TVA 2010 Tax Equivalent Payments Reach $550 Million

KNOXVILLE, Tenn., Nov. 8, 2010 /PRNewswire-USNewswire/ -- The Tennessee Valley Authority's tax equivalent payments to state and local governments reached $550 million in fiscal year 2010, a 9 percent increase from 2009.

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The TVA board of directors on Thursday, Nov. 4, approved the final payment for 2010 and estimated payments of $520 million for 2011. TVA makes payments monthly based on preliminary forecasts during the fiscal year.

In accordance with the TVA Act, TVA pays in lieu of taxes payments to eight states and 144 local governments where it conducts business or holds power-related assets. The payments are based on power sales revenue from the previous year and the book value of TVA-owned power property in each state.

"TVA's tax equivalent payments have become an important source of revenue for communities throughout the TVA region," TVA President and CEO Tom Kilgore said. "City and county governments use this money for everything from building roads to maintaining public parks to providing classroom supplies."

By the end of fiscal 2010, TVA estimates it will have paid states and counties more than $9 billion since the tax equivalent payments formally began in 1941. The funds are used at the discretion of state and local governments according to formulas in each state. TVA has no authority in deciding how the money is used.

In addition to the seven states in TVA's service area, TVA makes payments to Illinois for coal reserves owned by TVA in that state.

The Tennessee Valley Authority, a corporation owned by the U.S. government, provides electricity for utility and business customers in most of Tennessee and parts of Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia – an area of 80,000 square miles with a population of 9 million. TVA operates 29 hydroelectric dams, 11 coal-fired power plants, three nuclear plants and 11 natural gas-fired power facilities and supplies up to 33,700 megawatts of electricity, delivered over 16,000 miles of high-voltage power lines. TVA also provides flood control, navigation, land management and recreation for the Tennessee River system and works with local utilities and state and local governments to promote economic development across the region. TVA, which makes no profits and receives no taxpayer money, is funded by sales of electricity to its customers. Electricity prices in TVA's service territory are below the national average.

SOURCE Tennessee Valley Authority

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