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Revenue (Notes)
9 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer [Text Block] Revenue
Revenue from Sales of Electricity

TVA's revenue from contracts with customers is primarily derived from the generation and sale of electricity to its customers and is included in Revenue from sales of electricity on the Consolidated Statements of Operations. Electricity is sold primarily to LPCs for distribution to their end-use customers. In addition, TVA sells electricity to directly served industrial companies, federal agencies, and others.
LPC sales
Approximately 93 percent of TVA's revenue from sales of electricity for the three and nine months ended June 30, 2020 was to LPCs, which then distribute the power to their customers using their own distribution systems. Power is delivered to each LPC at delivery points within the LPC's service territory. TVA recognizes revenue when the customer takes possession of the power at the delivery point. For power sales, the performance obligation to deliver power is satisfied in a series over time because the sales of electricity over the term of the customer contract are a series of distinct goods that are substantially the same and have the same pattern of transfer to the customer. TVA has no continuing performance obligations subsequent to delivery. Using the output method for revenue recognition provides a faithful depiction of the transfer of electricity as customers obtain control of the power and benefit from its use at delivery. Additionally, TVA has an enforceable right to consideration for energy delivered at any discrete point in time and will recognize revenue at an amount that reflects the consideration to which TVA is entitled for the energy delivered.

The amount of revenue is based on contractual prices approved by the TVA Board. Customers are invoiced monthly for power delivered as measured by meters located at the delivery points. The net transaction price is offset by certain credits available to customers that are known at the time of billing. Credits are designed to achieve objectives of the TVA Act and include items such as hydro preference credits for residential customers of LPCs, economic development credits to promote growth in the Tennessee Valley, wholesale bill credits to LPCs participating in the long-term Partnership Agreement, and interruptible credits allowing TVA to reduce industrial customer usage in periods of peak demand to balance system demand. Payments are typically due within approximately one month of invoice issuance.
 
Directly served customersDirectly served customers, including industrial customers, federal agencies, and other customers, take power for their own consumption. Similar to LPCs, power is delivered to a delivery point, at which time the customer takes possession and TVA recognizes revenue. For all power sales, the performance obligation to deliver power is satisfied in a series over time since the sales of electricity over the term of the customer contract are a series of distinct goods that are substantially the same and have the same pattern of transfer to the customer. TVA has no continuing performance obligations subsequent to delivery. Using the output method for revenue recognition provides a faithful depiction of the transfer of electricity as customers obtain control of the power and benefit from its use at delivery. Additionally, TVA has an enforceable right to consideration for energy delivered at any discrete point in time and will recognize revenue at an amount that reflects the consideration to which TVA is entitled for the energy delivered.

The amount of revenue is based on contractual prices approved by the TVA Board. Customers are invoiced monthly for power delivered as measured by meters located at the delivery points. The net transaction price is offset by certain credits available to customers that are known at the time of billing. Examples of credits include items such as economic development credits to promote growth in the Tennessee Valley and interruptible credits allowing TVA to reduce industrial customer usage in periods of peak demand to balance system demand. Payments are typically due within approximately one month of invoice issuance.

Other Revenue

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, and certain other ancillary goods or services.
Disaggregated Revenues

During the three and nine months ended June 30, 2020, revenues generated from TVA's electricity sales were $2.2 billion and $7.2 billion, respectively, and accounted for virtually all of TVA's revenues. TVA's operating revenues by state for the three and nine months ended June 30, 2020 and 2019, are detailed in the table below:
Operating Revenues By State
(in millions)
Three Months Ended June 30Nine Months Ended June 30
 2020201920202019
Alabama
$312  $367  $1,041  $1,146  
Georgia
52  59  179  196  
Kentucky
140  157  455  498  
Mississippi
204  250  668  751  
North Carolina
13  15  50  56  
Tennessee
1,485  1,705  4,809  5,273  
Virginia
 10  32  35  
Subtotal2,215  2,563  7,234  7,955  
Off-system sales    
Revenue from sales of electricity2,216  2,565  7,237  7,958  
Other revenue35  39  113  121  
Total operating revenues$2,251  $2,604  $7,350  $8,079  

        TVA's operating revenues by customer type for the three and nine months ended June 30, 2020 and 2019, are detailed in the table below:
Operating Revenues by Customer Type
(in millions)
Three Months Ended June 30Nine Months Ended June 30
 2020201920202019
Revenue from sales of electricity  
Local power companies(1)
$2,058  $2,366  $6,716  $7,347  
Industries directly served132  168  442  521  
Federal agencies and other26  31  79  90  
Revenue from sales of electricity2,216  2,565  7,237  7,958  
Other revenue35  39  113  121  
Total operating revenues$2,251  $2,604  $7,350  $8,079  
Note
(1) The amount for the three and nine months ended June 30, 2020, is net of $38 million and $108 million, respectively, of wholesale bill credits to LPCs participating in the long-term Partnership Agreement.

        TVA and LPCs continue to work together to meet the changing needs of consumers around the Tennessee Valley. At its August 2019 meeting, the TVA Board approved a 20-year Partnership Agreement option that better aligns the length of LPC contracts with TVA's long-term commitments. These agreements are automatically extended each year after their initial effective date, contingent upon certain circumstances, including agreement on flexibility options and limited rate increases going forward. Participating LPCs will receive benefits including a 3.1 percent wholesale bill credit in exchange for their long-term commitment, which enables TVA to recover its long-term financial commitments over a commensurate period. In June 2020, TVA provided participating LPCs a flexibility option that allows them to locally generate up to approximately five percent of average total hourly energy sales over the prior five years in order to meet their individual customers' needs. As of August 3, 2020, 141 LPCs had signed the 20-year Partnership Agreement with TVA, and 42 LPCs had signed a Flexibility Agreement.
        The number of LPCs with the contract arrangements described below, the revenues derived from such arrangements for the three and nine months ended June 30, 2020, and the percentage of TVA's total operating revenues for the three and nine months ended June 30, 2020 represented by these revenues, are summarized in the tables below:
TVA Local Power Company Contracts
At and for the Three Months Ended June 30, 2020
Contract Arrangements(1)
Number of LPCs
Revenue from Sales of Electricity to LPCs
(in millions)
Percentage of Total Operating Revenues
20-year termination notice141  $1,630  72.4 %
10-year termination notice  — %
 5-year termination notice12  427  19.0 %
Total154  $2,058  91.4 %
Note
(1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with two of the LPCs with five-year termination notices, TVA has a 10-year termination notice (which becomes a five-year termination notice if TVA loses its discretionary wholesale rate-setting authority). Certain LPCs have five-year termination notices or a shorter period if any act of Congress, court decision, or regulatory change requires or permits that election. 
                   
TVA Local Power Company Contracts
At and for the Nine Months Ended June 30, 2020
Contract Arrangements(1)
Number of LPCs
Revenue from Sales of Electricity to LPCs
(in millions)
Percentage of Total Operating Revenues
20-year termination notice141  $5,399  73.5 %
10-year termination notice  — %
 5-year termination notice12  1,316  17.9 %
Total154  $6,716  91.4 %
Note
(1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with two of the LPCs with five-year termination notices, TVA has a 10-year termination notice (which becomes a five-year termination notice if TVA loses its discretionary wholesale rate-setting authority). Certain LPCs have five-year termination notices or a shorter period if any act of Congress, court decision, or regulatory change requires or permits that election.

        TVA's two largest LPCs — Memphis Light, Gas and Water Division ("MLGW") and Nashville Electric Service ("NES") — have contracts with a five-year and a 20-year termination notice period, respectively. Sales to MLGW and NES accounted for nine percent and eight percent, respectively, of TVA's total operating revenues during the nine months ended June 30, 2020. Sales to MLGW and NES each accounted for eight percent of TVA's total operating revenues during the nine months ended June 30, 2019. In May 2020, MLGW published a draft Integrated Resource Plan to guide energy choices in the future, and in July 2020, TVA made a proposal to MLGW that highlights the benefits of remaining a TVA customer.

Contract Balances

        Contract assets represent an entity's right to consideration in exchange for goods and services that the entity has transferred to customers. TVA does not have any material contract assets at June 30, 2020.

        Contract liabilities represent an entity's obligations to transfer goods or services to customers for which the entity has received consideration (or an amount of consideration is due) from the customers. These contract liabilities are primarily related to upfront consideration received prior to the satisfaction of the performance obligation. TVA does not have any material contract liabilities at June 30, 2020.
        Economic Development Incentives. Under certain economic development programs, TVA offers incentives to existing and potential power customers in certain business sectors that make multi-year commitments to invest in the Tennessee Valley. TVA records those incentives as reductions of revenue. Incentives recorded as a reduction to revenue were $78 million and $76 million during the three months ended June 30, 2020 and 2019, respectively. Incentives recorded as a reduction to revenue were $238 million and $231 million during the nine months ended June 30, 2020 and 2019, respectively. Incentives that have been approved but have not been paid are recorded in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. At June 30, 2020, and September 30, 2019, the outstanding unpaid incentives were $169 million and $157 million, respectively. These incentives may be subject to clawback provisions if the customers fail to meet certain program requirements. In April 2020, TVA established flexibility provisions to support the continued operations and recovery of participating customers impacted by the COVID-19 pandemic.