissions economy-wide by no later than 2050.

Implementing Instructions for EO 14057 issued in August 2022 provided instructions to federal agencies regarding agency planning, reporting requirements, and accountability.

Agencies must issue or revise existing agency policies, directives, and guidance, as appropriate, including employee training, to ensure alignment with the goals and requirements of EO 14057.

• On September 12, 2022, President Biden issued EO 14082, “Implementation of the Energy and Infrastructure Provisions of the Inflation Reduction Act of 2022.” EO 14082 provides that in implementing the Inflation Reduction Act, federal agencies shall, as appropriate and to the extent consistent with law, prioritize, among other things, (1) driving progress to achieve the climate goals of the U.S.

to reduce greenhouse gas emissions 50 to 52 percent below 2005 levels in 2030, achieve a carbon pollution-free electricity sector by 2035, and achieve net-zero emissions by no later than 2050, (2) advancing environmental and climate justice through an all-of-government approach, including through the Justice40 Initiative set forth in EO 14008, and (3) promoting construction of clean energy generation, storage, transmission, and enabling technologies through efficient, effective mechanisms that incorporate community engagement.

• On April 21, 2023, President Biden issued EO 14096, “Revitalizing Our Nation's Commitment to Environmental Justice for All.” EO 14096, among other things, details the administration’s policy to take a whole-of-government approach to environmental justice and to advance environmental justice by implementing and enforcing the nation’s environmental and civil rights laws, preventing pollution, addressing climate change and its effects, and working to clean up legacy pollution that is harming human health and the environment.

In addition, EO 14096 directs each federal agency to make achieving environmental justice part of its mission and to submit an environmental justice strategic plan to the Chair of the Council on Environmental Quality within 18 months of the date of the order and every four years thereafter.

TVA is voluntarily pursuing multiple policies and programs in the Tennessee Valley that support the goals and policies of these executive actions.

See Actions Taken by TVA to Reduce GHG Emissions below.

TVA must consider executive actions within the context of statutory requirements imposed by Congress when carrying out its mission such as the TVA Act, which requires power to be sold at rates as low as feasible, and the Energy Policy Act of 1992, which requires the use of least-cost resource planning.

TVA performs long-term least-cost resource planning through its Integrated Resource Plan process.

The current Administration has taken two executive actions relating to climate change.

On January 20, 2025, the President issued EO 14148, "Initial Rescissions of Harmful Executive Orders and Actions," which among other things revoked Biden-era EOs related to climate change and environmental justice.

In addition, on January 20, 2025, the President issued EO 14154, "Unleashing American Energy," which instructed agencies to pause the disbursement of funds appropriated under the IRA and Bipartisan Infrastructure Law ("BIL") for programs inconsistent with the Administration's policies.

TVA is evaluating the impacts of these policies in relation to its current operations and long-term planning.

TVA is currently not able to predict the outcome of these evaluations.

TVA must consider executive actions within the context of statutory requirements imposed by Congress when carrying out its mission such as the TVA Act, which requires power to be sold

at rates as low as feasible, and the Energy Policy Act of 1992, which requires the use of least-cost resource planning.

TVA performs long-term least-cost resource planning through its Integrated Resource Plan ("IRP") process.

Paris Agreement .

is currently part of the Paris Agreement.

On January 20, 2025, the U.S.

withdrew from the Paris Agreement.

The Paris Agreement tracks emissions targets through nationally determined contributions ("NDCs").

Each nation that is a party to the Paris Agreement is asked to prepare five-year, successive NDCs that it plans to achieve.

In April 2021, the Biden Administration announced its GHG NDCs for 2030 under the Paris Agreement, and these NDCs establish a new target for the U.S.

Previously, in April 2021, the Biden Administration announced its GHG NDCs for 2030 under the Paris Agreement, and these NDCs established a new target for the U.S.

to achieve a 50 to 52 percent reduction from 2005 levels in economy-wide net GHG pollution in 2030.

TVA's own operations have achieved GHG reductions from 2005 levels that are in excess of 50 to 52 percent.

Climate change issues have been the subject of a number of lawsuits, including lawsuits against TVA, and TVA may be subject to additional lawsuits in the future.

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The goal of the action planning process is to ensure TVA continues to achieve its mission and program goals and to operate in a secure, effective, and efficient manner in a changing climate by integrating climate change adaptation efforts in coordination with state and local partners, tribal governments, and private stakeholders.

TVA manages the risks proposed by climate change on its mission, programs, and operations within its environmental management processes, though such risks cannot be completely eliminated.

TVA manages the risks associated with climate change on its mission, programs, and operations within its environmental management processes, though such risks cannot be completely eliminated.

Actions Taken by TVA to Reduce GHG Emissions .

TVA has reduced GHG emissions from both its generation facilities and its other operations.

The impact of GHG emissions on climate change is a contested topic, and federal and state policymakers hold varying views on the existence or nature of such impacts, appropriate actions to deal with any impacts, and the appropriate approach to balancing the costs of such actions with other policy objectives, such as national energy independence, energy generation and capacity needs, consumer energy costs, and national security.

With respect to such matters, TVA seeks to implement a pragmatic approach to well position itself to respond to changing, and sometimes oscillating, regulatory environments consistent with TVA's mission and within legal and technical restraints.

As part of this approach, over the last two decades, TVA has programmatically sought to reduce GHG emissions from both its generation facilities and its other operations.

TVA Board actions have focused on further reducing GHG emissions from its generation fleet by evaluating the potential retirement of its coal-fired fleet, increasing its nuclear capacity, modernizing its hydroelectric generation system, increasing natural gas-fired generation to enable greater integration of renewables on the grid, increasing its purchases of renewable energy, building solar facilities, and investing in energy efficiency initiatives to reduce energy use in the Tennessee Valley.

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See Power Supply and Load Management Resources — Renewable Energy Resources .

These changes support the broad electrification and carbon emission reduction efforts in other sectors of the economy.

Also, TVA has partnered with the University of Tennessee Baker School for Public Policy and Public Affairs and with diverse stakeholders from across the Tennessee Valley to conduct a Valley Pathways Study, which is focused on building a competitive and clean economy for the Tennessee Valley.

This study examines potential scenarios for all economic sectors across the Tennessee Valley that will support sustainable growth and a viable and preferred decarbonization pathway.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio .

There are inherent challenges each year in both operations and asset changes.

TVA will not sacrifice reliability at any time, which means that TVA must make certain operational decisions at times to keep the system reliable, possibly impacting annual performance on carbon emissions.

Therefore, while TVA continues to strive to lower GHG emissions, there will be fluctuations in TVA’s emission numbers resulting from changes in the power supply mix, weather impacts, economic conditions, and generating unit performance.

As TVA evolves its generation portfolio, and after appropriate environmental review under NEPA, the TVA Board could make decisions about the timing, retirement, and replacement of aging fossil units or other expiring capacity, which may further TVA’s CO 2 and other emissions reductions.

The Environmental Policy also provides additional direction in several environmental stewardship areas related to reducing environmental impacts on the Tennessee Valley's natural resources, including reducing carbon intensity and air emissions.

In addition, TVA's decarbonization initiative is aimed at understanding and applying clean resources to support the reduction of carbon emissions from its power supply, and TVA is exploring several technologies as part of these efforts.

See Research and Development above.

TVA will not sacrifice reliability at any time, which means that TVA must make certain operational decisions at times to keep the system reliable.

TVA's Environmental Policy also provides additional direction in several environmental stewardship areas related to reducing environmental impacts on the Tennessee Valley's natural resources.

Renewable/Clean Energy Standards

Thirty-five states and the District of Columbia have established enforceable or mandatory requirements for electric

Numerous states and the District of Columbia have established enforceable or mandatory requirements for electric

utilities to generate a certain amount of electricity from renewable sources or have established a renewable goal.

In 18 of those

states and the District of Columbia, the requirement is for a 100% clean electricity standard or goal by 2050 or earlier.

Several of those states and the District of Columbia have further requirements for a 100% clean electricity standard or goal by 2050 or earlier.

One state within the TVA service area, North Carolina, has a mandatory renewable and clean energy goal that, while not applying directly to TVA, does apply to TVA's LPCs serving retail customers in that state.

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In reaching its decision, the Court rejected the “significant nexus” standard for determining the jurisdiction of the CWA that was articulated by Justice Kennedy in the Court’s Rapanos decision.

The result of this decision is that fewer waters will be subject to CWA permitting or other restrictions.

The likely result of this decision is that fewer waters will be subject to CWA permitting or other restrictions.

In response to the Sackett v.

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Fish and Wildlife Service comments and may require additional measures to be taken to protect threatened and endangered species and critical habitats directly or indirectly related to the plant cooling water intake.

TVA's review of the final rule indicates that the rule offers adequate flexibility for cost-effective compliance.

TVA's experience with the final rule indicates that the rule offers adequate flexibility for cost-effective compliance.

The required compliance timeframe is linked to plant-specific NPDES permit renewal cycles (i.e., technology retrofits), and compliance activities have begun and are expected to continue through the 2028 - 2030 timeframe.

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In determining the BTA to minimize adverse impacts on the environment using best professional judgment, Region 10 analyzed the existing controls that the hydroelectric facilities were already implementing and concluded that those controls constitute BTA.

In addition, in February 2023, EPA Region 1, which also covers an area outside TVA’s service area, issued a Final Hydroelectric Generating Facilities General Permit for Facilities in Massachusetts and New Hampshire that includes Section 316(b) requirements;

both EPA regions cover areas outside of TVA’s service area.

It is not clear whether this approach will be adopted nationwide or how the BTA standard would be applied to TVA's hydroelectric facilities;

accordingly, the specific impacts to TVA from the Region 10 permits cannot be determined at this time.

accordingly, the specific impacts to TVA from the Region 10 and Region 1 permits cannot be determined at this time.

Hydrothermal Discharges.

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On May 9, 2024, EPA issued final steam ELGs.

This rule is expected to significantly impact wastewater treatment options at coal combustion facilities with waste streams that operate past 2028.

This rule is expected to significantly impact wastewater treatment options at coal combustion facilities with waste streams that operate past CY 2028.

This rule establishes more stringent technology-based effluent limitations for four waste streams:

flue gas desulfurization (“FGD”) wastewater, bottom ash transport water (“BATW”), combustion residual leachate (“CRL”), and legacy wastewater.

The rule also establishes a new subcategory for CRL called unmanaged CRL, which includes discharges of CRL that the permitting authority determines are the functional equivalent

of direct discharges of CRL or groundwater that meets the definition of CRL that is pumped to the surface and discharged to the waters of the United States.

The rule also establishes a new subcategory for

CRL called unmanaged CRL, which includes discharges of CRL that the permitting authority determines are the functional equivalent of direct discharges of CRL or groundwater that meets the definition of CRL that is pumped to the surface and discharged to the waters of the United States.

The 2024 ELGs are based on performance of specific technologies applied to these wastewaters.

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Additionally, this rule could impact any sites with CRL that have repowered or in the future could repower with steam electric generation.

TVA is evaluating the applicability of this rule on all facilities as appropriate.

Currently, the rule is subject to legal challenges.

Currently, the rule is subject to legal challenges, but such challenges are being held in abeyance.

If the challenges are not successful, TVA could incur substantial costs to comply with the rule.

In 2021, TVA submitted requests to state regulatory authorities to modify NPDES permits for Kingston, Cumberland, Bull Run, Shawnee, and Gallatin Fossil Plant ("Gallatin") to incorporate into the permits limitations in EPA's 2020 rule.

On June 30, 2025, EPA announced the agency's intent to update the 2024 ELGs for steam electric power generating units.

On October 2, 2025, EPA issued a proposed rule that, among other things, would extend deadlines for certain compliance tasks under its 2024 ELG rule.

In addition, on October 2, 2025, EPA issued a direct final rule to extend the date for existing steam electric power plants to decide whether to submit a notice of planned participation for the permanent cessation of coal combustion by 2034 subcategory under the 2024 rule.

TVA is still evaluating the potential impacts of the proposed rule and direct final rule, but the proposed rule, if adopted as proposed, would provide TVA with greater flexibility to meet requirements if it elects to operate its coal-fired plants past CY 2028.

In 2021, TVA submitted requests to state regulatory authorities to modify NPDES permits for Kingston, Cumberland, Bull Run, Shawnee, and Gallatin to incorporate into the permits limitations in EPA's 2020 rule.

The Tennessee Department of Environment and Conservation ("TDEC") issued a final permit for Cumberland in the first quarter of 2024.

In addition, consistent with the 2024 rule, on August 6, 2024, TVA submitted requests to state regulatory authorities to modify NPDES permits for Kingston, Cumberland, Shawnee, and Gallatin to incorporate into the permits limitations in EPA's 2024 rule.

Other Water Quality Control Requirements .

As is the case in other industrial sectors, TVA and other utilities are also facing more stringent requirements related to drinking water standards, including new limits and requirements for per- and polyfluoroalkyl substances, the protection of wetlands, reductions in storm water impacts from construction activities, new water quality criteria for nutrients and other pollutants, new wastewater analytical methods, and changes in regulation of pesticide application.

In addition, consistent with the 2024 rule, in August 2024, TVA submitted requests to state regulatory authorities to modify NPDES permits for Kingston, Cumberland, Shawnee, and Gallatin to incorporate into the permits limitations in EPA's 2024 rule.

Cleanup of Solid and Hazardous Wastes

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Coal Combustion Residuals.

EPA published its final rule governing CCR in 2015.

The rule regulates CCR as nonhazardous waste under Subtitle D of RCRA and establishes standards for landfill and surface impoundment placement, design, operation, and closure;

EPA published a final rule governing CCR in 2015 ("2015 CCR Rule" and, as subsequently amended, "CCR Rule").

The rule regulates CCR as nonhazardous waste under Subtitle D of RCRA and establishes standards for the placement, design, operation, and closure of landfills and surface impoundments ("CCR Units");

groundwater monitoring;

corrective action;

corrective action where required;

and post-closure care.

The initial version of the rule provided for self-implementation by utilities and allowed enforcement through citizen suits in federal court.

The Water Infrastructure Improvements for the Nation Act subsequently allowed state or federal-based permitting to implement EPA's CCR rule ("CCR Rule") instead of self-implementation.

In 2020, EPA issued the final Part A revision to its CCR Rule.

Among other things, the final Part A rule requires unlined CCR surface impoundments to stop receiving CCR and non-CCR wastestreams and to initiate closure or retrofit by no later than April 11, 2021.

TVA ceased sending CCR and non-CCR wastestreams to, and initiated closure of, unlined CCR surface impoundments by the specified deadline.

The rule provides for self-implementation by owners or operators of CCR Units and, through RCRA's citizen suit provisions, allows limited enforcement through citizen suits in federal court.

The Water Infrastructure Improvements for the Nation Act subsequently authorized state or federal-based permitting to implement the 2015 CCR Rule instead of self-implementation.

In 2020, EPA issued the final Part A revision to the 2015 CCR Rule.

Among other things, the final Part A rule requires unlined CCR surface impoundments to stop receiving CCR and non-CCR waste streams and to initiate closure or retrofit by no later than April 11, 2021.

TVA ceased sending CCR and non-CCR waste streams to, and initiated closure of, unlined CCR surface impoundments by the specified deadline.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Coal Combustion Residuals — Coal Combustion Residuals Facilities for a discussion of the impact on TVA's operations, including the cost and timing estimates of related projects.

On May 8, 2024, EPA published its final legacy CCR Rule ("Legacy CCR Rule"), which expands the scope of the existing regulatory requirements of the 2015 CCR Rule to include two additional classes of CCR units:

In 2024, EPA published the legacy coal combustion residual rule ("Legacy CCR Rule"), which expanded the scope of the regulatory requirements of the 2015 CCR Rule to include two additional classes of CCR units:

Legacy Surface Impoundments (“Legacy SIs”) and Coal Combustion Residual Management Units (“CCRMUs”).

Legacy SIs include inactive surface impoundments at retired generating facilities that were exempt from the 2015 CCR Rule.

CCRMUs are a newly defined category that includes previously unregulated areas at CCR facilities where CCR was beneficially reused in an unencapsulated manner, disposed, placed, or managed on land outside of CCR units regulated by the 2015 CCR Rule.

TVA completed applicability reports for multiple Legacy SIs by the November 8, 2024 deadline and as authorized by regulation is still evaluating whether other CCR units might constitute Legacy SIs.

For CCRMUs, TVA must complete the initial round of facility evaluation reports by February 8, 2026, and the subsequent round by February 8, 2027.

During 2024, TVA recorded additional estimated AROs of $3.1 billion as a result of EPA's Legacy CCR Rule and recorded a corresponding regulatory asset of $3.1 billion due to these AROs being associated with closed sites and asset retirement costs having been fully depreciated.

TVA completed applicability reports for multiple Legacy SIs by the November 8, 2024 deadline and where authorized by regulation is still evaluating whether other CCR units might constitute Legacy SIs.

CCRMUs are a newly defined category that includes previously unregulated areas at CCR facilities where CCR may have been beneficially reused in an unencapsulated manner, disposed of, placed, or managed on land outside of CCR Units regulated by the 2015 CCR Rule.

On July 22, 2025, EPA issued a direct final rule and, in the alternative, a proposed rule, extending deadlines for several CCRMU requirements.

Among other things, the rulemaking extends groundwater monitoring compliance by 15 months to August 8, 2029, and modifies the deadlines that owners and operators can elect to meet for CCRMU facility evaluation reports.

TVA is evaluating the rule's potential impact.

During 2024, TVA recorded additional estimated asset retirement obligations ("AROs") of $3.1 billion as a result of EPA's Legacy CCR Rule and recorded a

corresponding regulatory asset due to these AROs being associated with closed sites and asset retirement costs having been fully depreciated.

These amounts are forward-looking and are subject to various uncertainties, and actual amounts may differ materially based upon a number of factors, including, but not limited to, the outcome of legal challenges to the Legacy CCR Rule, ongoing evaluations of the number and scope of newly regulated units, and determinations on final closure requirements and performance standards.

See Forward-Looking Information and Item 1A, Risk Factors for a discussion of additional factors.

Revisions to the additional estimated non-

nuclear AROs from the Legacy CCR Rule will be made whenever factors indicate that the timing or amounts of estimated cash flows have changed.

See also Note 13 — Asset Retirement Obligations .

In addition, EPA has recently interpreted its CCR Rule in a way that could challenge TVA's predominant closure methodology for many units, thereby potentially creating significant additional costs with implementing closure.

In August 2015, TDEC issued an order that includes an iterative process through which TVA and TDEC will investigate, assess, and remediate any unacceptable risks resulting from CCR management and disposal at TVA CCR units in the State of Tennessee.

As part of this process, TVA has submitted environmental assessment reports (“EARs”) to TDEC, and after the EARs are approved, TVA will submit Corrective Action/Risk Assessment (“CARA”) Plans that will identify the unacceptable risks and TVA's proposed remediation.

Revisions to the additional estimated non-nuclear AROs from the Legacy CCR Rule will be made whenever factors indicate that the timing or amounts of estimated cash flows have changed.

In 2025, TVA recorded a net decrease of $500 million in AROs related to the final Legacy CCR Rule for updated cost estimates.

See Note 14 — Asset Retirement Obligations .

In addition, in 2024, EPA interpreted its CCR Rule in a way that could challenge TVA's predominant closure methodology for many units, thereby potentially creating significant additional costs with implementing closure.

In 2025, EPA has announced a number of interpretation and guidance changes to its CCR Rule, including its intention to reconsider the CCR Rule, which will require a new round of notice-and-comment rulemaking.

No schedule for this rulemaking has yet been announced.

As part of this process, TVA submitted environmental assessment reports (“EARs”) to TDEC, and after the EARs were approved, TVA has submitted and will continue to submit Corrective Action/Risk Assessment (“CARA”) Plans that will identify the unacceptable risks and all associated TVA actions to remediate those risks.

TDEC will review the CARA Plans and provide comments, and TVA will make revisions to address TDEC's comments until TDEC approves a final CARA Plan for each site.

The public also will have an opportunity to review and comment on each CARA Plan prior to TDEC's approval of the final plan.

During 2024, TDEC approved EARs for John Sevier, Cumberland, Kingston, Allen, and Watts Bar, and TVA submitted initial drafts of the CARA Plans for John Sevier, Cumberland, Allen, Watts Bar, and Kingston.

TVA also submitted an initial draft of the Gallatin Ash Pond Complex CARA Plan to TDEC in January 2024 pursuant to a consent order and agreement.

TDEC has approved EARs for John Sevier, Cumberland, Kingston, Allen, Watts Bar, Bull Run, and Johnsonville, and TVA has submitted to TDEC initial drafts of the CARA Plans for each of these plants.

In addition, TVA submitted an initial draft of the Gallatin Ash Pond Complex CARA Plan to TDEC in January 2024 pursuant to a consent order and agreement.

See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Initiatives and Challenges – Coal Combustion Residuals – Coal Combustion Residual Facilities for a discussion of the Gallatin Ash Pond Complex.

As discussed above, revisions of these initial draft CARA Plans will continue through the iterative process until the final plans are approved.

In July 2025, TDEC approved the final CARA Plan for John Sevier.

In October 2019, TDEC released amendments to its regulations which govern solid waste disposal facilities, including TVA's active CCR facilities covered by a solid waste disposal permit and those which closed pursuant to a TDEC-approved closure plan.

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There is increased attention among EPA, environmental groups, and state regulatory agencies on impacts to groundwater associated with CCR management activities.

As a result, TVA may be required to change how it manages CCR at some of its plants, potentially resulting in higher costs.

As a result, at some point in the future, TVA may be required to change how it manages CCR at some of its plants, potentially resulting in higher costs, and/or implement groundwater corrective action where applicable.

See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Coal Combustion Residuals — Coal Combustion Residuals Facilities and — Allen Groundwater Investigation and Note 14 — Asset Retirement Obligations.

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From 1970 to 2025, TVA spent approximately $6.9 billion on controls to reduce emissions from its coal-fired power plants, including $59 million, $28 million, and $25 million in 2025, 2024, and 2023, respectively, on clean air controls.

In addition, TVA has reduced emissions by idling or retiring coal-fired units and relying more on cleaner energy resources including natural gas and nuclear generation and renewable sources.

TVA currently anticipates spending significant amounts on environmental projects in the future, including investments in new clean energy generation including renewables to reduce TVA's overall environmental footprint.

TVA currently anticipates spending significant amounts on environmental projects in the future.

TVA environmental project expenditures could also result from coal-fired plant decommissioning and from effective ash management modernization.

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TVA has also retired 35 of 59 coal-fired units.

In 2024, TVA constructed an SCR on Shawnee Unit 7 and is constructing SCRs at three additional Shawnee Units by the end of 2025.

TVA is evaluating plans for the remaining units.

Except for six units at Shawnee, the remaining coal-fired units in the TVA fleet have scrubbers and SCRs.

In 2025, TVA constructed an SCR on each of Shawnee Units 2, 3, and 8.

TVA also expects to complete construction of scrubbers at two Shawnee units by the end of 2028.

In addition, TVA plans to install SO 2 controls at five Shawnee units.

Except for three units at Shawnee, the remaining coal-fired units in the TVA fleet have scrubbers or SCRs.

See Power Supply and Load Management Resources — Coal-Fired above.

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Greenhouse Gas Emissions .

Various federal agencies, including EPA and the Department of Commerce, may issue regulations establishing more stringent air and waste requirements, as well as GHG accounting requirements, and these requirements could result in significant changes in the structure of the U.S.

Under the current Administration, federal agencies, including EPA and the Department of Commerce, have signaled that they are not likely to issue regulations establishing more stringent air and waste requirements.

However, such changes could occur under future administrations or statutory enactments, and any such requirements could result in significant changes in the structure of the U.S.

power industry, especially in the eastern half of the country.

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Clean Air Act control projects (5)

114 128 96 338

Clean Water Act requirements (6)

87 91 160 338

(1) These estimates are subject to change as additional information becomes available and as regulations change.

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The employees of TVA continued to advance TVA’s unique mission and business goals to create an environment that supports and responds to the changing needs of its workforce, using People Advantage and four other Strategic Priorities (Operational Excellence, Financial Strength, Powerful Partnerships, and Igniting Innovation) to help create a culture that lives up to its values.

Paramount to TVA's focus on human capital and its People Advantage priority are three specific pillars:

(1) Inclusion with Diversity ("IwD"), (2) Talent, and (3) Engagement, all of which are briefly highlighted below.

To help shape an inclusive work environment that values all voices, TVA has intensified its efforts over the past few years to integrate IwD into its culture and make its efforts and progress sustainable and a part of TVA's daily operations.

Inclusion with Diversity

TVA recognizes inclusion as a journey, not a destination, and has continued to make significant strides throughout 2024 by acknowledging that its people bring more to the workplace than simply skills.

Looking ahead, TVA and its industry will face challenging new technologies, customer expectations, and environmental requirements.

TVA further illustrates its commitment to employees and communities by championing Employee Resource Groups and various diversity councils across TVA.

Diversity Impact Awards also reflect the effectiveness of TVA’s diversity efforts, which extend outside of TVA.

Attracting and Retaining Talent.

The strength of TVA lies in the collective power from the diverse knowledge, experiences, and perspectives that its employees bring from a variety of backgrounds.

The strength of TVA lies in the collective knowledge, experiences, and perspectives that its employees bring from a variety of backgrounds.

TVA recruits talent primarily from across the Tennessee Valley region and utilizes a talent framework to deliver enterprise workforce needs supporting attraction, selection, development, engagement, and performance.

TVA actively engages with key community and university partners to recruit talent in craft, engineering, information technology, and professional positions, and continues to improve employment opportunities and the talent pool within TVA’s workforce through early career apprenticeships and internships.

TVA's top majors for its intern population are engineering, computer science, data analytics, and business/finance.

Healthy Attrition.

TVA’s voluntary attrition rates continue to fall well below the national, utility, and government benchmarks, with the majority of TVA's attrition note d as “healthy” attrition (e.g., retirements).

TVA believes this stability is critical to TVA’s success in a complex and competitive work environment and among a highly skilled workforce.

The primary fields of study among TVA's intern population include engineering, computer science, data analytics, and business/finance.

TVA’s voluntary attrition rates increased during the year ended September 30, 2025 as compared to the prior year, primarily due to Enterprise Transformation Program efforts.

See Note 3 — Restructuring.

Competitive Total Rewards.

TVA’s total rewards package is a significant factor in attracting and retaining top talent.

TVA’s total rewards package positions TVA to attract and retain top talent.

TVA provides market-based and competitive compensation and benefits, which includes an annual incentive plan (extended to all eligible employees, including TVA's represented employee population).

Additionally, in support of its cultural commitment to IwD,

TVA periodically reviews and monitors compensation pay practices to promote fairness and equity and continues to provide leaders with tools to assist in making equitable pay decisions.

TVA reviews its compensation plan on an annual basis and regularly evaluates compensation programs to ensure they align to market practice.

Development and Training.

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TVA encourages and motivates employees to seek development and leadership opportunities.

With the assistance of TVA’s talent review and succession planning program, 91 percent of director and executive level roles have at least one succession candidate identified and at least one ready-now succession candidate.

A continuous focus on and support of leadership development has helped TVA meet or exceed established goals for female and people of color representation in leadership.

TVA believes that its strength lies in the collective power from the diverse knowledge, experiences, and perspectives that its employees bring.

TVA's talent and succession programs ensure talent is ready to fill critical roles across TVA, as recently evidenced by internal selections for several executive officer positions.

To inspire the best from its people, TVA utilizes a talent management framework to deliver enterprise workforce needs supporting talent attraction, selection, development, engagement, and performance.

Strong engagement levels impact all TVA strategic priorities.

TVA’s employee engagement survey is administered a minimum of annually to all employees and measures overall engagement and drivers of engagement.

Results from the surveys are shared with employees and used by TVA leadership and business units to improve and monitor progress against People Advantage objectives.

Safety and Employee Health.

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Further, management illustrates its commitment to human capital by including a safety metric in its incentive compensation metrics that tracks the serious injury incident rate and applies to all eligible participants in TVA’s annual program.

A keen focus on safety helps TVA maintain top quartile ranking in workforce engagement, top quartile serious injury performance, and a clear link to other key areas such as IwD.

A keen focus on safety helps TVA achieve top decile ranking in serious injury performance.

Partnerships with Unions.

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This reflects 59 percent of TVA's internal workforce, or approximately 6,000 employees.

With the addition of collective bargaining agreements and labor unions for TVA's contractors, there are a total of nine collective bargaining agreements and 17 labor unions.

TVA’s partnerships with these unions go back more than 80 years and form the backbone of TVA and its ability to serve the people of the Tennessee Valley.

With the addition of those representing TVA contractors, there are a total of nine collective bargaining agreements and 17 labor unions.

Ethics and integrity have been highly valued and essential elements of TVA's culture since TVA's establishment in 1933.

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Performance Measures (1)

People of color representation in leadership (%) (1)

2025 2025 2024

Female representation in leadership (%) (1)

22.0 % 19.4 % 19.7 %

Diverse external hires (%) (2)

42.0 % 39.2 % 41.4 %

Voluntary attrition (%) (2)

2.4 % 6.8 % 1.2 %

Engagement (100-point scale) (4)

Top Quartile (≥77)

Inclusion (100-point scale) (5)

Recordable injuries (#) (3)

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Ethics violations (5)

(1) Defined as first line supervisors and above.

(2) Defined as external hires who are female, persons of color, or persons with disabilities.

(1) Engagement and inclusion surveys are not represented in the table above as they were removed as performance measures during 2025 due to the Enterprise Transformation Program efforts.

People of color representation in leadership, female representation in leadership, and diverse external hires are also no longer represented in the table above, as they were removed as performance measures during 2025 in alignment with EOs related to diversity, equity, and inclusion.

Employee demographics for female, people of color, military, veteran, and disabled are also no longer reported below, in alignment with these EOs.

(2) Voluntary attrition measures and accounts for all employees who leave the business voluntarily during a fiscal year.

(4) Based on score from Employee Engagement Survey defined as degree to which employees invest their cognitive, emotional, and behavioral energies toward positive organizational outcomes, at November 2023.

Benchmark data is provided by the third-party administrator of the survey, based on data collected from over 550 organizations.

Benchmarks are updated at least annually using data from the previous 12-month period.

(5) Based on score from Employee Engagement Survey defined as the degree to which employees sense they belong at work, at November 2023.

Benchmark data is provided by the third-party administrator of the survey, based on data collected from over 550 organizations.

Benchmarks are updated at least annually using data from the previous 12-month period.

(3) Retroactive cases can affect annual recordable injury counts reported.

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Average age 45.8 45.4

All Employees Leadership New Hires

At September 30 At September 30 At September 30

2024 2023 2024 2023 2024 2023

Female 2,401 2,289 323 309 261 267

People of Color 1,428 1,363 184 171 161 206

Military, Veteran 1,910 1,883 352 336 115 148

Disabled 877 844 139 134 49 44

All data is based upon self-reported information provided to TVA.

In addition to the employees above, TVA also had approximately 18,000 and 16,800 contractors on September 30, 2025 and 2024, respectively, providing intermittent or full-time services to achieve critical strategic objectives.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business