DEI Document shares in Millions, $ in Millions	12 Months Ended
DEI Document shares in Millions, $ in Millions	Sep. 30, 2019 USD ($) shares
Document Information [Line Items]
Entity Registrant Name	Tennessee Valley Authority
Entity Central Index Key	0001376986
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Document Type	10-K/A
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	true
Amendment Description	TVA is filing this amendment to include the conformed signatures of the directors to the filing
Entity Common Stock, Shares Outstanding \| shares	0
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float \| $	$ 0

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Operating revenues
Electric revenue	$ 11,159	$ 11,075	$ 10,586
Other revenue	159	158	153
Revenue from sales of electricity	11,318	11,233	10,739
Operating expenses
Fuel	1,896	2,049	2,169
Purchased power	1,007	973	991
Operating and maintenance	3,090	2,598	2,604
Depreciation and amortization	1,973	2,527	1,717
Tax equivalents	541	518	525
Total operating expenses	8,507	8,665	8,006
Operating income	2,811	2,568	2,733
Other income (expense), net	62	50	56
Defined Benefit Plan, Other Cost (Credit)	258	256	758
Interest expense
Interest expense	1,198	1,243	1,346
Net income (loss)	1,417	1,119	685
ALABAMA
Operating revenues
Electric revenue	1,593	1,600	1,524
GEORGIA
Operating revenues
Electric revenue	270	267	252
KENTUCKY
Operating revenues
Electric revenue	691	696	665
MISSISSIPPI
Operating revenues
Electric revenue	1,063	1,052	1,016
NORTH CAROLINA
Operating revenues
Electric revenue	74	66	57
TENNESSEE
Operating revenues
Electric revenue	7,419	7,350	7,041
VIRGINIA
Operating revenues
Electric revenue	$ 45	$ 48	$ 47

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018
Current assets
Cash and cash equivalents	$ 299	$ 299
Accounts receivable, net	1,739	1,657
Inventories, net	999	961
Regulatory assets	156	414
Other current assets	85	86
Total current assets	3,278	3,417
Property, plant, and equipment
Completed plant	62,944	61,114
Less accumulated depreciation	(31,384)	(29,335)
Net completed plant	31,560	31,779
Construction in progress	1,893	1,999
Nuclear fuel	1,534	1,487
Capital leases	146	149
Total property, plant, and equipment, net	35,133	35,414
Investment funds	2,968	2,862
Regulatory and other long-term assets
Regulatory assets	8,763	6,612
Other long-term assets	325	362
Total regulatory and other long-term assets	9,088	6,974
Total assets	50,467	48,667
Current liabilities
Accounts payable and accrued liabilities	1,812	1,982
Accrued interest	296	305
Current portion of leaseback obligations	40	38
Current portion of energy prepayment obligations	0	10
Regulatory liabilities	150	187
Short-term debt, net of discounts	922	1,216
Total Current maturities of power bonds issued at par	1,030	1,032
Current maturities of long-term debt of variable interest entities issued at par	39	38
Current maturities of notes payable	23	46
Total current liabilities	4,312	4,854
Other liabilities
Post-retirement and post-employment benefit obligations	6,181	4,476
Asset retirement obligations	5,453	4,665
Other long-term liabilities	2,490	2,715
Leaseback obligations	223	263
Non-current regulatory liabilities	0	104
Total other liabilities	14,347	12,223
Long-term debt, net
Long-term power bonds, net	19,094	20,157
Long-term debt of variable interest entities, net	1,089	1,127
Long-term notes payable	0	23
Total long-term debt, net	20,183	21,307
Total liabilities	38,842	38,384
Commitments and contingencies (Note 21)
Proprietary capital
Power program appropriation investment	258	258
Power program retained earnings	10,823	9,404
Total power program proprietary capital	11,081	9,662
Nonpower programs appropriation investment, net	556	564
Accumulated other comprehensive income (loss)	(12)	57
Total proprietary capital	11,625	10,283
Total liabilities and proprietary capital	$ 50,467	$ 48,667

CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Millions	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Millions	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)
Regulatory asset amount expensed	$ 261	$ 2	$ 143
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	322	322
Cash flows from operating activities
Net income (loss)	1,417	1,119	685
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization (including amortization of debt issuance costs and premiums/discounts)	1,993	2,554	1,763
Amortization of nuclear fuel cost	379	382	341
Non-cash retirement benefit expense	314	324	837
Prepayment credits applied to revenue	(10)	(100)	(100)
Changes in current assets and liabilities
Accounts receivable, net	(40)	(68)	230
Inventories and other current assets, net	(87)	65	1
Accounts payable and accrued liabilities	(155)	143	(109)
Accrued interest	(8)	(36)	(17)
Pension contributions	(307)	(304)	(805)
Settlements of asset retirement obligations	(89)	(106)	(123)
Other, net	52	(37)	(118)
Net cash provided by operating activities	3,720	3,938	2,728
Cash flows from investing activities
Construction expenditures	(1,700)	(1,759)	(2,153)
Nuclear fuel expenditures	(474)	(457)	(305)
Purchases of investments	(48)	(49)	(49)
Loans and other receivables
Advances	(10)	(12)	(11)
Repayments	11	4	8
Other, net	(22)	4	(26)
Net cash used in investing activities	(2,243)	(2,269)	(2,536)
Long-term debt
Issues of power bonds	0	998	999
Redemptions and repurchases of power bonds	(1,035)	(1,731)	(1,558)
Redemptions of notes payable	(46)	(53)	(27)
Payments on debt of variable interest entities	(38)	(36)	(35)
Short-term debt issues (redemptions), net	(294)	(782)	592
Payments on leases and leasebacks	(43)	(42)	(136)
Financing costs, net	0	(3)	(4)
Other, net	(21)	(9)	(22)
Net cash (used in) provided by financing activities	(1,477)	(1,658)	(191)
Net change in cash and cash equivalents	0	11	1
Cash and cash equivalents at beginning of the year	299	311	310
Cash and cash equivalents at end of the year	$ 299	$ 299	$ 311

CONSOLIDATED STATEMENTS OF CHANGES IN PROPRIETARY CAPITAL - USD ($) $ in Millions	3 Months Ended				12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Balance at beginning of year		$ 10,283		$ 9,133	$ 10,283	$ 9,133	$ 8,420
Net income (loss)	$ 588	423	$ (101)	288	1,417	1,119	685
Total other comprehensive income (loss)					(69)	36	33
Return on power program appropriation investment					(6)	(5)	(5)
Balance at end of year	11,625		10,283		11,625	10,283	9,133
Power Program Appropriation Investment
Balance at beginning of year		258		258	258	258	258
Net income (loss)					0	0	0
Total other comprehensive income (loss)					0	0	0
Return on power program appropriation investment					0	0	0
Balance at end of year	258		258		258	258	258
Power Program Retained Earnings
Balance at beginning of year		9,404		8,282	9,404	8,282	7,594
Net income (loss)					1,425	1,127	693
Total other comprehensive income (loss)					0	0	0
Return on power program appropriation investment					(6)	(5)	(5)
Balance at end of year	10,823		9,404		10,823	9,404	8,282
Nonpower Programs Appropriation Investment, Net
Balance at beginning of year		564		572	564	572	580
Net income (loss)					(8)	(8)	(8)
Total other comprehensive income (loss)					0	0	0
Return on power program appropriation investment					0	0	0
Balance at end of year	556		564		556	564	572
Accumulated Other Comprehensive Income (Loss) Net Gains (Losses) on Cash Flow Hedges
Balance at beginning of year		$ 57		$ 21	57	21	(12)
Net income (loss)					0	0	0
Total other comprehensive income (loss)					(69)	36	33
Return on power program appropriation investment					0	0	0
Balance at end of year	$ (12)		$ 57		$ (12)	$ 57	$ 21

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Statement - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 1,417	$ 1,119	$ 685
Net unrealized gain (loss) on cash flow hedges	(114)	10	59
Reclassification to earnings from cash flow hedges	45	(26)	26
Total other comprehensive income (loss)	(69)	36	33
Total comprehensive income (loss)	$ 1,348	$ 1,155	$ 718

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Summary of Significant Accounting Policies

12 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

General

The Tennessee Valley Authority ("TVA") is a corporate agency and instrumentality of the United States ("U.S.") that was created in 1933 by federal legislation in response to a proposal by President Franklin D. Roosevelt. TVA was created to, among other things, improve navigation on the Tennessee River, reduce the damage from destructive flood waters within the Tennessee River system and downstream on the lower Ohio and Mississippi Rivers, further the economic development of TVA's service area in the southeastern U.S., and sell the electricity generated at the facilities TVA operates.

Today, TVA operates the nation's largest public power system and supplies power in most of Tennessee, northern Alabama, northeastern Mississippi, and southwestern Kentucky and in portions of northern Georgia, western North Carolina, and southwestern Virginia to a population of nearly 10 million people.

TVA also manages the Tennessee River, its tributaries, and certain shorelines to provide, among other things, year-round navigation, flood damage reduction, and affordable and reliable electricity. Consistent with these primary purposes, TVA also manages the river system and public lands to provide recreational opportunities, adequate water supply, improved water quality, cultural and natural resource protection, and economic development.

The power program has historically been separate and distinct from the stewardship programs. It is required to be self-supporting from power revenues and proceeds from power financings, such as proceeds from the issuance of bonds, notes, or other evidences of indebtedness (collectively, "Bonds"). Although TVA does not currently receive congressional appropriations, it is required to make annual payments to the United States Department of the Treasury ("U.S. Treasury") as a return on the government's appropriation investment in TVA's power facilities (the "Power Program Appropriation Investment"). In the 1998 Energy and Water Development Appropriations Act, Congress directed TVA to fund essential stewardship activities related to its management of the Tennessee River system and nonpower or stewardship properties with power revenues in the event that there were insufficient appropriations or other available funds to pay for such activities in any fiscal year. Congress has not provided any appropriations to TVA to fund such activities since 1999. Consequently, during 2000, TVA began paying for essential stewardship activities primarily with power revenues, with the remainder funded with user fees and other forms of revenues derived in connection with those activities. The activities related to stewardship properties do not meet the criteria of an operating segment under accounting principles generally accepted in the United States of America ("GAAP"). Accordingly, these assets and properties are included as part of the power program, TVA's only operating segment.

Power rates are established by the TVA Board of Directors (the "TVA Board") as authorized by the Tennessee Valley Authority Act of 1933 (the "TVA Act"). The TVA Act requires TVA to charge rates for power that will produce gross revenues sufficient to provide funds for operation, maintenance, and administration of its power system; payments to states and counties in lieu of taxes ("tax equivalents"); debt service on outstanding indebtedness; payments to the U.S. Treasury in repayment of and as a return on the Power Program Appropriation Investment; and such additional margin as the TVA Board may consider desirable for investment in system assets, retirement of outstanding Bonds in advance of maturity, additional reduction of the Power Program Appropriation Investment, and other purposes connected with TVA's business. TVA fulfilled its requirement to repay $1.0 billion of the Power Program Appropriation Investment with the 2014 payment; therefore, this item is no longer a component of rate setting. In setting TVA's rates, the TVA Board is charged by the TVA Act to have due regard for the primary objectives of the TVA Act, including the objective that power shall be sold at rates as low as are feasible. Rates set by the TVA Board are not subject to review or approval by any state or other federal regulatory body.

Fiscal Year

TVA's fiscal year ends September 30. Years (2019, 2018, etc.) refer to TVA's fiscal years unless they are preceded by "CY," in which case the references are to calendar years.

Cost-Based Regulation

Since the TVA Board is authorized by the TVA Act to set rates for power sold to its customers, TVA is self-regulated. Additionally, TVA's regulated rates are designed to recover its costs. Based on current projections, TVA believes that rates, set at levels that will recover TVA's costs, can be charged and collected. As a result of these factors, TVA records certain assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. TVA assesses whether the regulatory assets are probable of future recovery by considering factors such as applicable regulatory changes, potential legislation, and changes in technology. Based on these assessments, TVA believes the existing regulatory assets are probable of recovery. This determination reflects the current regulatory and political environment and is subject to change in the future. If future recovery of regulatory assets ceases to be probable, or any of the other factors described above cease to be applicable, TVA would no longer be considered to be a regulated entity and would be required to write off these costs. All regulatory asset write offs would be required to be recognized in earnings in the period in which future recovery ceases to be probable.

Basis of Presentation

The accompanying consolidated financial statements, which have been prepared in accordance with GAAP, include the accounts of TVA, wholly-owned direct subsidiaries, and variable interest entities ("VIE") of which TVA is the primary beneficiary. See Note 9 — Asset Acquisitions and Note 10 — Variable Interest Entities. Intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements requires TVA to estimate the effects of various matters that are inherently uncertain as of the date of the consolidated financial statements. Although the consolidated financial statements are prepared in conformity with GAAP, TVA is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the amounts of revenues and expenses reported during the reporting period. Each of these estimates varies in regard to the level of judgment involved and its potential impact on TVA's financial results. Estimates are considered critical either when a different estimate could have reasonably been used, or where changes in the estimate are reasonably likely to occur from period to period, and such use or change would materially impact TVA's financial condition, results of operations, or cash flows.

Reclassifications

Certain historical amounts have been reclassified in the accompanying consolidated financial statements to the current presentation. TVA reclassified $256 million and $758 million of net periodic benefit costs from Operating and maintenance expense to Other net periodic benefit cost in the Consolidated Statements of Operations for the years ending September 30, 2018 and 2017, respectively, as a result of the retrospective presentation of financing costs due to the implementation of the new accounting standard for defined benefit plan costs effective for TVA October 1, 2018. TVA also reclassified $13 million from Restricted cash and cash equivalents to Other long-term assets on the Consolidated Balance Sheet at September 30, 2018.

In the September 30, 2018, Consolidated Statements of Cash Flows, amounts previously reported as $(30) million Fuel cost adjustment deferral, $(7) million Fuel cost tax equivalents, and $39 million Other, net were consolidated and presented as $2 million Other regulatory amortization and deferrals. Additionally, $(22) million in cash flows from operating activities previously recorded as $(9) million Accounts payable and accrued liabilities and $(13) million Regulatory asset costs were reclassified to Other, net. In cash flows from financing activities, $(5) million previously recorded as Payments to U.S. Treasury was reclassified to Other, net.

In the September 30, 2017, Consolidated Statements of Cash Flows, amounts previously reported as $98 million Fuel cost adjustment deferral, $5 million Fuel cost tax equivalents, and $40 million Other, net were consolidated and presented as $143 million Other regulatory amortization and deferrals. Additionally, $(60) million in cash flows from operating activities previously recorded as $(10) million Accounts payable and accrued liabilities and $(50) million Regulatory asset costs were reclassified to Other, net. In cash flows from financing activities, $(5) million previously recorded as Payments to U.S. Treasury was reclassified to Other, net.

Additionally, as a result of the implementation of the new accounting standard for Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments, $(29) million and $(9) million were reclassified from Short-term debt issues (redemptions), net in cash flows from financing to Other, net in cash flows from operating activities in 2018 and 2017, respectively.

Cash, Cash Equivalents, and Restricted Cash

Cash includes cash on hand, non-interest bearing cash, and deposit accounts. All highly liquid investments with original maturities of three months or less are considered cash equivalents. Cash and cash equivalents that are restricted, as to withdrawal or use under the terms of certain contractual agreements, are recorded in Other long-term assets on the Consolidated Balance Sheets. Restricted cash and cash equivalents includes cash held in trusts that are currently restricted for TVA economic development loans and for certain TVA environmental programs in accordance with agreements related to compliance with certain environmental regulations. See Note 22 — Commitments and Contingencies — Legal Proceedings — Environmental Agreements.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the Consolidated Balance Sheets and Consolidated Statements of Cash Flows:



Cash, Cash Equivalents, and Restricted Cash At September 30
	2019		2018
Cash and cash equivalents	$	299	$	299
Restricted cash and cash equivalents, included in Other long-term assets	23		23
Total Cash, cash equivalents, and restricted cash	$	322	$	322

On the September 30, 2018 and 2017, Consolidated Statements of Cash Flows, transfers between cash and restricted cash were previously reported as $12 million and $1 million, respectively, as Other, net in cash flows from operating activities. Due to the implementation of the new accounting standard for restricted cash in 2019, these amounts are not reported as cash flow activities on the Consolidated Statement of Cash Flows.

Allowance for Uncollectible Accounts

The allowance for uncollectible accounts reflects TVA's estimate of probable losses inherent in its accounts and loans receivable balances excluding the EnergyRight^®loans receivable. TVA determines the allowance based on known accounts, historical experience, and other currently available information including events such as customer bankruptcy and/or customers failing to fulfill payment arrangements after 90 days. It also reflects TVA's corporate credit department's assessment of the financial condition of customers and the credit quality of the receivables.

The allowance for uncollectible accounts was less than $1 million at both September 30, 2019 and 2018, for accounts receivable. Additionally, loans receivable of $131 million and $138 million at September 30, 2019 and 2018, respectively, are included in Accounts receivable, net and Other long-term assets, for the current and long-term portions, respectively, and are reported net of allowances for uncollectible accounts of less than $1 million at both September 30, 2019 and 2018, respectively.

Revenues

TVA recognizes revenue from contracts with customers to depict the transfer of goods or services to customers in an amount to which the entity expects to be entitled in exchange for those goods or services. For the generation and transmission of electricity, this is generally at the time the power is delivered to a metered customer delivery point for the customer's consumption or distribution. As a result, revenues from power sales are recorded as electricity is delivered to customers. In addition to power sales invoiced and recorded during the month, TVA accrues estimated unbilled revenues for power sales provided to five customers whose billing date occurs prior to the end of the month. Exchange power sales are presented in the accompanying Consolidated Statements of Operations as a component of sales of electricity. Exchange power sales are sales of excess power after meeting TVA native load and directly served requirements. Native load refers to the customers on whose behalf a company, by statute, franchise, regulatory requirement, or contract, has undertaken an obligation to serve. TVA engages in other arrangements in addition to power sales. Certain other revenue from activities related to TVA's overall mission are recorded in Other revenue. Revenues that are not related to the overall mission are recorded in Other income (expense), net.

Pre-Commercial Plant Operations

As part of the process of completing the construction of a generating unit, the electricity produced is used to serve the

demands of the electric system. TVA estimates revenue from such pre-commercial generation based on the guidance provided by Federal Energy Regulatory Commission ("FERC") regulations. Watts Bar Nuclear Plant ("Watts Bar") Unit 2 commenced pre-commercial plant operations in June 2016, and commercial operations began in October 2016. In addition, the Paradise Combined Cycle Plant ("Paradise CC") commenced pre-commercial plant operations in October 2016, and commercial operations began in April 2017. The Allen Combined Cycle Plant ("Allen CC") began pre-commercial plant operations in September 2017, and began commercial operations in April 2018. Cogeneration capability at Johnsonville Combustion Turbine Unit 20 commenced pre-commercial plant operations in September 2017, and was placed in service during December 2017. Estimated revenue of $11 million related to these projects was capitalized to offset project costs for the year ended September 30, 2018. TVA also capitalized related fuel costs for these construction projects of approximately $19 million during the year ended September 30, 2018. No such amounts were capitalized during 2019.

Inventories

Certain Fuel, Materials, and Supplies. Materials and supplies inventories are valued using an average unit cost method. A new average cost is computed after each inventory purchase transaction, and inventory issuances are priced at the latest moving weighted average unit cost. Coal, fuel oil, and natural gas inventories are valued using an average cost method. A new weighted average cost is computed monthly, and monthly issues are priced accordingly.

Renewable Energy Credits. TVA accounts for Renewable Energy Certificates ("RECs") using the specific identification cost method. RECs that are acquired through power purchases are recorded as inventory and charged to purchased power expense when the RECs are subsequently used or sold. TVA assigns a value to the RECs at the inception of the power purchase arrangement using a relative fair value approach. RECs created through TVA-owned asset generation are recorded at zero cost.

Emission Allowances. TVA has emission allowances for sulfur dioxide ("SO₂")and nitrogen oxide ("NO_x") which are accounted for as inventory. The cost of specific allowances used each month is charged to operating expense based on tons of SO₂ and NO_x emitted during the respective compliance periods. Allowances granted to TVA by the Environmental Protection Agency ("EPA") are recorded at zero cost.

Allowance for Inventory Obsolescence. TVA reviews materials and supplies inventories by category and usage on a periodic basis. Each category is assigned a probability of becoming obsolete based on the type of material and historical usage data. In 2018, TVA started moving from a site-specific inventory management policy to a fleet-wide strategy for each generation type. Based on the estimated value of the inventory, TVA adjusts its allowance for inventory obsolescence.

Property, Plant, and Equipment, and Depreciation

Property, Plant, and Equipment. Additions to plant are recorded at cost, which includes direct and indirect costs. The cost of current repairs and minor replacements is charged to operating expense. Nuclear fuel, which is included in Property, plant, and equipment, is valued using the average cost method for raw materials and the specific identification method for nuclear fuel in a reactor. Amortization of nuclear fuel in a reactor is calculated on a units-of-production basis and is included in fuel expense. When property, plant, and equipment is retired, accumulated depreciation is charged for the original cost of the assets. Gains or losses are only recognized upon the sale of land or an entire operating unit.

Depreciation. TVA accounts for depreciation of its properties using the composite depreciation convention of accounting. Under the composite method, assets with similar economic characteristics are grouped and depreciated as one asset. Depreciation is generally computed on a straight-line basis over the estimated service lives of the various classes of assets. The estimation of asset useful lives requires management judgment, supported by external depreciation studies of historical asset retirement experience. Depreciation rates are determined based on the external depreciation studies. These studies will be updated at least every five years. Depreciation expense for the years ended September 30, 2019, 2018, and 2017 was $1.8 billion, $1.3 billion, and $1.3 billion, respectively. Depreciation expense expressed as a percentage of the average annual depreciable completed plant was 3.09 percent for 2019, 2.45 percent for 2018, and 2.49 percent for 2017. Average depreciation rates by asset class are as follows:



Property, Plant, and Equipment Depreciation Rates At September 30 (percent)
	2019	2018	2017
Asset Class
Nuclear	2.38	2.64	2.66
Coal-fired⁽¹⁾	4.96	2.32	2.33
Hydroelectric	1.61	1.57	1.58
Gas and oil-fired	3.00	2.93	3.27
Transmission	1.34	1.32	1.34
Other	7.16	5.90	6.12

Note

(1) The rate for 2019 includes the acceleration of depreciation related to retiring certain coal-fired units.

Coal-Fired. As a result of TVA's decision to idle or retire certain units since the previous depreciation study, TVA recognized $566 million, $48 million, and $104 million in accelerated depreciation expense related to the units during the years ended September 30, 2019, 2018, and 2017, respectively. Accelerated depreciation is based on the remaining useful life of the asset at the time the decision is made to idle or retire a unit.

Capital Lease Agreements. Assets recorded under capital lease agreements are included in property, plant, and equipment. These primarily consist of a natural gas lateral pipeline, power production facilities, water treatment assets, certain office equipment, and land of $146 million and $149 million at September 30, 2019 and 2018, respectively. Amortization expense related to capital leases is included in Depreciation and amortization in TVA's statement of operations, excluding leases and other financing obligations where regulatory accounting is applied. See Note 8 — Regulatory Assets and Liabilities — Other Non-Current Regulatory Assets — Deferred Capital Leases and Other Financing Obligations.

Reacquired Rights. Property, plant, and equipment includes intangible reacquired rights, net of amortization, of $200 million and $208 million as of September 30, 2019 and 2018, respectively, related to the purchase of residual interests from lease/leaseback agreements of certain combustion turbine units. Amortization expense was $8 million, $8 million, and $4 million for 2019, 2018, and 2017, respectively. See Note 9 — Asset Acquisitions.

Software Costs. TVA capitalizes certain costs incurred in connection with developing or obtaining internal-use software. Capitalized software costs are included in Property, plant, and equipment on the Consolidated Balance Sheets and are generally amortized over seven years. At September 30, 2019 and 2018, unamortized computer software costs totaled $63 million and $53 million, respectively. Amortization expense related to capitalized computer software costs was $38 million, $32 million, and $26 million for 2019, 2018, and 2017, respectively. Software costs that do not meet capitalization criteria are expensed as incurred.

Impairment of Assets. TVA evaluates long-lived assets for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. For long-lived assets, TVA bases its evaluation on impairment indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, regulatory approval and ability to set rates at levels that allow for recoverability of the assets, and other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate that the carrying amount of an asset may not be recoverable, TVA determines whether an impairment has occurred based on an estimate of undiscounted cash flows attributable to the asset as compared with the carrying value of the asset. If an impairment has occurred, the amount of the impairment recognized is measured as the excess of the asset's carrying value over its fair value. Additionally, TVA regularly evaluates construction projects. If the project is canceled or deemed to have no future economic benefit, the project is written off as an asset impairment or, upon TVA Board approval, reclassified as a regulatory asset. See Note 6 — Plant Closures.

Decommissioning Costs

TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets. These obligations relate to fossil fuel-fired generating plants, nuclear generating plants, hydroelectric generating plants/dams, transmission structures, and other property-related assets. These other property-related assets include, but are not limited to, easements and coal rights. Activities involved with retiring these assets could include decontamination and demolition of structures, removal and disposal of wastes, and site restoration. Revisions to the estimates of asset retirement obligations ("AROs") are made whenever factors indicate that the timing or amounts of estimated cash flows have changed materially. Any accretion or depreciation expense related to these liabilities and assets is charged to a regulatory asset. See Note 8 — Regulatory Assets and Liabilities — Nuclear Decommissioning Costs and Non-Nuclear Decommissioning Costs and Note 12 — Asset Retirement Obligations.

Blended Low-Enriched Uranium Program

Under the blended low-enriched uranium ("BLEU") program, TVA, the U.S. Department of Energy ("DOE"), and certain nuclear fuel contractors have entered into agreements providing for the DOE's surplus of enriched uranium to be blended with other uranium down to a level that allows the blended uranium to be fabricated into fuel that can be used in nuclear power plants. Under the terms of an interagency agreement between TVA and the DOE, in exchange for supplying highly enriched uranium materials to the appropriate third-party fuel processors for processing into usable BLEU fuel for TVA, the DOE participates to a degree in the savings generated by TVA's use of this blended nuclear fuel. TVA accrues an obligation with each BLEU reload batch related to the portion of the ultimate future payments estimated to be attributable to the BLEU fuel currently in use. TVA estimated DOE's portion of the cost savings from the program to be $166 million since 2006. The last reload of BLEU material is currently underway at Browns Ferry Nuclear Plant ("Browns Ferry"). Since 2011, total payments to the DOE amounted to approximately $165 million for this program. No payments were made during the year ended September 30, 2019, and the remaining obligation recorded was $1 million at September 30, 2019.

Down-blend Offering for Tritium

TVA, the DOE, and certain nuclear fuel contractors have entered into agreements, referred to as the Down-blend offering for Tritium, 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 the summer of 2019 and is contracted to continue through October 2027. Beginning October 2027, contract activity will consist of storage and flag management. Flag management ensures that the uranium is of U.S. origin, free from foreign obligations, and 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. During the year ended September 30, 2019, TVA received $23 million in reimbursements from the DOE. At September 30, 2019, TVA recorded $6 million in Accounts receivable, net related to this agreement.

Investment Funds

Investment funds consist primarily of trust funds designated to fund decommissioning requirements (see Note 22 — Commitments and Contingencies — Decommissioning Costs), the Supplemental Executive Retirement Plan ("SERP") (see Note 21 — Overview of Plans and Benefits — Supplemental Executive Retirement Plan), and the Deferred Compensation Plan ("DCP"). The Nuclear Decommissioning Trust ("NDT") holds funds primarily for the ultimate decommissioning of TVA's nuclear power plants. The Asset Retirement Trust ("ART") holds funds primarily for the costs related to the future closure and retirement of TVA's other long-lived assets. The NDT, ART, SERP, and DCP funds are invested in portfolios of securities generally designed to achieve a return in line with overall equity and debt market performance. The NDT, ART, SERP, and DCP funds are all classified as trading.

Energy Prepayment Obligations

In 2004, TVA and its largest customer, Memphis Light, Gas and Water Division ("MLGW"), entered into an energy prepayment agreement under which MLGW prepaid TVA $1.5 billion for the future costs of electricity to be delivered by TVA to MLGW over a period of 180 months. TVA accounted for the prepayment as unearned revenue and reported the obligation to deliver power under this arrangement as Energy prepayment obligations and Current portion of energy prepayment obligations on the September 30, 2018 Consolidated Balance Sheet. The arrangement ceased in 2019. Revenue was recognized in each year of the arrangement as electricity was delivered to MLGW based on the ratio of units of kilowatt hours delivered to total units of kilowatt hours under contract. As of September 30, 2019, $1.5 billion had been recognized as non-cash revenue on a cumulative basis during the life of the agreement, $10 million and $100 million of which was recognized as non-cash revenue during 2019 and 2018, respectively.

Discounts to account for the time value of money, which are recorded as a reduction to electricity sales, amounted to $4 million and $46 million for the years ended September 30, 2019 and 2018, respectively.

Insurance

Although TVA uses private companies to administer its healthcare plans for eligible active and retired employees not covered by Medicare, TVA does not purchase health insurance. Third-party actuarial specialists assist TVA in determining certain liabilities for self-insured claims. TVA recovers the costs of claims through power rates and through adjustments to the participants' contributions to their benefit plans. These liabilities are included in Other liabilities on the Consolidated Balance Sheets.

TVA sponsors an Owner Controlled Insurance Program which provides workers' compensation and liability insurance for a select group of contractors performing maintenance, modifications, outage, and new construction activities at TVA facilities.

The Federal Employees' Compensation Act ("FECA") governs liability to employees for service-connected injuries. TVA purchases excess workers' compensation insurance above a self-insured retention.

In addition to excess workers' compensation insurance, TVA purchases the following types of insurance:


•	Nuclear liability insurance; nuclear property, decommissioning, and decontamination insurance; and nuclear accidental outage insurance. See Note 22 — Commitments and Contingencies — Nuclear Insurance.


•	Excess liability insurance for aviation, auto, marine, and general liability exposures.


•	Property insurance for certain conventional (non-nuclear) assets.

The insurance policies are subject to the terms and conditions of the specific policy, including deductibles or self-insured retentions. To the extent insurance would not provide either a partial or total recovery of the costs associated with a loss, TVA would have to recover any such costs through other means, including through power rates.

Research and Development Costs

Research and development costs are expensed when incurred. TVA's research programs include those related to power delivery technologies, emerging technologies (clean energy, renewables, distributed resources, and energy efficiency), technologies related to generation (fossil fuel, nuclear, and hydroelectric), and environmental technologies.

Tax Equivalents

TVA is not subject to federal income taxation. In addition, neither TVA nor its property, franchises, or income is subject to taxation by states or their subdivisions. The TVA Act requires TVA to make payments to states and counties in which TVA conducts its power operations and in which TVA has acquired power properties previously subject to state and local taxation. The total amount of these payments is five percent of gross revenues from sales of power during the preceding year, excluding sales or deliveries to other federal agencies and off-system sales with other utilities, with a provision for minimum payments under certain circumstances. TVA calculates tax equivalent expense by subtracting the prior year fuel cost-related tax equivalent regulatory asset or liability from the payments made to the states and counties during the current year and adding back the current year fuel cost-related tax equivalent regulatory asset or liability. Fuel cost-related tax equivalent expense is recognized in the same accounting period in which the fuel cost-related revenue is recognized.

Maintenance Costs

TVA records maintenance costs and repairs related to its property, plant, and equipment in the Consolidated Statements of Operations as they are incurred except for the recording of certain regulatory assets for retirement and removal costs.

Impact of New Accounting Standards and Interpretations

12 Months Ended

Sep. 30, 2019

Accounting Changes and Error Corrections [Abstract]

Impact of New Accounting Standards and Interpretations

The following are accounting standard updates issued by the Financial Accounting Standards Board ("FASB") that TVA adopted during 2019:



Defined Benefit Costs
Description	This guidance changes how information about defined benefit costs for pension plans and other post-retirement benefit plans is presented in employer financial statements. The guidance requires employers that present a measure of operating income in their statement of income to include only the service cost component of net periodic pension cost and net periodic post-retirement benefit cost in operating expenses (together with other employee compensation costs). The other components of net benefit cost, including amortization of prior service cost/credit and settlement and curtailment effects, are to be included in non-operating expenses. Additionally, the guidance stipulates that only the service cost component of net benefit cost is eligible for capitalization in assets. The guidance requires retrospective presentation of the service and non-service cost components in the Consolidated Statements of Operations.
Effective Date for TVA	October 1, 2018
Effect on the Financial Statements or Other Significant Matters	TVA adopted this standard on a retrospective basis for the prior periods presented resulting in a reclassification of net periodic benefit costs from Operating and maintenance expense to Other net periodic benefit cost in the Consolidated Statements of Operations of $256 million and $758 million during 2018 and 2017, respectively. There was no impact on the Consolidated Balance Sheets because TVA has historically capitalized only the service cost component, which is consistent with the new guidance. See Note 1 — Summary of Significant Accounting Policies — Reclassifications for additional details.



Financial Instruments
Description	This guidance applies to the recognition and measurement of financial assets and liabilities. The standard requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). The standard also amends presentation requirements related to certain changes in the fair value of a liability and eliminates certain disclosure requirements of significant assumptions for financial instruments measured at amortized cost on the balance sheet. Public entities must apply the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption.
Effective Date for TVA	October 1, 2018
Effect on the Financial Statements or Other Significant Matters	TVA currently measures all of its equity investments (other than those that result in the consolidation of the investee) at fair value, with changes in the fair value recognized through net income, unless regulatory accounting is applied. The TVA Board has authorized the use of regulatory accounting for changes in fair value of certain equity investments, and as a result, those changes in fair value are deferred as regulatory assets or liabilities. TVA currently discloses significant assumptions around its estimates of fair value for financial instruments carried at amortized cost on its consolidated balance sheet. The adoption of this standard did not have a material impact on TVA's financial condition, results of operations, or cash flows because changes in fair value accounting are recognized through regulatory accounting.

Revenue from Contracts with Customers
Description	This guidance, including subsequent amendments, replaces the existing accounting standard and industry specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the guidance is to recognize revenue related to the transfer of goods or services to customers at the amount expected to be collected. The objective of the new standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within and across industries. The new standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and the related cash flows arising from contracts with customers.
Effective Date for TVA	October 1, 2018
Effect on the Financial Statements or Other Significant Matters	TVA adopted this standard using the modified retrospective method with no material changes to the amount or timing of revenue recognition. In accordance with the modified retrospective method, TVA's previously issued financial statements have not been restated to comply with the new accounting standard. TVA recognizes revenue when it satisfies a performance obligation by transferring control to the customer. For the generation and transmission of electricity, this is generally at the time the power is delivered to a metered customer delivery point for a customer's consumption or distribution. As a result, revenues from power sales are recorded as electricity is delivered to customers. TVA utilized certain practical expedients including applying the guidance to open contracts at the date of adoption, applying the guidance to a portfolio of contracts with similar characteristics, and recognizing revenue in the amount for which it has the right to invoice. As a result of adoption of the standard, TVA did not have a cumulative-effect adjustment to proprietary capital.

Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments
Description	This standard adds or clarifies guidance on the classification of certain cash receipts and payments on the statement of cash flows as follows: debt prepayment or extinguishment costs, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies and bank-owned life insurance policies, distributions received from equity method investees, beneficial interest in securitization transactions, and the application of the predominance principle to separately identifiable cash flows.
Effective Date for TVA	October 1, 2018
Effect on the Financial Statements or Other Significant Matters	TVA adopted this standard on a retrospective basis for the prior periods presented. The adoption of this standard resulted in a reclassification of certain cash payments of $29 million and $9 million from financing activities to operating activities shown on the Consolidated Statements of Cash Flows for 2018 and 2017, respectively. The changes did not have a material impact on TVA's financial condition and results of operations. See Note 1 — Summary of Significant Accounting Policies — Reclassifications for additional details.

Statement of Cash Flows - Restricted Cash
Description	This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance does not provide a definition of restricted cash or restricted cash equivalents.
Effective Date for TVA	October 1, 2018
Effect on the Financial Statements or Other Significant Matters	Adoption of this standard resulted in a change to the beginning-of-period and end-of-period cash and cash equivalents and restricted cash amounts presented on the Consolidated Statements of Cash Flows. Amounts previously reported as Other, net in cash flows from operating activities of transfers from cash and restricted cash are not reported as cash flow activities. See Note 1 — Summary of Significant Accounting Policies — Cash, Cash Equivalents, and Restricted Cash for additional details. TVA applied this standard on a retrospective basis for the prior periods presented.

The following accounting standards have been issued but as of September 30, 2019, were not effective and had not been adopted by TVA:



Lease Accounting
Description	This guidance changes the provisions of recognition in both the lessee and lessor accounting models. The standard requires entities that lease assets ("lessees") to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with terms of more than 12 months, while also refining the definition of a lease. In addition, lessees are required to disclose key information about the amount, timing and uncertainty of cash flows arising from leasing arrangements. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily depend on its classification as a finance lease (formerly referred to as capital lease) or operating lease. The standard requires both types of leases to be recognized on the balance sheet. Operating leases will result in straight-line expense, while finance leases will result in recognition of interest expense on the lease liability separate from amortization expense. The accounting rules for the owner of assets leased by the lessee ("lessor accounting") remain relatively unchanged. The standard allows for certain practical expedients to be elected related to lease term determination, separation of lease and non-lease elements, reassessment of existing leases, and short-term leases. The standard is to be applied using a modified retrospective transition.
Effective Date for TVA	The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2019.
Effect on the Financial Statements or Other Significant Matters	TVA has completed its evaluation of the impact of adopting this guidance and the changes on its consolidated financial statements and related disclosures. The standard is expected to impact financial position as adoption will increase the amount of assets and liabilities recognized on TVA's Consolidated Balance Sheets approximately $200 million each. The standard is not expected to have a material impact on results of operations or cash flows as expense recognition is intended to be substantially the same as the existing standard. TVA has elected to apply the following practical expedients:
		Practical Expedient	Description
		Package of transition practical expedients (for leases commenced prior to adoption date; expedients must be adopted as a package)	Do not need to 1) reassess whether any expired or existing contracts are leases or contain leases, 2) reassess the lease classification for any expired or existing leases, and 3) reassess initial direct costs for any existing leases.
		Short-term lease expedient (elect by class of underlying asset)	Elect as an accounting policy to not apply the recognition requirements to short-term leases by asset class.
		Existing and expired land easements not previously accounted for as leases	Elect to not evaluate existing or expired easements under the new guidance and carry forward current accounting treatment.
		Comparative reporting requirements for initial adoption	Elect to apply transition requirements at adoption date, recognize cumulative effect adjustment to retained earnings in period of adoption, and not apply the new requirements to comparative periods, including disclosures.


Derivatives and Hedging - Improvements to Accounting for Hedging Activities
Description	This guidance better aligns an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements.
Effective Date for TVA	The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2019.
Effect on the Financial Statements or Other Significant Matters	TVA does not expect the adoption of this standard to have a material impact on TVA's financial condition, results of operations, or cash flows.

Customer's Accounting for Implementation Costs in a Cloud Arrangement That Is a Service Contract
Description	This guidance relates to the accounting for a customer's implementation costs in a hosting arrangement that is a service contract. The amendments align the requirements for capitalizing those implementation costs with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The amendments also provide requirements for the classification of the capitalized costs and related expense and cash flows in the financial statements, the application of impairment guidance to the capitalized costs, and the application of abandonment guidance to the capitalized costs. Entities are required to apply the amendments either retrospectively or prospectively to all implementation costs incurred after the adoption date.
Effective Date for TVA	The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2020. Early adoption is permitted, and TVA plans to adopt this standard October 1, 2019, on a prospective basis.
Effect on the Financial Statements or Other Significant Matters	TVA does not expect any material impact on TVA's financial condition, results of operations, or cash flows after the adoption of this standard.



Financial Instruments - Credit Losses
Description	This guidance eliminates the probable initial recognition threshold in current GAAP and, instead, requires an allowance to be recorded for all expected credit losses for certain financial assets that are not measured at fair value. The allowance for credit losses is based on historical information, current conditions, and reasonable and supportable forecasts. The new standard also makes revisions to the other than temporary impairment model for available-for-sale debt securities. Disclosures of credit quality indicators in relation to the amortized cost of financing receivables are further disaggregated by year of origination. The standard also provides a transition relief that is optional for all entities. It provides entities an option to irrevocably elect the fair value option, applied on an instrument-by-instrument basis for eligible instruments.
Effective Date for TVA	The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2020. While early adoption is permitted, TVA does not plan to adopt the standard early.
Effect on the Financial Statements or Other Significant Matters	TVA is evaluating the potential impact of these changes on its consolidated financial statements and related disclosures.

Fair Value Measurement Disclosure
Description	The guidance changes certain disclosure requirements for fair value measurements. It removes certain disclosure requirements, such as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of the transfers between levels; and the valuation processes for Level 3 fair value measurements. Some disclosure requirements are added, such as the change in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.
Effective Date for TVA	The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2020. While early adoption is permitted, TVA does not plan to adopt the standard early.
Effect on the Financial Statements or Other Significant Matters	TVA does not expect the adoption of this standard to have a material impact on TVA's financial condition, results of operations or cash flows. TVA is evaluating the potential impact on related disclosures.

Defined Benefit Plans - Disclosure Requirements
Description	This guidance applies to all employers that sponsor defined benefit pension or other post-retirement plans and modifies or clarifies the disclosure requirements for those plans. The amendments in this update remove disclosures that no longer are considered cost-beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. Entities are required to apply the amendments retrospectively.
Effective Date for TVA	The new standard is effective for TVA's annual reporting periods beginning October 1, 2021. While early adoption is permitted, TVA does not plan to adopt the standard early.
Effect on the Financial Statements or Other Significant Matters	TVA is evaluating the potential impact of these changes on its consolidated financial statements and related disclosures.

Accounts Receivable, Net

12 Months Ended

Sep. 30, 2019

Accounts Receivable, after Allowance for Credit Loss [Abstract]

Accounts Receivable, Net

3. Accounts Receivable, Net

Accounts receivable primarily consist of amounts due from customers for power sales. The table below summarizes the types and amounts of TVA's accounts receivable:



Accounts Receivable, Net At September 30
	2019		2018
Power receivables	$	1,624	$	1,570
Other receivables	115		87
Accounts receivable, net⁽¹⁾	$	1,739	$	1,657

Note

(1) Allowance for uncollectible accounts was less than $1 million at September 30, 2019 and 2018, and therefore is not represented in the table above.

Inventories, Net

12 Months Ended

Sep. 30, 2019

Inventory, Net [Abstract]

Inventories, Net

4. Inventories, Net

The table below summarizes the types and amounts of TVA's inventories:



Inventories, Net At September 30
	2019			2018
Materials and supplies inventory	$	742		$	725
Fuel inventory	294			266
RECs/Emission allowance inventory, net	16			14
Allowance for inventory obsolescence	(53		)	(44		)
Inventories, net	$	999		$	961

Net Completed Plant

12 Months Ended

Sep. 30, 2019

Property, Plant and Equipment, Net, by Type [Abstract]

Net Completed Plant

5. Net Completed Plant

Net completed plant consisted of the following:



Net Completed Plant At September 30
	2019						2018
	Cost		Accumulated Depreciation		Net		Cost		Accumulated Depreciation		Net
Coal-fired⁽¹⁾	$	17,400	$	12,538	$	4,862	$	16,482	$	11,033	$	5,449
Gas and oil-fired	6,054		1,562		4,492		5,990		1,459		4,531
Nuclear	25,543		11,656		13,887		25,227		11,310		13,917
Transmission	7,932		3,083		4,849		7,515		3,038		4,477
Hydroelectric	3,163		1,051		2,112		3,087		1,012		2,075
Other electrical plant	1,920		1,110		810		1,881		1,107		774
Intangible software	3		1		2		3		—		3
Multipurpose dams	900		373		527		900		367		533
Other stewardship	29		10		19		29		9		20
Total	$	62,944	$	31,384	$	31,560	$	61,114	$	29,335	$	31,779

Note

(1) TVA recognized accelerated depreciation as a result of the decision to idle or retire certain units. See Note 6 — Plant Closures.

Other Long-Term Assets

12 Months Ended

Sep. 30, 2019

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Long-Term Assets

The table below summarizes the types and amounts of TVA's other long-term assets:



Other Long-Term Assets At September 30
	2019		2018
EnergyRight^®loans receivable	$	81	$	90
Loans and other long-term receivables, net⁽¹⁾	125		125
Commodity contract derivative assets⁽²⁾	—		31
Restricted cash and cash equivalents⁽¹⁾	23		23
Prepaid capacity payments	19		27
Other	77		66
Total other long-term assets	$	325	$	362

Notes

(1) At September 30, 2018, $13 million and $10 million previously classified as Restricted cash and cash equivalents and Loans and other long-term receivables, net (a component of Other long-term assets), respectively, have been reclassified to Restricted cash and cash equivalents (a component of Other long-term assets).

(2) In 2019, these assets are less than $1 million, and therefore are not represented in the table above.

In association with the EnergyRight^® Solutions program, LPCs offer financing to end-use customers for the purchase of energy-efficient equipment. Depending on the nature of the energy-efficiency project, loans may have a maximum term of five years or 10 years. TVA purchases the resulting loans receivable from its LPCs. The loans receivable are then transferred to a third-party bank with which TVA has agreed to repay in full any loans receivable that has been in default for 180 days or more or that TVA has determined is uncollectible. Given this continuing involvement, TVA accounts for the transfer of the loans receivable as secured borrowings. The current and long-term portions of the loans receivable are reported in Accounts receivable, net and Other long-term assets, respectively, on TVA's Consolidated Balance Sheets. At September 30, 2019 and 2018, the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was approximately $20 million and $22 million, respectively. See Note 11 — Other Long-Term Liabilities for information regarding the associated financing obligation.

Regulatory Assets and Liabilities

12 Months Ended

Sep. 30, 2019

Regulatory Assets and Liabilities Disclosure [Abstract]

Regulatory Assets and Liabilities

Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. Components of regulatory assets and regulatory liabilities are summarized in the table below.



Regulatory Assets and Liabilities At September 30
	2019		2018
Current regulatory assets
Unrealized losses on interest rate derivatives	$	89	$	73
Unrealized losses on commodity derivatives	39		4
Environmental agreements	—		3
Gallatin coal combustion residual facilities	—		38
Environmental cleanup costs - Kingston ash spill	—		266
Fuel cost adjustment receivable	28		30
Total current regulatory assets	156		414

Non-current regulatory assets
Deferred pension costs and other post-retirement benefits costs	4,756		3,119
Non-nuclear decommissioning costs	1,741		1,019
Unrealized losses on interest rate derivatives	1,241		692
Nuclear decommissioning costs	868		784
Unrealized losses on commodity derivatives	15		8
Environmental agreements	12		11
Gallatin coal combustion residual facilities	—		861
Other non-current regulatory assets	130		118
Total non-current regulatory assets	8,763		6,612
Total regulatory assets	$	8,919	$	7,026

Current regulatory liabilities
Fuel cost adjustment tax equivalents	$	138	$	146
Unrealized gains on commodity derivatives	12		41
Total current regulatory liabilities	150		187

Non-current regulatory liabilities
Deferred other post-retirement benefits cost	—		73
Unrealized gains on commodity derivatives	—		31
Total non-current regulatory liabilities	—		104
Total regulatory liabilities	$	150	$	291

In 2017, the TVA Board authorized management to accelerate amortization of certain regulatory assets to the extent actual net income in 2018 exceeded the budgeted amount, up to the aggregate amount of those certain regulatory assets. Assets included in this TVA Board action include: deferred nuclear generating units, environmental cleanup costs related to the Kingston ash spill, and nuclear training costs related to the refurbishing and restarting of Browns Ferry Unit 1 and the construction of Watts Bar Unit 2. TVA recorded $857 million of accelerated amortization of the Deferred nuclear generating units and Nuclear training costs regulatory assets in 2018. The TVA Board authorized TVA to use the amount included in the 2019 rate action for these two regulatory assets, to the extent needed, to accelerate amortization of the Environmental cleanup costs - Kingston ash spill regulatory asset in 2019. TVA recorded $266 million of accelerated recovery for the Kingston ash spill regulatory asset in 2019.

Deferred Pension Costs and Other Post-retirement Benefit Costs. TVA measures the funded status of its pension and post-retirement ("OPEB") benefit plans at each year-end balance sheet date. The funded status is measured as the difference between the fair value of plan assets and the benefit obligations at the measurement date for each plan. The changes in funded status are actuarial gains and losses that are recognized on TVA's Consolidated Balance Sheets by adjusting the recognized pension and OPEB liabilities, with the offset deferred as a regulatory asset or a regulatory liability. In an unregulated environment, these deferred costs would be recognized as an increase or decrease to accumulated other comprehensive income (loss) ("AOCI").

"Incurred cost" is a cost arising from cash paid out or an obligation to pay for an acquired asset or service, and a loss from any cause that has been sustained and for which payment has been or must be made. In the cases of pension and OPEB costs, the unfunded obligation represents a projected liability to the employee for services rendered, and thus it meets the definition of an incurred cost. Therefore, amounts that otherwise would be charged to AOCI for these costs are recorded as a regulatory asset or liability since TVA has historically recovered pension and OPEB expense in rates. Through historical and current year expense included in ratemaking, the TVA Board has demonstrated the ability and intent to include pension and OPEB costs in allowable costs and in rates for ratemaking purposes. As a result, it is probable that future revenue will result from inclusion of the pension and OPEB regulatory assets or regulatory liability in allowable costs for ratemaking purposes.

The regulatory asset and liability are classified as long-term, which is consistent with the pension and OPEB liabilities, and are not amortized to the consolidated statements of operations over a specified recovery period. They are adjusted either upward or downward each year in conjunction with the adjustments to the unfunded pension liability and OPEB liability, as calculated by the actuaries. Ultimately the regulatory asset and liability will be recognized in the consolidated statements of operations in the form of pension and OPEB expense as the actuarial liabilities are eliminated in future periods. See Note 21 — Benefit Plans — Obligations and Funded Status.

Additionally on October 1, 2014, TVA began recognizing pension costs as a regulatory asset to the extent that the amount calculated under GAAP as pension expense differs from the amount TVA contributes to the pension plan. As a result of recent plan design changes, future contributions are expected to exceed the expense calculated under U.S. GAAP. Accordingly, TVA will discontinue this regulatory accounting practice once all such deferred costs have been recovered, at which time it will recognize pension costs in accordance with U.S. GAAP.

Non-Nuclear Decommissioning Costs. Non-nuclear decommissioning costs include: (1) certain deferred charges related to the future closure and decommissioning of TVA's non-nuclear long-lived assets, (2) recognition of changes in the liability, (3) recognition of changes in the value of TVA's ART, and (4) certain other deferred charges under the accounting rules for AROs. TVA has established the ART to more effectively segregate, manage, and invest funds to help meet future non-nuclear AROs. The funds from the ART may be used, among other things, to pay the costs related to the future closure and retirement of non-nuclear long-lived assets under various legal requirements. These future costs can be funded through a combination of investment funds already set aside in the ART, future earnings on those investment funds, and future cash contributions to the ART and future earnings thereon. For 2019, TVA recovered in rates a portion of its estimated current year non-nuclear decommissioning costs and contributions to the ART. Deferred charges will be recovered in rates based on an analysis of the expected expenditures, contributions, and investment earnings required to recover the decommissioning costs. There is not a specified recovery period; therefore, the regulatory asset is classified as long-term consistent with the ART investments and ARO liability.

Unrealized Losses on Interest Rate Derivatives. TVA uses regulatory accounting treatment to defer the unrealized gains and losses on certain interest rate derivative contracts. When amounts in these contracts are realized, the resulting gains or losses are included in the ratemaking formula. The unrealized losses on these interest rate derivatives are recorded on TVA's Consolidated Balance Sheets as current and non-current regulatory assets, and the related realized gains or losses, if any, are recorded on TVA's Consolidated Statements of Operations when the contracts settle. A portion of certain unrealized gains will be amortized into earnings over the remaining lives of the contracts. Gains and losses on interest rate derivatives that are expected to be realized within the next year are included as a current regulatory asset or liability on TVA's Consolidated Balance Sheet.

Nuclear Decommissioning Costs. Nuclear decommissioning costs include: (1) certain deferred charges related to the future closure and decommissioning of TVA's nuclear generating units under the Nuclear Regulatory Commission ("NRC") requirements, (2) recognition of changes in the liability, (3) recognition of changes in the value of TVA's NDT, and (4) certain other deferred charges under the accounting rules for AROs. These future costs will be funded through a combination of the NDT, future earnings on the NDT, and, if necessary, additional TVA cash contributions to the NDT and future earnings thereon. See Note 1 — Summary of Significant Accounting Policies — Investment Funds. There is not a specified recovery period; therefore, the regulatory asset is classified as long-term consistent with the NDT investments and ARO liability.

Unrealized Gains (Losses) on Commodity Derivatives. Unrealized gains (losses) on coal and natural gas purchase contracts, included as part of unrealized gains (losses) on commodity derivatives, relate to the mark-to-market ("MtM") valuation of coal and natural gas purchase contracts. These contracts qualify as derivative contracts but do not qualify for cash flow hedge accounting treatment. As a result, TVA recognizes the changes in the market value of these derivative contracts as a regulatory liability or asset. This treatment reflects TVA's ability and intent to recover the cost of these commodity contracts on a settlement basis for ratemaking purposes through the fuel cost adjustment. TVA recognizes the actual cost of fuel received under these contracts in fuel expense at the time the fuel is used to generate electricity. These contracts expire at various times through 2020. Unrealized gains and losses on contracts with a maturity of less than one year are included as a current regulatory asset or liability on TVA's Consolidated Balance Sheets. See Note 15 — Risk Management Activities and Derivative Transactions.

Environmental Agreements. In conjunction with the Environmental Agreements, TVA recorded certain liabilities totaling $360 million ($290 million investment in energy efficiency projects, demand response projects, renewable energy projects, and other TVA projects; $60 million to be provided to Alabama, Kentucky, North Carolina, and Tennessee to fund environmental projects with preference for projects in the Tennessee River watershed; and $10 million in civil penalties). The TVA Board determined that these costs would be collected in customer rates in the future, and, accordingly, the amounts were deferred as a regulatory asset. Through the end of 2019, $279 million has been paid with respect to environmental projects, $60 million has been paid to Alabama, Kentucky, North Carolina, and Tennessee, and $10 million has been paid with respect to civil penalties. The remaining deferred amounts will be charged to expense and recovered in rates over future periods as payments are made through 2027.

Gallatin Coal Combustion Residuals. Based on the August 2017 Order and the assumptions that a new lined facility would be permitted and constructed on the Gallatin site and all existing CCR materials at Gallatin would be moved to this site, TVA estimated the costs of the project to be approximately $900 million, which reflected the expected costs of inflation over the duration of the project but was not discounted to a present value amount given the nature of the obligation. At September 30, 2018, $861 million and $38 million were recorded as long-term and short-term regulatory assets, respectively.

As a result of the subsequent decision in TVA's favor by the Sixth Circuit, as well as the June 2019 consent order filed

in the case brought by TDEC, Gallatin CCR project costs are now recorded in Asset retirement obligations. See Note 12 for additional details.

Environmental Cleanup Costs – Kingston Ash Spill. TVA used regulatory accounting treatment to defer all actual costs incurred and expected future costs related to the Kingston Fossil Plant ("Kingston") Ash Spill. The TVA Board approved a plan to amortize these costs over 15 years beginning on October 1, 2009. Insurance proceeds have been recorded as reductions to the regulatory asset and have reduced amounts collected in future rates. Amounts included as a current regulatory asset on TVA's Consolidated Balance Sheets represent the amount to be amortized in the next 12 months. The TVA Board authorized TVA to use the amount included in the 2019 rate action for the Deferred nuclear generating units and Nuclear training costs regulatory assets, to the extent needed, to accelerate amortization of the Environmental cleanup costs - Kingston ash spill regulatory asset in 2019. The remaining balance at September 30, 2018 was recorded as a current asset, and TVA recorded $266 million of accelerated recovery for the Kingston ash spill regulatory asset in 2019.

Fuel Cost Adjustment Receivable. The fuel cost adjustment provides a mechanism to alter rates monthly to reflect changing fuel and purchased power costs, including realized gains and losses relating to transactions under TVA's Financial Trading Program ("FTP"). There is typically a lag between the occurrence of a change in fuel and purchased power costs and the reflection of the change in fuel rates. Balances in the fuel cost adjustment regulatory accounts represent over-collected or under-collected revenues that offset fuel and purchased power costs, and the fuel rate is designed to recover or refund the balance in less than one year.

Other Non-Current Regulatory Assets. Other non-current regulatory assets consist of the following:

Deferred Capital Leases and Other Financing Obligations. Deferred capital lease and other financing asset costs represent the difference between the FERC's Uniform System of Accounts Prescribed for Public Utilities and Licensees Subject to the Provisions of the Federal Power Act ("Uniform System of Accounts") model balances and the balances under GAAP guidance. Under the Uniform System of Accounts, TVA recognizes the initial capital lease and other financing asset and liability at inception of the lease or other obligation; however, the annual expense under the Uniform System of Accounts is equal to the annual lease or other financing obligation payments, which differs from GAAP treatment. This practice results in TVA's asset balances being higher than they otherwise would have been under GAAP, with the difference representing a regulatory asset related to each capital lease or other financing obligation. These costs will be amortized over the respective lease or other financing obligation terms as lease or other financing obligation payments are made. As the costs associated with this regulatory asset are not currently being considered in rates and the asset is expected to increase over the next year, the regulatory asset has been classified as long-term.

Debt Reacquisition Costs. Reacquisition expenses, call premiums, and other related costs, such as unamortized debt issue costs associated with redeemed Bond issues, are deferred and amortized (accreted) on a straight-line basis over the weighted average life of TVA's debt portfolio. Because timing of additional reacquisition expenses and changes to the weighted average life of the debt are uncertain, the regulatory asset is classified as long-term.

Retirement Removal Costs. Retirement removal costs, net of salvage, that are not legally required are recognized as a regulatory asset. Prior to 2017, net removal costs were amortized over a recovery period consistent with the depreciable lives of related assets under the most recent depreciation study. In 2017 and thereafter, net removal costs are amortized over a one-year period subsequent to completion of the removal activities. TVA treats this regulatory asset as long-term in its entirety primarily because it relates to assets that are long-term in nature.

Fuel Cost Adjustment Tax Equivalents. The fuel cost adjustment includes a provision related to the current funding of the future payments TVA will make. As TVA records the fuel cost adjustment, five percent of the calculation that relates to a future asset or liability for tax equivalent payments is recorded as a current regulatory liability and paid or refunded in the following year.

Asset Acquisitions and Business Combinations (Notes)	12 Months Ended
Asset Acquisitions and Business Combinations (Notes)	Sep. 30, 2019
Business Combinations and Settlement of Preexisting Relationships [Abstract]
Asset Acquisitions and Business Combinations Disclosure	Asset Acquisitions On September 20, 2017, TVA acquired 100 percent of the equity interests in two special purpose entities ("SPEs") designed to administer rent payments TVA makes under certain of its lease/leaseback arrangements. Each entity holds residual interests in four of TVA's peaking combustion turbine units ("CTs"). TVA acquired these entities in order to reacquire the residual interests in eight CTs it had previously granted in the lease/leaseback arrangements. TVA acquired the entities for total cash consideration of $36 million. The fair value of the assets acquired consisted of $110 million of reacquired rights, and the fair value of liabilities assumed consisted of $74 million in notes payable. Reacquired rights are an intangible asset included in TVA's Completed plant balance and are amortized over the estimated useful life of the underlying CTs. Notes payable assumed in the transaction are included in TVA's Short-term debt and require TVA to make semi-annual payments through May 2020. TVA recognized less than $1 million of amortization expense, related to reacquired rights, within TVA's consolidated statements of operations. Transaction costs were not material. TVA determined that its lease/leaseback obligations were preexisting relationships that were effectively settled in the asset acquisitions. TVA settled the preexisting relationships separately from the asset acquisitions, resulting in a loss on extinguishment of the obligations of $3 million. The carrying value of lease/leaseback obligations effectively settled was $71 million, including accrued interest, and the reacquisition price was $74 million, paid in cash, at the acquisition date.

Variable Interest Entities

12 Months Ended

Sep. 30, 2019

Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract]

Variable Interest Entities

A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of owning a controlling financial interest. When TVA determines that it has a variable interest in a VIE, a qualitative evaluation is performed to assess which interest holders have the power to direct the activities that most significantly impact the economic performance of the entity and have the obligation to absorb losses or receive benefits that could be significant to the entity. The evaluation considers the purpose and design of the business, the risks that the business was designed to create and pass along to other entities, the activities of the business that can be directed and which party can direct them, and the expected relative impact of those activities on the economic performance of the business through its life. TVA has the power to direct the activities of an entity when it has the ability to make key operating and financing decisions, including, but not limited to, capital investment and the issuance of debt. Based on the evaluation of these criteria, TVA has determined it is the primary beneficiary of certain entities and as such is required to account for the VIEs on a consolidated basis.

John Sevier VIEs

In 2012, TVA entered into a $1.0 billion construction management agreement and lease financing arrangement with John Sevier Combined Cycle Generation LLC ("JSCCG") for the completion and lease by TVA of the John Sevier Combined Cycle Facility ("John Sevier CCF"). JSCCG is a special single-purpose limited liability company formed in January 2012 to finance the John Sevier CCF through a $900 million secured note issuance (the "JSCCG notes") and the issuance of $100 million of membership interests subject to mandatory redemption. The membership interests were purchased by John Sevier Holdco LLC ("Holdco"). Holdco is a special single-purpose entity, also formed in January 2012, established to acquire and hold the membership interests in JSCCG. A non-controlling interest in Holdco is held by a third party through nominal membership interests, to which none of the income, expenses, and cash flows are allocated.

The membership interests held by Holdco in JSCCG were purchased with proceeds from the issuance of $100 million of secured notes (the "Holdco notes") and are subject to mandatory redemption pursuant to a schedule of amortizing, semi-annual payments due each January 15 and July 15, with a final payment due in January 2042. The payment dates for the mandatorily redeemable membership interests are the same as those of the Holdco notes. The sale of the JSCCG notes, the membership interests in JSCCG, and the Holdco notes closed in January 2012. The JSCCG notes are secured by TVA's lease payments, and the Holdco notes are secured by Holdco's investment in, and amounts receivable from, JSCCG. TVA's lease payments to JSCCG are equal to and payable on the same dates as JSCCG's and Holdco's semi-annual debt service payments. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by JSCCG and Holdco. Certain agreements related to this transaction contain default and acceleration provisions.

Due to its participation in the design, business conduct, and credit and financial support of JSCCG and Holdco, TVA

has determined that it has a variable interest in each of these entities. Based on its analysis, TVA has concluded that it is the

primary beneficiary of JSCCG and Holdco and, as such, is required to account for the VIEs on a consolidated basis. Holdco's

membership interests in JSCCG are eliminated in consolidation.

Southaven VIE

In 2013, TVA entered into a $400 million lease financing arrangement with Southaven Combined Cycle Generation LLC ("SCCG") for the lease by TVA of the Southaven Combined Cycle Facility ("Southaven CCF"). SCCG is a special single-purpose limited liability company formed in June 2013 to finance the Southaven CCF through a $360 million secured notes issuance (the "SCCG notes") and the issuance of $40 million of membership interests subject to mandatory redemption. The membership interests were purchased by Southaven Holdco LLC ("SHLLC"). SHLLC is a special single-purpose entity, also formed in June 2013, established to acquire and hold the membership interests in SCCG. A non-controlling interest in SHLLC is held by a third party through nominal membership interests, to which none of the income, expenses, and cash flows of SHLLC are allocated.

The membership interests held by SHLLC were purchased with proceeds from the issuance of $40 million of secured notes (the "SHLLC notes") and are subject to mandatory redemption pursuant to a schedule of amortizing, semi-annual payments due each February 15 and August 15, with a final payment due on August 15, 2033. The payment dates for the mandatorily redeemable membership interests are the same as those of the SHLLC notes, and the payment amounts are sufficient to provide returns on, as well as returns of, capital until the investment has been repaid to SHLLC in full. The rate of return on investment to SHLLC is 7.0 percent, which is reflected as interest expense in the consolidated statements of operations. SHLLC is required to pay a pre-determined portion of the return on investment to Seven States Southaven, LLC ("SSSL") on each lease payment date as agreed in SHLLC's formation documents (the "Seven States Return"). The current and long-term portions of the Membership interests of VIE subject to mandatory redemption are included in Accounts payable and accrued liabilities and Other long-term liabilities, respectively.

The payment dates for the mandatorily redeemable membership interests are the same as those of the SHLLC notes. The SCCG notes are secured by TVA's lease payments, and the SHLLC notes are secured by SHLLC's investment in, and amounts receivable from, SCCG. TVA's lease payments to SCCG are payable on the same dates as SCCG's and SHLLC's semi-annual debt service payments and are equal to the sum of (i) the amount of SCCG's semi-annual debt service payments, (ii) the amount of SHLLC's semi-annual debt service payments, and (iii) the amount of the Seven States Return. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by SCCG and SHLLC. Certain agreements related to this transaction contain default and acceleration provisions.

In the event that TVA were to choose to exercise an early buy out feature of the Southaven facility lease, in part or in whole, TVA must pay to SCCG amounts sufficient for SCCG to repay or partially repay on a pro rata basis the membership interests held by SHLLC, including any outstanding investment amount plus accrued but unpaid return. TVA also has the right, at any time and without any early redemption of the other portions of the Southaven facility lease payments due to SCCG, to fully repay SHLLC's investment, upon which repayment SHLLC will transfer the membership interests to a designee of TVA.

TVA participated in the design, business conduct, and financial support of SCCG and has determined that it has a direct variable interest in SCCG resulting from risk associated with the value of the Southaven CCF at the end of the lease term. Based on its analysis, TVA has determined that it is the primary beneficiary of SCCG and, as such, is required to account for the VIE on a consolidated basis.

Impact on Consolidated Financial Statements

The financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, and SCCG as of September 30, 2019 and 2018, as reflected on the Consolidated Balance Sheets, are as follows:



Summary of Impact of VIEs on Consolidated Balance Sheets At September 30
	2019		2018
Current liabilities
Accrued interest	$	11	$	11
Accounts payable and accrued liabilities	3		2
Current maturities of long-term debt of variable interest entities	39		38
Total current liabilities	53		51
Other liabilities
Other long-term liabilities	25		28
Long-term debt, net
Long-term debt of variable interest entities, net	1,089		1,127
Total liabilities	$	1,167	$	1,206

Interest expense of $56 million, $58 million, and $59 million related to debt of VIEs and membership interests of variable interest entity subject to mandatory redemption is included in the consolidated statements of operations for the years ended September 30, 2019, 2018, and 2017, respectively.

Creditors of the VIEs do not have any recourse to the general credit of TVA. TVA does not have any obligations to provide financial support to the VIEs other than as prescribed in the terms of the agreements related to these transactions.

Other Long-Term Liabilities

12 Months Ended

Sep. 30, 2019

Other Liabilities, Noncurrent [Abstract]

Other Long-Term Liabilities

Other long-term liabilities consist primarily of liabilities related to certain derivative agreements as well as for environmental remediation liabilities and liabilities under agreements related to compliance with certain environmental regulations. See Note 12 — Asset Retirement Obligations, Note 15 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Interest Rate Derivatives, and Note 22 — Commitments and Contingencies — Legal Proceedings — Environmental Agreements. The table below summarizes the types and amounts of Other long-term liabilities:



Other Long-Term Liabilities At September 30
	2019		2018
Interest rate swap liabilities	$	1,676	$	1,122
Gallatin coal combustion residual facilities liability	—		862
Capital lease obligations	182		178
Currency swap liabilities	193		81
EnergyRight® financing obligation	90		102
Paradise pipeline financing obligation⁽¹⁾	80		80
Accrued long-term service agreements⁽¹⁾	66		74
Other⁽¹⁾	203		216
Total other long-term liabilities	$	2,490	$	2,715

Note

(1) Certain amounts have been reclassified to conform with current year presentation.

Interest Rate Swap Liabilities. TVA uses interest rate swaps to fix variable short-term debt to a fixed rate. The values of these derivatives are included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. As of September 30, 2019 and 2018, the carrying amount of the interest rate swap liabilities reported in Accounts payable and accrued liabilities was approximately $88 million and $77 million, respectively. See Note 15 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Interest Rate Derivatives for information regarding the interest rate swap liabilities. As of September 30, 2019, Interest rate swap liabilities increased $554 million as compared to September 30, 2018, primarily due to significant decreases in market interest rates used to discount future expected net cash flows in mark-to-market valuations.

Gallatin Coal Combustion Residual Facilities Liability. As of September 30, 2018, the estimated cost of the potential

Gallatin CCR project was $900 million. The current and long-term portions of the resulting obligation were reported in Accounts

payable and accrued liabilities and Other long-term liabilities, respectively, on TVA's Consolidated Balance Sheets. As of September 30, 2018, related liabilities of $30 million were recorded in Accounts payable and accrued liabilities. As a result of the

subsequent decision in TVA's favor by the Sixth Circuit, as well as the June 2019 consent order filed in the case brought by

TDEC, Gallatin CCR project costs are now recorded in Asset retirement obligations. See Note 12 — Asset Retirement Obligations.

EnergyRight^®Financing Obligation. TVA purchases certain loans receivable from its LPCs in association with the EnergyRight^® Solutions program. The current and long-term portions of the resulting financing obligation are reported in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA's Consolidated Balance Sheets. As of September 30, 2019 and 2018, the carrying amount of the financing obligation reported in Accounts payable and accrued liabilities was approximately $23 million and $25 million, respectively. See Note 7 — Other Long-Term Assets for information regarding the associated loans receivable.

Paradise Pipeline Financing Obligation. TVA reserves firm pipeline capacity on an approximately 19 mile pipeline

owned by Texas Gas, which serves TVA's Paradise CC. The capacity contract contains a lease component

due to TVA's exclusive right to use the pipeline. TVA accounts for this lease component as a financing transaction. The current

and long-term portions of the resulting financing obligation are reported in Accounts payable and accrued liabilities and Other

long-term liabilities, respectively, on TVA's Consolidated Balance Sheets. As of both September 30, 2019 and 2018,

related liabilities of less than $1 million were recorded in Accounts payable and accrued liabilities.

Accrued Long-Term Service Agreement. TVA has entered into various long-term service agreements for major

maintenance activities at certain of its combined cycle plants. TVA uses the direct expense method of accounting for these

arrangements. TVA accrues for parts when it takes ownership and for contractor services when they are rendered. Under

certain of these agreements, parts received and services rendered exceed payments made. The current and long-term portions

of the resulting obligation are reported in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on

TVA's Consolidated Balance Sheets. As of September 30, 2019 and 2018, related liabilities of $12 million and $30 million, respectively, were recorded in Accounts payable and accrued liabilities.

Asset Retirement Obligations

12 Months Ended

Sep. 30, 2019

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

During the year ended September 30, 2019, TVA's total ARO liability increased $837 million.

To estimate its decommissioning obligation related to its nuclear generating stations, TVA uses a probability-weighted, discounted cash flow model which, on a unit-by-unit basis, considers multiple outcome scenarios that include significant estimations and assumptions. Those assumptions include (1) estimates of the cost of decommissioning, (2) the method of decommissioning and the timing of the related cash flows, (3) the license period of the nuclear plant, considering the probability of license extensions, (4) cost escalation factors, and (5) the credit adjusted risk free rate to measure the obligation at the present value of the future estimated costs. TVA has ascribed probabilities to two different decommissioning methods related to its nuclear decommissioning obligation estimate: the DECON method and the SAFSTOR method. The DECON method requires radioactive contamination to be removed from a site and safely disposed of or decontaminated to a level that permits the site to be released for unrestricted use shortly after it ceases operation. The SAFSTOR method allows nuclear facilities to be placed and maintained in a condition that allows the facilities to be safely stored and subsequently decontaminated to levels that permit release for unrestricted use.

TVA bases its nuclear decommissioning estimates on site-specific cost studies. The most recent study was approved and implemented in September 2017. An increase of $250 million was recorded to the nuclear AROs as a result of the updates. Site-specific cost studies are updated for each of TVA's nuclear units at least every five years.

TVA also has decommissioning obligations related to its non-nuclear generating sites, ash impoundments, transmission substation and distribution assets, and certain general facilities. To estimate its decommissioning obligation related to these assets, TVA uses estimations and assumptions for the amounts and timing of future expenditures and makes judgments concerning whether or not such costs are considered a legal obligation. Those assumptions include (1) estimates of the costs of decommissioning, (2) the method of decommissioning and the timing of the related cash flows, (3) the expected retirement date of each asset, (4) cost escalation factors, and (5) the credit adjusted risk free rate to measure the obligation at the present value of the future estimated costs. TVA bases its decommissioning estimates for each asset on its identified preferred closure method.

During 2019, the revisions in non-nuclear estimates increased $50 million for the year ended September 30, 2019. As a result of recent experience in completing settlements at certain facilities, costs for asbestos abatement activities across TVA's fossil fleet increased $114 million. TVA changed the preferred closure method for the Allen West Impoundment from closure-in-place to closure-by-removal, which resulted in a cost increase of $33 million. Partially offsetting these increases was a $57 million decrease in costs for Paradise closure projects, and a $44 million decrease in costs for the Allen East Impoundment closure project. Additionally, as a result of the decision in TVA's favor by the Sixth Circuit in the lawsuit brought by TSRA and TCWN, as well as the June 2019 consent order filed in the case brought by TDEC, Gallatin discounted cash flows related to CCR closure and post-closure costs of $672 million have been recorded as Asset retirement obligations. The obligation is based upon the assumptions outlined in the consent order, including a new lined facility will be permitted and constructed on the Gallatin site and existing CCR materials in the existing wet ash disposal impoundments at Gallatin will be moved to this new facility over a 20-year period. See Note 22 — Commitments and Contingencies — Legal Proceedings — Lawsuit Brought by TDEC Involving Gallatin Fossil Plant CCR Facilities and Lawsuit Brought by TSRA and TCWN Involving Gallatin Fossil Plant CCR Facilities for additional information.

Additionally, during the years ended September 30, 2019 and 2018, both the nuclear and non-nuclear liabilities were increased by periodic accretion, partially offset by settlement projects that were conducted during these periods. The nuclear and non-nuclear accretion amounts were deferred as regulatory assets. During 2019, 2018, and 2017, $144 million per year of the related regulatory assets were amortized into expense as these amounts were collected in rates. See Note 8 — Regulatory Assets and Liabilities. TVA maintains investment trusts to help fund its decommissioning obligations. See Note 16 — Fair Value Measurements — Investment Funds and Note 22 — Commitments and Contingencies — Decommissioning Costs for a discussion of the trusts' objectives and the current balances of the trusts.



Asset Retirement Obligation Activity
	Nuclear			Non-Nuclear			Total
Balance at September 30, 2017	$	2,859		$	1,445		$	4,304
Settlements	—			(106		)	(106		)
Revisions in estimate	—			430			430
Additional obligations	—			1			1
Accretion (recorded to regulatory asset)	130			35			165
Asset disposition	—			(15		)	(15		)
Balance at September 30, 2018	2,989			1,790			4,779			⁽¹⁾
Settlements	(7		)	(82		)	(89		)
Revisions in estimate	—			50			50
Additional obligations	18			—			18
Gallatin CCR	—			672			672
Accretion (recorded to regulatory asset)	136			50			186
Balance at September 30, 2019	$	3,136		$	2,480		$	5,616		⁽¹⁾

Note

(1) The current portions of the ARO liability in the amounts of $163 million and $115 million at September 30, 2019 and 2018, respectively, are included in Accounts payable and accrued liabilities.

Debt and Other Obligations

12 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Debt and Other Obligations

General

The TVA Act authorizes TVA to issue Bonds in an amount not to exceed $30.0 billion at any time. At September 30, 2019, TVA had only two types of Bonds outstanding: power bonds and discount notes. Power bonds have maturities between one and 50 years, and discount notes have maturities of less than one year. Power bonds and discount notes are both issued pursuant to Section 15d of the TVA Act and pursuant to the Basic Tennessee Valley Authority Power Bond Resolution adopted by the TVA Board on October 6, 1960, as amended on September 28, 1976, October 17, 1989, and March 25, 1992 (the "Basic Resolution"). Bonds are not obligations of the U.S., and the U.S. does not guarantee the payments of principal or interest on Bonds.

Power bonds and discount notes rank on parity and have first priority of payment from net power proceeds, which are defined as the remainder of TVA's gross power revenues after deducting the costs of operating, maintaining, and administering its power properties and tax equivalent payments, but before deducting depreciation accruals or other charges representing the amortization of capital expenditures, plus the net proceeds from the sale or other disposition of any power facility or interest therein.

TVA considers its scheduled rent payments under its leaseback transactions, as well as its scheduled payments under its lease financing arrangements involving John Sevier CCF and Southaven CCF, as costs of operating, maintaining, and administering its power properties. Costs of operating, maintaining, and administering TVA's power properties have priority over TVA's payments on the Bonds. Once net power proceeds have been applied to payments on power bonds and discount notes as well as any other Bonds that TVA may issue in the future that rank on parity with or subordinate to power bonds and discount notes, Section 2.3 of the Basic Resolution provides that the remaining net power proceeds shall be used only for (1) minimum payments into the U.S. Treasury required by the TVA Act as repayment of, and as a return on, the Power Program Appropriation Investment, (2) investment in power assets, (3) additional reductions of TVA's capital obligations, and (4) other lawful purposes related to TVA's power program.

The TVA Act and the Basic Resolution each contain two bond tests: the rate test and the bondholder protection test. Under the rate test, TVA must charge rates for power which will produce gross revenues sufficient to provide funds for, among other things, debt service on outstanding Bonds. As of September 30, 2019, TVA was in compliance with the rate test. See Note 1 — Summary of Significant Accounting Policies — General. Under the bondholder protection test, TVA must, in successive five-year periods, use an amount of net power proceeds at least equal to the sum of (1) the depreciation accruals and other charges representing the amortization of capital expenditures and (2) the net proceeds from any disposition of power facilities for either the reduction of its capital obligations (including Bonds and the Power Program Appropriation Investment) or investment in power assets. TVA met the bondholder protection test for the five-year period ended September 30, 2015, and must next meet the bondholder protection test for the five-year period ending September 30, 2020.

Secured Debt of VIEs

On August 9, 2013, SCCG issued secured notes totaling $360 million that bear interest at a rate of 3.846 percent. The SCCG notes require amortizing semi-annual payments on each February 15 and August 15, and mature on August 15, 2033. Also on August 9, 2013, SCCG issued $40 million of membership interests subject to mandatory redemption. The proceeds from the secured notes issuance and the issuance of the membership interests were paid to TVA in accordance with the terms of the Southaven head lease. See Note 10 — Variable Interest Entities — Southaven VIE. TVA used the proceeds from the transaction primarily to fund the acquisition of the Southaven CCF from SSSL.

On January 17, 2012, JSCCG issued secured notes totaling $900 million in aggregate principal amount that bear interest at a rate of 4.626 percent. Also on January 17, 2012, Holdco issued secured notes totaling $100 million that bear interest at a rate of 7.1 percent. The JSCCG notes and the Holdco notes require amortizing semi-annual payments on each January 15 and July 15, and mature on January 15, 2042. The Holdco notes require a $10 million balloon payment upon maturity. See Note 10 — Variable Interest Entities — John Sevier VIEs. TVA used the proceeds from the transaction to meet its requirements under the TVA Act. Secured debt of VIEs, including current maturities, outstanding at September 30, 2019 and 2018 totaled approximately $1.1 billion and $1.2 billion, respectively.

Secured Notes

On July 20, 2016, TVA acquired two entities, in a business combination, designed to administer rent payments TVA makes under certain of its lease/leaseback arrangements. On September 27, 2000, the entities issued secured notes totaling $255 million that had an interest rate of 7.299 percent and required amortizing semi-annual payments on each March 15 and September 15 with a maturity date of March 15, 2019. In 2016, TVA assumed these secured notes in the acquisition at a fair value of $78 million. The secured notes of the entities, including current maturities, outstanding at September 30, 2018, totaled approximately $20 million, and are included in Notes payable on TVA's Consolidated Balance Sheet. No such amounts were outstanding at September 30, 2019.

On September 20, 2017, TVA acquired two entities, in an asset acquisition, designed to administer rent payments TVA makes under certain of its lease/leaseback arrangements. On November 14, 2001, the entities issued secured notes totaling $272 million that had an interest rate of 5.572 percent and required amortizing semi-annual payments on each May 1 and November 1 with a maturity date of May 1, 2020. In 2017, TVA assumed these secured notes in the acquisition at a fair value of $74 million. The secured notes of the entities, including current maturities, outstanding at September 30, 2019, totaled approximately $23 million, and are included in Notes payable on TVA's Consolidated Balance Sheet. See Note 9 — Asset Acquisitions.

Short-Term Debt

The following table provides information regarding TVA's short-term borrowings:



Short-term Borrowings At September 30
	2019			2018			2017
Gross amount outstanding - discount notes	$	922		$	1,217		$	1,999

Weighted average interest rate - discount notes	2.152		%	2.045		%	1.000		%

Put and Call Options

Bond issues of $357 million held by the public are redeemable in whole or in part, at TVA's option, on call dates through 2020 and at call prices of 100 percent of the principal amount. Nine Bond issues totaling $217 million, with maturity dates ranging from 2025 to 2043, include a "survivor's option," which allows for right of redemption upon the death of a beneficial owner in certain specified circumstances. These Bonds were classified as long-term as of September 30, 2019. TVA subsequently announced in October 2019 that $217 million of callable bonds will be redeemed at par on November 15, 2019. See Note 25 — Subsequent Events.

Additionally, TVA has two issues of Putable Automatic Rate Reset Securities ("PARRS") outstanding. After a fixed-rate period of five years, the coupon rate on the PARRS may automatically be reset downward under certain market conditions on an annual basis. The coupon rate reset on the PARRS is based on a calculation. For both series of PARRS, the coupon rate will reset downward on the reset date if the rate calculated is below the then-current coupon rate on the Bond. The calculation dates, potential reset dates, and terms of the calculation are different for each series. The coupon rate on the 1998 Series D PARRS may be reset on June 1 (annually) if the sum of the five-day average of the 30-Year Constant Maturity Treasury ("CMT") rate for the week ending the last Friday in April, plus 94 basis points, is below the then-current coupon rate. The coupon rate on the 1999 Series A PARRS may be reset on May 1 (annually) if the sum of the five-day average of the 30-Year CMT rate for the week ending the last Friday in March, plus 84 basis points, is below the then-current coupon rate. The coupon rates may only be reset downward, but investors may request to redeem their Bonds at par value in conjunction with a coupon rate reset for a limited period of time prior to the reset dates under certain circumstances.

The coupon rate for the 1998 Series D PARRS, which mature in June 2028, has been reset seven times, from an initial rate of 6.750 percent to the current rate of 3.550 percent. In connection with these resets, $301 million of the Bonds have been redeemed; therefore, $274 million of the Bonds were outstanding at September 30, 2019. The coupon rate for the 1999 Series A PARRS, which mature in May 2029, has been reset six times, from an initial rate of 6.50 percent to the current rate of 3.360 percent. In connection with these resets, $293 million of the Bonds have been redeemed; therefore, $232 million of the Bonds were outstanding at September 30, 2019.

Due to the contingent nature of the put option on the PARRS, TVA determines whether the PARRS should be classified as long-term debt or current maturities of long-term debt by calculating the expected reset rate for the Bonds on the calculation dates, described above. If the determination date for reset is before the balance sheet date of the reporting period and the expected reset rate is less than the then-current coupon rate on the PARRS, the PARRS are included in current maturities. Otherwise, the PARRS are included in long-term debt.

Debt Securities Activity

The table below summarizes the long-term debt securities activity for the years ended September 30, 2019 and 2018.



Debt Securities Activity For the years ended September 30
	2019		2018
Issues
2018 Series A⁽¹⁾	$	—	$	1,000
Discount on debt issues	—		(2		)
Total	$	—	$	998

Redemptions/Maturities⁽²⁾
Variable interest entities	$	38	$	36
Notes payable	46		53
electronotes^®	5		52
2013 Series A	1,000		—
2009 Series B	30		29
1997 Series E	—		650
2008 Series B	—		1,000
Total	$	1,119	$	1,820

Notes

(1) The 2018 Series A bonds were issued at 99.8 percent of par.

(2) All redemptions were at 100 percent of par.

Debt Outstanding

Total debt outstanding at September 30, 2019 and 2018, consisted of the following:



Short-Term Debt At September 30
CUSIP or Other Identifier	Maturity	Call/(Put) Date	Coupon Rate	2019		2018
Short-term debt, net of discounts				$	922	$	1,216
Current maturities of long-term debt of VIEs issued at par				39		38
Current maturities of notes payable				23		46
Current maturities of power bonds issued at par
880591EQ1	10/15/2018		1.750%	—		1,000
880591EF5	12/15/2019		3.770%	1		1
880591EF5	6/15/2020		3.770%	27		29
88059TEL1	11/15/2019		2.650%	1		1
88059TEL1	5/15/2020		2.650%	1		1
880591EV0	3/15/2020		2.250%	1,000		—
Total current maturities of power bonds issued at par				1,030		1,032
Total current debt outstanding, net				$	2,014	$	2,332



Long-Term Debt At September 30
CUSIP or Other Identifier	Maturity	Coupon Rate		Effective Call Date	2019 Par				2018 Par			Stock Exchange Listings
electronotes^®(2)	5/15/2020 - 2/15/2043	2.375% - 3.625%		2/15/2015 - 2/15/2018 ⁽⁵⁾	$	217			$	221		None
880591EV0	3/15/2020	2.250%			—				1,000			New York
880591EL2	2/15/2021	3.875%			1,500				1,500			New York
880591DC3	6/7/2021	5.805%	⁽³⁾		246			⁽¹⁾	261			New York, Luxembourg
880591EN8	8/15/2022	1.875%			1,000				1,000			New York
880591ER9	9/15/2024	2.875%			1,000				1,000			New York
880591CJ9	11/1/2025	6.750%			1,350				1,350			New York, Hong Kong, Luxembourg, Singapore
880591EU2	2/1/2027	2.875%			1,000				1,000			New York
880591300⁽⁴⁾	6/1/2028	3.550%			273				273			New York
880591409⁽⁴⁾	5/1/2029	3.360%			232				232			New York
880591DM1	5/1/2030	7.125%			1,000				1,000			New York, Luxembourg
880591DP4	6/7/2032	6.587%	⁽³⁾		307			⁽¹⁾	326			New York, Luxembourg
880591DV1	7/15/2033	4.700%			472				472			New York, Luxembourg
880591EF5	6/15/2034	3.770%			246				273			None
880591DX7	6/15/2035	4.650%			436				436			New York
880591CK6	4/1/2036	5.980%			121				121			New York
880591CS9	4/1/2036	5.880%			1,500				1,500			New York
880591CP5	1/15/2038	6.150%			1,000				1,000			New York
880591ED0	6/15/2038	5.500%			500				500			New York
880591EH1	9/15/2039	5.250%			2,000				2,000			New York
880591EP3	12/15/2042	3.500%			1,000				1,000			New York
880591DU3	6/7/2043	4.962%	⁽³⁾		185			⁽¹⁾	195			New York, Luxembourg
880591CF7	7/15/2045	6.235%		7/15/2020	140				140			New York
880591EB4	1/15/2048	4.875%			500				500			New York, Luxembourg
880591DZ2	4/1/2056	5.375%			1,000				1,000			New York
880591EJ7	9/15/2060	4.625%			1,000				1,000			New York
880591ES7	9/15/2065	4.250%			1,000				1,000			New York
Subtotal					19,225				20,300
Unamortized discounts, premiums, issue costs, and other					(131		)		(143		)
Total long-term outstanding power bonds, net					19,094				20,157
Long-term debt of VIEs, net					1,089				1,127
Long-term notes payable					—				23
Total long-term debt, net					$	20,183			$	21,307

Notes

(1) Includes net exchange gain from currency transactions of $191 million and $147 million at September 30, 2019 and 2018, respectively.

(2) Includes one electronotes^® issue with partial maturities of principal for each required annual payment.

(3) The coupon rate represents TVA's effective interest rate.

(4) TVA PARRS, CUSIP numbers 880591300 and 880591409, may be redeemed under certain conditions. See Put and Call Options above.

(5) The bonds are callable on or after the dates shown.



Maturities Due in the Year Ending September 30
	2020		2021		2022		2023		2024		Thereafter		Total
Long-term power bonds, long-term debt of VIEs, and notes payable including current maturities⁽¹⁾	$	1,092	$	1,901	$	1,071	$	69	$	1,057	$	16,415	$	21,605
Short-term debt, net of discounts	922		—		—		—		—		—		922

Note

(1) Long-term power bonds does not include non-cash items of foreign currency exchange gain of $191 million, unamortized debt issue costs of $50 million, and net discount on sale of Bonds of $81 million. Long-term debt of VIE does not include non-cash item of unamortized debt issue costs of $8 million.

Credit Facility Agreements

TVA and the U.S. Treasury, pursuant to the TVA Act, have entered into a memorandum of understanding under which the U.S. Treasury provides TVA with a $150 million credit facility. This credit facility was renewed for 2019 with a maturity date of September 30, 2020. Access to this credit facility or other similar financing arrangements with the U.S. Treasury has been available to TVA since the 1960s. TVA can borrow under the U.S. Treasury credit facility only if it cannot issue Bonds in the market on reasonable terms, and TVA considers the U.S. Treasury credit facility a secondary source of liquidity. The interest rate on any borrowing under this facility is based on the average rate on outstanding marketable obligations of the U.S. with maturities from date of issue of one year or less. There were no outstanding borrowings under the facility at September 30, 2019. The availability of this credit facility may be impacted by how the U.S. government addresses the possibility of approaching its debt limit.

TVA also has funding available under the four long-term revolving credit facilities totaling $2.7 billion: a $150 million credit facility that matures on December 11, 2021, a $500 million credit facility that matures on February 1, 2022, a $1.0 billion credit facility that matures on June 13, 2023, and a $1.0 billion credit facility that matures on September 28, 2023. The interest rate on any borrowing under these facilities varies based on market factors and the rating of TVA's senior unsecured, long-term, non-credit-enhanced debt. TVA is required to pay an unused facility fee on the portion of the total $2.7 billion that TVA has not borrowed or committed under letters of credit. This fee, along with letter of credit fees, may fluctuate depending on the rating of TVA's senior unsecured, long-term, non-credit-enhanced debt. At September 30, 2019 and 2018, there were $1.3 billion and $921 million, respectively, of letters of credit outstanding under the facilities, and there were no borrowings outstanding. See Note 15 — Risk Management Activities and Derivative Transactions — Other Derivative Instruments — Collateral.

The following table provides additional information regarding TVA's funding available under the four long-term revolving credit facilities:



Summary of Long-Term Credit Facilities At September 30, 2019
Maturity Date	Facility Limit		Letters of Credit Outstanding		Cash Borrowings		Availability
December 2021	$	150	$	38	$	—	$	112
February 2022	500		500		—		—
June 2023	1,000		494		—		506
September 2023	1,000		310		—		690
Total	$	2,650	$	1,342	$	—	$	1,308

Lease/Leasebacks

TVA previously entered into leasing transactions to obtain third-party financing for 24 peaking combustion turbine units

("CTs") as well as certain qualified technological equipment and software ("QTE"). Due to TVA's continuing involvement with the combustion turbine facilities and the QTE during the leaseback term, TVA accounted for the lease proceeds as financing obligations. On September 30, 2019 and 2018, the outstanding leaseback obligations related to the remaining CTs and QTE were $263 million and $301 million, respectively. In March 2019, TVA made final rent payments under lease/leaseback transactions involving eight CTs, and TVA had previously acquired the equity interests related to these transactions. These transactions were terminated in July 2019. Final rent payments are scheduled to be made under the remaining CT lease/leaseback transactions on various dates from May 2020 to January 2022. TVA has already acquired the equity interests related to transactions involving eight of these CTs and will have the option to acquire the equity interests related to transactions involving the remaining eight CTs for additional amounts.

Accumulated Other Comprehensive Income (Loss)	12 Months Ended
Accumulated Other Comprehensive Income (Loss)	Sep. 30, 2019
Equity [Abstract]
Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss) AOCI represents market valuation adjustments related to TVA's currency swaps. The currency swaps are cash flow hedges and are the only derivatives in TVA's portfolio that have been designated and qualify for hedge accounting treatment. TVA records exchange rate gains and losses on its foreign currency-denominated debt and any related accrued interest in net income and marks its currency swap assets and liabilities to market through other comprehensive income (loss) ("OCI"). TVA then reclassifies an amount out of AOCI into net income, offsetting the exchange gain/loss recorded on the debt. For the years ended September 30, 2019 and 2018, TVA reclassified $45 million and $26 million of losses, respectively, related to its cash flow hedges from AOCI to Interest expense. See Note 15 — Risk Management Activities and Derivative Transactions. TVA records certain assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. As such, certain items that would generally be reported in AOCI or that would impact the statements of operations are recorded as regulatory assets or regulatory liabilities. See Note 8 — Regulatory Assets and Liabilities for a schedule of regulatory assets and liabilities. See Note 15 — Risk Management Activities and Derivative Transactions for a discussion of the recognition in AOCI of gains and losses associated with certain derivative contracts. See Note 16 — Fair Value Measurements for a discussion of the recognition of certain investment fund gains and losses as regulatory assets and liabilities. See Note 21 — Benefit Plans for a discussion of the regulatory accounting related to components of TVA's benefit plans.

Risk Management Activities and Derivative Transactions

12 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Risk Management Activities and Derivative Transactions

TVA is exposed to various risks. These include risks related to commodity prices, investment prices, interest rates, currency exchange rates, and inflation as well as counterparty credit and performance risks. To help manage certain of these risks, TVA has historically entered into various derivative transactions, principally commodity option contracts, forward contracts, swaps, swaptions, futures, and options on futures. Other than certain derivative instruments in its trust investment funds, it is TVA's policy to enter into these derivative transactions solely for hedging purposes and not for speculative purposes. TVA has suspended its FTP and no longer uses financial instruments to hedge risks related to commodity prices; however, TVA plans to continue to manage fuel price volatility through other methods and to periodically reevaluate its suspended FTP program for future use of financial instruments.

Overview of Accounting Treatment

TVA recognizes certain of its derivative instruments as either assets or liabilities on its Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of these instruments depends on (1) whether TVA uses regulatory accounting to defer the derivative gains and losses, (2) whether the derivative instrument has been designated and qualifies for hedge accounting treatment, and (3) if so, the type of hedge relationship (for example, cash flow hedge).

The following tables summarize the accounting treatment that certain of TVA's financial derivative transactions receive:



Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1) Amount of Mark-to-Market Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) For the years ended September 30
Derivatives in Cash Flow Hedging Relationship	Objective of Hedge Transaction	Accounting for Derivative Hedging Instrument	2019			2018
Currency swaps	To protect against changes in cash flows caused by changes in foreign currency exchange rates (exchange rate risk)	Unrealized gains and losses are recorded in AOCI and reclassified to interest expense to the extent they are offset by gains and losses on the hedged transaction	$	(114	)	$	10



Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2)⁽¹⁾ Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income to Interest Expense For the years ended September 30
Derivatives in Cash Flow Hedging Relationship	2019			2018
Currency swaps	$	(45	)	$	(26	)

Note

(1) There were no ineffective portions or amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $30 million of gains from AOCI to interest expense within the next 12 months to offset amounts anticipated to be recorded in interest expense related to exchange gain on the debt.



Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment Amount of Gain (Loss) Recognized in Income on Derivatives⁽¹⁾ For the years ended September 30

Derivative Type	Objective of Derivative	Accounting for Derivative Instrument	2019			2018
Interest rate swaps	To fix short-term debt variable rate to a fixed rate (interest rate risk)	Mark-to-Market gains and losses are recorded as regulatory assets or liabilities Realized gains and losses are recognized in interest expense when incurred during the settlement period	$	(79	)	$	(89	)

Commodity derivatives under FTP	To protect against fluctuations in market prices of purchased commodities (price risk)	Mark-to-Market gains and losses are recorded as regulatory assets or liabilities Realized gains and losses are recognized in fuel expense or purchased power expense when the related commodity is used in production	—			(8		)

Note

(1) All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in income but instead are deferred as regulatory assets and liabilities. As such, there were no related gains (losses) recognized in income for these unrealized gains (losses) for the years ended September 30, 2019 and 2018.



Fair Values of TVA Derivatives At September 30
	2019				2018
Derivatives That Receive Hedge Accounting Treatment:
	Balance			Balance Sheet Presentation	Balance			Balance Sheet Presentation
Currency swaps
£200 million Sterling	$	(90	)	Accounts payable and accrued liabilities $(6); Other long-term liabilities $(84)	$	(67	)	Accounts payable and accrued liabilities $(5); Other long-term liabilities $(62)
£250 million Sterling	(61		)	Accounts payable and accrued liabilities $(5); Other long-term liabilities $(56)	(12		)	Accounts payable and accrued liabilities $(5); Other long-term liabilities $(7)
£150 million Sterling	(57		)	Accounts payable and accrued liabilities $(4); Other long-term liabilities $(53)	(15		)	Accounts payable and accrued liabilities $(3); Other long-term liabilities $(12)

Derivatives That Do Not Receive Hedge Accounting Treatment:
	Balance			Balance Sheet Presentation	Balance			Balance Sheet Presentation
Interest rate swaps
$1.0 billion notional	$	(1,261	)	Accounts payable and accrued liabilities $(62); Other long-term liabilities $(1,199)	$	(878	)	Accounts payable and accrued liabilities $(56); Other long-term liabilities $(822)
$476 million notional	(498		)	Accounts payable and accrued liabilities $(24); Other long-term liabilities $(474)	(317		)	Accounts payable and accrued liabilities $(20); Other long-term liabilities $(297)
$42 million notional	(5		)	Accounts payable and accrued liabilities $(2); Other long-term liabilities $(3)	(4		)	Accounts payable and accrued liabilities $(1); Other long-term liabilities $(3)
Commodity contract derivatives	(41		)	Other current assets $12; Other long-term liabilities $(16); Accounts payable and accrued liabilities $(37)	60			Other current assets $41; Other long-term assets $31; Other long-term liabilities $(8); Accounts payable and accrued liabilities $(4)

Cash Flow Hedging Strategy for Currency Swaps

To protect against exchange rate risk related to three British pound sterling denominated Bond transactions, TVA entered into foreign currency hedges at the time the Bond transactions occurred. TVA had the following currency swaps outstanding at September 30, 2019:



Currency Swaps Outstanding At September 30, 2019
Effective Date of Currency Swap Contract	Associated TVA Bond Issues Currency Exposure	Expiration Date of Swap	Overall Effective Cost to TVA
1999	£200 million	2021	5.81%
2001	£250 million	2032	6.59%
2003	£150 million	2043	4.96%

When the dollar strengthens against the British pound sterling, the exchange gain on the Bond liability and related accrued interest is offset by an equal amount of loss on the swap contract that is reclassified out of AOCI. Conversely, the exchange loss on the Bond liability and related accrued interest is offset by an equal amount of gain on the swap contract that is reclassified out of AOCI. All such exchange gains or losses on the Bond liability and related accrued interest are included in Long-term debt, net and Accounts payable and accrued liabilities, respectively. The offsetting exchange losses or gains on the swap contracts are recognized in AOCI. If any gain (loss) were to be incurred as a result of the early termination of the foreign currency swap contract, the resulting income (expense) would be amortized over the remaining life of the associated Bond as a component of Interest expense. The values of the currency swap liabilities are included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets.

Derivatives Not Receiving Hedge Accounting Treatment

Interest Rate Derivatives. Generally TVA uses interest rate swaps to fix variable short-term debt to a fixed rate, and TVA uses regulatory accounting treatment to defer the MtM gains and losses on its interest rate swaps. The net deferred unrealized gains and losses are classified as regulatory assets or liabilities on TVA's Consolidated Balance Sheets and are included in the ratemaking formula when gains or losses are realized. The values of these derivatives are included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets, and realized gains and losses, if any, are included in TVA's Consolidated Statements of Operations. For the years ended September 30, 2019 and 2018, the changes in fair market value of the interest rate swaps resulted in the deferral of unrealized losses of $565 million and unrealized gains of $310 million, respectively.

Commodity Derivatives. TVA enters into certain derivative contracts for coal and natural gas that require physical delivery of the contracted quantity of the commodity. TVA marks to market all such contracts and defers the fair market values as regulatory assets or liabilities on a gross basis. At September 30, 2019, TVA's coal and natural gas contract derivatives both had terms of up to three years.



Commodity Contract Derivatives At September 30
	2019					2018
	Number of Contracts	Notional Amount	Fair Value (MtM)			Number of Contracts	Notional Amount	Fair Value (MtM)
Coal contract derivatives	8	9 million tons	$	(4	)	13	20 million tons	$	58
Natural gas contract derivatives	65	330 million mmBtu	$	(37	)	61	359 million mmBtu	$	2

Derivatives Under FTP. TVA has suspended its FTP and no longer uses financial instruments to hedge risks related to commodity prices. Prior to the suspension of the FTP, TVA deferred all FTP unrealized gains (losses) as regulatory liabilities (assets) and recorded only realized gains or losses to match the delivery period of the underlying commodity. TVA did not experience any unrealized gains and losses related to the FTP at September 30, 2019 or September 30, 2018. TVA experienced the following realized losses related to the FTP during the periods set forth in the table below:



Financial Trading Program Realized Gains (Losses) For the years ended September 30
Decrease (increase) in fuel expense	2019		2018
Natural gas	$	—	$	(6	)



Decrease (increase) in purchased power expense
Natural gas	$	—	$	(2	)

Offsetting of Derivative Assets and Liabilities

The amounts of TVA's derivative instruments as reported on the Consolidated Balance Sheets at September 30, 2019 and 2018, are shown in the table below.



Derivative Assets and Liabilities
	At September 30, 2019
	Gross Amounts of Recognized Assets/Liabilities		Gross Amounts Offset in the Balance Sheet⁽¹⁾		Net Amounts of Assets/Liabilities Presented in the Balance Sheet⁽²⁾
Assets
Commodity derivatives not subject to master netting or similar arrangement	$	12	$	—	$	12

Liabilities
Currency swaps⁽³⁾	$	208	$	—	$	208
Interest rate swaps⁽³⁾	1,764		—		1,764
Total derivatives subject to master netting or similar arrangement	1,972		—		1,972
Commodity derivatives not subject to master netting or similar arrangement	53		—		53
Total liabilities	$	2,025	$	—	$	2,025

	At September 30, 2018
	Gross Amounts of Recognized Assets/Liabilities		Gross Amounts Offset in the Balance Sheet⁽¹⁾		Net Amounts of Assets/Liabilities Presented in the Balance Sheet⁽²⁾
Assets
Commodity derivatives not subject to master netting or similar arrangement	$	72	$	—	$	72

Liabilities
Currency swaps⁽³⁾	$	94	$	—	$	94
Interest rate swaps⁽³⁾	1,199		—		1,199
Total derivatives subject to master netting or similar arrangement	1,293		—		1,293
Commodity derivatives not subject to master netting or similar arrangement	12		—		12
Total liabilities	$	1,305	$	—	$	1,305

Notes

(1) Amounts primarily include counterparty netting of derivative contracts, margin account deposits for futures commission merchants transactions, and cash collateral received or paid in accordance with the accounting guidance for derivatives and hedging transactions.

(2) There are no derivative contracts subject to a master netting arrangement or similar agreement that are not offset on the Consolidated Balance Sheets.

(3) Letters of credit of approximately $1.3 billion and $921 million were posted as collateral at September 30, 2019 and 2018, respectively, to partially secure the liability positions of one of the currency swaps and one of the interest rate swaps in accordance with the collateral requirements for these derivatives.

Other Derivative Instruments

Investment Fund Derivatives. Investment funds consist primarily of funds held in the NDT, ART, SERP, and DCP. See Note 16 — Fair Value Measurements — Investments Funds for a discussion of the trusts, plans, and types of investments. The NDT and ART may invest in derivative instruments which may include swaps, futures, options, forwards, and other instruments. At September 30, 2019 and 2018, the NDT held investments in forward contracts to purchase debt securities. The fair values of these derivatives were in net asset positions totaling $22 million and $45 million at September 30, 2019 and 2018, respectively.

Collateral. TVA's interest rate swaps and currency swaps contain contract provisions that require a party to post collateral (in a form such as cash or a letter of credit) when the party's liability balance under the agreement exceeds a certain threshold. At September 30, 2019, the aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a liability position was $2.0 billion. TVA's collateral obligations at September 30, 2019, under these arrangements, were approximately $1.3 billion, for which TVA had posted approximately $1.3 billion in letters of credit. These letters of credit reduce the available balance under the related credit facilities. TVA's assessment of the risk of its nonperformance includes a reduction in its exposure under the contract as a result of this posted collateral.

For all of its derivative instruments with credit-risk related contingent features:


•	If TVA remains a majority-owned U.S. government entity but Standard & Poor's Financial Services, LLC ("S&P") or Moody's Investors Service, Inc. ("Moody's") downgrades TVA's credit rating to AA or Aa2, respectively, TVA's collateral obligations would likely increase by $22 million, and


•	If TVA ceases to be majority-owned by the U.S. government, TVA's credit rating would likely be downgraded and TVA would be required to post additional collateral.

Counterparty Risk

TVA may be exposed to certain risks when a counterparty has the potential to fail to meet its obligations in accordance with agreed terms. These risks may be related to credit, operational, or nonperformance matters. To mitigate certain counterparty risk, TVA analyzes the counterparty's financial condition prior to entering into an agreement, establishes credit limits, monitors the appropriateness of those limits, as well as any changes in the creditworthiness of the counterparty, on an ongoing basis, and when required, employs credit mitigation measures, such as collateral or prepayment arrangements and master purchase and sale agreements, to mitigate credit risk.

Customers. TVA is exposed to counterparty credit risk associated with trade accounts receivable from delivered power sales to LPCs, and from industries and federal agencies directly served, all located in the Tennessee Valley region. Of the $1.6 billion of receivables from power sales outstanding at both September 30, 2019 and 2018, nearly all counterparties were rated investment grade. TVA is also exposed to risk from exchange power arrangements with a small number of investor-owned regional utilities related to either delivered power or the replacement of open positions of longer-term purchased power or fuel agreements. TVA believes its policies and procedures for counterparty performance risk reviews have generally protected TVA against significant exposure related to market and economic conditions. See Note 1 — Summary of Significant Accounting Policies — Allowance for Uncollectible Accounts and Note 3 — Accounts Receivable, Net.

TVA had revenue from two LPCs that accounted for 17 percent of total operating revenue for the years ended both September 30, 2019 and September 30, 2018.

Suppliers. If one of TVA's fuel or purchased power suppliers fails to perform under the terms of its contract with TVA, TVA might lose the money that it paid to the supplier under the contract and have to purchase replacement fuel or power on the spot market, perhaps at a significantly higher price than TVA was entitled to pay under the contract. In addition, TVA might not be able to acquire replacement fuel or power in a timely manner and thus might be unable to satisfy its own obligations to deliver power. Nuclear fuel requirements, including uranium mining and milling, conversion services, enrichment services, and fabrication services, are met from various suppliers, depending on the type of service. TVA purchases the majority of its natural gas requirements from a variety of suppliers under short-term contracts.

To help ensure a reliable supply of coal, TVA had coal contracts with multiple suppliers at September 30, 2019. The contracted supply of coal is sourced from multiple geographic regions of the United States and is to be delivered via various transportation methods (e.g., barge, rail, and truck). Emerging technologies, environmental regulations, and low natural gas prices have contributed to weak demand for coal. As a result, coal suppliers are facing increased financial pressure, which has led to relatively poor credit ratings and bankruptcies. Continued difficulties by coal suppliers could result in consolidations, additional bankruptcies, restructurings, contract renegotiations, or other scenarios. Under these scenarios and TVA's potential available responses, TVA does not anticipate a significant financial impact in obtaining continued fuel supply for its coal-fired generation.

Nuclear fuel is obtained predominantly through long-term uranium concentrate supply contracts, contracted conversion services, contracted enrichment services, or a combination thereof, and contracted fuel fabrication services. The supply markets for uranium concentrates and certain nuclear fuel services are subject to price fluctuations and availability restrictions. Supply market conditions may make procurement contracts subject to credit risk related to the potential nonperformance of counterparties. In the event of nonperformance by these or other suppliers, TVA believes that replacement uranium concentrate can be obtained, although at prices that may be unfavorable when compared to the prices under the current supply agreements.

TVA has a power purchase agreement that expires on March 31, 2032, with a supplier of electricity for 440 megawatts ("MW") of summer net capability from a lignite-fired generating plant. TVA has determined that the supplier has the equivalent of a non-investment grade credit rating; therefore, the supplier has provided credit assurance to TVA under the terms of the agreement.

Derivative Counterparties. TVA has entered into physical and financial contracts that qualify as derivatives for hedging purposes, and TVA's NDT, ART, and qualified defined benefit pension plan have entered into derivative contracts for investment purposes. If a counterparty to one of the physical or financial derivative transactions defaults, TVA might incur substantial costs in connection with entering into a replacement transaction. If a counterparty to the derivative contracts into which the NDT, ART, and qualified pension plan have entered for investment purposes defaults, the value of the investment could decline significantly or perhaps become worthless. TVA has concentrations of credit risk from the banking, coal, and gas industries because multiple companies in these industries serve as counterparties to TVA in various derivative transactions. At September 30, 2019, all of TVA's currency swaps and interest rate swaps as well as all of the derivatives in the NDT and ART were with banking counterparties whose Moody's credit ratings were A3 or higher.

TVA classifies qualified forward coal and natural gas contracts as derivatives. See Derivatives Not Receiving Hedge Accounting Treatment above. At September 30, 2019, the coal contracts were with counterparties whose Moody's credit rating, or TVA's internal analysis when such information was unavailable, ranged from D to Ba3. At September 30, 2019, the natural gas contracts were with counterparties whose ratings ranged from B1 to A2. See Suppliers above for discussion of challenges facing the coal industry.

Fair Value Measurements

12 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the asset or liability's principal market, or in the absence of a principal market, the most advantageous market for the asset or liability in an orderly transaction between market participants. TVA uses market or observable inputs as the preferred source of values, followed by assumptions based on hypothetical transactions in the absence of market inputs.

Valuation Techniques

The measurement of fair value results in classification into a hierarchy by the inputs used to determine the fair value as follows:



Level 1	—	Unadjusted quoted prices in active markets accessible by the reporting entity for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing.
Level 2	—	Pricing inputs other than quoted market prices included in Level 1 that are based on observable market data and that are directly or indirectly observable for substantially the full term of the asset or liability. These include quoted market prices for similar assets or liabilities, quoted market prices for identical or similar assets in markets that are not active, adjusted quoted market prices, inputs from observable data such as interest rate and yield curves, volatilities and default rates observable at commonly quoted intervals, and inputs derived from observable market data by correlation or other means.
Level 3	—	Pricing inputs that are unobservable, or less observable, from objective sources. Unobservable inputs are only to be used to the extent observable inputs are not available. These inputs maintain the concept of an exit price from the perspective of a market participant and should reflect assumptions of other market participants. An entity should consider all market participant assumptions that are available without unreasonable cost and effort. These are given the lowest priority and are generally used in internally developed methodologies to generate management's best estimate of the fair value when no observable market data is available.

A financial instrument's level within the fair value hierarchy (where Level 1 is the highest and Level 3 is the lowest) is based on the lowest level of input significant to the fair value measurement.

The following sections describe the valuation methodologies TVA uses to measure different financial instruments at fair value. Except for gains and losses on SERP and DCP assets, all changes in fair value of these assets and liabilities have been recorded as changes in regulatory assets, regulatory liabilities, or AOCI on TVA's Consolidated Balance Sheets and Consolidated Statements of Comprehensive Income (Loss). Except for gains and losses on SERP and DCP assets, there has been no impact to the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows related to these fair value measurements.

Investment Funds

At September 30, 2019, Investment funds were composed of $3.0 billion of equity securities and debt securities classified as trading measured at fair value. Equity and trading debt securities are held in the NDT, ART, SERP, and DCP. The NDT holds funds for the ultimate decommissioning of TVA's nuclear power plants. The ART holds funds primarily for the costs related to the future closure and retirement of TVA's other long-lived assets. The balances in the NDT and ART were $2.1 billion and $765 million, respectively, at September 30, 2019.

TVA established a SERP to provide benefits to selected employees of TVA which are comparable to those provided by competing organizations. The DCP is designed to provide participants with the ability to defer compensation until employment with TVA ends. The NDT, ART, SERP, and DCP funds are invested in portfolios of securities generally designed to achieve a return in line with overall equity and debt market performance.

The NDT, ART, SERP, and DCP are composed of multiple types of investments and are managed by external institutional investment managers. Most U.S. and international equities, U.S. Treasury inflation-protected securities, real estate investment trust securities, and cash securities and certain derivative instruments are measured based on quoted exchange prices in active markets and are classified as Level 1 valuations. Fixed-income investments, high-yield fixed-income investments, currencies, and most derivative instruments are non-exchange traded and are classified as Level 2 valuations. These measurements are based on market and income approaches with observable market inputs.

Private equity limited partnerships, private real asset investments, and private credit investments may include holdings of investments in private real estate, venture capital, buyout, mezzanine or subordinated debt, restructuring or distressed debt, and special situations through funds managed by third-party investment managers. These investments generally involve a three-to-four-year period where the investor contributes capital, followed by a period of distribution, typically over several years. The investment period is generally, at a minimum, 10 years or longer. The NDT had unfunded commitments related to private equity limited partnerships of $191 million, unfunded commitments related to private real assets of $33 million, and unfunded commitments related to private credit of $22 million at September 30, 2019. The ART had unfunded commitments related to private equity limited partnerships of $96 million, unfunded commitments related to private real assets of $19 million, and unfunded commitments related to private credit of $11 million at September 30, 2019. These investments have no redemption or limited redemption options and may also impose restrictions on the NDT's and ART's ability to liquidate their investments. There are no readily available quoted exchange prices for these investments. The fair value of these investments is based on information provided by the investment managers. These investments are valued on a quarterly basis. TVA's private equity limited partnerships, private real asset investments, and private credit investments are valued at net asset values ("NAV") as a practical expedient for fair value. TVA classifies its interest in these types of investments as investments measured at net asset value in the fair value hierarchy.

Commingled funds represent investment funds comprising multiple individual financial instruments. The commingled funds held by the NDT, ART, SERP, and DCP consist of either a single class of securities, such as equity, debt, or foreign currency securities, or multiple classes of securities. All underlying positions in these commingled funds are either exchange traded or measured using observable inputs for similar instruments. The fair value of commingled funds is based on NAV per fund share (the unit of account), derived from the prices of the underlying securities in the funds. These commingled funds can be redeemed at the measurement date NAV and are classified as Commingled funds measured at net asset value in the fair value hierarchy.

Realized and unrealized gains and losses on equity and trading debt securities are recognized in current earnings and are based on average cost. The gains and losses of the NDT and ART are subsequently reclassified to a regulatory asset or liability account in accordance with TVA's regulatory accounting policy. See Note 1 — Summary of Significant Accounting Policies — Cost-Based Regulation. TVA recorded unrealized gains and losses related to its equity and trading debt securities held during each period as follows:



	Unrealized Investment Gains (Losses) At or for the years ended September 30
Fund	Financial Statement Presentation	2019			2018
NDT	Regulatory asset	$	(112	)	$	18
ART	Regulatory asset	(70		)	15
SERP	Other income (expense)	—			1
DCP	Other income (expense)	(2		)	1

Currency and Interest Rate Derivatives

See Note 15 — Risk Management Activities and Derivative Transactions — Cash Flow Hedging Strategy for Currency Swaps and Derivatives Not Receiving Hedge Accounting Treatment for a discussion of the nature, purpose, and contingent features of TVA's currency swaps and interest rate swaps. These swaps are classified as Level 2 valuations and are valued based on income approaches using observable market inputs for similar instruments.

Commodity Contract Derivatives

Most of these contracts are valued based on market approaches which utilize short- and mid-term market-quoted prices from an external industry brokerage service. A small number of these contracts are valued based on a pricing model using long-term price estimates from TVA's coal price forecast. To value the volume option component of applicable coal contracts, TVA uses a Black-Scholes pricing model which includes inputs from the forecast, contract-specific terms, and other market inputs. These contracts are classified as Level 3 valuations.

Nonperformance Risk

The assessment of nonperformance risk, which includes credit risk, considers changes in current market conditions, readily available information on nonperformance risk, letters of credit, collateral, other arrangements available, and the nature of master netting arrangements. TVA is a counterparty to currency swaps, interest rate swaps, commodity contracts, and other derivatives which subject TVA to nonperformance risk. Nonperformance risk on the majority of investments and certain exchange-traded instruments held by TVA is incorporated into the exit price that is derived from quoted market data that is used to mark the investment to market.

Nonperformance risk for most of TVA's derivative instruments is an adjustment to the initial asset/liability fair value. TVA adjusts for nonperformance risk, both of TVA (for liabilities) and the counterparty (for assets), by applying credit valuation adjustments ("CVAs"). TVA determines an appropriate CVA for each applicable financial instrument based on the term of the instrument and TVA's or the counterparty's credit rating as obtained from Moody's. For companies that do not have an observable credit rating, TVA uses internal analysis to assign a comparable rating to the counterparty. TVA discounts each financial instrument using the historical default rate (as reported by Moody's for CY 1983 to CY 2018) for companies with a similar credit rating over a time period consistent with the remaining term of the contract. The application of CVAs resulted in a less than $1 million decrease in the fair value of assets and a $1 million decrease in the fair value of liabilities at September 30, 2019.

Fair Value Measurements

The following tables set forth by level, within the fair value hierarchy, TVA's financial assets and liabilities that were measured at fair value on a recurring basis at September 30, 2019 and 2018. Financial assets and liabilities have been classified in their entirety based on the lowest level of input that is significant to the fair value measurement. TVA's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the determination of the fair value of the assets and liabilities and their classification in the fair value hierarchy levels.



Fair Value Measurements At September 30, 2019
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets
Investments
Equity securities	$	464	$	—	$	—	$	464
Government debt securities	279		65		—		344
Corporate debt securities	—		417		—		417
Mortgage and asset-backed securities	—		32		—		32
Institutional mutual funds	250		—		—		250
Forward debt securities contracts	—		22		—		22
Private equity funds measured at net asset value⁽¹⁾	—		—		—		140
Private real asset funds measured at net asset value⁽¹⁾	—		—		—		135
Private credit measured at net asset value⁽¹⁾	—		—		—		33
Commingled funds measured at net asset value⁽¹⁾	—		—		—		1,131
Total investments	993		536		—		2,968
Commodity contract derivatives	—		7		5		12
Total	$	993	$	543	$	5	$	2,980

	Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities
Currency swaps⁽²⁾	$	—	$	208	$	—	$	208
Interest rate swaps	—		1,764		—		1,764
Commodity contract derivatives	—		44		9		53
Total	$	—	$	2,016	$	9	$	2,025

Notes

(1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the Consolidated Balance Sheets.

(2) TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 15 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities.



Fair Value Measurements At September 30, 2018
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets
Investments
Equity securities	$	220	$	—	$	—	$	220
Government debt securities	199		37		—		236
Corporate debt securities	—		499		—		499
Mortgage and asset-backed securities	—		50		—		50
Institutional mutual funds	126		—		—		126
Forward debt securities contracts	—		45		—		45
Private equity funds measured at net asset value⁽¹⁾	—		—		—		132
Private real asset funds measured at net asset value⁽¹⁾	—		—		—		124
Commingled funds measured at net asset value⁽¹⁾	—		—		—		1,430
Total investments	545		631		—		2,862
Commodity contract derivatives	—		13		59		72
Total	$	545	$	644	$	59	$	2,934

	Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities
Currency swaps⁽²⁾	$	—	$	94	$	—	$	94
Interest rate swaps	—		1,199		—		1,199
Commodity contract derivatives	—		11		1		12
Total	$	—	$	1,304	$	1	$	1,305

Notes

(1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the Consolidated Balance Sheets.

(2) TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 15 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities.

TVA uses internal valuation specialists for the calculation of its commodity contract derivatives fair value measurements classified as Level 3. Analytical testing is performed on the change in fair value measurements each period to ensure the valuation is reasonable based on changes in general market assumptions. Significant changes to the estimated data used for unobservable inputs, in isolation or combination, may result in significant variations to the fair value measurement reported.

The following table presents a reconciliation of all commodity contract derivatives measured at fair value on a recurring basis using significant unobservable inputs (Level 3):



Fair Value Measurements Using Significant Unobservable Inputs
	Commodity Contract Derivatives
Balance at October 1, 2017	$	(67	)
Change in net unrealized gains (losses) deferred as regulatory assets and liabilities	125
Balance at September 30, 2018	58
Change in net unrealized gains (losses) deferred as regulatory assets and liabilities	(62		)
Balance at September 30, 2019	$	(4	)

The following table presents quantitative information related to the significant unobservable inputs used in the measurement of fair value of TVA's assets and liabilities classified as Level 3 in the fair value hierarchy:



Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at September 30, 2019		Valuation Technique(s)	Unobservable Inputs	Range
Assets
Commodity contract derivatives	$	5	Pricing model	Coal supply and demand	0.4 - 0.8 billion tons/year
				Long-term market prices	$12.10 - $94.51/ton

Liabilities
Commodity contract derivatives	$	9	Pricing model	Coal supply and demand	0.4 - 0.8 billion tons/year
				Long-term market prices	$12.10 - $94.51/ton



Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at September 30, 2018		Valuation Technique(s)	Unobservable Inputs	Range
Assets
Commodity contract derivatives	$	59	Pricing model	Coal supply and demand	0.7 - 0.8 billion tons/year
				Long-term market prices	$12.25 - $112.24/ton

Liabilities
Commodity contract derivatives	$	1	Pricing model	Coal supply and demand	0.7 - 0.8 billion tons/year
				Long-term market prices	$12.25 - $112.24/ton

Other Financial Instruments Not Recorded at Fair Value

TVA uses the methods and assumptions described below to estimate the fair value of each significant class of financial instrument. The fair value of the financial instruments held at September 30, 2019 and 2018, may not be representative of the actual gains or losses that will be recorded when these instruments mature or are called or presented for early redemption. The estimated values of TVA's financial instruments not recorded at fair value at September 30, 2019 and 2018, were as follows:



Estimated Values of Financial Instruments Not Recorded at Fair Value
		At September 30, 2019				At September 30, 2018
	Valuation Classification	Carrying Amount		Fair Value		Carrying Amount		Fair Value
EnergyRight^®receivables (including current portion)	Level 2	$	101	$	100	$	112	$	112

Loans and other long-term receivables, net (including current portion)	Level 2	$	131	$	120	$	138	$	123

EnergyRight^®financing obligation (including current portion)	Level 2	$	113	$	126	$	127	$	143

Unfunded loan commitments	Level 2	$	—	$	10	$	—	$	3

Membership interests of VIEs subject to mandatory redemption (including current portion)	Level 2	$	28	$	37	$	30	$	37

Long-term outstanding power bonds (including current maturities), net	Level 2	$	20,124	$	26,059	$	21,189	$	23,896

Long-term debt of VIEs (including current maturities), net	Level 2	$	1,128	$	1,371	$	1,165	$	1,256

Long-term notes payable (including current maturities)	Level 2	$	23	$	23	$	69	$	68

The carrying value of Cash and cash equivalents, Restricted cash and cash equivalents, and Short-term debt, net approximate their fair values.

The fair value for loans and other long-term receivables is estimated by determining the present value of future cash flows using a discount rate equal to lending rates for similar loans made to borrowers with similar credit ratings and for similar remaining maturities, where applicable. The fair value of long-term debt and membership interests of VIEs subject to mandatory redemption is estimated by determining the present value of future cash flows using current market rates for similar obligations, giving effect to credit ratings and remaining maturities.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Proprietary Capital

12 Months Ended

Sep. 30, 2019

Stockholders' Equity Note [Abstract]

Proprietary Capital

Appropriation Investment

TVA's power program and stewardship (nonpower) programs were originally funded primarily by appropriations from Congress. In 1959, Congress passed an amendment to the TVA Act that required TVA's power program to be self-financing from power revenues and proceeds from power program financings. While TVA's power program did not directly receive appropriated funds after it became self-financing, TVA continued to receive appropriations for certain multipurpose and other nonpower mission-related activities as well as for its stewardship activities. TVA has not received any appropriations from Congress for any activities since 1999, and since that time, TVA has funded stewardship program activities primarily with power revenues.

The 1959 amendment to the TVA Act also required TVA, beginning in 1961, to make annual payments to the U.S. Treasury from net power proceeds as a repayment of and as a return on the Power Program Appropriation Investment until a total of $1.0 billion of the Power Program Appropriation Investment has been repaid in accordance with the 1959 amendment. TVA fulfilled its requirement to repay $1.0 billion of the Power Program Appropriation Investment in 2014. The TVA Act requires TVA to continue making payments to the U.S. Treasury as a return on the remaining $258 million of the Power Program Appropriation Investment.

The table below summarizes TVA's activities related to appropriated funds and retained earnings.



Summary of Proprietary Capital Activity At or for the years ended September 30
	2019						2018
	Power Program			Nonpower Programs			Power Program			Nonpower Programs
Appropriation Investment	$	258		$	4,351		$	258		$	4,351
Retained Earnings
Balance at beginning of year	9,404			(3,787		)	8,282			(3,779		)
Net income (loss) for year	1,425			(8		)	1,127			(8		)
Return on power program appropriation investment	(6		)	—			(5		)	—
Balance at end of year	10,823			(3,795		)	9,404			(3,787		)
Net proprietary capital at September 30	$	11,081		$	556		$	9,662		$	564

Payments to the U.S. Treasury

TVA paid the U.S. Treasury $6 million, $5 million, and $5 million in 2019, 2018, and 2017, respectively, as a return on the Power Program Appropriation Investment. The amount of the return on the Power Program Appropriation Investment is based on the Power Program Appropriation Investment balance at the beginning of that year and the computed average interest rate payable by the U.S. Treasury on its total marketable public obligations at the same date. The interest rates payable by TVA on the Power Program Appropriation Investment were 2.37 percent, 2.09 percent, and 2.00 percent for 2019, 2018, and 2017, respectively.

Accumulated Other Comprehensive Income (Loss)

The items included in AOCI consist of market valuation adjustments for certain derivative instruments. See Note 15 — Risk Management Activities and Derivative Transactions.

TVA records exchange rate gains and losses on debt and related accrued interest in net income and marks its currency swap assets and liabilities to market through OCI. TVA recognized unrealized gains (losses) of $(114) million and $10 million in 2019 and 2018, respectively, into AOCI on the mark-to-market of currency swaps. TVA then reclassifies an amount out of AOCI into net income, offsetting the gain/loss from recording the exchange gain/loss on the debt and related accrued interest. The amounts reclassified from OCI into net income resulted in increases (decreases) to net income of $(45) million, $(26) million, and $26 million in 2019, 2018, and 2017, respectively. These reclassifications, coupled with the recording of the exchange gain/loss on the debt and related accrued interest, did not have an impact on net income in 2019, 2018, and 2017. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $30 million of gains from AOCI to interest expense within the next 12 months to offset amounts anticipated to be recorded in interest expense related to exchange gain on the debt and related accrued interest.

Other Income (Expense), Net

12 Months Ended

Sep. 30, 2019

Other Income and Expenses [Abstract]

Other Income (Expense), Net

Income and expenses not related to TVA's operating activities are summarized in the following table:



Other Income (Expense), Net For the years ended September 30
	2019		2018		2017
Bellefonte deposit	$	21	$	—	$	—
Interest income	25		23		23
External services	13		14		14
Gains (losses) on investments	3		6		9
Miscellaneous	—		7		10
Total other income (expense), net	$	62	$	50	$	56

During 2019, Other income (expense), net increased $12 million primarily driven by other income related to a $21 million deposit liability received by TVA as a down payment on the sale of Bellefonte. The purchaser, Nuclear Development, LLC, failed to fulfill the requirements of the sales contract with respect to obtaining NRC approval of the transfer of required nuclear licenses and payment of the remainder of the selling price before the November 30, 2018 closing date. Partially offsetting this increase was a decrease of $5 million resulting from gains on the disposition of prior year property and $2 million of unrealized losses on the SERP and DCP investments.

Supplemental Cash Flow Information	12 Months Ended
Supplemental Cash Flow Information	Sep. 30, 2019
Supplemental Cash Flow Information [Abstract]
Supplemental Cash Flow Information	Supplemental Cash Flow Information Interest paid was $1.2 billion for both 2019 and 2018 and $1.3 billion for 2017. These amounts differ from interest expense in certain years due to the timing of payments and interest capitalized for major capital expenditures. There was no interest capitalized in 2019, 2018, or 2017. Construction in progress and Nuclear fuel expenditures included in Accounts payable and accrued liabilities at September 30, 2019, 2018, and 2017 were $324 million, $372 million, and $425 million, respectively, and are excluded from the Statements of Consolidated Cash Flows for the years ended September 30, 2019, 2018 and 2017 as non-cash investing activities. Excluded from the Statements of Consolidated Cash Flows for the years ended September 30, 2019 and 2017 as non-cash financing activities were capital lease obligations incurred related to $10 million of leased equipment in 2019 and $10 million of purchase power assets in 2017. There were no capital leases incurred during 2018. Also excluded from the Statement of Consolidated Cash Flows for the year ended September 30, 2017 was $74 million of notes payable related to TVA's acquisition of equity interests in certain SPEs. See Note 9 — Asset Acquisitions. Cash flows from swap contracts that are accounted for as hedges are classified in the same category as the item being hedged or on a basis consistent with the nature of the instrument.

Benefit Plans

12 Months Ended

Sep. 30, 2019

Retirement Benefits [Abstract]

Benefit Plans

TVA sponsors a qualified defined benefit plan ("pension plan") that covers most of its full-time employees hired prior to July 1, 2014, a qualified defined contribution plan ("401(k) plan") that covers most of its full-time employees, two unfunded post-retirement health care plans that provide for non-vested contributions toward the cost of eligible retirees' medical coverage, other postemployment benefits such as workers' compensation, and the SERP. The pension plan and the 401(k) plan are administered by a separate legal entity, the TVA Retirement System ("TVARS"), which is governed by its own board of directors (the "TVARS Board").

Overview of Plans and Benefits

Retirement Plans. The participants in the pension plan receive either a traditional final average pay pension or a cash balance pension. The traditional pension benefit is based on the participant's creditable service, average monthly salary for their highest three consecutive years of eligible compensation, and a pension factor based on the participant's age and years of service, less a Social Security offset. The cash balance pension benefit is based on pay and interest credits accumulated in the participant's account and the participant's age.

Participants in the pension plan are also eligible to receive 401(k) plan matching contributions, may be eligible to receive 401(k) plan non-elective contributions, and may be eligible to make after-tax contributions of up to $10,000 per year to the pension plan, which at the election of the participant are invested in either the fixed fund, which receives a fixed interest rate set forth in the plan, or the variable fund, which receives a rate of return based on an S&P 500 index fund. Participants in the pension plan may also become eligible for a supplemental pension benefit based on age and years of service at retirement, which is provided to help offset the cost of retiree medical insurance. Employees first hired on or after July 1, 2014, are participants in the 401(k) plan only and receive both non-elective and matching contributions to their accounts in the 401(k) plan.

On May 23, 2018, the TVARS Board approved amendments to the pension plan and 401(k) plan. These amendments allowed employees who are continuing to accrue cash balance benefits in the pension plan to voluntarily elect to switch future participation to the 401(k) plan only, and employees with cash balance accounts in the pension plan who have a 401(k) only benefit the additional option to waive their rights to benefits under the pension plan and transfer their cash balance accounts (and fixed and variable accounts, if any) to the 401(k) plan. TVARS presented these amendments to TVA for its review and consideration, and the amendments became effective July 8, 2018.

Under the plan amendments, the voluntary election options were offered to eligible TVA employees during a two-month window from July 1, 2018, to August 31, 2018, with changes and transfers becoming effective on October 1, 2018. As a result, there were $23 million of one-time transfers to the 401(k) plan based upon employee elections. These amendments did not trigger curtailment or settlement accounting.

401(k) Plan. Under the 401(k) plan, the non-elective and matching contributions TVA makes to participant accounts are based on the participant's employment hire date and years of service. Non-elective employer contributions for eligible participants range from three percent to six percent and matching employer contributions range from 1.5 percent to six percent. TVA recognized $84 million in 401(k) plan contribution costs in 2019. TVA recognized $80 million in 401(k) plan contribution costs in both 2018 and 2017. The 2020 plan contribution costs are estimated to be approximately $88 million.

Supplemental Executive Retirement Plan. TVA has established a SERP for certain executives in critical positions to provide supplemental pension benefits tied to compensation that exceeds limits imposed by IRS rules applicable to the qualified defined benefit pension plan.

Other Post-Retirement Benefits. TVA sponsors two unfunded post-retirement benefit plans that provide for non-vested contributions toward the cost of certain eligible retirees' medical coverage. The first plan covers only certain retirees and surviving dependents who do not qualify for TVARS benefits, including the supplemental pension benefit. The second plan is designed to place a limit on the out-of-pocket amount certain eligible retirees pay for medical coverage and provides a credit based on years of TVA service and monthly base pension amount, reduced by any TVARS supplemental pension benefits or any TVA contribution from the first plan, described above. Effective January 2017, all Medicare-eligible retirees and spouses were provided Medicare coverage through a private exchange. Transition to the exchange does not affect any TVARS supplemental benefits for eligible retirees, and the credit will continue to be calculated in the same manner as before.

Other Post-Employment Benefits. TVA employees injured in work-related incidents are covered by the workers' compensation program for federal employees administered through the Department of Labor by the Office of Workers' Compensation Programs in accordance with the provisions of the Federal Employees' Compensation Act ("FECA"). FECA provides compensation and medical benefits to federal employees for permanent and temporary disability due to employment-related injury or disease.

Accounting Mechanisms

Regulatory Accounting. TVA has classified all amounts related to unrecognized prior service costs/(credits), net actuarial gains or losses, and the funded status as regulatory assets or liabilities as such amounts are probable of collection in future rates. Additionally, TVA recognizes pension costs as regulatory assets or regulatory liabilities to the extent that the amount calculated under U.S. GAAP as pension expense differs from the amount TVA contributes to the pension plan as pension plan contributions. As a result of recent plan design changes, future contributions are expected to exceed the expense calculated under U.S. GAAP. Accordingly, TVA will discontinue this regulatory accounting practice once all such deferred costs have been recovered, at which time it will recognize pension costs in accordance with U.S. GAAP.

Cost Method. TVA uses the projected unit credit cost method to determine the service cost and the projected benefit obligation for retirement, termination, and ancillary benefits. Under this method, a "projected accrued benefit" is calculated at the beginning of the year and at the end of the year for each benefit that may be payable in the future. The "projected accrued benefit" is based on the plan's accrual formula and upon service at the beginning or end of the year, but it uses final average compensation, social security benefits, and other relevant factors projected to the age at which the employee is assumed to leave active service. The projected benefit obligation is the actuarial present value of the "projected accrued benefits" at the beginning of the year for employed participants and is the actuarial present value of all benefits for other participants. The service cost is the actuarial present value of the difference between the "projected accrued benefits" at the beginning and end of the year.

Amortization of Net Gain or Loss. TVA utilizes the corridor approach for gain/loss amortization. Differences between actuarial assumptions and actual plan results are deferred and amortized into periodic cost only when the accumulated differences exceed 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets. If necessary, the excess is amortized over the average remaining service period of participating employees expected to receive benefits. The current projected amortization periods of unrecognized net gain or loss is approximately 10 years for the pension plan and 12 years for the post-retirement plan.

Amortization of Prior Service Cost/(Credit). Amortization of net prior service cost/(credit) resulting from a plan change is included as a component of period expense in the year first recognized and every year thereafter until it is fully amortized. The increase or decrease in the benefit obligation due to the plan change is amortized over the average remaining service period of participating employees expected to receive benefits under the plan. The pension and post-retirement plans have prior service costs/(credits) related to plan changes made in 2009, 2010, 2016, 2018, and 2019 with remaining amortization periods ranging from one to 10 years. However, when a plan change reduces the benefit obligation, existing positive prior service costs are reduced or eliminated starting with the earliest established before a new prior service credit base is established.

Asset Method. TVA's asset method calculates a market-related value of assets ("MRVA") that recognizes realized and unrealized investment gains and losses over a three-year smoothing period to decrease the volatility of annual net periodic pension benefit costs. The MRVA is used to determine the expected return on plan assets, a component of net periodic pension benefit cost. The difference in the expected return on the MRVA and the actual return on the fair value on plan assets is recognized as an actuarial (gain)/loss in the pension benefit obligation at September 30. However, the MRVA has no impact on the fair value of plan assets measured at September 30.

Obligations and Funded Status

The changes in plan obligations, assets, and funded status for the years ended September 30, 2019 and 2018, were as follows:



Obligations and Funded Status For the years ended September 30
798,000,000	Pension Benefits						Other Post-Retirement Benefits
	2019			2018			2019			2018
Change in benefit obligation
Benefit obligation at beginning of year	$	11,725		$	12,601		$	428		$	494
Service cost	44			53			11			14
Interest cost	499			473			18			19
Plan participants' contributions	7			7			—			—
Collections⁽¹⁾	—			—			22			25
Actuarial (gain) loss	1,756			(658		)	78			(46		)
Plan change	7			—			—			(17		)
Net transfers (to) from variable fund/401(k) plan⁽²⁾	1			(26		)	—			—
Expenses paid	(6		)	(6		)	—			—
Benefits paid	(721		)	(719		)	(58		)	(61		)
Benefit obligation at end of year	13,312			11,725			499			428

Change in plan assets
Fair value of net plan assets at beginning of year	8,003			7,989			—			—
Actual return on plan assets	389			454			—			—
Plan participants' contributions	7			7			—			—
Collections⁽¹⁾	—			—			22			25
Net transfers (to) from variable fund/401(k) plan⁽²⁾	1			(26		)	—			—
Employer contributions	307			304			36			36
Expenses paid	(6		)	(6		)	—			—
Benefits paid	(721		)	(719		)	(58		)	(61		)
Fair value of net plan assets at end of year	7,980			8,003			—			—
Funded status	$	(5,332	)	$	(3,722	)	$	(499	)	$	(428	)

Notes

(1) Collections include retiree contributions as well as provider discounts and rebates.

(2) Includes one-time transfers to the 401(k) of $23 million related to the 2018 plan amendment.

The pension actuarial loss for 2019 primarily reflects the impact of the decrease in the discount rate from 4.35 percent to 3.20 percent, which increased the liability by $1.6 billion. In addition, TVA recognized actuarial losses of $88 million resulting from the difference between the expected and actual return on plan assets and $59 million of experience losses. These actuarial losses were partially offset by a $14 million gain due to mortality assumption changes. The 2019 pension plan change of $7 million was a result of two new participants entering the SERP plan during 2019.

The pension actuarial gain for 2018 primarily reflects the impact of the increase in the discount rate from 3.85 percent to 4.35 percent, which decreased the liability by $676 million. Based on the results obtained from the most recent experience study performed in 2018, TVA had gains of $138 million due to mortality assumption changes offset by losses of $46 million due to the revision of other demographic and experience based assumptions. In addition, TVA recognized losses related to the change in the assumptions on lump sum elections and annuity benefits as a result of the 2016 plan amendments, which increased the liability by $110 million.

The other post-retirement actuarial loss for 2019 was primarily due to the decrease in the discount rate from 4.40 percent to 3.30 percent, which increased the liability by $71 million. TVA recognized losses of $24 million primarily due to the updated per capita claim costs assumption and an additional loss of $7 million related to actual experience different from assumed. These losses were partially offset by a net gain of $24 million due to the change in health care trend rate assumptions.

The other post-retirement benefit actuarial gain for 2018 was primarily due to an increase in the discount rate from 3.95 percent to 4.40 percent, which decreased the liability by $28 million. Based on the results obtained from the recent experience study performed during 2018, TVA recognized gains of $6 million due to mortality assumption changes and $23 million of additional gains in other experience related assumptions. These gains were partially offset by losses of $8 million related to per capita claim costs and retiree contributions assumptions and $3 million in actuarial losses related to actual experience different from assumed. For CY 2019, TVA made plan changes to the other post-retirement benefit plan resulting in a decrease in the liability of $17 million for 2018. This decrease is primarily related to the use of a new national preferred formulary and utilization manager program.

Amounts related to these benefit plans recognized on TVA's Consolidated Balance Sheets consist of regulatory assets and liabilities that have not been recognized as components of net periodic benefit cost at September 30, 2019 and 2018, and the funded status of TVA's benefit plans, which are included in Accounts payable and accrued liabilities and Post-retirement and post-employment benefit obligations:



Amounts Recognized on TVA's Consolidated Balance Sheets At September 30
	Pension Benefits						Other Post-Retirement Benefits
	2019			2018			2019			2018
Regulatory assets (liabilities)	$	4,731		$	3,119		$	25		$	(73	)
Accounts payable and accrued liabilities	(5		)	(6		)	(28		)	(28		)
Pension and post-retirement benefit obligations⁽¹⁾	(5,327		)	(3,716		)	(471		)	(400		)

Note

(1) The table above excludes $383 million and $360 million of post-employment benefit costs that are recorded in Post-retirement and post-employment benefit obligations on the Consolidated Balance Sheets at September 30, 2019 and 2018, respectively.

Unrecognized amounts included in regulatory assets or liabilities yet to be recognized as components of accrued benefit cost at September 30, 2019 and 2018, consisted of the following:



Post-Retirement Benefit Costs Deferred as Regulatory Assets (Liabilities) At September 30
	Pension Benefits						Other Post-Retirement Benefits
	2019			2018			2019			2018
Unrecognized prior service credit	$	(714	)	$	(819	)	$	(135	)	$	(159	)
Unrecognized net loss	5,350			3,842			160			86
Amount capitalized due to actions of regulator	95			96			—			—
Total regulatory assets (liabilities)	$	4,731		$	3,119		$	25		$	(73	)

The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plan at September 30, 2019 and 2018, were as follows:



Projected Benefit Obligations and Accumulated Benefit Obligations in Excess of Plan Assets At September 30
	2019		2018
Projected benefit obligation	$	13,312	$	11,725
Accumulated benefit obligation	13,246		11,659
Fair value of net plan assets	7,980		8,003

The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the years ended September 30, 2019, 2018, and 2017 were as follows:



Components of Net Periodic Benefit Cost For the years ended September 30
	Pension Benefits									Other Post-Retirement Benefits
	2019			2018			2017			2019			2018			2017
Service cost	$	44		$	53		$	60		$	11		$	14		$	18
Interest cost	499			473			464			18			19			21
Expected return on plan assets	(477		)	(478		)	(457		)	—			—			—
Amortization of prior service credit	(99		)	(99		)	(99		)	(24		)	(22		)	(22		)
Recognized net actuarial loss	336			409			472			4			8			14
Total net periodic benefit cost as actuarially determined	303			358			440			9			19			31
Amount expensed (capitalized) due to actions of regulator	1			(54		)	365			—			—			—
Net periodic benefit cost	$	304		$	304		$	805		$	9		$	19		$	31

The amounts in the regulatory asset that are expected to be recognized as components of net periodic benefit cost during the next fiscal year are as follows:



Expected Amortization of Regulatory Assets in 2020 At September 30, 2019
	Pension Benefits			Other Post-Retirement Benefits			Total
Prior service credit	$	(97	)	$	(24	)	$	(121	)
Net actuarial loss	435			9			444

The amount in the components of net periodic benefit cost expected to be deferred due to actions of the regulator in the next fiscal year is $13 million.

Plan Assumptions

TVA's reported costs of providing the plan benefits are impacted by numerous factors including the provisions of the plans, changing employee demographics, and various assumptions, the most significant of which are noted below.



Actuarial Assumptions Utilized to Determine Benefit Obligations at September 30
	Pension Benefits				Other Post-Retirement Benefits
	2019		2018		2019		2018
Discount rate	3.20	%	4.35	%	3.30	%	4.40	%
Rate of compensation increase	3.50	%	3.60	%	N/A		N/A
Cost of living adjustment (COLA)⁽¹⁾	2.00	%	2.00	%	2.00	%	2.00	%
Pre-Medicare eligible
Initial health care cost trend rate	N/A		N/A		6.75	%	6.25	%
Ultimate health care cost trend rate	N/A		N/A		5.00	%	5.00	%
Year ultimate trend rate is reached	N/A		N/A		2027		2024
Post-Medicare eligible
Initial health care cost trend rate	N/A		N/A		—	%	—	%
Ultimate health care cost trend rate	N/A		N/A		4.00	%	4.00	%
Year ultimate trend rate is reached	N/A		N/A		2023		2021

Note

(1) The COLA rate is the ultimate long-term rate.



Actuarial Assumptions Utilized to Determine Net Periodic Benefit Cost for the Years Ended September 30⁽¹⁾
	Pension Benefits						Other Post-Retirement Benefits
	2019		2018		2017		2019		2018		2017
Discount rate	4.35	%	3.85	%	3.65	%	4.40	%	3.95	%	3.70	%
Expected return on plan assets	6.75	%	6.75	%	7.00	%	N/A		N/A		N/A
Cost of living adjustment (COLA)⁽²⁾	2.00	%	2.00	%	2.00	%	2.00	%	2.00	%	2.00	%
Rate of compensation increase	3.50	%	5.34	%	5.43	%	N/A		N/A		N/A
Pre-Medicare eligible
Initial health care cost trend rate	N/A		N/A		N/A		6.25	%	6.50	%	6.50	%
Ultimate health care cost trend rate	N/A		N/A		N/A		5.00	%	5.00	%	5.00	%
Year ultimate trend rate is reached	N/A		N/A		N/A		2024		2024		2019
Post-Medicare eligible
Initial health care cost trend rate	N/A		N/A		N/A		—	%	—	%	—	%
Ultimate health care cost trend rate	N/A		N/A		N/A		4.00	%	4.00	%	4.00	%
Year ultimate trend rate is reached	N/A		N/A		N/A		2021		2021		2021

Notes

(1) The actuarial assumptions used to determine the benefit obligations at September 30 of each year are subsequently used to determine net periodic benefit cost for the following year except the rate of compensation increase assumption.

(2) The COLA assumption is the ultimate rate. The actual calendar year rate is used in determining the expense, and for years thereafter the ultimate rate is used.

Discount Rate. In selecting the assumed discount rate, TVA reviews market yields on high-quality corporate debt and long-term obligations of the U.S. Treasury and endeavors to match, through the use of a hypothetical bond portfolio, instrument maturities with the maturities of its pension obligations in accordance with the prevailing accounting standards. The selected bond portfolio is derived from a universe of high quality corporate bonds of Aa-rated quality or higher. After the bond portfolio is selected, a single interest rate is determined that equates the present value of the plan's projected benefit payments discounted at this rate with the market value of the bonds selected.

Rate of Return. The qualified defined benefit pension plan is the only plan that is funded with qualified plan assets. In determining the expected long-term rate of return on pension plan assets, TVA uses a process that incorporates actual historical asset class returns and an assessment of expected future performance and takes into consideration external actuarial advice, the current outlook on capital markets, the asset allocation policy, and the anticipated impact of active management. Asset allocations are periodically updated using the pension plan asset/liability studies and are part of the determination of the estimates of long-term rates of return. The TVARS asset allocation policy diversifies plan assets across multiple asset classes so as to minimize the risk of large losses. The asset allocation policy is designed to be dynamic in nature and responsive to changes in the funded status of TVARS. Changes in the expected return rates are based on annual studies performed by third party professional investment consultants. Taking into account changes in the plan's asset target allocation mix, capital market outlooks, and the most recent studies, TVA management adopted a 6.75 percent expected long-term rate of return on plan assets in 2017 to calculate the 2018 net periodic pension cost. There were no changes to the assumption in 2019 or 2018. The 6.75 percent expected long-term return on plan assets will be used to calculate the 2020 net periodic pension cost.

Compensation Increases. Assumptions related to compensation increases are based on the results obtained from an actual company experience study performed during the most recent five years for plan participants. TVA obtained an updated study in 2018 and determined that future compensation would likely increase at rates between 2.50 percent and 14.00 percent per year, depending upon the employee's age. The average assumed compensation increase used to determine benefit obligations is based upon the current active participants.

Mortality. The mortality assumption is comprised of a base table that represents the current future life expectancy adjusted by an improvement scale to project future improvements in life expectancy. TVA's mortality assumptions are based upon actuarial projections in combination with studies of the actual mortality experience of TVA's pension and post-retirement benefit plan participants while taking into consideration the published Society of Actuaries ("SOA") mortality table and projection scale at September 30. Based upon the recent 2018 experience study, TVA adjusted its version of the SOA RP-2014 mortality table to reflect increases in female mortality. In 2019, TVA adopted a modified version of the SOA MP-2018 improvement scale published by the SOA.

The following mortality assumptions were used to determine the benefit obligations for the pension and other post-retirement benefit plans at September 30, 2019, 2018, and 2017. Assumptions used to determine year-end benefit obligations are the assumptions used to determine the subsequent year's net periodic benefit costs.



Mortality Assumptions At September 30
	2019	2018	2017
Mortality table	RP-2014 table (adjusted)	RP-2014 table (adjusted)	RP-2014 table (adjusted)
Improvement scale	MP-2018 (modified)	MP-2017 (modified)	RP-2016 (modified)

Health Care Cost Trends. TVA reviews actual recent cost trends and projected future trends in establishing health care cost trend rates. In 2019, TVA changed both the pre-Medicare and post-Medicare health care cost trend rate assumptions adopted in 2017. The pre-Medicare initial health care trend rate was reset to 6.75 percent, the ultimate trend rate remained constant at 5.00 percent, and the year to reach the ultimate rate was extended to 2027 from 2023. The post-Medicare initial health care trend rate and ultimate health care cost trend rate remained constant at zero percent and 4.00 percent, respectively, whereas the year to reach the ultimate rate was extended to 2023 from 2021 attributable to lower than expected premium increases on the private exchange.

Cost of Living Adjustment. COLAs are an increase in the benefits for eligible retirees to help maintain the purchasing power of benefits as consumer prices increase. Eligible retirees receive a COLA on pension and supplemental benefits equal to the percentage change in the Consumer Price Index for All Urban Consumers ("CPI-U") in January following any year in which the 12-month average CPI-U exceeded by as much as one percent the 12-month average of the CPI-U for the preceding year in which a COLA was given. Increases in the COLA will be the percent increase in CPI-U over the preceding year less 0.25 percent, with a 6.00 percent cap for any one year.

TVA's COLA assumption is derived from long-term expectations of the expected future rate of inflation, based upon capital market assumptions, economic forecasts, and the Federal Reserve policy. The actual calendar year COLA and the long- term COLA assumption are used to determine the benefit obligation at September 30 and the net periodic benefit costs for the following fiscal year. The actual calendar year COLAs for 2019, 2018, and 2017 were 2.21 percent, 1.84 percent, and 0.99 percent, respectively.

Sensitivity of Costs to Changes in Assumptions. The following chart reflects the sensitivity of pension cost to changes in certain actuarial assumptions:



Sensitivity to Certain Changes in Pension Assumptions At September 30, 2019
Actuarial Assumption	Change in Assumption		Impact on 2019 Pension Cost		Impact on 2019 Projected Benefit Obligation
Discount rate	(0.25	)%	$	16	$	399
Rate of return on plan assets	(0.25	)%	14		N/A
Cost of living adjustments	0.25	%	27		261

Each fluctuation above assumes that the other components of the calculation are held constant and excludes any impact for unamortized actuarial gains or losses.

The following chart reflects the sensitivity of post-retirement benefit cost to changes in the health care trend rate:



Sensitivity to Changes in Assumed Health Care Cost Trend Rates At September 30, 2019
	1% Increase		1% Decrease
Effect on total of service and interest cost components for the year	$	4	$	(4	)
Effect on end-of-year accumulated post-retirement benefit obligation	71		(68		)

Each fluctuation above assumes that the other components of the calculation are held constant and excludes any impact for unamortized actuarial gains or losses.

Plan Investments

The TVARS asset allocation policy for qualified pension plan assets has targets of 43 percent equity including global public and private equity investments, 32 percent fixed income securities, and 25 percent real assets including public and private real assets. TVARS has a long-term investment plan that contains a dynamic de-risking strategy which will allocate investments to assets that better match the liability, such as long duration fixed income securities, over time as improved funding status targets are met. Pursuant to the TVARS Rules and Regulations, any proposed changes in asset allocation that would change TVARS's assumed rate of investment return are subject to TVA's review and veto.

As set forth above, the qualified pension plan assets are invested across global public equity, private equity, safety oriented fixed income, opportunistic fixed income, public real assets, and private real assets. The TVARS asset allocation policy includes permissible deviations from target allocations, and action can be taken, as appropriate, to rebalance the plan's assets consistent with the asset allocation policy. At September 30, 2019 and 2018, the asset holdings of TVARS included the following:



Asset Holdings of TVARS At September 30
			Plan Assets at September 30
Asset Category	Target Allocation		2019		2018
Global public equity	35	%	37	%	44	%
Private equity	8	%	10	%	7	%
Safety oriented fixed income	17	%	18	%	16	%
Opportunistic fixed income	15	%	12	%	10	%
Public real assets	15	%	15	%	15	%
Private real assets	10	%	8	%	8	%
Total	100	%	100	%	100	%

Fair Value Measurements

The following table provides the fair value measurement amounts for assets held by TVARS at September 30, 2019:



TVA Retirement System At September 30, 2019
	Total⁽¹⁾⁽²⁾		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Equity securities	$	1,766	$	1,762	$	—	$	4

Preferred securities	10		1		9		—

Debt securities
Corporate debt securities	1,387		—		1,382		5
Residential mortgage-backed securities	427		—		424		3
Debt securities issued by U.S. Treasury	807		807		—		—
Debt securities issued by foreign governments	210		—		209		1
Asset-backed securities	144		—		116		28
Debt securities issued by state/local governments	18		—		18		—
Commercial mortgage-backed securities	81		—		80		1

Commingled funds measured at net asset value⁽³⁾
Equity	795		—		—		—
Debt	308		—		—		—
Commodities	217		—		—		—
Blended	125		—		—		—

Institutional mutual funds	97		97		—		—
Cash equivalents and other short-term investments	329		1		328		—
Certificates of deposit	3		—		3		—
Private credit measured at net asset value⁽³⁾	78		—		—		—
Private equity measured at net asset value⁽³⁾	891		—		—		—
Private real estate measured at net asset value⁽³⁾	546		—		—		—

Securities lending collateral	224		—		224		—

Derivatives
Futures	2		2		—		—
Swaps	5		—		5		—
Options	1		—		1		—
Foreign currency forward receivable	1		—		1		—

Total assets	$	8,472	$	2,670	$	2,800	$	42

Liabilities
Derivatives
Futures	$	4	$	4	$	—	$	—
Foreign currency forward payable	1		—		1		—
Swaps	12		—		12		—
Options	1		—		1		—

Securities sold under agreements to repurchase	118		—		118		—

Total liabilities	$	136	$	4	$	132	$	—

Notes

(1) Excludes approximately $132 million in net payables associated with security purchases and sales and various other payables.

(2) Excludes a $224 million payable for collateral on loaned securities in connection with TVARS's participation in securities lending programs.

(3) In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The following table provides the fair value measurement amounts for assets held by TVARS at September 30, 2018:



TVA Retirement System At September 30, 2018
	Total⁽¹⁾⁽²⁾		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Equity securities	$	1,787	$	1,786	$	—	$	1

Preferred securities	10		4		6		—

Debt securities
Corporate debt securities	1,151		—		1,148		3
Residential mortgage-backed securities	377		—		371		6
Debt securities issued by U.S. Treasury	696		696		—		—
Debt securities issued by foreign governments	322		—		304		18
Asset-backed securities	129		—		103		26
Debt securities issued by state/local governments	17		—		17		—
Commercial mortgage-backed securities	74		—		70		4

Commingled funds measured at net asset value⁽³⁾
Equity	1,175		—		—		—
Debt	317		—		—		—
Commodities	232		—		—		—
Blended	109		—		—		—

Institutional mutual funds	109		109		—		—
Cash equivalents and other short-term investments	466		42		424		—
Certificates of deposit	2		—		2		—
Private credit measured at net asset value⁽³⁾	8		—		—		—
Private equity measured at net asset value⁽³⁾	631		—		—		—
Private real estate measured at net asset value⁽³⁾	583		—		—		—

Securities lending collateral	318		—		318		—

Derivatives
Futures	7		7		—		—
Swaps	8		—		8		—
Foreign currency forward receivable	3		—		3		—

Total assets	$	8,531	$	2,644	$	2,774	$	58

Liabilities
Derivatives
Futures	$	3	$	3	$	—	$	—
Foreign currency forward payable	3		—		3		—
Options	1		—		1		—

Securities sold under agreements to repurchase	108		—		108		—

Total liabilities	$	115	$	3	$	112	$	—

Notes

(1) Excludes approximately $95 million in net payables associated with security purchases and sales and various other payables.

(2) Excludes a $318 million payable for collateral on loaned securities in connection with TVARS's participation in securities lending programs.

(3) In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The following table provides a reconciliation of beginning and ending balances of pension plan assets measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):



Fair Value Measurements Using Significant Unobservable Inputs
	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Balance at October 1, 2017	$	88
Net realized/unrealized gains (losses)	(4		)
Purchases, sales, issuances, and settlements (net)	(23		)
Transfers in and/or out of Level 3	(3		)
Balance at September 30, 2018	58
Net realized/unrealized gains (losses)	4
Purchases, sales, issuances, and settlements (net)	(12		)
Transfers in and/or out of Level 3	(8		)
Balance at September 30, 2019	$	42

The following descriptions of the valuation methods and assumptions used by the pension plan to estimate the fair value of investments apply to investments held directly by the pension plan. Third-party pricing vendors provide valuations for investments held by the pension plan in most instances, except for commingled, private credit, private equity, and private real estate funds which are priced at net asset values established by the investment managers. In instances where pricing is determined to be based on unobservable inputs, a Level 3 classification has been assigned. Certain securities priced by the investment manager using a proprietary fair value model with unobservable inputs have been classified as Level 3.

Equity and Preferred Securities. Investments listed on either a national or foreign securities exchange or traded in the over-the-counter National Market System are generally valued each business day at the official closing price (typically the last reported sale price) on the exchange on which the security is primarily traded and are classified as Level 1. Equity securities, including common stocks and preferred securities, classified as Level 2 may have been priced by dealer quote or using assumptions based on observable market data, such as yields on bonds from the same issuer or industry. Certain securities priced by the investment manager using unobservable inputs have been classified as Level 3.

Corporate Debt Securities. Corporate bonds are valued based upon recent bid prices or the average of recent bid and asked prices when available (Level 2 inputs) and, if not available, they are valued through matrix pricing models. Matrix pricing, which is a mathematical technique commonly used to price debt securities that are not actively traded, values debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). Certain securities priced by the investment manager using broker pricing or unobservable inputs have been classified as Level 3.

Mortgage and Asset-Backed Securities. Residential mortgage-backed securities consist of collateralized mortgage obligations ("CMOs") and U.S. pass-through security pools related to government-sponsored enterprises. CMO pricing is typically based on either a volatility-driven, multidimensional, single-cash-flow stream model or an option-adjusted spread model. These models incorporate available market data such as trade information, dealer quotes, market color, spreads, bids, and offers. Pricing for government-sponsored enterprise securities, including the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, and the Government National Mortgage Association, is typically based on quotes from the To Be Announced ("TBA") market, which is highly liquid with multiple electronic platforms that facilitate the execution of trading between investors and broker/dealers. Prices from the TBA market are then compared against other live data feeds as well as input obtained directly from the dealer community. Most residential mortgage-backed securities are considered to be priced using Level 2 inputs because of the nature of their market-data-based pricing models. Certain securities priced by vendors using a single broker quote or unobservable inputs have been classified as Level 3.

Debt Securities Issued by U.S. Treasury. For U.S. Treasury securities, fair values reflect the closing price reported in the active market in which the security is traded (Level 1 inputs).

Debt Securities Issued by Foreign Governments. Foreign government bonds and foreign government inflation-linked securities are typically priced based on proprietary discounted cash flow models, incorporating option-adjusted spread features as appropriate. Debt securities issued by foreign governments are classified as Level 2 because of the nature of their market-data-based pricing models. Certain securities priced by the investment manager using broker quotes or unobservable input have been classified as Level 3.

Debt Securities Issued by State and Local Governments. Debt securities issued by state and local governments are typically priced using market-data-based pricing models, and are therefore classified as Level 2. These pricing models incorporate market data such as quotes, trading levels, spread relationships, and yield curves, as applicable. Certain securities priced using an unobservable input have been classified as Level 3.

Commercial Mortgage-Backed and Asset-Backed Securities. Commercial mortgage-backed and asset-backed securities are typically priced based on a single-cash-flow stream model, which incorporates available market data such as trade information, dealer quotes, market color, spreads, bids, and offers. Because of the market-data-based nature of such pricing models, these securities are typically classified as Level 2. Certain securities priced by investment managers using broker pricing or unobservable inputs have been classified as Level 3.

Commingled Funds. The pension plan invests in commingled funds, which include collective trusts, unit investment trusts, and similar investment funds that predominantly hold debt and/or equity securities as underlying assets. The pension plan's ownership consists of a pro rata share and not a direct ownership of an underlying investment. These commingled funds are valued at their closing net asset values (or unit value) per share as reported by the managers of the commingled funds and as supported by the unit prices of actual purchases and sale transactions occurring as of or close to the financial statement date. These funds have not been classified in the fair value hierarchy in accordance with FASB guidance issued in May 2015.

The pension plan is invested in equity commingled funds, which can be categorized as either passively managed index funds or actively managed funds. The equity index funds seek to track the performance of a particular index by replicating its capitalization and characteristics. Passive fund benchmark indices include the Russell 1000 index, S&P 500 index, MSCI ACWI ex-U.S. index, MSCI ACWI ex-U.S. Small-Cap index, and Dow Jones U.S. Select REIT index. The actively managed equity funds seek to outperform certain equity benchmarks through a combination of fundamental and technical analysis. Active funds select portfolio positions based upon their research.

The pension plan is invested in debt commingled funds, which can be categorized as either passively managed index funds or actively managed funds. The pension plan's debt index fund invests in a diversified portfolio of fixed-income securities and derivatives of varying maturities to replicate the characteristics of the Bloomberg Barclays Capital U.S. Treasury Inflation-Protected Securities ("TIPS") index. The fund seeks to track the total return of the Bloomberg Barclays Capital U.S. TIPS index. The actively managed debt funds seek to outperform certain fixed-income benchmarks through fundamental research and analysis. The funds invest in a diversified portfolio of fixed income securities and derivatives of varying maturities. Varying by strategy, fund objectives include achieving a positive relative total return through active credit selection and providing risk management through desired strategic exposures.

The pension plan is invested in commodity commingled funds, which can be categorized as actively managed funds. The funds seek to outperform certain commodity benchmarks through fundamental research and analysis. The funds invest in a diversified portfolio of commodity securities and derivatives of varying maturities. The objective is to achieve a positive relative return through active security selection.

The pension plan is invested in commingled funds, which invest across multiple asset classes that can be categorized as blended. These funds seek to outperform a passive benchmark through active security selection. The funds invest in securities across equity, fixed income, currency, and commodities. The portfolios employ fundamental, quantitative, and technical analysis.

The pension plan's investments in equity, debt, blended, and commodity commingled funds can generally be redeemed upon notification of the investment managers, with required notice periods varying from same-day to monthly. These investments do not have unfunded commitments.

Institutional Mutual Funds. Investments in institutional mutual funds are valued at prices based on their net asset value. Institutional mutual funds have daily published market prices that represent their net asset value (or unit value) per share and are classified as Level 1.

Cash Equivalents and Other Short-Term Investments and Certificates of Deposit. Cash equivalents and other short-term investments are highly liquid securities with maturities of less than three months and 12 months, respectively. These consist primarily of discount securities such as commercial paper, repurchase agreements, U.S. Treasury bills, and certain agency securities. These securities, as well as certificates of deposit, may be priced at cost, which approximates fair value due to the short-term nature of the instruments. Model based pricing which incorporates observable inputs may also be utilized. These securities are classified as Level 2. Active market pricing may be utilized for U.S. Treasury bills, which are classified as Level 1.

Private Credit Funds. Private credit limited partnerships are reported at net asset values provided by the fund managers. These funds have not been classified in the fair value hierarchy in accordance with FASB guidance issued in May 2015.

The private credit limited partnerships generally focus on direct lending investments of senior secured first-lien loans to lower-middle market companies and seek to obtain financial returns through high income potential and occasional equity upside. The limited partnerships generally have a term life of five to 10 years and are diversified by sector and industry.

Private Equity Funds. Private equity limited partnerships are reported at net asset values provided by the fund managers. These funds have not been classified in the fair value hierarchy in accordance with FASB guidance issued in May 2015.

The private equity limited partnerships typically make longer-term investments in private companies and seek to obtain financial returns through long-term appreciation based on corporate stewardship, improved operating processes, and financial restructuring which may involve a merger or acquisition. Significant investment strategies include venture capital, buyout, mezzanine or subordinated debt, restructuring or distressed debt, energy infrastructure, and special situations. Venture capital partnerships consist of two main groupings. Early-stage venture capital partnerships invest in businesses still in the conceptual stage where products may not be fully developed and where revenues and/or profits may be several years away. Later-stage venture capital partnerships invest in more mature companies in need of growth or expansion capital. Buyout partnerships provide the equity capital for acquisition transactions either from a private seller or the public, which may represent the purchase of the entire company or a refinancing or recapitalization transaction where equity is invested. Mezzanine or subordinated debt partnerships provide the intermediate capital between equity and senior debt in a buyout or refinancing transaction and typically own a security in the company that carries current interest payments as well as a potential equity interest in the company. Restructuring or distressed debt partnerships purchase opportunities generated by overleveraged or poorly managed companies. Energy infrastructure partnerships acquire essential, long-lived real assets in three main groups. Upstream assets include oil and gas exploration, drilling, and acquisition. Midstream assets include storage, pipelines, gathering, processing, and transportation of energy commodities. Downstream assets include generation, distribution, and transmission facilities. Special situation partnerships include organizations with a specific industry focus not covered by the other private equity subclasses or unique opportunities that fall outside the regular subclasses.

The private equity funds have no investment withdrawal provisions prior to the termination of the partnership. Partnerships generally continue 10 to 12 years after the inception of the fund. The partnerships are subject to two to three one-year extensions at the discretion of the General Partner. Partnerships can generally be dissolved by an 80 percent vote in interest by all limited partners, with some funds requiring the occurrence of a specific event.

Private Real Estate Investments. The pension plan's ownership in private real estate investments consists of a pro rata share and not a direct ownership of the underlying investments. The fair values of the pension plan's private real estate investments are estimated utilizing net asset values provided by the investment managers. These investments have not been classified in the fair value hierarchy in accordance with FASB guidance issued in May 2015. The investment strategies and methodologies utilized by the investment managers to calculate their net asset values are summarized as follows:

The pension plan is invested in limited partnerships that invest in real estate securities, real estate partnerships, and direct real estate properties. This includes investments in office, multifamily, industrial, and retail investment properties in the U.S. and international markets. The investment strategy focuses on distressed, opportunistic, and value-added opportunities. Partnership investments also include mortgage and/or real estate-related fixed-income instruments and related securities. Investments are diversified by property type and geographic location.

The pension plan is invested in a commingled fund which invests across multiple asset classes that can be categorized as blended. The fund seeks to achieve capital appreciation while targeting a specific risk profile. The fund invests in securities across equity, fixed income, currency, and commodities. The portfolio employs fundamental, quantitative, and technical analysis.

Fair value estimates of the underlying investments in these limited partnerships and commingled fund investments are primarily based upon property appraisal reports prepared by independent real estate appraisers within a reasonable amount of time following acquisition of the real estate and no less frequently than annually thereafter. The appraisals are based on one or a combination of three methodologies: cost of reproduction analysis, discounted cash flow analysis, and sales comparison analysis. Pricing for certain investments in mortgage-backed and asset-backed securities is typically based on models that incorporate observable inputs.

The pension plan is invested in a private real estate investment trust formed to make direct or indirect investments in commercial timberland properties. Pricing for these types of investments is based on comprehensive appraisals that are conducted shortly after initial purchase of properties and at three-year intervals thereafter. All appraisals are conducted by third-party timberland appraisal firms. Appraisals are based on either a sales comparison analysis or a discounted cash flow analysis.

Securities Lending Collateral. Collateral held under securities lending arrangements are invested in highly liquid short-term securities, primarily repurchase agreements. The securities are often priced at cost, which approximates fair value due to the short-term nature of the instruments. These securities are classified as Level 2.

Derivatives. The pension plan invests in a variety of derivative instruments. The valuation methodologies for these instruments are as follows:

Futures. The pension plan enters into futures. The futures contracts are listed on either a national or foreign securities exchange and are generally valued each business day at the official closing price (typically the last reported sales price) on the exchange on which the security is primarily traded. The pricing is performed by third-party vendors. Since futures are priced by an exchange in an active market, they are classified as Level 1.

Options. The pension plan enters into purchased and written options. Options that are listed on either a national or foreign securities exchange are generally valued each business day at the official closing price (typically the last reported sales price) on the exchange on which the security is primarily traded. These options are classified as Level 1. Options traded over the counter and not on exchanges are priced by third-party vendors and are classified as Level 2.

Swaps. The pension plan enters into various types of swaps. Credit default swaps are priced at market using models that consider cash flows, credit curves, recovery rates, and other factors. The pricing is performed by third-party vendors, and in some cases by clearing exchanges. Interest rate swap contracts are priced at market using forward rates derived from the swap curve, and the pricing is also performed by third-party vendors, and in some cases by clearing exchanges. Other swaps such as equity index swaps and variance swaps are priced by third-party vendors using market inputs such as spot rates, yield curves, and volatility. The pension plan's swaps are generally classified as Level 2 based on the observable nature of their pricing inputs.

Foreign currency forwards. The pension plan enters into foreign currency forwards. All commitments are marked to market daily at the applicable translation rates, and any resulting unrealized gains or losses are recorded. Foreign currency forwards are priced by third-party vendors and are classified as Level 2.

Securities Sold Under Agreements to Repurchase. The pension plan enters into contracts to sell securities to a counterparty at a specified price with an agreement to purchase the same or substantially the same security from the same counterparty at a fixed or determinable price at a future date. Securities sold under agreements to repurchase are presented at their contract price which approximates fair value due to their short-term nature. These securities are classified as Level 2. In connection with sales of securities under agreements to repurchase, the counterparties require the pension plan to maintain collateral securities with a fair value that approximates or exceeds the contract amount of the repurchase agreement. These securities are held in government inflation-linked bonds and classified as government debt securities.

The valuation methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the pension plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Reclassification. In the September 30, 2018 fair value measurements table, $(108) million of cash equivalents and other short-term investments were reclassified to securities sold under agreements to repurchase.

Cash Flows

Estimated Future Benefit Payments. The following table sets forth the estimated future benefit payments under the benefit plans.



Estimated Future Benefits Payments At September 30, 2019
	Pension Benefits⁽¹⁾		Other Post-Retirement Benefits
2020	$	782	$	29
2021	779		27
2022	778		25
2023	775		24
2024	771		22
2025 - 2029	3,786		111

Note

(1) Participants are assumed to receive the Fixed Fund in a lump sum in lieu of available annuity options allowed for certain grandfathered participants resulting in higher estimated pension benefits payments.

Contributions. TVA made contributions to the pension plan of $300 million for 2019 and 2018. TVA has committed to make a minimum contribution of $300 million per year through 2036 or until the plan has reached and remained at 100 percent funded status under the actuarial rules applicable to TVARS. TVA made SERP contributions of $7 million and $4 million for 2019 and 2018, respectively. TVA made cash contributions to the other post-retirement benefit plans of $36 million (net of $4 million in rebates) and $25 million (net of $15 million in rebates) for 2019 and 2018, respectively. TVA expects to contribute $300 million to TVARS, $5 million to the SERP, and $29 million to the other post-retirement benefit plans in 2020.

Other Post-Employment Benefits

Post-employment benefit cost estimates are revised to properly reflect changes in actuarial assumptions made at the end of each year. TVA utilizes a discount rate determined by reference to the U.S. Treasury Constant Maturities corresponding to calculated average durations of TVA's future estimated post-employment claims payments. The use of a 1.68 percent discount rate resulted in the recognition of approximately $59 million in expenses in 2019 and an unpaid benefit obligation of $419 million at September 30, 2019. The use of a 3.05 percent discount rate resulted in the recognition of approximately $(6) million in expenses in 2018 and an unpaid benefit obligation of $339 million at September 30, 2018. The use of a 2.33 percent discount rate resulted in the recognition of approximately $(12) million in expenses in 2017 and an unpaid benefit obligation of $447 million at September 30, 2017.

The increase in the unpaid benefit obligation when comparing 2019 to 2018 was due primarily to the decrease of the discount rate from 3.05 percent in 2018 to 1.68 percent in 2019. The decrease in the unpaid benefit obligation when comparing 2018 to 2017 was due primarily to the increase in the discount rate from 2.33 percent in 2017 to 3.05 percent in 2018. Additional reduction in the obligation was due to a decrease in loss experience and fewer claims.

Amounts related to other post-employment benefit obligations are recognized on TVA's Consolidated Balance Sheets. The current portion which represents unpaid losses and administrative fees due are in Accounts payable and accrued liabilities. The long-term portion is recognized in Post-retirement and post-employment benefit obligations.



Amounts Recognized on TVA's Consolidated Balance Sheets At September 30
	2019		2018
Accounts payable and accrued liabilities	$	36	$	39
Post-retirement and post-employment benefit obligations	383		360

Commitments and Contingencies

12 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments

Power Purchase Obligations. TVA has contracted with various independent power producers and LPCs for additional capacity to be made available to TVA. Several of these agreements have contractual minimum payments and are accounted for as either capital or operating leases. In total, these agreements provide 2,230 MW of summer net capability. The remaining terms of the agreements range up to 13 years. Additionally, TVA has contracted with regional transmission organizations to reserve 1,450 MW of transmission service to support purchases from the market and wind power purchase agreements. The remaining terms of these agreements range up to four years. TVA incurred $195 million, $188 million, and $178 million of expense under these power purchase and transmission service agreements during 2019, 2018, and 2017, respectively. Lease-related costs under TVA's power purchase agreements not accounted for as capital leases, as well as certain leases that are accounted for as capital leases, are included in TVA's consolidated statements of operations as purchased power expense and are expensed as incurred.

Under federal law, TVA is obligated to purchase power from qualifying facilities (cogenerators and small power producers). As of September 30, 2019, there was a combined qualifying facility capacity of 263 MW from 55 different generation sources, from which TVA purchased power under this law.

Membership Interests of VIE Subject to Mandatory Redemption. At September 30, 2019, TVA had outstanding membership interests subject to mandatory redemption (including current portion) of $28 million issued by one of its VIEs of which it is the primary beneficiary. See Note 10 — Variable Interest Entities for additional information. At September 30, 2019, the mandatory redemptions for each of the next five years are shown below:



	2020		2021		2022		2023		2024
Membership interests of variable interest entity subject to mandatory redemption	$	3	$	3	$	3	$	2	$	1

Leases. TVA leases certain property, plant, and equipment under agreements with terms ranging from one to 38 years. TVA's rental expense for operating leases, including power purchase agreement operating leases, was $97 million, $92 million, and $90 million in 2019, 2018, and 2017, respectively. At September 30, 2019, the future minimum lease payments under operating leases, including purchased power agreements that are accounted for as operating leases, are shown below.



Operating Leases Minimum payments due in years ending September 30
2020	$	76
2021	75
2022	60
2023	12
2024	3
Thereafter	2
Total	$	228

At September 30, 2019, the future minimum lease payments under capital leases shown below were included in Capital leases and Other long-term liabilities on TVA's Consolidated Balance Sheet.



Capital Leases Minimum payments due in years ending September 30
2020	$	53
2021	53
2022	53
2023	55
2024	51
Thereafter	418
Minimum annual payments	683
Less: amount representing interest	(495		)
Total	$	188

Leasebacks. At September 30, 2019 and 2018, the outstanding leaseback obligations related to CTs and QTE were $263 million and $301 million, respectively. See Note 13 — Debt and Other Obligations — Lease/Leasebacks. At September 30, 2019, the future minimum payments under leaseback obligations are shown below.



Lease/Leasebacks Minimum payments due in years ending September 30
2020	$	50
2021	207
2022	25
2023	—
2024	—
Thereafter	—
Total	$	282

Unfunded Loan Commitments. At September 30, 2019, TVA's commitments under unfunded loan commitments were $7 million for 2020. TVA has no commitments under unfunded loan commitments for 2021 through 2024.

In addition to the commitments above, TVA had contractual obligations in the form of revenue discounts related to energy prepayments. TVA recognized $10 million of prepayment obligations and related interest payments of $4 million in revenue during 2019. The arrangement ceased in 2019. See Note 1 — Summary of Significant Accounting Policies — Energy Prepayment Obligations and Note 17 — Revenue.

Contingencies

Nuclear Insurance. Section 170 of the Atomic Energy Act, commonly known as the Price-Anderson Act, provides a layered framework of financial protection to compensate for liability claims of members of the public for personal injury and property damages arising from a nuclear incident in the U.S. This financial protection consists of two layers of coverage:


•	The primary level is private insurance underwritten by American Nuclear Insurers ("ANI") and provides public liability insurance coverage of $450 million for each nuclear power plant licensed to operate. If this amount is not sufficient to cover claims arising from a nuclear incident, the second level, Secondary Financial Protection, applies.

•

Within the Secondary Financial Protection level, the licensee of each nuclear reactor has a contingent obligation to pay a retrospective premium, equal to its proportionate share of the loss in excess of the primary level, regardless of proximity to the incident of fault, up to a maximum of approximately $138 million per reactor per incident. With TVA's seven reactors, the maximum total contingent obligation per incident is $963 million. This retrospective premium is payable at a maximum rate currently set at approximately $20 million per year, per incident, per reactor. Currently, 98 reactors are participating in the Secondary Financial Protection program.

In the event that a nuclear incident results in public liability claims, the primary level provided by ANI combined with the Secondary Financial Protection should provide up to approximately $14.0 billion in coverage.

Federal law requires that each NRC power reactor licensee obtain property insurance from private sources to cover the cost of stabilizing and decontaminating a reactor and its station site after an accident. TVA carries property, decommissioning liability, and decontamination liability insurance from Nuclear Electric Insurance Limited ("NEIL") with limits up to $2.1 billion available for a loss at any one of TVA's three sites. Some of this insurance may require the payment of retrospective premiums up to a maximum of approximately $139 million.

TVA purchases accidental outage (business interruption) insurance for TVA's nuclear sites from NEIL. In the event that an accident covered by this policy takes a nuclear unit offline or keeps a nuclear unit offline, NEIL will pay TVA, after a waiting period, an indemnity (up to a set dollar amount per week) with maximum limits of $490 million per unit. This insurance policy may require the payment of retrospective premiums up to a maximum of approximately $46 million, but only to the extent the retrospective premium is deemed necessary by the NEIL Board of Directors to pay losses unable to be covered by NEIL's surplus.

Decommissioning Costs. TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets related primarily to nuclear generating plants, coal-fired generating plants, hydroelectric generating plants/dams, transmission structures, and other property-related assets. See Note 12 — Asset Retirement Obligations.

Nuclear Decommissioning. Provision for decommissioning costs of nuclear generating units is based on options prescribed by the NRC procedures to dismantle and decontaminate the facilities to meet the NRC criteria for license termination. At September 30, 2019, $3.1 billion, representing the discounted value of future estimated decommissioning costs, was included in AROs. The actual decommissioning costs may vary from the derived estimates because of, among other things, changes in current assumptions, such as the assumed dates of decommissioning, changes in regulatory requirements, changes in technology, and changes in the cost of labor, materials, and equipment. Utilities that own and operate nuclear plants are required to use different procedures in calculating nuclear decommissioning costs under GAAP than those that are used in calculating nuclear decommissioning costs when reporting to the NRC. The two sets of procedures produce different estimates for the costs of decommissioning primarily because of differences in the underlying assumptions.

TVA maintains a NDT to provide funding for the ultimate decommissioning of its nuclear power plants. See Note 16 — Fair Value Measurements. TVA monitors the value of its NDT and believes that, over the long term and before cessation of nuclear plant operations and commencement of decommissioning activities, adequate funds from investments and additional contributions, if necessary, will be available to support decommissioning. TVA's operating nuclear power units are licensed through 2033 - 2055, depending on the unit. It may be possible to extend the operating life of some of the units with approval from the NRC. See Note 8 — Regulatory Assets and Liabilities — Nuclear Decommissioning Costs and Note 12 — Asset Retirement Obligations.

Non-Nuclear Decommissioning. At September 30, 2019, $2.5 billion, representing the discounted value of future estimated decommissioning costs, was included in AROs. This decommissioning cost estimate involves estimating the amount and timing of future expenditures and making judgments concerning whether or not such costs are considered a legal obligation. Estimating the amount and timing of future expenditures includes, among other things, making projections of the timing and duration of the asset retirement process and how costs will escalate with inflation. The actual decommissioning costs may vary from the derived estimates because of changes in current assumptions, such as the assumed dates of decommissioning, changes in regulatory requirements, changes in technology, and changes in the cost of labor, materials, and equipment.

TVA maintains an ART to help fund the ultimate decommissioning of its non-nuclear power assets. See Note 16 — Fair Value Measurements. Estimates involved in determining if additional funding will be made to the ART include inflation rate, rate of return projections on the fund investments, and the planned use of other sources to fund decommissioning costs. See Note 8 — Regulatory Assets and Liabilities — Non-Nuclear Decommissioning Costs and Note 12 — Asset Retirement Obligations.

Environmental Matters. TVA's power generation activities, like those across the utility industry and in other industrial sectors, are subject to federal, state, and local environmental laws and regulations. Major areas of regulation affecting TVA's activities include air quality control, water quality control, and management and disposal of solid and hazardous wastes. In the future, regulations in all of these areas are expected to become more stringent. Regulations are also expected to apply to new emissions and sources, with a particular emphasis on climate change, renewable generation, and energy efficiency.

TVA has incurred, and expects to continue to incur, substantial capital and operating and maintenance costs to comply with evolving environmental requirements primarily associated with, but not limited to, the operation of TVA's coal-fired generating units. Environmental requirements placed on the operation of TVA's coal-fired and other generating units will likely continue to become more restrictive over time. Litigation over emissions or discharges from coal-fired generating units is also occurring. Failure to comply with environmental and safety laws can result in TVA being subject to enforcement actions, which can lead to the imposition of significant civil liability, including fines and penalties, criminal sanctions, and/or the shutting down of non-compliant facilities.

From 1970 to 2019, TVA spent approximately $6.8 billion to reduce emissions from its power plants, including $17 million, $62 million, and $206 million in 2019, 2018, and 2017, respectively, on clean air controls. TVA estimates that compliance with existing and future Clean Air Act ("CAA") requirements (excluding greenhouse gas ("GHG") requirements) could lead to costs of $142 million from 2020 to 2024, which include existing controls capital projects and air operations and maintenance projects. TVA also estimates additional expenditures of approximately $1.2 billion from 2020 to 2024 relating to TVA's CCR conversion program, not including costs related to the Gallatin lawsuits, as well as expenditures of approximately $278 million from 2020 to 2024 relating to compliance with Clean Water Act requirements. Future costs could differ from these estimates if new environmental laws or regulations become applicable to TVA or the facilities it operates, or if existing environmental laws or regulations are revised or reinterpreted. There could also be costs that cannot reasonably be predicted at this time, due to uncertainty of actions, that could increase these estimates.

Liability for releases and cleanup of hazardous substances is primarily regulated by the federal Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), and other federal and parallel state statutes. In a manner similar to many other industries and power systems, TVA has generated or used hazardous substances over the years. TVA operations at some facilities have resulted in contamination that TVA is addressing. At September 30, 2019 and 2018, TVA's estimated liability for cleanup and similar environmental work for those sites for which sufficient information is available to develop a cost estimate was approximately $15 million and $12 million, respectively, on a non-discounted basis, and was included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets.

Potential Liability Associated with Workers' Exposure to CCR Materials. In response to the 2008 ash spill at Kingston, TVA hired Jacobs Engineering Group, Inc. ("Jacobs") to oversee certain aspects of the cleanup. After the cleanup was completed, Jacobs was sued in the United States District Court for the Eastern District of Tennessee ("Eastern District") by employees of a contractor involved in the cleanup and family members of some of the employees. The plaintiffs alleged that Jacobs had failed to take or provide proper health precautions and misled workers about the health risks associated with exposure to coal fly ash, which is a CCR material. The plaintiffs alleged that exposure to the fly ash caused a variety of significant health issues and illnesses, including in some cases death. The case was split into two phases, with the first phase considering, among other issues, general causation and the second determining specific causation and damages. On November 7, 2018, a jury hearing the first phase returned a verdict in favor of the plaintiffs, including determinations that Jacobs failed to adhere to its contract with TVA or the Site Wide Safety and Health Plan in place; Jacobs failed to provide reasonable care to the plaintiffs; and Jacobs's failures were capable of causing a list of medical conditions, ranging from hypertension to cancer. On January 11, 2019, the district court referred the parties to mediation. Depending on the outcome of mediation, the litigation will proceed to the second phase on the question of whether Jacobs's failures did in fact cause the plaintiffs' alleged injuries and damages.

On May 13, 2019, an additional group of contractor employees and family members filed suit against Jacobs in the Circuit Court for Roane County, Tennessee. These plaintiffs have raised similar claims to those litigated in the case referenced above.

While TVA is not a party to either of these lawsuits, TVA could be contractually obligated to reimburse Jacobs for some amounts that Jacobs is required to pay. Further, TVA will continue monitoring the litigation to determine whether these or similar cases could have broader implications for the utility industry.

Legal Proceedings

From time to time, TVA is party to or otherwise involved in lawsuits, claims, proceedings, investigations, and other legal matters ("Legal Proceedings") that have arisen in the ordinary course of conducting TVA's activities, as a result of a catastrophic event or otherwise.

General. At September 30, 2019, TVA had accrued $14 million with respect to Legal Proceedings. Of the accrued amount, $12 million is included in Other long-term liabilities and $2 million is included in Accounts payable and accrued liabilities. No assurance can be given that TVA will not be subject to significant additional claims and liabilities. If actual liabilities significantly exceed the estimates made, TVA's results of operations, liquidity, and financial condition could be materially adversely affected.

Environmental Agreements. In April 2011, TVA entered into two substantively similar agreements, one with the EPA and the other with Alabama, Kentucky, North Carolina, Tennessee, and three environmental advocacy groups: the Sierra Club, the National Parks Conservation Association, and Our Children's Earth Foundation (collectively, the "Environmental Agreements"). They became effective in June 2011. Under the Environmental Agreements, TVA committed to (1) retire on a phased schedule 18 coal-fired units with a combined summer net dependable capability of 2,200 MW, (2) control, convert, or retire additional coal-fired units with a combined summer net dependable capability of 3,500 MW, (3) comply with annual, declining emission caps for SO₂ and NO_x, (4) invest $290 million in certain TVA environmental projects (of which TVA had spent approximately $279 million as of September 30, 2019), (5) provide $60 million to Alabama, Kentucky, North Carolina, and Tennessee to fund environmental projects, and (6) pay civil penalties of $10 million. In exchange for these commitments, most past claims against TVA based on alleged New Source Review ("NSR") and associated violations were waived and cannot be brought against TVA. Future claims, including those for sulfuric acid mist and GHG emissions, can still be brought against TVA, and claims for increases in particulates can also be pursued at many of TVA's coal-fired units. Additionally, the Environmental Agreements do not address compliance with new laws and regulations or the cost associated with such compliance.

The liabilities related to the Environmental Agreements are included in Accounts payable and accrued liabilities and Other long-term liabilities on the September 30, 2019 Consolidated Balance Sheet. In conjunction with the approval of the Environmental Agreements, the TVA Board determined that it was appropriate to record TVA's obligations under the Environmental Agreements as regulatory assets, and they are included as such on the September 30, 2019 Consolidated Balance Sheet and will be recovered in rates in future periods. TVA has substantially completed the requirements in the Environmental Agreements related to retiring coal-fired units or installing controls on such units.

Case Involving Kingston Fossil Plant. On May 7, 2019, Roane County and the Cities of Kingston and Harriman ("local governments") filed a lawsuit in the Circuit Court for Roane County, Tennessee, against TVA and Jacobs for monetary damages and unspecified injunctive relief relating to TVA's cleanup response to the 2008 ash spill at Kingston. The local governments allege that TVA and Jacobs failed to take proper measures to mitigate environmental and health risks during the cleanup response and misled the local governments and their citizens about health and environmental risks associated with exposure to coal fly ash. The local governments seek to recover monetary damages on behalf of their citizens for personal injury and property loss claims, damages for lost tax revenue, damages for increased emergency and medical response costs claims, punitive damages, and unspecified injunctive relief. On June 6, 2019, TVA removed the lawsuit to the Eastern District. TVA has filed a motion to dismiss the case. Trial has been scheduled for March 23, 2021.

Class Action Lawsuit Involving Kingston Fossil Plant. On November 7, 2019, a resident of Roane County, Tennessee, filed a proposed class action lawsuit against Jacobs and TVA in the United States District Court for the Eastern District of Tennessee. The complaint alleges that the class representative and all other members of the proposed class were damaged as a result of the 2008 ash spill at Kingston and the resulting cleanup activities. The complaint alleges, among other things, that 1) TVA was negligent in its construction and operation of the Kingston CCR facility, 2) TVA and Jacobs failed to take proper measures to mitigate environmental and health risks during the cleanup response, and 3) TVA and Jacobs misled the community about health and environmental risks associated with exposure to coal fly ash. The complaint seeks monetary damages and injunctive relief in the form of an order requiring that the defendants establish a blood testing program and medical monitoring protocol, and to remediate damage to the proposed class’ properties.

Lawsuit Brought by TDEC Involving Gallatin Fossil Plant CCR Facilities. In January 2015, the Tennessee Department of Environment and Conservation ("TDEC") filed a lawsuit against TVA in the Chancery Court for Davidson County, Tennessee, alleging that pollutants from Gallatin have been discharged in violation of the Tennessee Water Quality Control Act and the Tennessee Solid Waste Disposal Act. The Tennessee Scenic Rivers Association ("TSRA") and Tennessee Clean Water Network ("TCWN") were also plaintiffs. On June 13, 2019, the parties filed a consent decree with the court to resolve this matter, which the court approved and entered on July 24, 2019. Under the consent decree, TVA agreed to close the existing wet ash disposal impoundments by removal, either to an onsite landfill or to an offsite facility, which will be determined after appropriate environmental reviews. TVA may also submit a plan that allows for beneficial reuse of the CCR material. Under the consent decree, TVA must submit a removal and closure plan to TDEC and must remove the CCR material within 20 years of TDEC's approval of the plan. The consent decree does not contain penalties or any admission of fault or liability. In addition to the consent decree, TDEC entered an administrative order providing for ongoing investigation and monitoring related to a closed legacy impoundment at the site. After a five-year study period, TDEC and TVA will determine whether any additional corrective action and/or closure activities are necessary for the legacy impoundment.

Lawsuit Brought by TSRA and TCWN Involving Gallatin Fossil Plant CCR Facilities. In April 2015, TSRA and TCWN filed a lawsuit against TVA in the U.S. District Court for the Middle District of Tennessee alleging that pollutants have been discharged into the Cumberland River from CCR facilities at Gallatin in violation of the Clean Water Act ("CWA"). The plaintiffs sought injunctive relief, including an order requiring TVA to relocate the CCR facilities, civil penalties of up to $37,500 per violation per day, and attorneys' fees. On August 4, 2017, the court issued a decision (the "August 2017 Order") that found TVA had discharged pollutants into the Cumberland River in the past and that the discharge was likely ongoing. On October 2, 2017, TVA appealed the August 2017 Order to the United States Court of Appeals for the Sixth Circuit ("Sixth Circuit"). On September 24, 2018, a panel of the Sixth Circuit reversed the district court decision and held that the district court erred by imposing CWA liability against TVA and that, therefore, the imposition of injunctive relief was an abuse of discretion. On April 15, 2019, the plaintiffs filed a petition with the U.S. Supreme Court ("Supreme Court") requesting that the Supreme Court accept an appeal of the Sixth Circuit's decision. The plaintiffs subsequently filed a motion requesting that the petition be dismissed. The Supreme Court granted this request on September 23, 2019, effectively ending this lawsuit.

Consent Decree Involving Colbert Fossil Plant. In May 2013, the Alabama Department of Environmental Management ("ADEM") and TVA entered into a consent decree concerning alleged violations of the Alabama Water Pollution Control Act. The consent decree required, among other things, that TVA continue remediation efforts TVA had begun prior to the suit being filed and stop using an unlined landfill after a lined landfill is approved and constructed. In August 2018, the parties agreed to amend the consent decree to deal with groundwater issues identified after TVA published groundwater monitoring reports in accordance with the CCR rule. The amended consent decree requires TVA to investigate the nature and extent of any groundwater contamination, develop and implement a remedy, provide semiannual status reports to ADEM, and remedy any seeps identified during inspections. TVA also paid $100,000 to Alabama under the amended consent decree. In accordance with the amended consent decree, TVA submitted to ADEM a Comprehensive Groundwater Investigation Report on May 17, 2019, and an Assessment of Corrective Measures on July 17, 2019.

Case Involving Tennessee River Boat Accident. On July 23, 2015, plaintiffs filed suit in the United States District Court for the Northern District of Alabama, seeking recovery for personal injuries sustained when the plaintiffs' boat struck a TVA transmission line which was being raised from the Tennessee River during a repair operation. The district court dismissed the case, finding that TVA's exercise of its discretion as a governmental entity in deciding how to carry out the operation barred any liability for negligence. In August 2017, the United States Court of Appeals for the Eleventh Circuit ("Eleventh Circuit") affirmed the decision. The plaintiffs petitioned the Supreme Court for review of the decision, arguing that the provision of the TVA Act which allows suit to be brought against TVA does not allow TVA to claim immunity for discretionary actions. On April 29, 2019, the Supreme Court issued its opinion reversing the judgment of the Eleventh Circuit and remanding the case to the Eleventh Circuit. On July 17, 2019, the Eleventh Circuit remanded the case to the district court for further proceedings consistent with the Supreme Court's opinion. The district court has issued a scheduling order setting the trial for February 16, 2021.

Case Involving Bellefonte Nuclear Plant. On November 30, 2018, Nuclear Development, LLC, filed suit against TVA in the United States District Court for the Northern District of Alabama. The plaintiff alleges that TVA breached its agreement to sell Bellefonte to the plaintiff. The plaintiff seeks, among other things, (1) an injunction requiring TVA to maintain Bellefonte and the associated NRC permits until the case is concluded, (2) an order compelling TVA to complete the sale of Bellefonte to the plaintiff, and (3) if the court does not order TVA to complete the sale, monetary damages in excess of $30 million. On December 26, 2018, Nuclear Development, LLC, and TVA filed a joint stipulation with the court. Under the stipulation, Nuclear Development, LLC, withdrew its request for an expedited hearing on its injunction in exchange for TVA's agreement to continue to maintain Bellefonte in accordance with the NRC permits and to give Nuclear Development, LLC, and the court five days prior notice of any filing by TVA to terminate the permits or sell the site. TVA filed a motion to dismiss the case on February 4, 2019. On May 15, 2019, the court denied TVA's motion. Trial is currently scheduled for May 2020.

Related Parties

12 Months Ended

Sep. 30, 2019

Related Parties

TVA is a wholly-owned corporate agency of the federal government, and because of this relationship, TVA's revenues and expenses are included as part of the federal budget as a revolving fund. TVA's purpose and responsibilities as an agency are described under the "Other Agencies" section of the federal budget.

TVA currently receives no appropriations from Congress and funds its business using power system revenues, power financings, and other revenues. TVA is a source of cash to the federal government. TVA will indefinitely continue to pay a return on the outstanding $258 million payments to the U.S. Treasury in repayment of and as a return on the government's appropriation investment in TVA's power facilities (the "Power Program Appropriation Investment"). See Note 18 — Proprietary Capital — Appropriation Investment.

TVA also has access to a financing arrangement with the U.S. Treasury pursuant to the TVA Act. TVA and the U.S. Treasury entered into a memorandum of understanding under which the U.S. Treasury provides TVA with a $150 million credit facility. This credit facility has a maturity date of September 30, 2020, and is typically renewed annually. Access to this credit facility or other similar financing arrangements has been available to TVA since the 1960s. See Note 13 — Debt and Other Obligations — Credit Facility Agreements.

In the normal course of business, TVA contracts with other federal agencies for sales of electricity and other services. Transactions with agencies of the federal government were as follows:



Related Party Transactions For the years ended, or at, September 30
	2019		2018		2017
Revenue from sales of electricity	$	118	$	122	$	126
Other income	258		240		136
Expenditures
Operating expenses	222		220		216
Additions to property, plant, and equipment	10		8		16
Cash and cash equivalents	45		46		46
Accounts receivable, net	76		60		84
Long-term accounts receivable	53		46		35
Accounts payable and accrued liabilities	69		69		71
Long-term power bonds, net	—		—		1
Return on Power Program Appropriation Investment	6		5		5

Unaudited Quarterly Financial Information

12 Months Ended

Sep. 30, 2019

Quarterly Financial Information Disclosure [Abstract]

Unaudited Quarterly Financial Information

A summary of the unaudited quarterly results of operations for the years 2019 and 2018 follows. This summary should be read in conjunction with the audited consolidated financial statements appearing herein. Results for interim periods may fluctuate as a result of seasonal weather conditions, changes in rates, and other factors.



	Unaudited Quarterly Financial Information
	2019
	First		Second		Third		Fourth		Total
Operating revenues	$	2,725	$	2,750	$	2,604	$	3,239	$	11,318
Operating expenses	1,960		2,158		2,088		2,301		8,507
Operating income	765		592		516		938		2,811
Net income (loss)	423		241		165		588		1,417



	Unaudited Quarterly Financial Information
	2018
	First		Second		Third		Fourth			Total
Operating revenues	$	2,549	$	2,792	$	2,707	$	3,185		$	11,233
Operating expenses	1,951		2,027		1,942		2,745			8,665
Operating income	598		765		765		440			2,568
Net income (loss)	288		462		470		(101		)	1,119

Revenue (Notes)

12 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue Recognition, Deferred Revenue [Policy Text Block]

17. Revenue

As described in Note 2 — Impact of New Accounting Standards and Interpretations, TVA adopted Revenue from Contracts with Customers effective October 1, 2018, using the modified retrospective method of adoption, which does not require restatement of prior year reported results. As a result of the adoption of this standard, no cumulative effect adjustment was recorded. Additionally, comparative disclosures for 2018 operating results with the previous revenue recognition rules are not applicable as TVA's revenue recognition has not materially changed as a result of the new standard.

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 is 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 maintain long-term partnerships with LPCs, 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 customers	Directly 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 Revenue

In 2019, the revenues generated from TVA's electricity sales were $11.2 billion and accounted for virtually all of TVA's revenues. TVA's revenues by state for each of the last three years are detailed in the table below:



Operating Revenues By State For the years ended September 30 (in millions)
	2019		2018			2017
Alabama	$	1,593	$	1,600		$	1,524
Georgia	270		267			252
Kentucky	691		696			665
Mississippi	1,063		1,052			1,016
North Carolina	74		66			57
Tennessee	7,419		7,350			7,041
Virginia	45		48			47
Subtotal	11,155		11,079			10,602
Off-system sales	4		7			6
Revenue capitalized during pre-commercial plant operations⁽¹⁾	—		(11		)	(22		)
Revenue from sales of electricity	11,159		11,075			10,586
Other revenues	159		158			153
Total operating revenues	$	11,318	$	11,233		$	10,739

Note

(1) Represents revenue capitalized during pre-commercial operations of $11 million at Allen CC in 2018 and $22 million at Watts Bar Unit 2, Paradise CC, and Allen CC in 2017. See Note 1 — Summary of Significant Accounting Policies — Pre-Commercial Plant Operations.

TVA's revenues by customer type for each of the last three years are detailed in the table below:



Operating Revenues by Customer Type For the years ended September 30 (in millions)
	2019		2018			2017
Revenue from sales of electricity
Local power companies	$	10,351	$	10,262		$	9,741
Industries directly served	686		695			735
Federal agencies and other	122		129			132
Revenue capitalized during pre-commercial plant operations⁽¹⁾	—		(11		)	(22		)
Revenue from sales of electricity	11,159		11,075			10,586
Other revenues	159		158			153
Total operating revenues	$	11,318	$	11,233		$	10,739

Note

(1) Represents revenue capitalized during pre-commercial operations of $11 million at Allen CC in 2018 and $22 million at Watts Bar Unit 2, Paradise CC, and Allen CC in 2017. See Note 1 — Summary of Significant Accounting Policies — Pre-Commercial Plant Operations.

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. 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. As of September 30, 2019, 131 LPCs had signed the 20-year Partnership Agreement with TVA.

The number of LPCs with the contract arrangements described below, the revenues derived from such arrangements during 2019, and the percentage of TVA's total operating revenues during 2019 represented by these revenues are summarized in the tables below:



TVA Local Power Company Contracts At or for the year ended September 30, 2019
Contract Arrangements⁽¹⁾	Number of LPCs	Revenue from Sales of Electricity to LPCs (in millions)		Percentage of Total Operating Revenues
20-year termination notice	131	$	6,350	56.1	%
10-year termination notice	5	938		8.3	%
5-year termination notice	18	3,063		27.1	%
Total	154	$	10,351	91.5	%

Note

(1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with three 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). Two of the 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 — 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 in 2019.

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 as of September 30, 2019.

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.

Energy Prepayment Obligations. In 2004, TVA and its largest customer, MLGW, entered into an energy prepayment agreement under which MLGW prepaid TVA $1.5 billion for the future costs of electricity to be delivered by TVA to MLGW over a period of 15 years. TVA accounted for the prepayment as unearned revenue and reported the obligation to deliver power under this arrangement as Energy prepayment obligations and Current portion of energy prepayment obligations on the September 30, 2018 Consolidated Balance Sheet. The arrangement ceased in 2019. TVA recognized approximately $100 million of noncash revenue in each year of the arrangement as electricity was delivered to MLGW based on the ratio of units of kilowatt hours delivered to total units of kilowatt hours under contract. As of September 30, 2019, $1.5 billion had been recognized as noncash revenue on a cumulative basis during the life of the agreement, $100 million of which was recognized as noncash revenue and a corresponding reduction in the balance of Energy prepayment obligations during 2018. During 2019, $10 million was recognized as noncash revenue and a corresponding reduction in the balance of Energy prepayment obligations. Discounts to account for the time value of money, which were recorded as a reduction to electricity sales, amounted to $4 million and $46 million during 2019 and 2018, respectively.

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 $310 million and $276 million during 2019 and 2018, 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 September 30, 2019 and 2018, the outstanding unpaid incentives were $157 million and $145 million, respectively. These incentives may be subject to clawback provisions if the customers fail to meet certain program requirements.

Subsequent Events Subsequent Events (Notes)

12 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events [Text Block]

25. Subsequent Events

Redemption of Debt

On October 15, 2019, TVA provided notice of its intent to redeem on November 15, 2019, the following electronotes identified by their respective CUSIP numbers and maturity dates. The notes will be redeemed at 100 percent of par value.



Year Issued	CUSIP	Coupon Rate	Maturity Date	Principal Outstanding
2012	88059TFH9	3.250%	2/15/2032	$	34
2012	88059TFJ5	3.625%	3/15/2042	27
2012	88059TFK2	3.375%	4/15/2032	24
2012	88059TFL0	3.550%	5/15/2042	35
2013	88059TFM8	3.625%	2/15/2043	48
2013	88059TFN6	2.375%	2/15/2025	9
2013	88059TFP1	2.375%	2/15/2025	12
2013	88059TFQ9	3.000%	3/15/2029	16
2013	88059TFR7	3.150%	4/15/2033	12
				$	217

TDEC Regulations

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. Such facilities are generally subject to a 30-year post-closure care period during which the owner or operator must undertake certain activities, including monitoring and maintaining the facility. The amendments will, among other things, substantially increase the post-closure care period, require resubmittal of closure plans every 10 years, and require TVA to submit recommendations as to what activities must be performed during the extended closure period to protect human health and the environment. TVA is currently evaluating the amendments to determine their potential impact on TVA and anticipates that the costs of complying with the amendments could be material.

Plant Closures (Notes)	12 Months Ended
Plant Closures (Notes)	Sep. 30, 2019
Property, Plant and Equipment [Abstract]
Plant Retirement and Abandonment, Policy [Policy Text Block]	6. Plant Closures Background TVA must continuously evaluate all generating assets to ensure an optimum energy portfolio that provides safe, clean, and reliable power while maintaining flexibility and fiscal responsibility to the people of the Tennessee Valley. During its August 2018 meeting, the TVA Board approved a plan to perform assessments of Bull Run Fossil Plant ("Bull Run") and Paradise Fossil Plant ("Paradise"). These assessments included resiliency studies for fuel and transmission and financial considerations. TVA also prepared Environmental Assessments ("EAs") pursuant to the National Environmental Policy Act ("NEPA"). Results of these assessments were presented to the TVA Board at its February 2019 meeting, and the Board approved the retirement of Paradise Unit 3 by December 2020 and Bull Run by December 2023. Subsequent to the Board approval, TVA determined that Paradise would not be restarted after January 2020 due to the plant's material condition. Financial Impact As a result of TVA's decision to accelerate the retirements of Paradise and Bull Run, certain construction projects at these locations were identified as probable of abandonment or were no longer expected to be in service for greater than one year prior to the plants' retirement dates. The write-off of these projects resulted in $151 million of Operating and maintenance expense during the year ended September 30, 2019. TVA also recognized losses of $19 million in Operating and maintenance expense related to additional materials and supplies inventory reserves and write-offs identified at Paradise during the year ended September 30, 2019. TVA's policy is to adjust depreciation rates to reflect the most current assumptions, ensuring units will be fully depreciated by the applicable retirement dates. As a result of TVA's decision to accelerate the retirement of Paradise and Bull Run, TVA recognized an additional $566 million of accelerated depreciation for the year ended September 30, 2019.

Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Policies)

12 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Regulatory Environmental Costs, Policy [Policy Text Block]

TDEC Regulations

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. Such facilities are generally subject to a 30-year post-closure care period during which the owner or operator must undertake certain activities, including monitoring and maintaining the facility. The amendments will, among other things, substantially increase the post-closure care period, require resubmittal of closure plans every 10 years, and require TVA to submit recommendations as to what activities must be performed during the extended closure period to protect human health and the environment. TVA is currently evaluating the amendments to determine their potential impact on TVA and anticipates that the costs of complying with the amendments could be material.

General

The Tennessee Valley Authority ("TVA") is a corporate agency and instrumentality of the United States ("U.S.") that was created in 1933 by federal legislation in response to a proposal by President Franklin D. Roosevelt. TVA was created to, among other things, improve navigation on the Tennessee River, reduce the damage from destructive flood waters within the Tennessee River system and downstream on the lower Ohio and Mississippi Rivers, further the economic development of TVA's service area in the southeastern U.S., and sell the electricity generated at the facilities TVA operates.

Today, TVA operates the nation's largest public power system and supplies power in most of Tennessee, northern Alabama, northeastern Mississippi, and southwestern Kentucky and in portions of northern Georgia, western North Carolina, and southwestern Virginia to a population of nearly 10 million people.

TVA also manages the Tennessee River, its tributaries, and certain shorelines to provide, among other things, year-round navigation, flood damage reduction, and affordable and reliable electricity. Consistent with these primary purposes, TVA also manages the river system and public lands to provide recreational opportunities, adequate water supply, improved water quality, cultural and natural resource protection, and economic development.

The power program has historically been separate and distinct from the stewardship programs. It is required to be self-supporting from power revenues and proceeds from power financings, such as proceeds from the issuance of bonds, notes, or other evidences of indebtedness (collectively, "Bonds"). Although TVA does not currently receive congressional appropriations, it is required to make annual payments to the United States Department of the Treasury ("U.S. Treasury") as a return on the government's appropriation investment in TVA's power facilities (the "Power Program Appropriation Investment"). In the 1998 Energy and Water Development Appropriations Act, Congress directed TVA to fund essential stewardship activities related to its management of the Tennessee River system and nonpower or stewardship properties with power revenues in the event that there were insufficient appropriations or other available funds to pay for such activities in any fiscal year. Congress has not provided any appropriations to TVA to fund such activities since 1999. Consequently, during 2000, TVA began paying for essential stewardship activities primarily with power revenues, with the remainder funded with user fees and other forms of revenues derived in connection with those activities. The activities related to stewardship properties do not meet the criteria of an operating segment under accounting principles generally accepted in the United States of America ("GAAP"). Accordingly, these assets and properties are included as part of the power program, TVA's only operating segment.

Power rates are established by the TVA Board of Directors (the "TVA Board") as authorized by the Tennessee Valley Authority Act of 1933 (the "TVA Act"). The TVA Act requires TVA to charge rates for power that will produce gross revenues sufficient to provide funds for operation, maintenance, and administration of its power system; payments to states and counties in lieu of taxes ("tax equivalents"); debt service on outstanding indebtedness; payments to the U.S. Treasury in repayment of and as a return on the Power Program Appropriation Investment; and such additional margin as the TVA Board may consider desirable for investment in system assets, retirement of outstanding Bonds in advance of maturity, additional reduction of the Power Program Appropriation Investment, and other purposes connected with TVA's business. TVA fulfilled its requirement to repay $1.0 billion of the Power Program Appropriation Investment with the 2014 payment; therefore, this item is no longer a component of rate setting. In setting TVA's rates, the TVA Board is charged by the TVA Act to have due regard for the primary objectives of the TVA Act, including the objective that power shall be sold at rates as low as are feasible. Rates set by the TVA Board are not subject to review or approval by any state or other federal regulatory body.

Fiscal Year

TVA's fiscal year ends September 30. Years (2019, 2018, etc.) refer to TVA's fiscal years unless they are preceded by "CY," in which case the references are to calendar years.

Cost-Based Regulation

Since the TVA Board is authorized by the TVA Act to set rates for power sold to its customers, TVA is self-regulated. Additionally, TVA's regulated rates are designed to recover its costs. Based on current projections, TVA believes that rates, set at levels that will recover TVA's costs, can be charged and collected. As a result of these factors, TVA records certain assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. TVA assesses whether the regulatory assets are probable of future recovery by considering factors such as applicable regulatory changes, potential legislation, and changes in technology. Based on these assessments, TVA believes the existing regulatory assets are probable of recovery. This determination reflects the current regulatory and political environment and is subject to change in the future. If future recovery of regulatory assets ceases to be probable, or any of the other factors described above cease to be applicable, TVA would no longer be considered to be a regulated entity and would be required to write off these costs. All regulatory asset write offs would be required to be recognized in earnings in the period in which future recovery ceases to be probable.

Basis of Presentation

The accompanying consolidated financial statements, which have been prepared in accordance with GAAP, include the accounts of TVA, wholly-owned direct subsidiaries, and variable interest entities ("VIE") of which TVA is the primary beneficiary. See Note 9 — Asset Acquisitions and Note 10 — Variable Interest Entities. Intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements requires TVA to estimate the effects of various matters that are inherently uncertain as of the date of the consolidated financial statements. Although the consolidated financial statements are prepared in conformity with GAAP, TVA is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the amounts of revenues and expenses reported during the reporting period. Each of these estimates varies in regard to the level of judgment involved and its potential impact on TVA's financial results. Estimates are considered critical either when a different estimate could have reasonably been used, or where changes in the estimate are reasonably likely to occur from period to period, and such use or change would materially impact TVA's financial condition, results of operations, or cash flows.

Reclassifications

Certain historical amounts have been reclassified in the accompanying consolidated financial statements to the current presentation. TVA reclassified $256 million and $758 million of net periodic benefit costs from Operating and maintenance expense to Other net periodic benefit cost in the Consolidated Statements of Operations for the years ending September 30, 2018 and 2017, respectively, as a result of the retrospective presentation of financing costs due to the implementation of the new accounting standard for defined benefit plan costs effective for TVA October 1, 2018. TVA also reclassified $13 million from Restricted cash and cash equivalents to Other long-term assets on the Consolidated Balance Sheet at September 30, 2018.

In the September 30, 2018, Consolidated Statements of Cash Flows, amounts previously reported as $(30) million Fuel cost adjustment deferral, $(7) million Fuel cost tax equivalents, and $39 million Other, net were consolidated and presented as $2 million Other regulatory amortization and deferrals. Additionally, $(22) million in cash flows from operating activities previously recorded as $(9) million Accounts payable and accrued liabilities and $(13) million Regulatory asset costs were reclassified to Other, net. In cash flows from financing activities, $(5) million previously recorded as Payments to U.S. Treasury was reclassified to Other, net.

In the September 30, 2017, Consolidated Statements of Cash Flows, amounts previously reported as $98 million Fuel cost adjustment deferral, $5 million Fuel cost tax equivalents, and $40 million Other, net were consolidated and presented as $143 million Other regulatory amortization and deferrals. Additionally, $(60) million in cash flows from operating activities previously recorded as $(10) million Accounts payable and accrued liabilities and $(50) million Regulatory asset costs were reclassified to Other, net. In cash flows from financing activities, $(5) million previously recorded as Payments to U.S. Treasury was reclassified to Other, net.

Additionally, as a result of the implementation of the new accounting standard for Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments, $(29) million and $(9) million were reclassified from Short-term debt issues (redemptions), net in cash flows from financing to Other, net in cash flows from operating activities in 2018 and 2017, respectively.

Cash and Cash Equivalents and Restricted Cash and Investments

Cash, Cash Equivalents, and Restricted Cash

Cash includes cash on hand, non-interest bearing cash, and deposit accounts. All highly liquid investments with original maturities of three months or less are considered cash equivalents. Cash and cash equivalents that are restricted, as to withdrawal or use under the terms of certain contractual agreements, are recorded in Other long-term assets on the Consolidated Balance Sheets. Restricted cash and cash equivalents includes cash held in trusts that are currently restricted for TVA economic development loans and for certain TVA environmental programs in accordance with agreements related to compliance with certain environmental regulations. See Note 22 — Commitments and Contingencies — Legal Proceedings — Environmental Agreements.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the Consolidated Balance Sheets and Consolidated Statements of Cash Flows:



Cash, Cash Equivalents, and Restricted Cash At September 30
	2019		2018
Cash and cash equivalents	$	299	$	299
Restricted cash and cash equivalents, included in Other long-term assets	23		23
Total Cash, cash equivalents, and restricted cash	$	322	$	322

On the September 30, 2018 and 2017, Consolidated Statements of Cash Flows, transfers between cash and restricted cash were previously reported as $12 million and $1 million, respectively, as Other, net in cash flows from operating activities. Due to the implementation of the new accounting standard for restricted cash in 2019, these amounts are not reported as cash flow activities on the Consolidated Statement of Cash Flows.

Allowance for Uncollectible Accounts

The allowance for uncollectible accounts reflects TVA's estimate of probable losses inherent in its accounts and loans receivable balances excluding the EnergyRight^®loans receivable. TVA determines the allowance based on known accounts, historical experience, and other currently available information including events such as customer bankruptcy and/or customers failing to fulfill payment arrangements after 90 days. It also reflects TVA's corporate credit department's assessment of the financial condition of customers and the credit quality of the receivables.

The allowance for uncollectible accounts was less than $1 million at both September 30, 2019 and 2018, for accounts receivable. Additionally, loans receivable of $131 million and $138 million at September 30, 2019 and 2018, respectively, are included in Accounts receivable, net and Other long-term assets, for the current and long-term portions, respectively, and are reported net of allowances for uncollectible accounts of less than $1 million at both September 30, 2019 and 2018, respectively.

Energy Prepayment Obligations

In 2004, TVA and its largest customer, Memphis Light, Gas and Water Division ("MLGW"), entered into an energy prepayment agreement under which MLGW prepaid TVA $1.5 billion for the future costs of electricity to be delivered by TVA to MLGW over a period of 180 months. TVA accounted for the prepayment as unearned revenue and reported the obligation to deliver power under this arrangement as Energy prepayment obligations and Current portion of energy prepayment obligations on the September 30, 2018 Consolidated Balance Sheet. The arrangement ceased in 2019. Revenue was recognized in each year of the arrangement as electricity was delivered to MLGW based on the ratio of units of kilowatt hours delivered to total units of kilowatt hours under contract. As of September 30, 2019, $1.5 billion had been recognized as non-cash revenue on a cumulative basis during the life of the agreement, $10 million and $100 million of which was recognized as non-cash revenue during 2019 and 2018, respectively.

Discounts to account for the time value of money, which are recorded as a reduction to electricity sales, amounted to $4 million and $46 million for the years ended September 30, 2019 and 2018, respectively.

Revenues

TVA recognizes revenue from contracts with customers to depict the transfer of goods or services to customers in an amount to which the entity expects to be entitled in exchange for those goods or services. For the generation and transmission of electricity, this is generally at the time the power is delivered to a metered customer delivery point for the customer's consumption or distribution. As a result, revenues from power sales are recorded as electricity is delivered to customers. In addition to power sales invoiced and recorded during the month, TVA accrues estimated unbilled revenues for power sales provided to five customers whose billing date occurs prior to the end of the month. Exchange power sales are presented in the accompanying Consolidated Statements of Operations as a component of sales of electricity. Exchange power sales are sales of excess power after meeting TVA native load and directly served requirements. Native load refers to the customers on whose behalf a company, by statute, franchise, regulatory requirement, or contract, has undertaken an obligation to serve. TVA engages in other arrangements in addition to power sales. Certain other revenue from activities related to TVA's overall mission are recorded in Other revenue. Revenues that are not related to the overall mission are recorded in Other income (expense), net.

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.

Pre-Commercial Plant Operations

As part of the process of completing the construction of a generating unit, the electricity produced is used to serve the

demands of the electric system. TVA estimates revenue from such pre-commercial generation based on the guidance provided by Federal Energy Regulatory Commission ("FERC") regulations. Watts Bar Nuclear Plant ("Watts Bar") Unit 2 commenced pre-commercial plant operations in June 2016, and commercial operations began in October 2016. In addition, the Paradise Combined Cycle Plant ("Paradise CC") commenced pre-commercial plant operations in October 2016, and commercial operations began in April 2017. The Allen Combined Cycle Plant ("Allen CC") began pre-commercial plant operations in September 2017, and began commercial operations in April 2018. Cogeneration capability at Johnsonville Combustion Turbine Unit 20 commenced pre-commercial plant operations in September 2017, and was placed in service during December 2017. Estimated revenue of $11 million related to these projects was capitalized to offset project costs for the year ended September 30, 2018. TVA also capitalized related fuel costs for these construction projects of approximately $19 million during the year ended September 30, 2018. No such amounts were capitalized during 2019.

Inventories

Certain Fuel, Materials, and Supplies. Materials and supplies inventories are valued using an average unit cost method. A new average cost is computed after each inventory purchase transaction, and inventory issuances are priced at the latest moving weighted average unit cost. Coal, fuel oil, and natural gas inventories are valued using an average cost method. A new weighted average cost is computed monthly, and monthly issues are priced accordingly.

Renewable Energy Credits. TVA accounts for Renewable Energy Certificates ("RECs") using the specific identification cost method. RECs that are acquired through power purchases are recorded as inventory and charged to purchased power expense when the RECs are subsequently used or sold. TVA assigns a value to the RECs at the inception of the power purchase arrangement using a relative fair value approach. RECs created through TVA-owned asset generation are recorded at zero cost.

Emission Allowances. TVA has emission allowances for sulfur dioxide ("SO₂")and nitrogen oxide ("NO_x") which are accounted for as inventory. The cost of specific allowances used each month is charged to operating expense based on tons of SO₂ and NO_x emitted during the respective compliance periods. Allowances granted to TVA by the Environmental Protection Agency ("EPA") are recorded at zero cost.

Allowance for Inventory Obsolescence. TVA reviews materials and supplies inventories by category and usage on a periodic basis. Each category is assigned a probability of becoming obsolete based on the type of material and historical usage data. In 2018, TVA started moving from a site-specific inventory management policy to a fleet-wide strategy for each generation type. Based on the estimated value of the inventory, TVA adjusts its allowance for inventory obsolescence.

Property, Plant, and Equipment, and Depreciation

Property, Plant, and Equipment. Additions to plant are recorded at cost, which includes direct and indirect costs. The cost of current repairs and minor replacements is charged to operating expense. Nuclear fuel, which is included in Property, plant, and equipment, is valued using the average cost method for raw materials and the specific identification method for nuclear fuel in a reactor. Amortization of nuclear fuel in a reactor is calculated on a units-of-production basis and is included in fuel expense. When property, plant, and equipment is retired, accumulated depreciation is charged for the original cost of the assets. Gains or losses are only recognized upon the sale of land or an entire operating unit.

Depreciation. TVA accounts for depreciation of its properties using the composite depreciation convention of accounting. Under the composite method, assets with similar economic characteristics are grouped and depreciated as one asset. Depreciation is generally computed on a straight-line basis over the estimated service lives of the various classes of assets. The estimation of asset useful lives requires management judgment, supported by external depreciation studies of historical asset retirement experience. Depreciation rates are determined based on the external depreciation studies. These studies will be updated at least every five years. Depreciation expense for the years ended September 30, 2019, 2018, and 2017 was $1.8 billion, $1.3 billion, and $1.3 billion, respectively. Depreciation expense expressed as a percentage of the average annual depreciable completed plant was 3.09 percent for 2019, 2.45 percent for 2018, and 2.49 percent for 2017. Average depreciation rates by asset class are as follows:



Property, Plant, and Equipment Depreciation Rates At September 30 (percent)
	2019	2018	2017
Asset Class
Nuclear	2.38	2.64	2.66
Coal-fired⁽¹⁾	4.96	2.32	2.33
Hydroelectric	1.61	1.57	1.58
Gas and oil-fired	3.00	2.93	3.27
Transmission	1.34	1.32	1.34
Other	7.16	5.90	6.12

Note

(1) The rate for 2019 includes the acceleration of depreciation related to retiring certain coal-fired units.

Coal-Fired. As a result of TVA's decision to idle or retire certain units since the previous depreciation study, TVA recognized $566 million, $48 million, and $104 million in accelerated depreciation expense related to the units during the years ended September 30, 2019, 2018, and 2017, respectively. Accelerated depreciation is based on the remaining useful life of the asset at the time the decision is made to idle or retire a unit.

Capital Lease Agreements. Assets recorded under capital lease agreements are included in property, plant, and equipment. These primarily consist of a natural gas lateral pipeline, power production facilities, water treatment assets, certain office equipment, and land of $146 million and $149 million at September 30, 2019 and 2018, respectively. Amortization expense related to capital leases is included in Depreciation and amortization in TVA's statement of operations, excluding leases and other financing obligations where regulatory accounting is applied. See Note 8 — Regulatory Assets and Liabilities — Other Non-Current Regulatory Assets — Deferred Capital Leases and Other Financing Obligations.

Reacquired Rights. Property, plant, and equipment includes intangible reacquired rights, net of amortization, of $200 million and $208 million as of September 30, 2019 and 2018, respectively, related to the purchase of residual interests from lease/leaseback agreements of certain combustion turbine units. Amortization expense was $8 million, $8 million, and $4 million for 2019, 2018, and 2017, respectively. See Note 9 — Asset Acquisitions.

Software Costs. TVA capitalizes certain costs incurred in connection with developing or obtaining internal-use software. Capitalized software costs are included in Property, plant, and equipment on the Consolidated Balance Sheets and are generally amortized over seven years. At September 30, 2019 and 2018, unamortized computer software costs totaled $63 million and $53 million, respectively. Amortization expense related to capitalized computer software costs was $38 million, $32 million, and $26 million for 2019, 2018, and 2017, respectively. Software costs that do not meet capitalization criteria are expensed as incurred.

Impairment of Assets. TVA evaluates long-lived assets for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. For long-lived assets, TVA bases its evaluation on impairment indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, regulatory approval and ability to set rates at levels that allow for recoverability of the assets, and other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate that the carrying amount of an asset may not be recoverable, TVA determines whether an impairment has occurred based on an estimate of undiscounted cash flows attributable to the asset as compared with the carrying value of the asset. If an impairment has occurred, the amount of the impairment recognized is measured as the excess of the asset's carrying value over its fair value. Additionally, TVA regularly evaluates construction projects. If the project is canceled or deemed to have no future economic benefit, the project is written off as an asset impairment or, upon TVA Board approval, reclassified as a regulatory asset. See Note 6 — Plant Closures.

Decommissioning Costs

TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets. These obligations relate to fossil fuel-fired generating plants, nuclear generating plants, hydroelectric generating plants/dams, transmission structures, and other property-related assets. These other property-related assets include, but are not limited to, easements and coal rights. Activities involved with retiring these assets could include decontamination and demolition of structures, removal and disposal of wastes, and site restoration. Revisions to the estimates of asset retirement obligations ("AROs") are made whenever factors indicate that the timing or amounts of estimated cash flows have changed materially. Any accretion or depreciation expense related to these liabilities and assets is charged to a regulatory asset. See Note 8 — Regulatory Assets and Liabilities — Nuclear Decommissioning Costs and Non-Nuclear Decommissioning Costs and Note 12 — Asset Retirement Obligations.

To estimate its decommissioning obligation related to its nuclear generating stations, TVA uses a probability-weighted, discounted cash flow model which, on a unit-by-unit basis, considers multiple outcome scenarios that include significant estimations and assumptions. Those assumptions include (1) estimates of the cost of decommissioning, (2) the method of decommissioning and the timing of the related cash flows, (3) the license period of the nuclear plant, considering the probability of license extensions, (4) cost escalation factors, and (5) the credit adjusted risk free rate to measure the obligation at the present value of the future estimated costs. TVA has ascribed probabilities to two different decommissioning methods related to its nuclear decommissioning obligation estimate: the DECON method and the SAFSTOR method. The DECON method requires radioactive contamination to be removed from a site and safely disposed of or decontaminated to a level that permits the site to be released for unrestricted use shortly after it ceases operation. The SAFSTOR method allows nuclear facilities to be placed and maintained in a condition that allows the facilities to be safely stored and subsequently decontaminated to levels that permit release for unrestricted use.

Blended Low-Enriched Uranium Program

Under the blended low-enriched uranium ("BLEU") program, TVA, the U.S. Department of Energy ("DOE"), and certain nuclear fuel contractors have entered into agreements providing for the DOE's surplus of enriched uranium to be blended with other uranium down to a level that allows the blended uranium to be fabricated into fuel that can be used in nuclear power plants. Under the terms of an interagency agreement between TVA and the DOE, in exchange for supplying highly enriched uranium materials to the appropriate third-party fuel processors for processing into usable BLEU fuel for TVA, the DOE participates to a degree in the savings generated by TVA's use of this blended nuclear fuel. TVA accrues an obligation with each BLEU reload batch related to the portion of the ultimate future payments estimated to be attributable to the BLEU fuel currently in use. TVA estimated DOE's portion of the cost savings from the program to be $166 million since 2006. The last reload of BLEU material is currently underway at Browns Ferry Nuclear Plant ("Browns Ferry"). Since 2011, total payments to the DOE amounted to approximately $165 million for this program. No payments were made during the year ended September 30, 2019, and the remaining obligation recorded was $1 million at September 30, 2019.

Down-blend Offering for Tritium

TVA, the DOE, and certain nuclear fuel contractors have entered into agreements, referred to as the Down-blend offering for Tritium, 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 the summer of 2019 and is contracted to continue through October 2027. Beginning October 2027, contract activity will consist of storage and flag management. Flag management ensures that the uranium is of U.S. origin, free from foreign obligations, and 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. During the year ended September 30, 2019, TVA received $23 million in reimbursements from the DOE. At September 30, 2019, TVA recorded $6 million in Accounts receivable, net related to this agreement.

Investment Funds

Investment funds consist primarily of trust funds designated to fund decommissioning requirements (see Note 22 — Commitments and Contingencies — Decommissioning Costs), the Supplemental Executive Retirement Plan ("SERP") (see Note 21 — Overview of Plans and Benefits — Supplemental Executive Retirement Plan), and the Deferred Compensation Plan ("DCP"). The Nuclear Decommissioning Trust ("NDT") holds funds primarily for the ultimate decommissioning of TVA's nuclear power plants. The Asset Retirement Trust ("ART") holds funds primarily for the costs related to the future closure and retirement of TVA's other long-lived assets. The NDT, ART, SERP, and DCP funds are invested in portfolios of securities generally designed to achieve a return in line with overall equity and debt market performance. The NDT, ART, SERP, and DCP funds are all classified as trading.

Insurance

Although TVA uses private companies to administer its healthcare plans for eligible active and retired employees not covered by Medicare, TVA does not purchase health insurance. Third-party actuarial specialists assist TVA in determining certain liabilities for self-insured claims. TVA recovers the costs of claims through power rates and through adjustments to the participants' contributions to their benefit plans. These liabilities are included in Other liabilities on the Consolidated Balance Sheets.

TVA sponsors an Owner Controlled Insurance Program which provides workers' compensation and liability insurance for a select group of contractors performing maintenance, modifications, outage, and new construction activities at TVA facilities.

The Federal Employees' Compensation Act ("FECA") governs liability to employees for service-connected injuries. TVA purchases excess workers' compensation insurance above a self-insured retention.

In addition to excess workers' compensation insurance, TVA purchases the following types of insurance:


•	Nuclear liability insurance; nuclear property, decommissioning, and decontamination insurance; and nuclear accidental outage insurance. See Note 22 — Commitments and Contingencies — Nuclear Insurance.


•	Excess liability insurance for aviation, auto, marine, and general liability exposures.


•	Property insurance for certain conventional (non-nuclear) assets.

The insurance policies are subject to the terms and conditions of the specific policy, including deductibles or self-insured retentions. To the extent insurance would not provide either a partial or total recovery of the costs associated with a loss, TVA would have to recover any such costs through other means, including through power rates.

Research and Development Costs

Research and development costs are expensed when incurred. TVA's research programs include those related to power delivery technologies, emerging technologies (clean energy, renewables, distributed resources, and energy efficiency), technologies related to generation (fossil fuel, nuclear, and hydroelectric), and environmental technologies.

Tax Equivalents

TVA is not subject to federal income taxation. In addition, neither TVA nor its property, franchises, or income is subject to taxation by states or their subdivisions. The TVA Act requires TVA to make payments to states and counties in which TVA conducts its power operations and in which TVA has acquired power properties previously subject to state and local taxation. The total amount of these payments is five percent of gross revenues from sales of power during the preceding year, excluding sales or deliveries to other federal agencies and off-system sales with other utilities, with a provision for minimum payments under certain circumstances. TVA calculates tax equivalent expense by subtracting the prior year fuel cost-related tax equivalent regulatory asset or liability from the payments made to the states and counties during the current year and adding back the current year fuel cost-related tax equivalent regulatory asset or liability. Fuel cost-related tax equivalent expense is recognized in the same accounting period in which the fuel cost-related revenue is recognized.

Maintenance Costs

TVA records maintenance costs and repairs related to its property, plant, and equipment in the Consolidated Statements of Operations as they are incurred except for the recording of certain regulatory assets for retirement and removal costs.

Summary of Significant Accounting Policies Revenues (Policies)	12 Months Ended
	Sep. 30, 2019
Accounting Policies [Abstract]
Energy Prepayment Obligations	Energy Prepayment Obligations In 2004, TVA and its largest customer, Memphis Light, Gas and Water Division ("MLGW"), entered into an energy prepayment agreement under which MLGW prepaid TVA $1.5 billion for the future costs of electricity to be delivered by TVA to MLGW over a period of 180 months. TVA accounted for the prepayment as unearned revenue and reported the obligation to deliver power under this arrangement as Energy prepayment obligations and Current portion of energy prepayment obligations on the September 30, 2018 Consolidated Balance Sheet. The arrangement ceased in 2019. Revenue was recognized in each year of the arrangement as electricity was delivered to MLGW based on the ratio of units of kilowatt hours delivered to total units of kilowatt hours under contract. As of September 30, 2019, $1.5 billion had been recognized as non-cash revenue on a cumulative basis during the life of the agreement, $10 million and $100 million of which was recognized as non-cash revenue during 2019 and 2018, respectively. Discounts to account for the time value of money, which are recorded as a reduction to electricity sales, amounted to $4 million and $46 million for the years ended September 30, 2019 and 2018, respectively. Revenues TVA recognizes revenue from contracts with customers to depict the transfer of goods or services to customers in an amount to which the entity expects to be entitled in exchange for those goods or services. For the generation and transmission of electricity, this is generally at the time the power is delivered to a metered customer delivery point for the customer's consumption or distribution. As a result, revenues from power sales are recorded as electricity is delivered to customers. In addition to power sales invoiced and recorded during the month, TVA accrues estimated unbilled revenues for power sales provided to five customers whose billing date occurs prior to the end of the month. Exchange power sales are presented in the accompanying Consolidated Statements of Operations as a component of sales of electricity. Exchange power sales are sales of excess power after meeting TVA native load and directly served requirements. Native load refers to the customers on whose behalf a company, by statute, franchise, regulatory requirement, or contract, has undertaken an obligation to serve. TVA engages in other arrangements in addition to power sales. Certain other revenue from activities related to TVA's overall mission are recorded in Other revenue. Revenues that are not related to the overall mission are recorded in Other income (expense), net. 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.

Variable Interest Entities Variable Interest Entities (Policies)	12 Months Ended
	Sep. 30, 2019
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract]
Variable Interest Entity Policy	A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of owning a controlling financial interest. When TVA determines that it has a variable interest in a VIE, a qualitative evaluation is performed to assess which interest holders have the power to direct the activities that most significantly impact the economic performance of the entity and have the obligation to absorb losses or receive benefits that could be significant to the entity. The evaluation considers the purpose and design of the business, the risks that the business was designed to create and pass along to other entities, the activities of the business that can be directed and which party can direct them, and the expected relative impact of those activities on the economic performance of the business through its life. TVA has the power to direct the activities of an entity when it has the ability to make key operating and financing decisions, including, but not limited to, capital investment and the issuance of debt. Based on the evaluation of these criteria, TVA has determined it is the primary beneficiary of certain entities and as such is required to account for the VIEs on a consolidated basis.

Asset Retirement Obligations Asset Retirement Obligations (Policies)	12 Months Ended
	Sep. 30, 2019
Asset Retirement Obligation Disclosure [Abstract]
Asset Retirement Obligations, Policy	Decommissioning Costs TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets. These obligations relate to fossil fuel-fired generating plants, nuclear generating plants, hydroelectric generating plants/dams, transmission structures, and other property-related assets. These other property-related assets include, but are not limited to, easements and coal rights. Activities involved with retiring these assets could include decontamination and demolition of structures, removal and disposal of wastes, and site restoration. Revisions to the estimates of asset retirement obligations ("AROs") are made whenever factors indicate that the timing or amounts of estimated cash flows have changed materially. Any accretion or depreciation expense related to these liabilities and assets is charged to a regulatory asset. See Note 8 — Regulatory Assets and Liabilities — Nuclear Decommissioning Costs and Non-Nuclear Decommissioning Costs and Note 12 — Asset Retirement Obligations. To estimate its decommissioning obligation related to its nuclear generating stations, TVA uses a probability-weighted, discounted cash flow model which, on a unit-by-unit basis, considers multiple outcome scenarios that include significant estimations and assumptions. Those assumptions include (1) estimates of the cost of decommissioning, (2) the method of decommissioning and the timing of the related cash flows, (3) the license period of the nuclear plant, considering the probability of license extensions, (4) cost escalation factors, and (5) the credit adjusted risk free rate to measure the obligation at the present value of the future estimated costs. TVA has ascribed probabilities to two different decommissioning methods related to its nuclear decommissioning obligation estimate: the DECON method and the SAFSTOR method. The DECON method requires radioactive contamination to be removed from a site and safely disposed of or decontaminated to a level that permits the site to be released for unrestricted use shortly after it ceases operation. The SAFSTOR method allows nuclear facilities to be placed and maintained in a condition that allows the facilities to be safely stored and subsequently decontaminated to levels that permit release for unrestricted use.

Proprietary Capital Payments to the U.S. Treasury (Policies)	12 Months Ended
	Sep. 30, 2019
Equity [Abstract]
Payments to U S Treasury	Payments to the U.S. Treasury TVA paid the U.S. Treasury $6 million, $5 million, and $5 million in 2019, 2018, and 2017, respectively, as a return on the Power Program Appropriation Investment. The amount of the return on the Power Program Appropriation Investment is based on the Power Program Appropriation Investment balance at the beginning of that year and the computed average interest rate payable by the U.S. Treasury on its total marketable public obligations at the same date. The interest rates payable by TVA on the Power Program Appropriation Investment were 2.37 percent, 2.09 percent, and 2.00 percent for 2019, 2018, and 2017, respectively.

Benefit Plans Benefit Plans (Policies)	12 Months Ended
Benefit Plans Benefit Plans (Policies)	Sep. 30, 2019
Retirement Benefits [Abstract]
Benefit Plans	Accounting Mechanisms Regulatory Accounting. TVA has classified all amounts related to unrecognized prior service costs/(credits), net actuarial gains or losses, and the funded status as regulatory assets or liabilities as such amounts are probable of collection in future rates. Additionally, TVA recognizes pension costs as regulatory assets or regulatory liabilities to the extent that the amount calculated under U.S. GAAP as pension expense differs from the amount TVA contributes to the pension plan as pension plan contributions. As a result of recent plan design changes, future contributions are expected to exceed the expense calculated under U.S. GAAP. Accordingly, TVA will discontinue this regulatory accounting practice once all such deferred costs have been recovered, at which time it will recognize pension costs in accordance with U.S. GAAP. Cost Method. TVA uses the projected unit credit cost method to determine the service cost and the projected benefit obligation for retirement, termination, and ancillary benefits. Under this method, a "projected accrued benefit" is calculated at the beginning of the year and at the end of the year for each benefit that may be payable in the future. The "projected accrued benefit" is based on the plan's accrual formula and upon service at the beginning or end of the year, but it uses final average compensation, social security benefits, and other relevant factors projected to the age at which the employee is assumed to leave active service. The projected benefit obligation is the actuarial present value of the "projected accrued benefits" at the beginning of the year for employed participants and is the actuarial present value of all benefits for other participants. The service cost is the actuarial present value of the difference between the "projected accrued benefits" at the beginning and end of the year. Amortization of Net Gain or Loss. TVA utilizes the corridor approach for gain/loss amortization. Differences between actuarial assumptions and actual plan results are deferred and amortized into periodic cost only when the accumulated differences exceed 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets. If necessary, the excess is amortized over the average remaining service period of participating employees expected to receive benefits. The current projected amortization periods of unrecognized net gain or loss is approximately 10 years for the pension plan and 12 years for the post-retirement plan. Amortization of Prior Service Cost/(Credit). Amortization of net prior service cost/(credit) resulting from a plan change is included as a component of period expense in the year first recognized and every year thereafter until it is fully amortized. The increase or decrease in the benefit obligation due to the plan change is amortized over the average remaining service period of participating employees expected to receive benefits under the plan. The pension and post-retirement plans have prior service costs/(credits) related to plan changes made in 2009, 2010, 2016, 2018, and 2019 with remaining amortization periods ranging from one to 10 years. However, when a plan change reduces the benefit obligation, existing positive prior service costs are reduced or eliminated starting with the earliest established before a new prior service credit base is established. Asset Method.

- Definition

Disclosure of accounting policy for pension and other postretirement benefit plans. This accounting policy may address (1) the types of plans sponsored by the entity, and the benefits provided by each plan (2) groups that participate in (or are covered by) each plan (3) how plan assets, liabilities and expenses are measured, including the use of any actuaries and (4) significant assumptions used by the entity to value plan assets and liabilities and how such assumptions are derived.

+ References + Details

Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables)

12 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Property, Plant, and Equipment Depreciation Rates

Average depreciation rates by asset class are as follows:



Property, Plant, and Equipment Depreciation Rates At September 30 (percent)
	2019	2018	2017
Asset Class
Nuclear	2.38	2.64	2.66
Coal-fired⁽¹⁾	4.96	2.32	2.33
Hydroelectric	1.61	1.57	1.58
Gas and oil-fired	3.00	2.93	3.27
Transmission	1.34	1.32	1.34
Other	7.16	5.90	6.12

Impact of New Accounting Standards and Interpretations Impact of New Accounting Standards and Interpretations (Tables)

12 Months Ended

Sep. 30, 2019

Accounting Changes and Error Corrections [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

Impact of New Accounting Standards and Interpretations

The following are accounting standard updates issued by the Financial Accounting Standards Board ("FASB") that TVA adopted during 2019:



Defined Benefit Costs
Description	This guidance changes how information about defined benefit costs for pension plans and other post-retirement benefit plans is presented in employer financial statements. The guidance requires employers that present a measure of operating income in their statement of income to include only the service cost component of net periodic pension cost and net periodic post-retirement benefit cost in operating expenses (together with other employee compensation costs). The other components of net benefit cost, including amortization of prior service cost/credit and settlement and curtailment effects, are to be included in non-operating expenses. Additionally, the guidance stipulates that only the service cost component of net benefit cost is eligible for capitalization in assets. The guidance requires retrospective presentation of the service and non-service cost components in the Consolidated Statements of Operations.
Effective Date for TVA	October 1, 2018
Effect on the Financial Statements or Other Significant Matters	TVA adopted this standard on a retrospective basis for the prior periods presented resulting in a reclassification of net periodic benefit costs from Operating and maintenance expense to Other net periodic benefit cost in the Consolidated Statements of Operations of $256 million and $758 million during 2018 and 2017, respectively. There was no impact on the Consolidated Balance Sheets because TVA has historically capitalized only the service cost component, which is consistent with the new guidance. See Note 1 — Summary of Significant Accounting Policies — Reclassifications for additional details.



Financial Instruments
Description	This guidance applies to the recognition and measurement of financial assets and liabilities. The standard requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). The standard also amends presentation requirements related to certain changes in the fair value of a liability and eliminates certain disclosure requirements of significant assumptions for financial instruments measured at amortized cost on the balance sheet. Public entities must apply the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption.
Effective Date for TVA	October 1, 2018
Effect on the Financial Statements or Other Significant Matters	TVA currently measures all of its equity investments (other than those that result in the consolidation of the investee) at fair value, with changes in the fair value recognized through net income, unless regulatory accounting is applied. The TVA Board has authorized the use of regulatory accounting for changes in fair value of certain equity investments, and as a result, those changes in fair value are deferred as regulatory assets or liabilities. TVA currently discloses significant assumptions around its estimates of fair value for financial instruments carried at amortized cost on its consolidated balance sheet. The adoption of this standard did not have a material impact on TVA's financial condition, results of operations, or cash flows because changes in fair value accounting are recognized through regulatory accounting.

Revenue from Contracts with Customers
Description	This guidance, including subsequent amendments, replaces the existing accounting standard and industry specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the guidance is to recognize revenue related to the transfer of goods or services to customers at the amount expected to be collected. The objective of the new standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within and across industries. The new standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and the related cash flows arising from contracts with customers.
Effective Date for TVA	October 1, 2018
Effect on the Financial Statements or Other Significant Matters	TVA adopted this standard using the modified retrospective method with no material changes to the amount or timing of revenue recognition. In accordance with the modified retrospective method, TVA's previously issued financial statements have not been restated to comply with the new accounting standard. TVA recognizes revenue when it satisfies a performance obligation by transferring control to the customer. For the generation and transmission of electricity, this is generally at the time the power is delivered to a metered customer delivery point for a customer's consumption or distribution. As a result, revenues from power sales are recorded as electricity is delivered to customers. TVA utilized certain practical expedients including applying the guidance to open contracts at the date of adoption, applying the guidance to a portfolio of contracts with similar characteristics, and recognizing revenue in the amount for which it has the right to invoice. As a result of adoption of the standard, TVA did not have a cumulative-effect adjustment to proprietary capital.

Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments
Description	This standard adds or clarifies guidance on the classification of certain cash receipts and payments on the statement of cash flows as follows: debt prepayment or extinguishment costs, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies and bank-owned life insurance policies, distributions received from equity method investees, beneficial interest in securitization transactions, and the application of the predominance principle to separately identifiable cash flows.
Effective Date for TVA	October 1, 2018
Effect on the Financial Statements or Other Significant Matters	TVA adopted this standard on a retrospective basis for the prior periods presented. The adoption of this standard resulted in a reclassification of certain cash payments of $29 million and $9 million from financing activities to operating activities shown on the Consolidated Statements of Cash Flows for 2018 and 2017, respectively. The changes did not have a material impact on TVA's financial condition and results of operations. See Note 1 — Summary of Significant Accounting Policies — Reclassifications for additional details.

Statement of Cash Flows - Restricted Cash
Description	This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance does not provide a definition of restricted cash or restricted cash equivalents.
Effective Date for TVA	October 1, 2018
Effect on the Financial Statements or Other Significant Matters	Adoption of this standard resulted in a change to the beginning-of-period and end-of-period cash and cash equivalents and restricted cash amounts presented on the Consolidated Statements of Cash Flows. Amounts previously reported as Other, net in cash flows from operating activities of transfers from cash and restricted cash are not reported as cash flow activities. See Note 1 — Summary of Significant Accounting Policies — Cash, Cash Equivalents, and Restricted Cash for additional details. TVA applied this standard on a retrospective basis for the prior periods presented.

The following accounting standards have been issued but as of September 30, 2019, were not effective and had not been adopted by TVA:



Lease Accounting
Description	This guidance changes the provisions of recognition in both the lessee and lessor accounting models. The standard requires entities that lease assets ("lessees") to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with terms of more than 12 months, while also refining the definition of a lease. In addition, lessees are required to disclose key information about the amount, timing and uncertainty of cash flows arising from leasing arrangements. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily depend on its classification as a finance lease (formerly referred to as capital lease) or operating lease. The standard requires both types of leases to be recognized on the balance sheet. Operating leases will result in straight-line expense, while finance leases will result in recognition of interest expense on the lease liability separate from amortization expense. The accounting rules for the owner of assets leased by the lessee ("lessor accounting") remain relatively unchanged. The standard allows for certain practical expedients to be elected related to lease term determination, separation of lease and non-lease elements, reassessment of existing leases, and short-term leases. The standard is to be applied using a modified retrospective transition.
Effective Date for TVA	The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2019.
Effect on the Financial Statements or Other Significant Matters	TVA has completed its evaluation of the impact of adopting this guidance and the changes on its consolidated financial statements and related disclosures. The standard is expected to impact financial position as adoption will increase the amount of assets and liabilities recognized on TVA's Consolidated Balance Sheets approximately $200 million each. The standard is not expected to have a material impact on results of operations or cash flows as expense recognition is intended to be substantially the same as the existing standard. TVA has elected to apply the following practical expedients:
		Practical Expedient	Description
		Package of transition practical expedients (for leases commenced prior to adoption date; expedients must be adopted as a package)	Do not need to 1) reassess whether any expired or existing contracts are leases or contain leases, 2) reassess the lease classification for any expired or existing leases, and 3) reassess initial direct costs for any existing leases.
		Short-term lease expedient (elect by class of underlying asset)	Elect as an accounting policy to not apply the recognition requirements to short-term leases by asset class.
		Existing and expired land easements not previously accounted for as leases	Elect to not evaluate existing or expired easements under the new guidance and carry forward current accounting treatment.
		Comparative reporting requirements for initial adoption	Elect to apply transition requirements at adoption date, recognize cumulative effect adjustment to retained earnings in period of adoption, and not apply the new requirements to comparative periods, including disclosures.


Derivatives and Hedging - Improvements to Accounting for Hedging Activities
Description	This guidance better aligns an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements.
Effective Date for TVA	The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2019.
Effect on the Financial Statements or Other Significant Matters	TVA does not expect the adoption of this standard to have a material impact on TVA's financial condition, results of operations, or cash flows.

Customer's Accounting for Implementation Costs in a Cloud Arrangement That Is a Service Contract
Description	This guidance relates to the accounting for a customer's implementation costs in a hosting arrangement that is a service contract. The amendments align the requirements for capitalizing those implementation costs with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The amendments also provide requirements for the classification of the capitalized costs and related expense and cash flows in the financial statements, the application of impairment guidance to the capitalized costs, and the application of abandonment guidance to the capitalized costs. Entities are required to apply the amendments either retrospectively or prospectively to all implementation costs incurred after the adoption date.
Effective Date for TVA	The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2020. Early adoption is permitted, and TVA plans to adopt this standard October 1, 2019, on a prospective basis.
Effect on the Financial Statements or Other Significant Matters	TVA does not expect any material impact on TVA's financial condition, results of operations, or cash flows after the adoption of this standard.



Financial Instruments - Credit Losses
Description	This guidance eliminates the probable initial recognition threshold in current GAAP and, instead, requires an allowance to be recorded for all expected credit losses for certain financial assets that are not measured at fair value. The allowance for credit losses is based on historical information, current conditions, and reasonable and supportable forecasts. The new standard also makes revisions to the other than temporary impairment model for available-for-sale debt securities. Disclosures of credit quality indicators in relation to the amortized cost of financing receivables are further disaggregated by year of origination. The standard also provides a transition relief that is optional for all entities. It provides entities an option to irrevocably elect the fair value option, applied on an instrument-by-instrument basis for eligible instruments.
Effective Date for TVA	The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2020. While early adoption is permitted, TVA does not plan to adopt the standard early.
Effect on the Financial Statements or Other Significant Matters	TVA is evaluating the potential impact of these changes on its consolidated financial statements and related disclosures.

Fair Value Measurement Disclosure
Description	The guidance changes certain disclosure requirements for fair value measurements. It removes certain disclosure requirements, such as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of the transfers between levels; and the valuation processes for Level 3 fair value measurements. Some disclosure requirements are added, such as the change in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.
Effective Date for TVA	The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2020. While early adoption is permitted, TVA does not plan to adopt the standard early.
Effect on the Financial Statements or Other Significant Matters	TVA does not expect the adoption of this standard to have a material impact on TVA's financial condition, results of operations or cash flows. TVA is evaluating the potential impact on related disclosures.

Defined Benefit Plans - Disclosure Requirements
Description	This guidance applies to all employers that sponsor defined benefit pension or other post-retirement plans and modifies or clarifies the disclosure requirements for those plans. The amendments in this update remove disclosures that no longer are considered cost-beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. Entities are required to apply the amendments retrospectively.
Effective Date for TVA	The new standard is effective for TVA's annual reporting periods beginning October 1, 2021. While early adoption is permitted, TVA does not plan to adopt the standard early.
Effect on the Financial Statements or Other Significant Matters	TVA is evaluating the potential impact of these changes on its consolidated financial statements and related disclosures.

Accounts Receivable, Net Accounts Receivable, Net (Tables)

12 Months Ended

Sep. 30, 2019

Accounts Receivable, after Allowance for Credit Loss [Abstract]

Accounts Receivable, Net

Accounts receivable primarily consist of amounts due from customers for power sales. The table below summarizes the types and amounts of TVA's accounts receivable:



Accounts Receivable, Net At September 30
	2019		2018
Power receivables	$	1,624	$	1,570
Other receivables	115		87
Accounts receivable, net⁽¹⁾	$	1,739	$	1,657

Inventories, Net Inventories, Net (Tables)

12 Months Ended

Sep. 30, 2019

Inventory, Net [Abstract]

Inventories, Net

The table below summarizes the types and amounts of TVA's inventories:



Inventories, Net At September 30
	2019			2018
Materials and supplies inventory	$	742		$	725
Fuel inventory	294			266
RECs/Emission allowance inventory, net	16			14
Allowance for inventory obsolescence	(53		)	(44		)
Inventories, net	$	999		$	961

Net Completed Plant Net Completed Plant (Tables)

12 Months Ended

Sep. 30, 2019

Property, Plant and Equipment, Net, by Type [Abstract]

Net Completed Plant

Net completed plant consisted of the following:



Net Completed Plant At September 30
	2019						2018
	Cost		Accumulated Depreciation		Net		Cost		Accumulated Depreciation		Net
Coal-fired⁽¹⁾	$	17,400	$	12,538	$	4,862	$	16,482	$	11,033	$	5,449
Gas and oil-fired	6,054		1,562		4,492		5,990		1,459		4,531
Nuclear	25,543		11,656		13,887		25,227		11,310		13,917
Transmission	7,932		3,083		4,849		7,515		3,038		4,477
Hydroelectric	3,163		1,051		2,112		3,087		1,012		2,075
Other electrical plant	1,920		1,110		810		1,881		1,107		774
Intangible software	3		1		2		3		—		3
Multipurpose dams	900		373		527		900		367		533
Other stewardship	29		10		19		29		9		20
Total	$	62,944	$	31,384	$	31,560	$	61,114	$	29,335	$	31,779

Other Long-Term Assets Other Long-Term Assets (Tables)

12 Months Ended

Sep. 30, 2019

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Long-Term Assets

The table below summarizes the types and amounts of TVA's other long-term assets:



Other Long-Term Assets At September 30
	2019		2018
EnergyRight^®loans receivable	$	81	$	90
Loans and other long-term receivables, net⁽¹⁾	125		125
Commodity contract derivative assets⁽²⁾	—		31
Restricted cash and cash equivalents⁽¹⁾	23		23
Prepaid capacity payments	19		27
Other	77		66
Total other long-term assets	$	325	$	362

Regulatory Assets and Liabilities Regulatory Assets and Liabilities (Tables)

12 Months Ended

Sep. 30, 2019

Regulatory Assets and Liabilities Disclosure [Abstract]

Regulatory Assets and Liabilities

Components of regulatory assets and regulatory liabilities are summarized in the table below.



Regulatory Assets and Liabilities At September 30
	2019		2018
Current regulatory assets
Unrealized losses on interest rate derivatives	$	89	$	73
Unrealized losses on commodity derivatives	39		4
Environmental agreements	—		3
Gallatin coal combustion residual facilities	—		38
Environmental cleanup costs - Kingston ash spill	—		266
Fuel cost adjustment receivable	28		30
Total current regulatory assets	156		414

Non-current regulatory assets
Deferred pension costs and other post-retirement benefits costs	4,756		3,119
Non-nuclear decommissioning costs	1,741		1,019
Unrealized losses on interest rate derivatives	1,241		692
Nuclear decommissioning costs	868		784
Unrealized losses on commodity derivatives	15		8
Environmental agreements	12		11
Gallatin coal combustion residual facilities	—		861
Other non-current regulatory assets	130		118
Total non-current regulatory assets	8,763		6,612
Total regulatory assets	$	8,919	$	7,026

Current regulatory liabilities
Fuel cost adjustment tax equivalents	$	138	$	146
Unrealized gains on commodity derivatives	12		41
Total current regulatory liabilities	150		187

Non-current regulatory liabilities
Deferred other post-retirement benefits cost	—		73
Unrealized gains on commodity derivatives	—		31
Total non-current regulatory liabilities	—		104
Total regulatory liabilities	$	150	$	291

Variable Interest Entities Variable Interest Entities (Tables)

12 Months Ended

Sep. 30, 2019

Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract]

Summary of Impact of VIEs on Consolidated Balance Sheets

The financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, and SCCG as of September 30, 2019 and 2018, as reflected on the Consolidated Balance Sheets, are as follows:



Summary of Impact of VIEs on Consolidated Balance Sheets At September 30
	2019		2018
Current liabilities
Accrued interest	$	11	$	11
Accounts payable and accrued liabilities	3		2
Current maturities of long-term debt of variable interest entities	39		38
Total current liabilities	53		51
Other liabilities
Other long-term liabilities	25		28
Long-term debt, net
Long-term debt of variable interest entities, net	1,089		1,127
Total liabilities	$	1,167	$	1,206

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

Other Long-Term Liabilities Other Long-Term Liabilities (Tables)

12 Months Ended

Sep. 30, 2019

Other Liabilities, Noncurrent [Abstract]

Other Long-Term Liabilities

The table below summarizes the types and amounts of Other long-term liabilities:



Other Long-Term Liabilities At September 30
	2019		2018
Interest rate swap liabilities	$	1,676	$	1,122
Gallatin coal combustion residual facilities liability	—		862
Capital lease obligations	182		178
Currency swap liabilities	193		81
EnergyRight® financing obligation	90		102
Paradise pipeline financing obligation⁽¹⁾	80		80
Accrued long-term service agreements⁽¹⁾	66		74
Other⁽¹⁾	203		216
Total other long-term liabilities	$	2,490	$	2,715

Asset Retirement Obligations Asset Retirement Obligations (Tables)

12 Months Ended

Sep. 30, 2019

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligation Activity



Asset Retirement Obligation Activity
	Nuclear			Non-Nuclear			Total
Balance at September 30, 2017	$	2,859		$	1,445		$	4,304
Settlements	—			(106		)	(106		)
Revisions in estimate	—			430			430
Additional obligations	—			1			1
Accretion (recorded to regulatory asset)	130			35			165
Asset disposition	—			(15		)	(15		)
Balance at September 30, 2018	2,989			1,790			4,779			⁽¹⁾
Settlements	(7		)	(82		)	(89		)
Revisions in estimate	—			50			50
Additional obligations	18			—			18
Gallatin CCR	—			672			672
Accretion (recorded to regulatory asset)	136			50			186
Balance at September 30, 2019	$	3,136		$	2,480		$	5,616		⁽¹⁾

Note

(1) The current portions of the ARO liability in the amounts of $163 million and $115 million at September 30, 2019 and 2018, respectively, are included in Accounts payable and accrued liabilities.

Debt and Other Obligations Debt and Other Obligations (Tables)

12 Months Ended

Sep. 30, 2019

Debt and Other Obligations [Abstract]

Schedule of short-term borrowings

The following table provides information regarding TVA's short-term borrowings:



Short-term Borrowings At September 30
	2019			2018			2017
Gross amount outstanding - discount notes	$	922		$	1,217		$	1,999

Weighted average interest rate - discount notes	2.152		%	2.045		%	1.000		%

Debt Securities Activity

The table below summarizes the long-term debt securities activity for the years ended September 30, 2019 and 2018.



Debt Securities Activity For the years ended September 30
	2019		2018
Issues
2018 Series A⁽¹⁾	$	—	$	1,000
Discount on debt issues	—		(2		)
Total	$	—	$	998

Redemptions/Maturities⁽²⁾
Variable interest entities	$	38	$	36
Notes payable	46		53
electronotes^®	5		52
2013 Series A	1,000		—
2009 Series B	30		29
1997 Series E	—		650
2008 Series B	—		1,000
Total	$	1,119	$	1,820

Notes

(1) The 2018 Series A bonds were issued at 99.8 percent of par.

(2) All redemptions were at 100 percent of par.

Debt Outstanding

Total debt outstanding at September 30, 2019 and 2018, consisted of the following:



Short-Term Debt At September 30
CUSIP or Other Identifier	Maturity	Call/(Put) Date	Coupon Rate	2019		2018
Short-term debt, net of discounts				$	922	$	1,216
Current maturities of long-term debt of VIEs issued at par				39		38
Current maturities of notes payable				23		46
Current maturities of power bonds issued at par
880591EQ1	10/15/2018		1.750%	—		1,000
880591EF5	12/15/2019		3.770%	1		1
880591EF5	6/15/2020		3.770%	27		29
88059TEL1	11/15/2019		2.650%	1		1
88059TEL1	5/15/2020		2.650%	1		1
880591EV0	3/15/2020		2.250%	1,000		—
Total current maturities of power bonds issued at par				1,030		1,032
Total current debt outstanding, net				$	2,014	$	2,332



Long-Term Debt At September 30
CUSIP or Other Identifier	Maturity	Coupon Rate		Effective Call Date	2019 Par				2018 Par			Stock Exchange Listings
electronotes^®(2)	5/15/2020 - 2/15/2043	2.375% - 3.625%		2/15/2015 - 2/15/2018 ⁽⁵⁾	$	217			$	221		None
880591EV0	3/15/2020	2.250%			—				1,000			New York
880591EL2	2/15/2021	3.875%			1,500				1,500			New York
880591DC3	6/7/2021	5.805%	⁽³⁾		246			⁽¹⁾	261			New York, Luxembourg
880591EN8	8/15/2022	1.875%			1,000				1,000			New York
880591ER9	9/15/2024	2.875%			1,000				1,000			New York
880591CJ9	11/1/2025	6.750%			1,350				1,350			New York, Hong Kong, Luxembourg, Singapore
880591EU2	2/1/2027	2.875%			1,000				1,000			New York
880591300⁽⁴⁾	6/1/2028	3.550%			273				273			New York
880591409⁽⁴⁾	5/1/2029	3.360%			232				232			New York
880591DM1	5/1/2030	7.125%			1,000				1,000			New York, Luxembourg
880591DP4	6/7/2032	6.587%	⁽³⁾		307			⁽¹⁾	326			New York, Luxembourg
880591DV1	7/15/2033	4.700%			472				472			New York, Luxembourg
880591EF5	6/15/2034	3.770%			246				273			None
880591DX7	6/15/2035	4.650%			436				436			New York
880591CK6	4/1/2036	5.980%			121				121			New York
880591CS9	4/1/2036	5.880%			1,500				1,500			New York
880591CP5	1/15/2038	6.150%			1,000				1,000			New York
880591ED0	6/15/2038	5.500%			500				500			New York
880591EH1	9/15/2039	5.250%			2,000				2,000			New York
880591EP3	12/15/2042	3.500%			1,000				1,000			New York
880591DU3	6/7/2043	4.962%	⁽³⁾		185			⁽¹⁾	195			New York, Luxembourg
880591CF7	7/15/2045	6.235%		7/15/2020	140				140			New York
880591EB4	1/15/2048	4.875%			500				500			New York, Luxembourg
880591DZ2	4/1/2056	5.375%			1,000				1,000			New York
880591EJ7	9/15/2060	4.625%			1,000				1,000			New York
880591ES7	9/15/2065	4.250%			1,000				1,000			New York
Subtotal					19,225				20,300
Unamortized discounts, premiums, issue costs, and other					(131		)		(143		)
Total long-term outstanding power bonds, net					19,094				20,157
Long-term debt of VIEs, net					1,089				1,127
Long-term notes payable					—				23
Total long-term debt, net					$	20,183			$	21,307

Notes

(1) Includes net exchange gain from currency transactions of $191 million and $147 million at September 30, 2019 and 2018, respectively.

(2) Includes one electronotes^® issue with partial maturities of principal for each required annual payment.

(3) The coupon rate represents TVA's effective interest rate.

(4) TVA PARRS, CUSIP numbers 880591300 and 880591409, may be redeemed under certain conditions. See Put and Call Options above.

Maturities Due in the Year Ending September 30



Maturities Due in the Year Ending September 30
	2020		2021		2022		2023		2024		Thereafter		Total
Long-term power bonds, long-term debt of VIEs, and notes payable including current maturities⁽¹⁾	$	1,092	$	1,901	$	1,071	$	69	$	1,057	$	16,415	$	21,605
Short-term debt, net of discounts	922		—		—		—		—		—		922

Note

(1) Long-term power bonds does not include non-cash items of foreign currency exchange gain of $191 million, unamortized debt issue costs of $50 million, and net discount on sale of Bonds of $81 million. Long-term debt of VIE does not include non-cash item of unamortized debt issue costs of $8 million.

Summary of Long-Term Credit Facilities

The following table provides additional information regarding TVA's funding available under the four long-term revolving credit facilities:



Summary of Long-Term Credit Facilities At September 30, 2019
Maturity Date	Facility Limit		Letters of Credit Outstanding		Cash Borrowings		Availability
December 2021	$	150	$	38	$	—	$	112
February 2022	500		500		—		—
June 2023	1,000		494		—		506
September 2023	1,000		310		—		690
Total	$	2,650	$	1,342	$	—	$	1,308

Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions (Tables)

12 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Derivative Instruments That Receive Hedge Accounting Treatment

The following tables summarize the accounting treatment that certain of TVA's financial derivative transactions receive:



Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1) Amount of Mark-to-Market Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) For the years ended September 30
Derivatives in Cash Flow Hedging Relationship	Objective of Hedge Transaction	Accounting for Derivative Hedging Instrument	2019			2018
Currency swaps	To protect against changes in cash flows caused by changes in foreign currency exchange rates (exchange rate risk)	Unrealized gains and losses are recorded in AOCI and reclassified to interest expense to the extent they are offset by gains and losses on the hedged transaction	$	(114	)	$	10



Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2)⁽¹⁾ Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income to Interest Expense For the years ended September 30
Derivatives in Cash Flow Hedging Relationship	2019			2018
Currency swaps	$	(45	)	$	(26	)

Note

(1) There were no ineffective portions or amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $30 million of gains from AOCI to interest expense within the next 12 months to offset amounts anticipated to be recorded in interest expense related to exchange gain on the debt.

Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment



Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment Amount of Gain (Loss) Recognized in Income on Derivatives⁽¹⁾ For the years ended September 30

Derivative Type	Objective of Derivative	Accounting for Derivative Instrument	2019			2018
Interest rate swaps	To fix short-term debt variable rate to a fixed rate (interest rate risk)	Mark-to-Market gains and losses are recorded as regulatory assets or liabilities Realized gains and losses are recognized in interest expense when incurred during the settlement period	$	(79	)	$	(89	)

Commodity derivatives under FTP	To protect against fluctuations in market prices of purchased commodities (price risk)	Mark-to-Market gains and losses are recorded as regulatory assets or liabilities Realized gains and losses are recognized in fuel expense or purchased power expense when the related commodity is used in production	—			(8		)

Note

(1) All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in income but instead are deferred as regulatory assets and liabilities. As such, there were no related gains (losses) recognized in income for these unrealized gains (losses) for the years ended September 30, 2019 and 2018.



Fair Values of TVA Derivatives At September 30
	2019				2018
Derivatives That Receive Hedge Accounting Treatment:
	Balance			Balance Sheet Presentation	Balance			Balance Sheet Presentation
Currency swaps
£200 million Sterling	$	(90	)	Accounts payable and accrued liabilities $(6); Other long-term liabilities $(84)	$	(67	)	Accounts payable and accrued liabilities $(5); Other long-term liabilities $(62)
£250 million Sterling	(61		)	Accounts payable and accrued liabilities $(5); Other long-term liabilities $(56)	(12		)	Accounts payable and accrued liabilities $(5); Other long-term liabilities $(7)
£150 million Sterling	(57		)	Accounts payable and accrued liabilities $(4); Other long-term liabilities $(53)	(15		)	Accounts payable and accrued liabilities $(3); Other long-term liabilities $(12)

Derivatives That Do Not Receive Hedge Accounting Treatment:
	Balance			Balance Sheet Presentation	Balance			Balance Sheet Presentation
Interest rate swaps
$1.0 billion notional	$	(1,261	)	Accounts payable and accrued liabilities $(62); Other long-term liabilities $(1,199)	$	(878	)	Accounts payable and accrued liabilities $(56); Other long-term liabilities $(822)
$476 million notional	(498		)	Accounts payable and accrued liabilities $(24); Other long-term liabilities $(474)	(317		)	Accounts payable and accrued liabilities $(20); Other long-term liabilities $(297)
$42 million notional	(5		)	Accounts payable and accrued liabilities $(2); Other long-term liabilities $(3)	(4		)	Accounts payable and accrued liabilities $(1); Other long-term liabilities $(3)
Commodity contract derivatives	(41		)	Other current assets $12; Other long-term liabilities $(16); Accounts payable and accrued liabilities $(37)	60			Other current assets $41; Other long-term assets $31; Other long-term liabilities $(8); Accounts payable and accrued liabilities $(4)

Fair Values of TVA Derivatives



Fair Values of TVA Derivatives At September 30
	2019				2018
Derivatives That Receive Hedge Accounting Treatment:
	Balance			Balance Sheet Presentation	Balance			Balance Sheet Presentation
Currency swaps
£200 million Sterling	$	(90	)	Accounts payable and accrued liabilities $(6); Other long-term liabilities $(84)	$	(67	)	Accounts payable and accrued liabilities $(5); Other long-term liabilities $(62)
£250 million Sterling	(61		)	Accounts payable and accrued liabilities $(5); Other long-term liabilities $(56)	(12		)	Accounts payable and accrued liabilities $(5); Other long-term liabilities $(7)
£150 million Sterling	(57		)	Accounts payable and accrued liabilities $(4); Other long-term liabilities $(53)	(15		)	Accounts payable and accrued liabilities $(3); Other long-term liabilities $(12)

Derivatives That Do Not Receive Hedge Accounting Treatment:
	Balance			Balance Sheet Presentation	Balance			Balance Sheet Presentation
Interest rate swaps
$1.0 billion notional	$	(1,261	)	Accounts payable and accrued liabilities $(62); Other long-term liabilities $(1,199)	$	(878	)	Accounts payable and accrued liabilities $(56); Other long-term liabilities $(822)
$476 million notional	(498		)	Accounts payable and accrued liabilities $(24); Other long-term liabilities $(474)	(317		)	Accounts payable and accrued liabilities $(20); Other long-term liabilities $(297)
$42 million notional	(5		)	Accounts payable and accrued liabilities $(2); Other long-term liabilities $(3)	(4		)	Accounts payable and accrued liabilities $(1); Other long-term liabilities $(3)
Commodity contract derivatives	(41		)	Other current assets $12; Other long-term liabilities $(16); Accounts payable and accrued liabilities $(37)	60			Other current assets $41; Other long-term assets $31; Other long-term liabilities $(8); Accounts payable and accrued liabilities $(4)

Currency Swaps Outstanding

TVA had the following currency swaps outstanding at September 30, 2019:



Currency Swaps Outstanding At September 30, 2019
Effective Date of Currency Swap Contract	Associated TVA Bond Issues Currency Exposure	Expiration Date of Swap	Overall Effective Cost to TVA
1999	£200 million	2021	5.81%
2001	£250 million	2032	6.59%
2003	£150 million	2043	4.96%

Commodity Contract Derivatives



Commodity Contract Derivatives At September 30
	2019					2018
	Number of Contracts	Notional Amount	Fair Value (MtM)			Number of Contracts	Notional Amount	Fair Value (MtM)
Coal contract derivatives	8	9 million tons	$	(4	)	13	20 million tons	$	58
Natural gas contract derivatives	65	330 million mmBtu	$	(37	)	61	359 million mmBtu	$	2

Financial Trading Program Realized Gains (Losses)

TVA experienced the following realized losses related to the FTP during the periods set forth in the table below:



Financial Trading Program Realized Gains (Losses) For the years ended September 30
Decrease (increase) in fuel expense	2019		2018
Natural gas	$	—	$	(6	)



Decrease (increase) in purchased power expense
Natural gas	$	—	$	(2	)

Offsetting Assets and Liabilities

The amounts of TVA's derivative instruments as reported on the Consolidated Balance Sheets at September 30, 2019 and 2018, are shown in the table below.



Derivative Assets and Liabilities
	At September 30, 2019
	Gross Amounts of Recognized Assets/Liabilities		Gross Amounts Offset in the Balance Sheet⁽¹⁾		Net Amounts of Assets/Liabilities Presented in the Balance Sheet⁽²⁾
Assets
Commodity derivatives not subject to master netting or similar arrangement	$	12	$	—	$	12

Liabilities
Currency swaps⁽³⁾	$	208	$	—	$	208
Interest rate swaps⁽³⁾	1,764		—		1,764
Total derivatives subject to master netting or similar arrangement	1,972		—		1,972
Commodity derivatives not subject to master netting or similar arrangement	53		—		53
Total liabilities	$	2,025	$	—	$	2,025

	At September 30, 2018
	Gross Amounts of Recognized Assets/Liabilities		Gross Amounts Offset in the Balance Sheet⁽¹⁾		Net Amounts of Assets/Liabilities Presented in the Balance Sheet⁽²⁾
Assets
Commodity derivatives not subject to master netting or similar arrangement	$	72	$	—	$	72

Liabilities
Currency swaps⁽³⁾	$	94	$	—	$	94
Interest rate swaps⁽³⁾	1,199		—		1,199
Total derivatives subject to master netting or similar arrangement	1,293		—		1,293
Commodity derivatives not subject to master netting or similar arrangement	12		—		12
Total liabilities	$	1,305	$	—	$	1,305

Notes

(1) Amounts primarily include counterparty netting of derivative contracts, margin account deposits for futures commission merchants transactions, and cash collateral received or paid in accordance with the accounting guidance for derivatives and hedging transactions.

(2) There are no derivative contracts subject to a master netting arrangement or similar agreement that are not offset on the Consolidated Balance Sheets.

(3) Letters of credit of approximately $1.3 billion and $921 million were posted as collateral at September 30, 2019 and 2018, respectively, to partially secure the liability positions of one of the currency swaps and one of the interest rate swaps in accordance with the collateral requirements for these derivatives.

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

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+ Details

Fair Value Measurements Fair Value Measurements - (Tables)

12 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Valuation Techniques

The measurement of fair value results in classification into a hierarchy by the inputs used to determine the fair value as follows:



Level 1	—	Unadjusted quoted prices in active markets accessible by the reporting entity for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing.
Level 2	—	Pricing inputs other than quoted market prices included in Level 1 that are based on observable market data and that are directly or indirectly observable for substantially the full term of the asset or liability. These include quoted market prices for similar assets or liabilities, quoted market prices for identical or similar assets in markets that are not active, adjusted quoted market prices, inputs from observable data such as interest rate and yield curves, volatilities and default rates observable at commonly quoted intervals, and inputs derived from observable market data by correlation or other means.
Level 3	—	Pricing inputs that are unobservable, or less observable, from objective sources. Unobservable inputs are only to be used to the extent observable inputs are not available. These inputs maintain the concept of an exit price from the perspective of a market participant and should reflect assumptions of other market participants. An entity should consider all market participant assumptions that are available without unreasonable cost and effort. These are given the lowest priority and are generally used in internally developed methodologies to generate management's best estimate of the fair value when no observable market data is available.

Unrealized Investment Gains (Losses)

TVA recorded unrealized gains and losses related to its equity and trading debt securities held during each period as follows:



	Unrealized Investment Gains (Losses) At or for the years ended September 30
Fund	Financial Statement Presentation	2019			2018
NDT	Regulatory asset	$	(112	)	$	18
ART	Regulatory asset	(70		)	15
SERP	Other income (expense)	—			1
DCP	Other income (expense)	(2		)	1

Fair Value Measurements



Fair Value Measurements At September 30, 2019
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets
Investments
Equity securities	$	464	$	—	$	—	$	464
Government debt securities	279		65		—		344
Corporate debt securities	—		417		—		417
Mortgage and asset-backed securities	—		32		—		32
Institutional mutual funds	250		—		—		250
Forward debt securities contracts	—		22		—		22
Private equity funds measured at net asset value⁽¹⁾	—		—		—		140
Private real asset funds measured at net asset value⁽¹⁾	—		—		—		135
Private credit measured at net asset value⁽¹⁾	—		—		—		33
Commingled funds measured at net asset value⁽¹⁾	—		—		—		1,131
Total investments	993		536		—		2,968
Commodity contract derivatives	—		7		5		12
Total	$	993	$	543	$	5	$	2,980

	Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities
Currency swaps⁽²⁾	$	—	$	208	$	—	$	208
Interest rate swaps	—		1,764		—		1,764
Commodity contract derivatives	—		44		9		53
Total	$	—	$	2,016	$	9	$	2,025

Notes

(1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the Consolidated Balance Sheets.

(2) TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 15 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities.



Fair Value Measurements At September 30, 2018
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets
Investments
Equity securities	$	220	$	—	$	—	$	220
Government debt securities	199		37		—		236
Corporate debt securities	—		499		—		499
Mortgage and asset-backed securities	—		50		—		50
Institutional mutual funds	126		—		—		126
Forward debt securities contracts	—		45		—		45
Private equity funds measured at net asset value⁽¹⁾	—		—		—		132
Private real asset funds measured at net asset value⁽¹⁾	—		—		—		124
Commingled funds measured at net asset value⁽¹⁾	—		—		—		1,430
Total investments	545		631		—		2,862
Commodity contract derivatives	—		13		59		72
Total	$	545	$	644	$	59	$	2,934

	Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities
Currency swaps⁽²⁾	$	—	$	94	$	—	$	94
Interest rate swaps	—		1,199		—		1,199
Commodity contract derivatives	—		11		1		12
Total	$	—	$	1,304	$	1	$	1,305

Notes

(1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the Consolidated Balance Sheets.

(2) TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 15 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities.

Fair Value Measurements Using Significant Unobservable Inputs

The following table presents a reconciliation of all commodity contract derivatives measured at fair value on a recurring basis using significant unobservable inputs (Level 3):



Fair Value Measurements Using Significant Unobservable Inputs
	Commodity Contract Derivatives
Balance at October 1, 2017	$	(67	)
Change in net unrealized gains (losses) deferred as regulatory assets and liabilities	125
Balance at September 30, 2018	58
Change in net unrealized gains (losses) deferred as regulatory assets and liabilities	(62		)
Balance at September 30, 2019	$	(4	)

Quantitative Information about Level 3 Fair Value Measurements

The following table presents quantitative information related to the significant unobservable inputs used in the measurement of fair value of TVA's assets and liabilities classified as Level 3 in the fair value hierarchy:



Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at September 30, 2019		Valuation Technique(s)	Unobservable Inputs	Range
Assets
Commodity contract derivatives	$	5	Pricing model	Coal supply and demand	0.4 - 0.8 billion tons/year
				Long-term market prices	$12.10 - $94.51/ton

Liabilities
Commodity contract derivatives	$	9	Pricing model	Coal supply and demand	0.4 - 0.8 billion tons/year
				Long-term market prices	$12.10 - $94.51/ton



Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at September 30, 2018		Valuation Technique(s)	Unobservable Inputs	Range
Assets
Commodity contract derivatives	$	59	Pricing model	Coal supply and demand	0.7 - 0.8 billion tons/year
				Long-term market prices	$12.25 - $112.24/ton

Liabilities
Commodity contract derivatives	$	1	Pricing model	Coal supply and demand	0.7 - 0.8 billion tons/year
				Long-term market prices	$12.25 - $112.24/ton

Estimated Values of Financial Instruments Not Recorded at Fair Value

The estimated values of TVA's financial instruments not recorded at fair value at September 30, 2019 and 2018, were as follows:



Estimated Values of Financial Instruments Not Recorded at Fair Value
		At September 30, 2019				At September 30, 2018
	Valuation Classification	Carrying Amount		Fair Value		Carrying Amount		Fair Value
EnergyRight^®receivables (including current portion)	Level 2	$	101	$	100	$	112	$	112

Loans and other long-term receivables, net (including current portion)	Level 2	$	131	$	120	$	138	$	123

EnergyRight^®financing obligation (including current portion)	Level 2	$	113	$	126	$	127	$	143

Unfunded loan commitments	Level 2	$	—	$	10	$	—	$	3

Membership interests of VIEs subject to mandatory redemption (including current portion)	Level 2	$	28	$	37	$	30	$	37

Long-term outstanding power bonds (including current maturities), net	Level 2	$	20,124	$	26,059	$	21,189	$	23,896

Long-term debt of VIEs (including current maturities), net	Level 2	$	1,128	$	1,371	$	1,165	$	1,256

Long-term notes payable (including current maturities)	Level 2	$	23	$	23	$	69	$	68

Proprietary Capital Proprietary Capital (Tables)

12 Months Ended

Sep. 30, 2019

Stockholders' Equity Note [Abstract]

Summary of Proprietary Capital Activity

The table below summarizes TVA's activities related to appropriated funds and retained earnings.



Summary of Proprietary Capital Activity At or for the years ended September 30
	2019						2018
	Power Program			Nonpower Programs			Power Program			Nonpower Programs
Appropriation Investment	$	258		$	4,351		$	258		$	4,351
Retained Earnings
Balance at beginning of year	9,404			(3,787		)	8,282			(3,779		)
Net income (loss) for year	1,425			(8		)	1,127			(8		)
Return on power program appropriation investment	(6		)	—			(5		)	—
Balance at end of year	10,823			(3,795		)	9,404			(3,787		)
Net proprietary capital at September 30	$	11,081		$	556		$	9,662		$	564

Proprietary Capital Accumulated Other Comprehensive Income (Tables)	12 Months Ended
	Sep. 30, 2019
Equity [Abstract]
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]	Accumulated Other Comprehensive Income (Loss) The items included in AOCI consist of market valuation adjustments for certain derivative instruments. See Note 15 — Risk Management Activities and Derivative Transactions.

Other Income (Expense), Net Other Income (Expense), Net (Tables)

12 Months Ended

Sep. 30, 2019

Other Income and Expenses [Abstract]

Other Income (Expense), Net

Income and expenses not related to TVA's operating activities are summarized in the following table:



Other Income (Expense), Net For the years ended September 30
	2019		2018		2017
Bellefonte deposit	$	21	$	—	$	—
Interest income	25		23		23
External services	13		14		14
Gains (losses) on investments	3		6		9
Miscellaneous	—		7		10
Total other income (expense), net	$	62	$	50	$	56

Benefit Plans Benefit Plans (Tables)

12 Months Ended

Sep. 30, 2019

Retirement Benefits [Abstract]

Obligations and Funded Status

The changes in plan obligations, assets, and funded status for the years ended September 30, 2019 and 2018, were as follows:



Obligations and Funded Status For the years ended September 30
798,000,000	Pension Benefits						Other Post-Retirement Benefits
	2019			2018			2019			2018
Change in benefit obligation
Benefit obligation at beginning of year	$	11,725		$	12,601		$	428		$	494
Service cost	44			53			11			14
Interest cost	499			473			18			19
Plan participants' contributions	7			7			—			—
Collections⁽¹⁾	—			—			22			25
Actuarial (gain) loss	1,756			(658		)	78			(46		)
Plan change	7			—			—			(17		)
Net transfers (to) from variable fund/401(k) plan⁽²⁾	1			(26		)	—			—
Expenses paid	(6		)	(6		)	—			—
Benefits paid	(721		)	(719		)	(58		)	(61		)
Benefit obligation at end of year	13,312			11,725			499			428

Change in plan assets
Fair value of net plan assets at beginning of year	8,003			7,989			—			—
Actual return on plan assets	389			454			—			—
Plan participants' contributions	7			7			—			—
Collections⁽¹⁾	—			—			22			25
Net transfers (to) from variable fund/401(k) plan⁽²⁾	1			(26		)	—			—
Employer contributions	307			304			36			36
Expenses paid	(6		)	(6		)	—			—
Benefits paid	(721		)	(719		)	(58		)	(61		)
Fair value of net plan assets at end of year	7,980			8,003			—			—
Funded status	$	(5,332	)	$	(3,722	)	$	(499	)	$	(428	)

Notes

(1) Collections include retiree contributions as well as provider discounts and rebates.

(2) Includes one-time transfers to the 401(k) of $23 million related to the 2018 plan amendment.

Amounts Recognized on TVA's Consolidated Balance Sheets

Amounts related to these benefit plans recognized on TVA's Consolidated Balance Sheets consist of regulatory assets and liabilities that have not been recognized as components of net periodic benefit cost at September 30, 2019 and 2018, and the funded status of TVA's benefit plans, which are included in Accounts payable and accrued liabilities and Post-retirement and post-employment benefit obligations:



Amounts Recognized on TVA's Consolidated Balance Sheets At September 30
	Pension Benefits						Other Post-Retirement Benefits
	2019			2018			2019			2018
Regulatory assets (liabilities)	$	4,731		$	3,119		$	25		$	(73	)
Accounts payable and accrued liabilities	(5		)	(6		)	(28		)	(28		)
Pension and post-retirement benefit obligations⁽¹⁾	(5,327		)	(3,716		)	(471		)	(400		)

Note

(1) The table above excludes $383 million and $360 million of post-employment benefit costs that are recorded in Post-retirement and post-employment benefit obligations on the Consolidated Balance Sheets at September 30, 2019 and 2018, respectively.

Post-Retirement Benefit Costs Deferred as Regulatory Assets

Unrecognized amounts included in regulatory assets or liabilities yet to be recognized as components of accrued benefit cost at September 30, 2019 and 2018, consisted of the following:



Post-Retirement Benefit Costs Deferred as Regulatory Assets (Liabilities) At September 30
	Pension Benefits						Other Post-Retirement Benefits
	2019			2018			2019			2018
Unrecognized prior service credit	$	(714	)	$	(819	)	$	(135	)	$	(159	)
Unrecognized net loss	5,350			3,842			160			86
Amount capitalized due to actions of regulator	95			96			—			—
Total regulatory assets (liabilities)	$	4,731		$	3,119		$	25		$	(73	)

Projected Benefit Obligations and Accumulated Benefit Obligations in Excess of Plan Assets

The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plan at September 30, 2019 and 2018, were as follows:



Projected Benefit Obligations and Accumulated Benefit Obligations in Excess of Plan Assets At September 30
	2019		2018
Projected benefit obligation	$	13,312	$	11,725
Accumulated benefit obligation	13,246		11,659
Fair value of net plan assets	7,980		8,003

Components of Net Periodic Benefit Cost

The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the years ended September 30, 2019, 2018, and 2017 were as follows:



Components of Net Periodic Benefit Cost For the years ended September 30
	Pension Benefits									Other Post-Retirement Benefits
	2019			2018			2017			2019			2018			2017
Service cost	$	44		$	53		$	60		$	11		$	14		$	18
Interest cost	499			473			464			18			19			21
Expected return on plan assets	(477		)	(478		)	(457		)	—			—			—
Amortization of prior service credit	(99		)	(99		)	(99		)	(24		)	(22		)	(22		)
Recognized net actuarial loss	336			409			472			4			8			14
Total net periodic benefit cost as actuarially determined	303			358			440			9			19			31
Amount expensed (capitalized) due to actions of regulator	1			(54		)	365			—			—			—
Net periodic benefit cost	$	304		$	304		$	805		$	9		$	19		$	31

Expected Amortization of Regulatory Assets in Next Fiscal Year

The amounts in the regulatory asset that are expected to be recognized as components of net periodic benefit cost during the next fiscal year are as follows:



Expected Amortization of Regulatory Assets in 2020 At September 30, 2019
	Pension Benefits			Other Post-Retirement Benefits			Total
Prior service credit	$	(97	)	$	(24	)	$	(121	)
Net actuarial loss	435			9			444

Actuarial Assumptions

TVA's reported costs of providing the plan benefits are impacted by numerous factors including the provisions of the plans, changing employee demographics, and various assumptions, the most significant of which are noted below.



Actuarial Assumptions Utilized to Determine Benefit Obligations at September 30
	Pension Benefits				Other Post-Retirement Benefits
	2019		2018		2019		2018
Discount rate	3.20	%	4.35	%	3.30	%	4.40	%
Rate of compensation increase	3.50	%	3.60	%	N/A		N/A
Cost of living adjustment (COLA)⁽¹⁾	2.00	%	2.00	%	2.00	%	2.00	%
Pre-Medicare eligible
Initial health care cost trend rate	N/A		N/A		6.75	%	6.25	%
Ultimate health care cost trend rate	N/A		N/A		5.00	%	5.00	%
Year ultimate trend rate is reached	N/A		N/A		2027		2024
Post-Medicare eligible
Initial health care cost trend rate	N/A		N/A		—	%	—	%
Ultimate health care cost trend rate	N/A		N/A		4.00	%	4.00	%
Year ultimate trend rate is reached	N/A		N/A		2023		2021

Note

(1) The COLA rate is the ultimate long-term rate.



Actuarial Assumptions Utilized to Determine Net Periodic Benefit Cost for the Years Ended September 30⁽¹⁾
	Pension Benefits						Other Post-Retirement Benefits
	2019		2018		2017		2019		2018		2017
Discount rate	4.35	%	3.85	%	3.65	%	4.40	%	3.95	%	3.70	%
Expected return on plan assets	6.75	%	6.75	%	7.00	%	N/A		N/A		N/A
Cost of living adjustment (COLA)⁽²⁾	2.00	%	2.00	%	2.00	%	2.00	%	2.00	%	2.00	%
Rate of compensation increase	3.50	%	5.34	%	5.43	%	N/A		N/A		N/A
Pre-Medicare eligible
Initial health care cost trend rate	N/A		N/A		N/A		6.25	%	6.50	%	6.50	%
Ultimate health care cost trend rate	N/A		N/A		N/A		5.00	%	5.00	%	5.00	%
Year ultimate trend rate is reached	N/A		N/A		N/A		2024		2024		2019
Post-Medicare eligible
Initial health care cost trend rate	N/A		N/A		N/A		—	%	—	%	—	%
Ultimate health care cost trend rate	N/A		N/A		N/A		4.00	%	4.00	%	4.00	%
Year ultimate trend rate is reached	N/A		N/A		N/A		2021		2021		2021

Notes

(1) The actuarial assumptions used to determine the benefit obligations at September 30 of each year are subsequently used to determine net periodic benefit cost for the following year

Sensitivity to Certain Changes in Pension Assumptions

The following chart reflects the sensitivity of pension cost to changes in certain actuarial assumptions:



Sensitivity to Certain Changes in Pension Assumptions At September 30, 2019
Actuarial Assumption	Change in Assumption		Impact on 2019 Pension Cost		Impact on 2019 Projected Benefit Obligation
Discount rate	(0.25	)%	$	16	$	399
Rate of return on plan assets	(0.25	)%	14		N/A
Cost of living adjustments	0.25	%	27		261

Sensitivity to Changes in Assumed Health Care Cost Trend Rates

The following chart reflects the sensitivity of post-retirement benefit cost to changes in the health care trend rate:



Sensitivity to Changes in Assumed Health Care Cost Trend Rates At September 30, 2019
	1% Increase		1% Decrease
Effect on total of service and interest cost components for the year	$	4	$	(4	)
Effect on end-of-year accumulated post-retirement benefit obligation	71		(68		)

Asset Holdings and Fair Value Measurements

s consistent with the asset allocation policy. At September 30, 2019 and 2018, the asset holdings of TVARS included the following:



Asset Holdings of TVARS At September 30
			Plan Assets at September 30
Asset Category	Target Allocation		2019		2018
Global public equity	35	%	37	%	44	%
Private equity	8	%	10	%	7	%
Safety oriented fixed income	17	%	18	%	16	%
Opportunistic fixed income	15	%	12	%	10	%
Public real assets	15	%	15	%	15	%
Private real assets	10	%	8	%	8	%
Total	100	%	100	%	100	%

Fair Value Measurements

The following table provides the fair value measurement amounts for assets held by TVARS at September 30, 2019:



TVA Retirement System At September 30, 2019
	Total⁽¹⁾⁽²⁾		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Equity securities	$	1,766	$	1,762	$	—	$	4

Preferred securities	10		1		9		—

Debt securities
Corporate debt securities	1,387		—		1,382		5
Residential mortgage-backed securities	427		—		424		3
Debt securities issued by U.S. Treasury	807		807		—		—
Debt securities issued by foreign governments	210		—		209		1
Asset-backed securities	144		—		116		28
Debt securities issued by state/local governments	18		—		18		—
Commercial mortgage-backed securities	81		—		80		1

Commingled funds measured at net asset value⁽³⁾
Equity	795		—		—		—
Debt	308		—		—		—
Commodities	217		—		—		—
Blended	125		—		—		—

Institutional mutual funds	97		97		—		—
Cash equivalents and other short-term investments	329		1		328		—
Certificates of deposit	3		—		3		—
Private credit measured at net asset value⁽³⁾	78		—		—		—
Private equity measured at net asset value⁽³⁾	891		—		—		—
Private real estate measured at net asset value⁽³⁾	546		—		—		—

Securities lending collateral	224		—		224		—

Derivatives
Futures	2		2		—		—
Swaps	5		—		5		—
Options	1		—		1		—
Foreign currency forward receivable	1		—		1		—

Total assets	$	8,472	$	2,670	$	2,800	$	42

Liabilities
Derivatives
Futures	$	4	$	4	$	—	$	—
Foreign currency forward payable	1		—		1		—
Swaps	12		—		12		—
Options	1		—		1		—

Securities sold under agreements to repurchase	118		—		118		—

Total liabilities	$	136	$	4	$	132	$	—

Notes

(1) Excludes approximately $132 million in net payables associated with security purchases and sales and various other payables.

(2) Excludes a $224 million payable for collateral on loaned securities in connection with TVARS's participation in securities lending programs.

(3) In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The following table provides the fair value measurement amounts for assets held by TVARS at September 30, 2018:



TVA Retirement System At September 30, 2018
	Total⁽¹⁾⁽²⁾		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Equity securities	$	1,787	$	1,786	$	—	$	1

Preferred securities	10		4		6		—

Debt securities
Corporate debt securities	1,151		—		1,148		3
Residential mortgage-backed securities	377		—		371		6
Debt securities issued by U.S. Treasury	696		696		—		—
Debt securities issued by foreign governments	322		—		304		18
Asset-backed securities	129		—		103		26
Debt securities issued by state/local governments	17		—		17		—
Commercial mortgage-backed securities	74		—		70		4

Commingled funds measured at net asset value⁽³⁾
Equity	1,175		—		—		—
Debt	317		—		—		—
Commodities	232		—		—		—
Blended	109		—		—		—

Institutional mutual funds	109		109		—		—
Cash equivalents and other short-term investments	466		42		424		—
Certificates of deposit	2		—		2		—
Private credit measured at net asset value⁽³⁾	8		—		—		—
Private equity measured at net asset value⁽³⁾	631		—		—		—
Private real estate measured at net asset value⁽³⁾	583		—		—		—

Securities lending collateral	318		—		318		—

Derivatives
Futures	7		7		—		—
Swaps	8		—		8		—
Foreign currency forward receivable	3		—		3		—

Total assets	$	8,531	$	2,644	$	2,774	$	58

Liabilities
Derivatives
Futures	$	3	$	3	$	—	$	—
Foreign currency forward payable	3		—		3		—
Options	1		—		1		—

Securities sold under agreements to repurchase	108		—		108		—

Total liabilities	$	115	$	3	$	112	$	—

Notes

(1) Excludes approximately $95 million in net payables associated with security purchases and sales and various other payables.

(2) Excludes a $318 million payable for collateral on loaned securities in connection with TVARS's participation in securities lending programs.

Fair Value Measurements Using Significant Unobservable Inputs

The following table provides a reconciliation of beginning and ending balances of pension plan assets measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):



Fair Value Measurements Using Significant Unobservable Inputs
	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Balance at October 1, 2017	$	88
Net realized/unrealized gains (losses)	(4		)
Purchases, sales, issuances, and settlements (net)	(23		)
Transfers in and/or out of Level 3	(3		)
Balance at September 30, 2018	58
Net realized/unrealized gains (losses)	4
Purchases, sales, issuances, and settlements (net)	(12		)
Transfers in and/or out of Level 3	(8		)
Balance at September 30, 2019	$	42

Estimated Future Benefit Payments

Cash Flows

Estimated Future Benefit Payments. The following table sets forth the estimated future benefit payments under the benefit plans.



Estimated Future Benefits Payments At September 30, 2019
	Pension Benefits⁽¹⁾		Other Post-Retirement Benefits
2020	$	782	$	29
2021	779		27
2022	778		25
2023	775		24
2024	771		22
2025 - 2029	3,786		111

Note

(1) Participants are assumed to receive the Fixed Fund in a lump sum in lieu of available annuity options allowed for certain grandfathered participants resulting in higher estimated pension benefits payments.

Amounts recognized on Consolidated Balance Sheets

Amounts related to other post-employment benefit obligations are recognized on TVA's Consolidated Balance Sheets. The current portion which represents unpaid losses and administrative fees due are in Accounts payable and accrued liabilities. The long-term portion is recognized in Post-retirement and post-employment benefit obligations.



Amounts Recognized on TVA's Consolidated Balance Sheets At September 30
	2019		2018
Accounts payable and accrued liabilities	$	36	$	39
Post-retirement and post-employment benefit obligations	383		360

Commitments and Contingencies Commitments and Contingencies (Tables)

12 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of lease/leaseback future minimum payments [Table Text Block]

At September 30, 2019, the future minimum payments under leaseback obligations are shown below.



Lease/Leasebacks Minimum payments due in years ending September 30
2020	$	50
2021	207
2022	25
2023	—
2024	—
Thereafter	—
Total	$	282

Schedule of future minimum payments for membership interests subject to mandatory redemption [Table Text Block]

At September 30, 2019, the mandatory redemptions for each of the next five years are shown below:



	2020		2021		2022		2023		2024
Membership interests of variable interest entity subject to mandatory redemption	$	3	$	3	$	3	$	2	$	1

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

At September 30, 2019, the future minimum lease payments under operating leases, including purchased power agreements that are accounted for as operating leases, are shown below.



Operating Leases Minimum payments due in years ending September 30
2020	$	76
2021	75
2022	60
2023	12
2024	3
Thereafter	2
Total	$	228

Energy Prepayment Obligations

In addition to the commitments above, TVA had contractual obligations in the form of revenue discounts related to energy prepayments. TVA recognized $10 million of prepayment obligations and related interest payments of $4 million in revenue during 2019. The arrangement ceased in 2019. See Note 1 — Summary of Significant Accounting Policies — Energy Prepayment Obligations and Note 17 — Revenue.

Unfunded loan commitments

At September 30, 2019, TVA's commitments under unfunded loan commitments were $7 million for 2020. TVA has no commitments under unfunded loan commitments for 2021 through 2024.

Schedule of Future Minimum Lease Payments for Capital Leases

At September 30, 2019, the future minimum lease payments under capital leases shown below were included in Capital leases and Other long-term liabilities on TVA's Consolidated Balance Sheet.



Capital Leases Minimum payments due in years ending September 30
2020	$	53
2021	53
2022	53
2023	55
2024	51
Thereafter	418
Minimum annual payments	683
Less: amount representing interest	(495		)
Total	$	188

Related Parties Related Parties (Tables)

12 Months Ended

Sep. 30, 2019

Related Party Transactions

Transactions with agencies of the federal government were as follows:



Related Party Transactions For the years ended, or at, September 30
	2019		2018		2017
Revenue from sales of electricity	$	118	$	122	$	126
Other income	258		240		136
Expenditures
Operating expenses	222		220		216
Additions to property, plant, and equipment	10		8		16
Cash and cash equivalents	45		46		46
Accounts receivable, net	76		60		84
Long-term accounts receivable	53		46		35
Accounts payable and accrued liabilities	69		69		71
Long-term power bonds, net	—		—		1
Return on Power Program Appropriation Investment	6		5		5

Unaudited Quarterly Financial Information Unaudited Quarterly Financial Information (Tables)

12 Months Ended

Sep. 30, 2019

Quarterly Financial Information Disclosure [Abstract]

Unaudited Quarterly Financial Information



	Unaudited Quarterly Financial Information
	2019
	First		Second		Third		Fourth		Total
Operating revenues	$	2,725	$	2,750	$	2,604	$	3,239	$	11,318
Operating expenses	1,960		2,158		2,088		2,301		8,507
Operating income	765		592		516		938		2,811
Net income (loss)	423		241		165		588		1,417



	Unaudited Quarterly Financial Information
	2018
	First		Second		Third		Fourth			Total
Operating revenues	$	2,549	$	2,792	$	2,707	$	3,185		$	11,233
Operating expenses	1,951		2,027		1,942		2,745			8,665
Operating income	598		765		765		440			2,568
Net income (loss)	288		462		470		(101		)	1,119

Revenue (Tables)

12 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue Recognition, Sales of Services [Policy Text Block]

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 is 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 maintain long-term partnerships with LPCs, 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 customers	Directly 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.

Energy Prepayment Obligations

In 2004, TVA and its largest customer, Memphis Light, Gas and Water Division ("MLGW"), entered into an energy prepayment agreement under which MLGW prepaid TVA $1.5 billion for the future costs of electricity to be delivered by TVA to MLGW over a period of 180 months. TVA accounted for the prepayment as unearned revenue and reported the obligation to deliver power under this arrangement as Energy prepayment obligations and Current portion of energy prepayment obligations on the September 30, 2018 Consolidated Balance Sheet. The arrangement ceased in 2019. Revenue was recognized in each year of the arrangement as electricity was delivered to MLGW based on the ratio of units of kilowatt hours delivered to total units of kilowatt hours under contract. As of September 30, 2019, $1.5 billion had been recognized as non-cash revenue on a cumulative basis during the life of the agreement, $10 million and $100 million of which was recognized as non-cash revenue during 2019 and 2018, respectively.

Discounts to account for the time value of money, which are recorded as a reduction to electricity sales, amounted to $4 million and $46 million for the years ended September 30, 2019 and 2018, respectively.

Revenues

TVA recognizes revenue from contracts with customers to depict the transfer of goods or services to customers in an amount to which the entity expects to be entitled in exchange for those goods or services. For the generation and transmission of electricity, this is generally at the time the power is delivered to a metered customer delivery point for the customer's consumption or distribution. As a result, revenues from power sales are recorded as electricity is delivered to customers. In addition to power sales invoiced and recorded during the month, TVA accrues estimated unbilled revenues for power sales provided to five customers whose billing date occurs prior to the end of the month. Exchange power sales are presented in the accompanying Consolidated Statements of Operations as a component of sales of electricity. Exchange power sales are sales of excess power after meeting TVA native load and directly served requirements. Native load refers to the customers on whose behalf a company, by statute, franchise, regulatory requirement, or contract, has undertaken an obligation to serve. TVA engages in other arrangements in addition to power sales. Certain other revenue from activities related to TVA's overall mission are recorded in Other revenue. Revenues that are not related to the overall mission are recorded in Other income (expense), net.

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.

Disaggregation of Revenue [Table Text Block]

Disaggregated Revenue

In 2019, the revenues generated from TVA's electricity sales were $11.2 billion and accounted for virtually all of TVA's revenues. TVA's revenues by state for each of the last three years are detailed in the table below:



Operating Revenues By State For the years ended September 30 (in millions)
	2019		2018			2017
Alabama	$	1,593	$	1,600		$	1,524
Georgia	270		267			252
Kentucky	691		696			665
Mississippi	1,063		1,052			1,016
North Carolina	74		66			57
Tennessee	7,419		7,350			7,041
Virginia	45		48			47
Subtotal	11,155		11,079			10,602
Off-system sales	4		7			6
Revenue capitalized during pre-commercial plant operations⁽¹⁾	—		(11		)	(22		)
Revenue from sales of electricity	11,159		11,075			10,586
Other revenues	159		158			153
Total operating revenues	$	11,318	$	11,233		$	10,739

Note

(1) Represents revenue capitalized during pre-commercial operations of $11 million at Allen CC in 2018 and $22 million at Watts Bar Unit 2, Paradise CC, and Allen CC in 2017. See Note 1 — Summary of Significant Accounting Policies — Pre-Commercial Plant Operations.

TVA's revenues by customer type for each of the last three years are detailed in the table below:



Operating Revenues by Customer Type For the years ended September 30 (in millions)
	2019		2018			2017
Revenue from sales of electricity
Local power companies	$	10,351	$	10,262		$	9,741
Industries directly served	686		695			735
Federal agencies and other	122		129			132
Revenue capitalized during pre-commercial plant operations⁽¹⁾	—		(11		)	(22		)
Revenue from sales of electricity	11,159		11,075			10,586
Other revenues	159		158			153
Total operating revenues	$	11,318	$	11,233		$	10,739

Note

(1) Represents revenue capitalized during pre-commercial operations of $11 million at Allen CC in 2018 and $22 million at Watts Bar Unit 2, Paradise CC, and Allen CC in 2017. See Note 1 — Summary of Significant Accounting Policies — Pre-Commercial Plant Operations.

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. 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. As of September 30, 2019, 131 LPCs had signed the 20-year Partnership Agreement with TVA.

The number of LPCs with the contract arrangements described below, the revenues derived from such arrangements during 2019, and the percentage of TVA's total operating revenues during 2019 represented by these revenues are summarized in the tables below:



TVA Local Power Company Contracts At or for the year ended September 30, 2019
Contract Arrangements⁽¹⁾	Number of LPCs	Revenue from Sales of Electricity to LPCs (in millions)		Percentage of Total Operating Revenues
20-year termination notice	131	$	6,350	56.1	%
10-year termination notice	5	938		8.3	%
5-year termination notice	18	3,063		27.1	%
Total	154	$	10,351	91.5	%

Note

(1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with three 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). Two of the 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 — 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 in 2019.

Contract with Customer, Asset and Liability [Table Text Block]

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 as of September 30, 2019.

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.

Revenue Recognition, Incentives [Policy Text Block]

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 $310 million and $276 million during 2019 and 2018, 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 September 30, 2019 and 2018, the outstanding unpaid incentives were $157 million and $145 million, respectively. These incentives may be subject to clawback provisions if the customers fail to meet certain program requirements.

Energy Prepayment Obligation [Table Text Block]

Energy Prepayment Obligations. In 2004, TVA and its largest customer, MLGW, entered into an energy prepayment agreement under which MLGW prepaid TVA $1.5 billion for the future costs of electricity to be delivered by TVA to MLGW over a period of 15 years. TVA accounted for the prepayment as unearned revenue and reported the obligation to deliver power under this arrangement as Energy prepayment obligations and Current portion of energy prepayment obligations on the September 30, 2018 Consolidated Balance Sheet. The arrangement ceased in 2019. TVA recognized approximately $100 million of noncash revenue in each year of the arrangement as electricity was delivered to MLGW based on the ratio of units of kilowatt hours delivered to total units of kilowatt hours under contract. As of September 30, 2019, $1.5 billion had been recognized as noncash revenue on a cumulative basis during the life of the agreement, $100 million of which was recognized as noncash revenue and a corresponding reduction in the balance of Energy prepayment obligations during 2018. During 2019, $10 million was recognized as noncash revenue and a corresponding reduction in the balance of Energy prepayment obligations. Discounts to account for the time value of money, which were recorded as a reduction to electricity sales, amounted to $4 million and $46 million during 2019 and 2018, respectively.

Subsequent Events Subsequent Events (Tables)

12 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Debt Instrument Redemption [Table Text Block]

Redemption of Debt

On October 15, 2019, TVA provided notice of its intent to redeem on November 15, 2019, the following electronotes identified by their respective CUSIP numbers and maturity dates. The notes will be redeemed at 100 percent of par value.



Year Issued	CUSIP	Coupon Rate	Maturity Date	Principal Outstanding
2012	88059TFH9	3.250%	2/15/2032	$	34
2012	88059TFJ5	3.625%	3/15/2042	27
2012	88059TFK2	3.375%	4/15/2032	24
2012	88059TFL0	3.550%	5/15/2042	35
2013	88059TFM8	3.625%	2/15/2043	48
2013	88059TFN6	2.375%	2/15/2025	9
2013	88059TFP1	2.375%	2/15/2025	12
2013	88059TFQ9	3.000%	3/15/2029	16
2013	88059TFR7	3.150%	4/15/2033	12
				$	217

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - General (Details) People in Millions, $ in Millions	12 Months Ended
	Sep. 30, 2019 USD ($) People	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2014 USD ($)
Population of Service Area
Cash	$ 299	$ 299
Total possible amount of BLEU payments	166
Loans and other long-term receivables, net (including current portion)	$ 120	123
Population of TVA's service area (number of people) \| People	10
Allowance for uncollectible accounts - loans		1
Revenue Capitalized During Pre-Commercial Operations	$ 0	11	$ (22)
Fuel Cost Capitalized During Pre-Commercial Operations		19
Recorded cost for emission allowances granted by the Environmental Protection Agency	0
Payments attributable to blended low-enriched uranium fuel currently in use	165
BLEU fuel obligation	1
Reimbursements from DOE	23
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	322	322
Accounts receivable from DOE	6
Appropriation-investment power program	258	258		$ 1,000
Total
Population of Service Area
Discounts reducing electricity sales	$ 4	46
MLGW
Population of Service Area
Deferred revenue, revenue recognized		$ 100

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Reclassificatons (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Reclassifications
Restricted Cash		$ 12	$ 1
Defined Benefit Plan, Other Cost (Credit)	$ 258	256	758
Reclass of Other, net		(22)	(60)
Reclass of Other regulatory amortization and deferral		2	143
Other regulatory amortization and deferrals [Member]
Reclassifications
Deferred Fuel Cost		(30)	98
Reclass of fuel cost tax equivalents		(7)	5
Reclass of Other, net		39	40
Other, net [Member]
Reclassifications
Reclass of accounts payable		(9)	(10)
Regulatory assets costs		(13)	(50)
Payments to U S Treasury		(5)	(5)
Reclass of short-term debt issues (redemptions)		(29)	$ (9)
Other Long-Term Assets
Reclassifications
Restricted Cash		$ 13

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Allowance for Uncollectible Accounts (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Allowance for Uncollectible Accounts
Revenue Capitalized During Pre-Commercial Operations	$ 0	$ 11	$ (22)
Period of time for customers to fulfill payment arrangements	90 days
Allowance for uncollectible accounts - receivables		1
Loans receivable	$ 120	123
Allowance for uncollectible accounts - loans		1
Fuel Cost Capitalized During Pre-Commercial Operations		$ 19

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Property, Plant, and Equipment, and Depreciation (Details) - USD ($)	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Property, Plant, and Equipment, and Depreciation
Loans and other long-term receivables, net (including current portion)	$ 120,000,000	$ 123,000,000
Depreciation	1,800,000,000	$ 1,300,000,000	$ 1,300,000,000
Composite depreciation rate for completed plant		2.45%	2.49%
Accelerated depreciation	566,000,000	$ 48,000,000	$ 104,000,000
Reacquired Rights	200,000,000	208,000,000
Amortization of Reacquired Rights	$ 8,000,000	8,000,000	4,000,000
Capitalized software amortization period	7 years
Unamortized computer software costs	$ 63,000,000	53,000,000
Amortization expense of capitalized computer software costs	$ 38,000,000	$ 32,000,000	$ 26,000,000
Nuclear
Property, Plant, and Equipment, and Depreciation
Composite depreciation rate for completed plant	2.38%	2.64%	2.66%
Coal-fired
Property, Plant, and Equipment, and Depreciation
Composite depreciation rate for completed plant	4.96%	2.32%	2.33%
Hydroelectric
Property, Plant, and Equipment, and Depreciation
Composite depreciation rate for completed plant	1.61%	1.57%	1.58%
Gas and oil-fired
Property, Plant, and Equipment, and Depreciation
Composite depreciation rate for completed plant	3.00%	2.93%	3.27%
Transmission
Property, Plant, and Equipment, and Depreciation
Composite depreciation rate for completed plant	1.34%	1.32%	1.34%
Other
Property, Plant, and Equipment, and Depreciation
Composite depreciation rate for completed plant	7.16%	5.90%	6.12%
Electricity Generation Plant, Non-Nuclear
Property, Plant, and Equipment, and Depreciation
Capital Leases, Net	$ 146,000,000	$ 149,000,000

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Energy Prepayment Obligations and Discounts on Sales (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2004
Energy Prepayment Obligations and Discounts on Sales
Accounts Receivable, Allowance for Credit Loss, Current		$ 1
MLGW prepayment				$ 1,500
MLGW prepayment period				180 months
Recognition of Deferred Revenue	$ 10	$ 100	$ 100
MLGW
Energy Prepayment Obligations and Discounts on Sales
Recognition of Deferred Revenue	$ 1,500
Deferred revenue expected recognition each year	10	100		100
Deferred revenue, revenue recognized		$ 100
Total
Energy Prepayment Obligations and Discounts on Sales
Discounts reducing electricity sales	$ 4	$ 46

Impact of New Accounting Standards and Interpretations Impact of New Accounting Standards and Interpretations (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reclassification from Operating and maintenance expense to Other income	$ 758	$ 179	$ 185
Reclassification of net periodic benefit costs		256	758
Reclassification of cash receipts (payments)		$ 29	$ 9

Accounts Receivable, Net Accounts Receivable, Net (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018
Accounts Receivable, Net
Power receivables	$ 1,624	$ 1,570
Other receivables	115	87
Allowance for uncollectible accounts	(1)
Accounts receivable, net	$ 1,739	$ 1,657

Inventories, Net Inventories, Net (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018
Inventories, Net
Materials and supplies inventory	$ 742	$ 725
Fuel inventory	294	266
RECs/Emission allowance inventory, net	16	14
Allowance for inventory obsolescence	(53)	(44)
Inventories, net	$ 999	$ 961

Net Completed Plant Net Completed Plant (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018
Completed Plant
Completed plant cost	$ 62,944	$ 61,114
Accumulated depreciation	31,384	29,335
Net completed plant	31,560	31,779
Coal-fired
Completed Plant
Completed plant cost	17,400	16,482
Accumulated depreciation	12,538	11,033
Net completed plant	4,862	5,449
Gas and oil-fired
Completed Plant
Completed plant cost	6,054	5,990
Accumulated depreciation	1,562	1,459
Net completed plant	4,492	4,531
Nuclear
Completed Plant
Completed plant cost	25,543	25,227
Accumulated depreciation	11,656	11,310
Net completed plant	13,887	13,917
Transmission
Completed Plant
Completed plant cost	7,932	7,515
Accumulated depreciation	3,083	3,038
Net completed plant	4,849	4,477
Hydroelectric
Completed Plant
Completed plant cost	3,163	3,087
Accumulated depreciation	1,051	1,012
Net completed plant	2,112	2,075
Other electrical plant
Completed Plant
Completed plant cost	1,920	1,881
Accumulated depreciation	1,110	1,107
Net completed plant	810	774
Computer Software, Intangible Asset [Member]
Completed Plant
Completed plant cost	3	3
Accumulated depreciation	1	0
Net completed plant	2	3
Multipurpose dams
Completed Plant
Completed plant cost	900	900
Accumulated depreciation	373	367
Net completed plant	527	533
Other stewardship
Completed Plant
Completed plant cost	29	29
Accumulated depreciation	10	9
Net completed plant	$ 19	$ 20

Other Long-Term Assets Other Long-Term Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Other Long-Term Assets
Restricted Cash		$ 12	$ 1
Loans and other long-term receivables		10
EnergyRight receivables		112
Total other long-term assets	$ 325	362
Accounts Receivable [Member]
Other Long-Term Assets
EnergyRight receivables	20	22
Other long-term assets
Other Long-Term Assets
EnergyRight receivables	81	90
Loans and other long-term receivables, net	125	125
Commodity contract derivative assets	1	31
Restricted Cash and Investments, Noncurrent	23	23
Prepaid capacity payments	19	27
Other	$ 77	$ 66
Energy Right
Other Long-Term Assets
Number of days in default	180 days
Minimum \| Energy Right
Other Long-Term Assets
EnergyRight loan terms	5 years
Maximum \| Energy Right
Other Long-Term Assets
EnergyRight loan terms	10 years

Regulatory Assets and Liabilities Regulatory Assets and Liabilities (Details) - USD ($)
$ in Millions

12 Months Ended

Sep. 30, 2019

Sep. 30, 2018

Sep. 30, 2017

Aug. 01, 2017

Regulatory Assets and Liabilities

Non-current regulatory liabilities

$ 0

$ 104

Accelerated Amortization of Deferred Nuclear Generating Units and Training Costs

857

Accelerated recovery for Kingston ash spill

266

Current regulatory assets

156

414

Regulatory assets

8,763

6,612

Regulatory Assets

8,919

7,026

Current regulatory liabilities

150

187

Regulatory asset amount expensed

261

2

$ 143

Gallatin CCR

^[1]

$ 672

Gallatin CCR regulatory asset

$ 900

Period collected in rates

15 years

Regulatory Liabilities

$ 150

291

Environmental Agreements

Regulatory Assets and Liabilities

Initial liability recorded

360

Investment in environmental agreement projects

290

Amount to be provided to fund environmental projects

60

Amount to be paid in civil penalties

$ 10

Environmental cleanup costs - Kingston ash spill

Regulatory Assets and Liabilities

Current regulatory asset amortization period

12 months

Energy Efficiency Projects | Environmental Agreements

Regulatory Assets and Liabilities

Regulatory asset amount expensed

$ 279

Paid to States | Environmental Agreements

Regulatory Assets and Liabilities

Regulatory asset amount expensed

60

Civil Penalties | Environmental Agreements

Regulatory Assets and Liabilities

Regulatory asset amount expensed

10

Deferred Project Costs [Member]

Regulatory Assets and Liabilities

Gallatin coal combustion residual facilities estimated cost to cap and close

89

73

Regulatory Asset

Regulatory Assets and Liabilities

Regulatory assets

130

118

Removal Costs [Member]

Regulatory Assets and Liabilities

Regulatory assets

1,241

692

Environmental Agreements

Regulatory Assets and Liabilities

Current regulatory assets

0

3

Regulatory assets

12

11

Unrealized losses on interest rate derivatives

Regulatory Assets and Liabilities

Current regulatory assets

39

4

Regulatory assets

15

8

Non-nuclear decommissioning costs

Regulatory Assets and Liabilities

Regulatory assets

1,741

1,019

Pension Costs [Member]

Regulatory Assets and Liabilities

Regulatory assets

4,756

3,119

Unrealized gains/losses on commodity derivatives

Regulatory Assets and Liabilities

Current regulatory assets

0

38

Regulatory assets

0

861

Deferred Fuel Costs [Member]

Regulatory Assets and Liabilities

Current regulatory assets

28

30

Environmental cleanup costs - Kingston ash spill

Regulatory Assets and Liabilities

Current regulatory assets

0

266

Nuclear decommissioning costs

Regulatory Assets and Liabilities

Regulatory assets

868

784

Other current regulatory assets

Regulatory Assets and Liabilities

Gallatin CCR regulatory asset

38

Regulatory Asset

Regulatory Assets and Liabilities

Gallatin CCR regulatory asset

861

Unrealized gains/losses on commodity derivatives

Regulatory Assets and Liabilities

Non-current regulatory liabilities

0

31

Current regulatory liabilities

12

41

Deferred other post-retirement benefits cost

Regulatory Assets and Liabilities

Non-current regulatory liabilities

0

73

Fuel cost adjustment tax equivalents

Regulatory Assets and Liabilities

Current regulatory liabilities

$ 138

$ 146

[1]	(1) The current portions of the ARO liability in the amounts of $163 million and $115 million at September 30, 2019 and 2018, respectively, are included in Accounts payable and accrued liabilities.

Asset Acquisitions and Business Combinations (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2019	Sep. 20, 2017
Business Combinations and Settlement of Preexisting Relationships [Abstract]
Percentage equity interests acquired			100.00%
Total cash consideration	$ 36
Fair value of assets acquired			$ 110
Fair value of liabilities assumed		$ 78	74
Amortization expense of SPE's acquired	1
Loss on extinguishment	$ 3
Lease/leaseback obligations settled			71
Reacquisition price			$ 74

Variable Interest Entities Variable Interest Entities (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2013	Aug. 09, 2013	Sep. 30, 2012	Jan. 17, 2012
Liabilities
Total liabilities	$ 1,167	$ 1,206				$ 1,000
Current maturities of long-term debt of variable interest entities issued at par	39	38
Long-term debt of variable interest entities, net	1,089	1,127
VIE Financing
Face Amount	$ 40						$ 100
Rate of Return SHLLC	7.00%
Accrued interest	$ 11	11
Interest expense	56	58	$ 59
JSCCG
VIE Financing
Face Amount						900	$ 900
Holdco
VIE Financing
Face Amount						$ 100
SCCG
VIE Financing
Face Amount				$ 360	$ 360
Debt and Lease Obligation				$ 400
Accounts payable and accrued liabilities
Liabilities
Total liabilities	3	2
Total current liabilities
Liabilities
Total liabilities	53	51
Other long-term liabilities
Liabilities
Total liabilities	$ 25	$ 28

Other Long-Term Liabilities Other Long-Term Liabilities (Details) - USD ($)
$ in Millions

Sep. 30, 2019

Sep. 30, 2018

Other Long-Term Liabilities

Interest rate swaps

$ 1,764

$ 1,199

Derivative Liability

554

Accounts Payable and Accrued Liabilities

1

30

Capital lease obligations

223

263

Currency swap liabilities

208

^[1]

94

^[2]

EnergyRight financing obligation

143

Non-current regulatory liabilities

0

104

Total other long-term liabilities

2,490

2,715

Other long-term liabilities

Other Long-Term Liabilities

Interest rate swaps

1,676

1,122

Gallatin coal combustion residual facilities

0

862

Capital lease obligations

182

178

Currency swap liabilities

193

81

EnergyRight financing obligation

90

102

Environmental agreements liability

80

Membership interests of VIE subject to mandatory redemption

66

74

Other

203

216

Accounts payable and accrued liabilities

Other Long-Term Liabilities

Interest rate swaps

88

77

Service agreements

12

EnergyRight financing obligation

$ 23

25

Accounts Payable [Member]

Other Long-Term Liabilities

Accounts Payable and Accrued Liabilities

$ 30

[1]	TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 15 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities.
[2]	See Note 15 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities.

Asset Retirement Obligations Asset Retirement Obligations (Details) - USD ($)
$ in Millions

12 Months Ended

Sep. 30, 2019

Sep. 30, 2018

Aug. 01, 2017

Liabilities Settled [Line Items]

Change in estimate

^[1]

$ 50

$ 430

Allen East ARO increase (decrease)

44

Gallatin CCR ARO increase (decrease)

672

Additional obligations

^[1]

18

1

Gallatin CCR

^[1]

672

Gallatin CCR regulatory asset

$ 900

Balance

^[1]

5,616

4,779

Asset Retirement Obligation, Liabilities Settled

^[1]

89

106

Accretion (recorded as regulatory asset)

^[1]

186

165

Asset disposition

^[1]

(15)

Gain (Loss) on Disposition of Assets

5

Accounts payable and accrued liabilities

Liabilities Settled [Line Items]

Current portion of ARO

115

Nuclear

Liabilities Settled [Line Items]

Revision of estimate (other non nuclear)

(250)

Change in estimate

0

Additional obligations

0

Gallatin CCR

0

Balance

3,136

2,989

Asset Retirement Obligation, Liabilities Settled

0

Accretion (recorded as regulatory asset)

130

Asset disposition

0

Non-nuclear

Liabilities Settled [Line Items]

Change in estimate

430

Additional obligations

1

Gallatin CCR

672

Balance

$ 2,480

1,790

Asset Retirement Obligation, Liabilities Settled

106

Accretion (recorded as regulatory asset)

35

Asset disposition

$ (15)

[1]	(1) The current portions of the ARO liability in the amounts of $163 million and $115 million at September 30, 2019 and 2018, respectively, are included in Accounts payable and accrued liabilities.

Debt and Other Obligations Debt and Other Obligations - General (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2013	Aug. 09, 2013	Sep. 30, 2012	Jan. 17, 2012
Debt Instrument
Interest rate					7.10%
Debt ceiling	$ 30,000
Face Amount	40				$ 100
Holdco
Debt Instrument
Face Amount				$ 100
Holdco balloon payment upon maturity	$ 10
SCCG
Debt Instrument
Interest rate			3.846%
Face Amount		$ 360	$ 360

Debt and Other Obligations Debt and Other Obligations - Secured Debt of VIEs (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018	Aug. 09, 2013	Jan. 17, 2012
Variable Interest Entities
Face Amount	$ 40			$ 100
Debt Instrument, Interest Rate				4.626%
Interest rate				7.10%
Membership interests of VIE subject to mandatory redemption (including current portion)	37	$ 37	$ 40
Long-term debt of variable interest entities (including current maturities)	1,371	1,256
Secured debt of VIEs
Variable Interest Entities
Membership interests of VIE subject to mandatory redemption (including current portion)	28	30
Long-term debt of variable interest entities (including current maturities)	$ 1,100	$ 1,165

Debt and Other Obligations Debt and Other Obligations - Secured Notes of SPEs (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018	Sep. 20, 2017	Jan. 17, 2012	Nov. 14, 2001	Sep. 27, 2000
Secured notes
Secured notes	$ 40			$ 100
Interest rate				7.10%
Fair value of liabilities assumed	78		$ 74
Notes Payable	23	$ 68
Special purpose entity
Secured notes
Secured notes					$ 272	$ 255
Interest rate					5.572%	7.299%
7/20/16 Business Combination
Secured notes
Notes Payable		$ 20
9/20/17 Business Combination
Secured notes
Notes Payable	$ 23

Debt and Other Obligations Debt and Other Obligations - Short-Term Debt (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Short-Term Debt, Gross [Line Items]
Short-term debt, net of discounts	$ 922	$ 1,216	$ 1,999
Short-term Borrowings Gross	$ 922
Weighted average interest rate - discount notes	2.152%	2.045%	1.00%
Short-Term Debt, Gross [Domain]
Short-Term Debt, Gross [Line Items]
Short-term debt, net of discounts		$ 1,217

Debt and Other Obligations Debt and Other Obligations - Put and Call Options (Details) $ in Millions	12 Months Ended
	Sep. 30, 2019 USD ($)
Debt Instrument
Amount of redeemable bond issues outstanding	$ 357
Call price	100.00%
Bond issues with survivor's option	217
Amount of bonds redeemed	$ 217
PARRS 1998 Series D Bond
Debt Instrument
Amount of redeemable bond issues outstanding	$ 274
PARRS interest rate prior to rate reset	6.75%
PARRS interest rate after rate reset	3.55%
Amount of bonds redeemed	$ 301
PARRS 1999 Series A Bond
Debt Instrument
Amount of redeemable bond issues outstanding	$ 232
PARRS interest rate prior to rate reset	6.50%
PARRS interest rate after rate reset	3.36%
Amount of bonds redeemed	$ 293

Debt and Other Obligations Debt and Other Obligations - Debt Securities Activity (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017	Jul. 20, 2016	Jan. 17, 2012
Debt Instrument
Issues of power bonds	$ 0	$ 998	$ 999
Face Amount	40				$ 100
Discount on debt issues		(2)
Acquisition of notes payable			74
Redemptions/Maturities of variable interest entities	38	36	35
Redemptions/Maturities of power bonds	$ 1,035	$ 1,731	$ 1,558
Leaseback obligation settled as a result of acquisition				$ 70
Total
Debt Instrument
Debt Instrument, Redemption Period, End Date	1119	1820
Percent of par value	100.00%
Debt of variable interest entities
Debt Instrument
Redemptions/Maturities of variable interest entities	$ 38	$ 36
Notes Payable
Debt Instrument
Redemptions/Maturities of notes payable	46	53
electronotes
Debt Instrument
Redemptions/Maturities of power bonds	5	52
2013 Series A [Member]
Debt Instrument
Redemptions/Maturities of power bonds		0
2009 Series B
Debt Instrument
Redemptions/Maturities of power bonds	30	29
1997 Series E [Member]
Debt Instrument
Redemptions/Maturities of power bonds	0	650
2008 Series B [Member]
Debt Instrument
Redemptions/Maturities of power bonds	0	1,000
Total
Debt Instrument
Debt Securities Issues	$ 0	998
2018 Issue [Member]
Debt Instrument
Face Amount		$ 1,000

Debt and Other Obligations Debt and Other Obligations - Debt Outstanding (Details) - USD ($)
$ in Millions

3 Months Ended

12 Months Ended

Sep. 30, 2018

Sep. 30, 2019

Sep. 30, 2017

Jan. 17, 2012

Short-term debt

Coupon rate

7.10%

Short-term debt, net of discounts

$ 1,216

$ 922

$ 1,999

Current maturities of long-term debt of variable interest entities issued at par

38

39

Current maturities of notes payable

46

23

Total Current maturities of power bonds issued at par

1,032

1,030

Current maturities of power bonds

1,032

1,030

Total current debt outstanding, net

2,332

2,014

Long-term debt

Long-term power bonds, net

20,157

19,094

Long-term power bonds

^[1]

20,300

19,225

Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net

(143)

(131)

Long-term debt of variable interest entities, net

1,127

1,089

Long-term notes payable

23

0

Total long-term debt, net

21,307

20,183

Foreign Currency Transaction Gain (Loss), before Tax

147

$ 191

880591DX7

Short-term debt

Coupon rate

^[2]

4.65%

Debt Instrument, Maturity Date

Jun. 15, 2035

Long-term debt

Long-term power bonds, net

436

$ 436

880591EF5

Short-term debt

Coupon rate

3.77%

Debt Instrument, Maturity Date

Jun. 15, 2034

Long-term debt

Long-term power bonds, net

273

$ 246

880591DC3

Short-term debt

Coupon rate

5.805%

Debt Instrument, Maturity Date

Jun. 07, 2021

Long-term debt

Long-term power bonds, net

261

$ 246

880591EL2

Short-term debt

Coupon rate

3.875%

Debt Instrument, Maturity Date

Feb. 15, 2021

Long-term debt

Long-term power bonds, net

1,500

$ 1,500

electronotes

Long-term debt

Maturity date - earliest

May 15, 2020

Maturity date - latest

Feb. 15, 2043

Call date - earliest

Feb. 15, 2015

Call date - latest

Feb. 15, 2018

Long-term power bonds, net

221

$ 217

880591EN8

Short-term debt

Coupon rate

1.875%

Debt Instrument, Maturity Date

Aug. 15, 2022

Long-term debt

Long-term power bonds, net

1,000

$ 1,000

880591ER9

Short-term debt

Coupon rate

2.875%

Debt Instrument, Maturity Date

Sep. 15, 2024

Long-term debt

Long-term power bonds, net

1,000

$ 1,000

880591CJ9

Short-term debt

Coupon rate

6.75%

Debt Instrument, Maturity Date

Nov. 01, 2025

Long-term debt

Long-term power bonds, net

1,350

$ 1,350

880591EU2 [Member]

Short-term debt

Coupon rate

2.875%

Debt Instrument, Maturity Date

Feb. 01, 2027

Long-term debt

Long-term power bonds, net

1,000

$ 1,000

880591300

Short-term debt

Coupon rate

3.55%

Debt Instrument, Maturity Date

Jun. 01, 2028

Long-term debt

Long-term power bonds, net

273

$ 273

880591409

Short-term debt

Coupon rate

3.36%

Debt Instrument, Maturity Date

May 01, 2029

Long-term debt

Long-term power bonds, net

232

$ 232

880591DM1

Short-term debt

Coupon rate

7.125%

Debt Instrument, Maturity Date

May 01, 2030

Long-term debt

Long-term power bonds, net

1,000

$ 1,000

880591DV1

Short-term debt

Coupon rate

4.70%

Debt Instrument, Maturity Date

Jul. 15, 2033

Long-term debt

Long-term power bonds, net

472

$ 472

880591DP4

Short-term debt

Coupon rate

6.587%

Debt Instrument, Maturity Date

Jun. 07, 2032

Long-term debt

Long-term power bonds, net

326

$ 307

880591CK6

Short-term debt

Coupon rate

5.98%

Debt Instrument, Maturity Date

Apr. 01, 2036

Long-term debt

Long-term power bonds, net

121

$ 121

880591CS9

Short-term debt

Coupon rate

5.88%

Debt Instrument, Maturity Date

Apr. 01, 2036

Long-term debt

Long-term power bonds, net

1,500

$ 1,500

880591CP5

Short-term debt

Coupon rate

6.15%

Debt Instrument, Maturity Date

Jan. 15, 2038

Long-term debt

Long-term power bonds, net

1,000

$ 1,000

880591ED0

Short-term debt

Coupon rate

5.50%

Debt Instrument, Maturity Date

Jun. 15, 2038

Long-term debt

Long-term power bonds, net

500

$ 500

880591EH1

Short-term debt

Coupon rate

5.25%

Debt Instrument, Maturity Date

Sep. 15, 2039

Long-term debt

Long-term power bonds, net

2,000

$ 2,000

880591EP3

Short-term debt

Coupon rate

3.50%

Debt Instrument, Maturity Date

Dec. 15, 2042

Long-term debt

Long-term power bonds, net

1,000

$ 1,000

880591DU3

Short-term debt

Coupon rate

4.962%

Debt Instrument, Maturity Date

Jun. 07, 2043

Long-term debt

Long-term power bonds, net

195

$ 185

880591CF7

Short-term debt

Coupon rate

6.235%

Debt Instrument, Maturity Date

Jul. 15, 2045

Long-term debt

Long-term power bonds, net

140

$ 140

880591EB4

Short-term debt

Coupon rate

4.875%

Debt Instrument, Maturity Date

Jan. 15, 2048

Long-term debt

Long-term power bonds, net

500

$ 500

880591DZ2

Short-term debt

Coupon rate

^[2]

5.375%

Debt Instrument, Maturity Date

Apr. 01, 2056

Long-term debt

Long-term power bonds, net

1,000

$ 1,000

880591EJ7

Short-term debt

Coupon rate

4.625%

Debt Instrument, Maturity Date

Sep. 15, 2060

Long-term debt

Long-term power bonds, net

1,000

$ 1,000

880591ES7

Short-term debt

Coupon rate

4.25%

Debt Instrument, Maturity Date

Sep. 15, 2065

Long-term debt

Long-term power bonds, net

1,000

$ 1,000

880591EQ1

Short-term debt

Coupon rate

1.75%

Total Current maturities of power bonds issued at par

1,000

$ 0

Debt Instrument, Maturity Date

Oct. 15, 2018

880591EF5 (6/15/2018)

Short-term debt

Total Current maturities of power bonds issued at par

29

$ 27

Debt Instrument, Maturity Date

Jun. 15, 2020

880591EF5

Short-term debt

Coupon rate

3.77%

Total Current maturities of power bonds issued at par

1

$ 1

Debt Instrument, Maturity Date

Dec. 15, 2019

88059TEL1

Short-term debt

Coupon rate

2.65%

Total Current maturities of power bonds issued at par

1

$ 1

Debt Instrument, Maturity Date

Nov. 15, 2019

88059TEL1 (5/15/2018)

Short-term debt

Total Current maturities of power bonds issued at par

$ 1

Debt Instrument, Maturity Date

May 15, 2020

Minimum | electronotes

Short-term debt

Coupon rate

2.375%

Maximum | electronotes

Short-term debt

Coupon rate

3.625%

[1]	Includes net exchange gain from currency transactions of $191 million and $147 million at September 30, 2019 and
[2]	The coupon rate represents TVA's effective interest rate.

Debt and Other Obligations Debt and Other Obligations - Maturities Due (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2017
Debt Instrument
2018		$ 1,092
2019		1,901
2020		1,071
2021		69
2022		1,057
Thereafter		16,415
Total		21,605
Short-term debt, net of discounts	$ 1,216	922	$ 1,999
Short-term debt, net of discounts total		922
Foreign Currency Transaction Gain (Loss), before Tax	$ 147	191
Net discount on sale of Bonds		81
Power bonds
Debt Instrument
Debt issuance costs		50
Other long-term debt
Debt Instrument
Debt issuance costs		$ 8

Debt and Other Obligations Debt and Other Obligations - Credit Facility Agreements (Details)	Sep. 30, 2019 USD ($) Credit_facilities	Sep. 30, 2018 USD ($)
Credit Facility Agreements
Current borrowing capacity	$ 150,000,000
Line of Credit
Credit Facility Agreements
Current borrowing capacity	150,000,000
Credit facility agreements borrowings outstanding	0
Revolving Credit Facilities
Credit Facility Agreements
Current borrowing capacity	2,700,000,000
Credit facility agreements borrowings outstanding	$ 0
Number of revolving credit facilities \| Credit_facilities	4
Revolving Credit Facility 4	$ 150,000,000
Revolving credit facility 3	500,000,000
Revolving credit facility 1	1,000,000,000
Revolving Credit Facility 2	1,000,000,000
Long-term Line of Credit, Borrowings 4	0
Long-term Line of Credit, Borrowings 3	0
Long-term Line of Credit, Borrowings 1	0
Long-term Line of Credit, Borrowings 2	0
Line of Credit Facility, Remaining Borrowing Capacity 4	112,000,000
Line of Credit Facility, Remaining Borrowing Capacity 3	0
Line of Credit Facility, Remaining Borrowing Capacity 1	506,000,000
Line of Credit Facility, Remaining Borrowing Capacity 2	690,000,000
Line of Credit Facility, Remaining Borrowing Capacity	1,308,000,000
Letter of Credit
Credit Facility Agreements
Amount of letters of credit outstanding	1,300,000,000	$ 900,000,000
Letters of Credit Outstanding, Amount 4	38,000,000
Letters of Credit Outstanding, Amount 3	500,000,000
Letters of Credit Outstanding, Amount 1	494,000,000
Letter of Credit Outstanding, Amount 2	$ 310,000,000

Debt and Other Obligations Debt and Other Obligations - Lease/Leasebacks (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018	Sep. 20, 2017	Jul. 20, 2016
Lease/Leasebacks [Abstract]
Percentage equity interests acquired			100.00%
Leaseback obligation settled as a result of acquisition				$ 70
CT and QTE outstanding leaseback obligation	$ 263	$ 301

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Equity [Abstract]
Reclassification on cash flow hedges from AOCI to interest expense	$ (45)	$ 26	$ (26)

Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Derivative Instruments That Receive Hedge Accounting Treatment (Details) - USD ($)	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Summary of Derivative Instruments That Receive Hedge Accounting Treatment
Interest rate swaps	$ 1,764,000,000	$ 1,199,000,000
Net unrealized gain (loss) on future cash flow hedges	(114,000,000)	10,000,000	$ 59,000,000
Reclassification to earnings from cash flow hedges	(45,000,000)	26,000,000	$ (26,000,000)
Ineffective portion excluded from testing	0
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimated Net Amount to be Transferred	30,000,000
Accounts payable and accrued liabilities
Summary of Derivative Instruments That Receive Hedge Accounting Treatment
Interest rate swaps	$ 88,000,000	$ 77,000,000

Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Derivative Instruments That Do Not Receive Hedge Accounting Treatment (Details)	12 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Derivative
Unrealized gains/losses on derivatives	$ 0
Change in Unrealized gains (losses) on Interest Rate Derivatives	565,000,000	$ (310,000,000)
Interest rate swaps	1,764,000,000	1,199,000,000
Interest Rate Swap
Derivative
Amount of gain (loss) recognized in income on derivatives	(79,000,000)	(89,000,000)
Fair value	(498,000,000)	(317,000,000)
Commodity Contract Derivatives
Derivative
Fair value	(41,000,000)	60,000,000
Commodity derivatives under FTP
Derivative
Amount of gain (loss) recognized in income on derivatives	$ 0	$ (8,000,000)
Coal Contract Derivatives
Derivative
Number of contracts	8	13
Notional amount	9,000,000	20,000,000
Fair value	$ (4,000,000)	$ 58,000,000
Natural Gas Contract Derivatives
Derivative
Number of contracts	65	61
Notional amount	330,000,000	359,000,000
Fair value	$ (37,000,000)	$ 2,000,000
Accounts payable and accrued liabilities
Derivative
Interest rate swaps	88,000,000	77,000,000
Accounts payable and accrued liabilities \| Interest Rate Swap
Derivative
Fair value	(24,000,000)	(20,000,000)
Accounts payable and accrued liabilities \| Commodity Contract Derivatives
Derivative
Fair value	$ (37,000,000)	$ (4,000,000)

Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Mark-to-Market Values of TVA Derivatives (Details) - USD ($)
$ in Millions

Sep. 30, 2019

Sep. 30, 2018

Derivatives, Fair Value

Derivative Liability, Fair Value, Gross Liability

$ 1,972

$ 1,293

Other Credit Derivatives [Member] | Other long-term liabilities

Derivatives, Fair Value

Fair value

12

72

Other Credit Derivatives [Member] | Other current assets

Derivatives, Fair Value

Fair value

1,676

1,122

200 million Sterling currency swap

Derivatives, Fair Value

Derivative Liability, Fair Value, Gross Liability

208

94

^[1]

Fair value

(90)

(67)

200 million Sterling currency swap | Other long-term liabilities

Derivatives, Fair Value

Fair value

(84)

(62)

200 million Sterling currency swap | Accounts payable and accrued liabilities

Derivatives, Fair Value

Fair value

(6)

(5)

250 million Sterling currency swap

Derivatives, Fair Value

Fair value

(61)

(12)

250 million Sterling currency swap | Other long-term liabilities

Derivatives, Fair Value

Fair value

(56)

(7)

250 million Sterling currency swap | Accounts payable and accrued liabilities

Derivatives, Fair Value

Fair value

(5)

150 million Sterling currency swap

Derivatives, Fair Value

Fair value

(57)

(15)

150 million Sterling currency swap | Other long-term liabilities

Derivatives, Fair Value

Fair value

(53)

(12)

150 million Sterling currency swap | Accounts payable and accrued liabilities

Derivatives, Fair Value

Fair value

(4)

(3)

$1.0 billion notional interest rate swap

Derivatives, Fair Value

Fair value

(1,261)

(878)

$1.0 billion notional interest rate swap | Other long-term liabilities

Derivatives, Fair Value

Fair value

(1,199)

(822)

$1.0 billion notional interest rate swap | Accounts payable and accrued liabilities

Derivatives, Fair Value

Fair value

(62)

(56)

$476 million notional interest rate swap

Derivatives, Fair Value

Fair value

(498)

(317)

$476 million notional interest rate swap | Other long-term liabilities

Derivatives, Fair Value

Fair value

(474)

(297)

$476 million notional interest rate swap | Accounts payable and accrued liabilities

Derivatives, Fair Value

Fair value

(24)

(20)

$42 million notional interest rate swap

Derivatives, Fair Value

Fair value

(5)

(4)

$42 million notional interest rate swap | Other long-term liabilities

Derivatives, Fair Value

Fair value

(3)

$42 million notional interest rate swap | Accounts payable and accrued liabilities

Derivatives, Fair Value

Fair value

(2)

(1)

Commodity contract derivatives

Derivatives, Fair Value

Fair value

(41)

60

Commodity contract derivatives | Other long-term assets

Derivatives, Fair Value

Fair value

12

41

Commodity contract derivatives | Other long-term liabilities

Derivatives, Fair Value

Fair value

(16)

(8)

Commodity contract derivatives | Other current assets

Derivatives, Fair Value

Fair value

0

31

Commodity contract derivatives | Accounts payable and accrued liabilities

Derivatives, Fair Value

Fair value

$ (37)

$ (4)

[1]

Letters of credit of approximately $1.3 billion and $921 million were posted as collateral at September 30, 2019 and 2018, respectively, to partially secure the liability positions of one of the currency swaps and one of the interest rate swaps in accordance with the collateral requirements for these derivatives.

Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Currency Swaps Outstanding (Details) £ in Millions	12 Months Ended
	Sep. 30, 2019 GBP (£) Bond_issues
Derivative
Number of British pound sterling denominated bond transactions \| Bond_issues	3
1999 Currency Swap Contract
Derivative
Effective Date of Currency Swap Contract	1999
Associated TVA bond issues currency exposure	£ 200
Expiration Date of Swap	2021
Overall effective cost to TVA	5.81%
2001 Currency Swap Contract
Derivative
Effective Date of Currency Swap Contract	2001
Associated TVA bond issues currency exposure	£ 250
Expiration Date of Swap	2032
Overall effective cost to TVA	6.59%
2003 Currency Swap Contract
Derivative
Effective Date of Currency Swap Contract	2003
Associated TVA bond issues currency exposure	£ 150
Expiration Date of Swap	2043
Overall effective cost to TVA	4.96%

Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Derivatives Under Financial Trading Program (Details) - Natural Gas Contract Derivatives - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Derivative
Decrease (increase) in fuel expense	$ 0	$ (6)
Decrease (increase) in purchased power expense	$ 0	$ (2)

Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Counterparty Credit Risk (Details) $ in Millions	12 Months Ended
	Sep. 30, 2019 USD ($) Customers megawatts	Sep. 30, 2018 USD ($)
Derivative
Receivables from power sales \| $	$ 1,624	$ 1,570
Credit of Customers
Derivative
Number of customers that represent the percent of sales \| Customers	2
Percent of total sales by customers	17.00%
Power Purchase Agreement
Derivative
Megawatts \| megawatts	440

Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Offsetting of Derivative Assets (Details) - USD ($)
$ in Millions

Sep. 30, 2019

Sep. 30, 2018

Offsetting Assets [Line Items]

Commodity derivatives not subject to master netting or similar arrangement

^[1]

$ 72

Letter of Credit

Offsetting Assets [Line Items]

Amount of letters of credit outstanding

$ 1,300

$ 900

Other Contract

Offsetting Assets [Line Items]

Net Amounts of Assets Presented in the Balance Sheet

^[1]

$ 12

[1]	There are no derivative contracts subject to a master netting arrangement or similar agreement that are not offset on the Consolidated Balance Sheets.

Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Offsetting of Derivative Liabilities (Details) - USD ($)
$ in Millions

Sep. 30, 2019

Sep. 30, 2018

Offsetting Liabilities [Line Items]

Gross Amounts of Recognized Liabilities, subject to master netting or similar arrangements

$ 1,972

$ 1,293

Gross Amounts Offset in the Balance Sheet

^[1]

0

Derivative Liability

^[2]

2,025

1,305

Total derivatives not subject to master netting or similar arrangement

^[2]

53

12

Total

2,025

1,305

Currency Swap

Offsetting Liabilities [Line Items]

Gross Amounts of Recognized Liabilities, subject to master netting or similar arrangements

208

94

^[3]

Gross Amounts Offset in the Balance Sheet

0

^[1],[3]

Derivative Liability

^[2],[3]

208

94

Interest Rate Contract

Offsetting Liabilities [Line Items]

Gross Amounts of Recognized Liabilities, subject to master netting or similar arrangements

1,764

1,199

^[3]

Gross Amounts Offset in the Balance Sheet

0

^[1],[3]

Derivative Liability

^[2],[3]

1,764

1,199

Total derivatives subject to master netting or similar arrangement

Offsetting Liabilities [Line Items]

Derivative Liability

^[2]

1,972

1,293

Letter of Credit

Offsetting Liabilities [Line Items]

Amount of letters of credit outstanding

$ 1,300

$ 900

[1]	Amounts primarily include counterparty netting of derivative contracts, margin account deposits for futures commission merchants transactions, and cash collateral received or paid in accordance with the accounting guidance for derivatives and hedging transactions.
[2]	There are no derivative contracts subject to a master netting arrangement or similar agreement that are not offset on the Consolidated Balance Sheets.
[3]	Letters of credit of approximately $1.3 billion and $921 million were posted as collateral at September 30, 2019 and 2018, respectively, to partially secure the liability positions of one of the currency swaps and one of the interest rate swaps in accordance with the collateral requirements for these derivatives.

Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Other Derivative Instruments (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018
Derivative
Forward Contract Derivative Asset, at Fair Value	$ 22	$ 45
Fair Value, Inputs, Level 2
Derivative
Forward Contract Derivative Asset, at Fair Value	$ 22	$ 45

Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Collateral (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018
Derivative
Likely collateral obligation increase if downgraded	$ 22
Collateralized Securities [Member]
Derivative
Aggregate fair value of derivative instruments with credit-risk related contingent features that were in a liability position	2,000
Collateral obligations	1,300
Letter of Credit
Derivative
Amount of letters of credit outstanding	$ 1,300	$ 900

Fair Value Measurements Fair Value Measurements - Investments (Details) $ in Millions	12 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
Investment funds	$ 2,968	$ 2,862
Balance in the NDT	2,100
Balance in the ART	$ 765
Period of time where the investor contributes capital to an investment in a private partnership - minimum	three
Period of time where the investor contributes capital to an investment in a private partnership - maximum	four
Minimum investment period	10 years
Fair value of gross plan assets	$ 8,472	8,531
Number of readily available quoted exchange prices for the investments	0
LTDCP
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
Unrealized gains (losses) on investments	$ (2)	1
SERP
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
Unrealized gains (losses) on investments	0	1
ART
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
Unrealized gains (losses) on investments	(70)	15
NDT
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
Unrealized gains (losses) on investments	(112)	$ 18
Equity Funds [Member]
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
Commitments, Fair Value Disclosure	191
Real Estate Funds [Member]
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
Commitments, Fair Value Disclosure	33
Credit [Member]
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
Commitments, Fair Value Disclosure	22
Private equity
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
Commitments, Fair Value Disclosure	96
Private real estate funds
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
Fair value of gross plan assets	19
Private Credit [Member]
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
Commitments, Fair Value Disclosure	11
Interest Payments relating to energy prepayment obligations
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items]
2019	$ 4

Fair Value Measurements Fair Value Measurements - Nonperformance Risk (Details) $ in Millions	Sep. 30, 2019 USD ($)
Nonperformance Risk
Derivative credit valuation adjustment, assets	$ 1
Derivative credit valuation adjustment, liabilities	$ 1

Fair Value Measurements Fair Value Measurements - Fair Value Measurements (Details) - USD ($)
$ in Millions

Sep. 30, 2019

Sep. 30, 2018

Investments

Equity securities

$ 464

$ 220

Government debt securities

344

236

Corporate debt securities

417

499

Mortgage and asset-backed securities

32

50

Institutional mutual funds

250

126

Forward debt securities contracts - asset

22

45

Private equity funds measured at net asset value

140

^[1]

132

Private real estate measured at net asset value

135

^[1]

124

Private credit measured at net asset value

^[1]

33

Commingled funds measured at net asset value

1,131

^[1]

1,430

Total investments

2,968

2,862

Commodity contract derivatives

12

72

Total

2,980

2,934

Liabilities

Currency swaps

208

^[2]

94

^[3]

Interest rate swaps

1,764

1,199

Commodity contract derivatives

53

12

Total

2,025

1,305

Fair Value, Inputs, Level 1

Investments

Equity securities

464

220

Government debt securities

279

199

Corporate debt securities

0

Mortgage and asset-backed securities

0

Institutional mutual funds

250

126

Forward debt securities contracts - asset

0

Private equity funds measured at net asset value

0

^[1]

0

^[4]

Private real estate measured at net asset value

0

^[1]

0

^[4]

Commingled funds measured at net asset value

0

^[1]

0

^[4]

Total investments

993

545

Commodity contract derivatives

0

Total

993

545

Liabilities

Currency swaps

0

^[2]

0

^[3]

Interest rate swaps

0

Commodity contract derivatives

0

Total

0

Fair Value, Inputs, Level 2

Investments

Equity securities

0

Government debt securities

65

37

Corporate debt securities

417

499

Mortgage and asset-backed securities

32

50

Institutional mutual funds

0

Forward debt securities contracts - asset

22

45

Private equity funds measured at net asset value

0

^[1]

0

^[4]

Private real estate measured at net asset value

0

^[1]

0

^[4]

Commingled funds measured at net asset value

0

^[1]

0

^[4]

Total investments

536

631

Commodity contract derivatives

7

13

Total

543

644

Liabilities

Currency swaps

208

^[2]

94

^[3]

Interest rate swaps

1,764

1,199

Commodity contract derivatives

44

11

Total

2,016

1,304

Fair Value, Inputs, Level 3

Investments

Equity securities

0

Government debt securities

0

Corporate debt securities

0

Mortgage and asset-backed securities

0

Institutional mutual funds

0

Forward debt securities contracts - asset

0

Private equity funds measured at net asset value

0

^[1]

0

^[4]

Private real estate measured at net asset value

0

^[1]

0

^[4]

Commingled funds measured at net asset value

0

^[1]

0

^[4]

Total investments

0

Commodity contract derivatives

5

59

Total

5

59

Liabilities

Currency swaps

0

^[2]

0

^[3]

Interest rate swaps

0

Commodity contract derivatives

9

1

Total

$ 9

$ 1

[1]	Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the Consolidated Balance Sheets.
[2]	TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 15 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities.
[3]	See Note 15 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities.
[4]	Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the Consolidated Balance Sheets.

Fair Value Measurements Fair Value Measurements - Fair Value Measurements Using Significant Unobservable Inputs (Details) tons-per-year in Billions	12 Months Ended
	Sep. 30, 2019 USD ($) tons-per-year	Sep. 30, 2018 USD ($) tons-per-year	Sep. 30, 2017 USD ($)
Fair Value Measurements
Commodity contract derivatives, assets	$ 12,000,000	$ 72,000,000
Commodity contract derivatives, liabilities	$ 53,000,000	$ 12,000,000
Minimum
Assets
Fair value measurements tons per year \| tons-per-year	0.4	0.7
Price per ton	$ 12.10	$ 12.25
Liabilities
Fair value measurements tons per year \| tons-per-year	0.4	0.7
Price per ton	$ 12.10	$ 12.25
Maximum
Assets
Fair value measurements tons per year \| tons-per-year	0.8	0.8
Price per ton	$ 94.51	$ 112.24
Liabilities
Fair value measurements tons per year \| tons-per-year	0.8	0.8
Price per ton	$ 94.51	$ 112.24
Commodity Contract Derivatives
Fair Value Measurements
Balance at beginning/end of period	(4,000,000)	58,000,000	$ (67,000,000)
Change in net unrealized gains (losses) deferred as regulatory assets and liabilities	(62,000,000)	125,000,000
Fair Value, Inputs, Level 3
Fair Value Measurements
Commodity contract derivatives, assets	5,000,000	59,000,000
Commodity contract derivatives, liabilities	$ 9,000,000	$ 1,000,000

Fair Value Measurements Fair Value Measurements - Estimated Values of Financial Instruments (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018	Aug. 09, 2013
Estimated Values of Financial Instruments (Level 2 Valuation)
EnergyRight receivables (including current portion)		$ 112
Loans and other long-term receivables, net (including current portion)	$ 120	123
EnergyRight® financing obligation (including current portion)		143
Unfunded Loan Commitments	10	3
Membership interests of VIE subject to mandatory redemption (including current portion)	37	37	$ 40
Long-term outstanding power bonds (including current maturities), net	26,059	23,896
Long-term debt of variable interest entities (including current maturities)	1,371	1,256
Long-term notes payable (including current maturities)	23	68
Secured debt of VIEs
Estimated Values of Financial Instruments (Level 2 Valuation)
EnergyRight receivables (including current portion)	101	112
Loans and other long-term receivables, net (including current portion)		138
EnergyRight® financing obligation (including current portion)	113	127
Unfunded Loan Commitments	0	0
Membership interests of VIE subject to mandatory redemption (including current portion)	28	30
Long-term outstanding power bonds (including current maturities), net	20,124	21,189
Variable Interest Entity, Consolidated, Liabilities, No Recourse	1,128
Long-term debt of variable interest entities (including current maturities)	1,100	1,165
Long-term notes payable (including current maturities)	$ 23	$ 69

Proprietary Capital Proprietary Capital (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Appropriation Investment
Amount of appropriation investment that was repaid	$ 1,000								$ 1,000
Remaining appropriation investment	258								258
Balance at beginning of year				$ 10,283				$ 9,133	10,283	$ 9,133	$ 8,420
Net income (loss)	588	$ 165	$ 241	423	$ (101)	$ 470	$ 462	288	1,417	1,119	685
Return on power program appropriation investment									(6)	(5)	(5)
Balance at end of year	11,625				10,283				11,625	10,283	$ 9,133
Net proprietary capital at September 30	$ 11,625				$ 10,283				$ 11,625	$ 10,283
Computed average interest rate payable	2.37%				2.09%				2.37%	2.09%	2.00%
Nonpower Programs Appropriation Investment
Appropriation Investment
Balance at beginning of year				4,351					$ 4,351
Balance at end of year	$ 4,351				$ 4,351				4,351	$ 4,351
Power Program Appropriation Investment
Appropriation Investment
Balance at beginning of year				258				258	258	258	$ 258
Net income (loss)									0	0	0
Return on power program appropriation investment									0	0	0
Balance at end of year	258				258				258	258	258
Power Program Retained Earnings
Appropriation Investment
Balance at beginning of year				9,404				8,282	9,404	8,282	7,594
Net income (loss)									1,425	1,127	693
Return on power program appropriation investment									(6)	(5)	(5)
Balance at end of year	10,823				9,404				10,823	9,404	8,282
Net proprietary capital at September 30	11,081				9,662				11,081	9,662
Nonpower Programs Appropriation Investment, Net
Appropriation Investment
Balance at beginning of year				564				572	564	572	580
Net income (loss)									(8)	(8)	(8)
Return on power program appropriation investment									0	0	0
Balance at end of year	556				564				556	564	572
Nonpower Programs Retained Earnings
Appropriation Investment
Balance at beginning of year				$ (3,787)				$ (3,779)	(3,787)	(3,779)
Return on power program appropriation investment									0	0
Balance at end of year	(3,795)				(3,787)				(3,795)	(3,787)	(3,779)
Net proprietary capital at September 30	$ 556				$ 564				556	564
Affiliated Entity
Appropriation Investment
Return on power program appropriation investment									$ (6)	$ (5)	$ (5)

Proprietary Capital Proprietary Capital - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Accumulated Other Comprehensive Income (Loss)
Net effect on earnings	$ 0	$ 0
Net unrealized gain (loss) on future cash flow hedges		(114)	$ 10	$ 59
Reclassification to earnings from cash flow hedges		(45)	$ 26	$ (26)
Reclassification to earnings from cash flow hedges in the next twelve months		$ (30)

Other Income (Expense), Net Other Income (Expense), Net (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Other Income (Expense), Net
Change in other income (expense)	$ 12
Other income		$ 0	$ 0
Proceeds from Other Deposits	21
Interest income	25	23	23
External services	13	14	14
Gain (Loss) on Investments	3	6	9
Gains (losses) on investments	2
Miscellaneous		7	10
Miscellaneous	0
Total other income (expense), net	62	$ 50	$ 56
Gain (Loss) on Disposition of Assets	$ 5

Supplemental Cash Flow Information Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Supplemental Cash Flow Information
Interest paid	$ 1,300	$ 1,200		$ 1,300
Capital lease obligations incurred		10
Power purchased under agreement				10
Acquisition of notes payable				74
Accounts payable and accrued liabilities
Supplemental Cash Flow Information
Construction in progress and Nuclear fuel expenditures		$ 324	$ 372	$ 425

Benefit Plans Components of Benefit Plans (Details) - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Defined Benefit Plan Disclosure
Fixed and variable fund annual maximum contribution		$ 10,000
Defined Benefit Plan, Plan Assets, Increase (Decrease) for Assets Transferred to (from) Plan		23,000,000
Defined contribution plan contribution amount	$ 88,000,000	$ 84,000,000	$ 80,000,000
Minimum
Defined Benefit Plan Disclosure
Threshold for Deferral of Actuarial Gain/Loss Under Corridor Approach		10.00%

Benefit Plans Obligations and Funded Status (Details) - USD ($)
$ in Millions

12 Months Ended

Sep. 30, 2019

Sep. 30, 2018

Sep. 30, 2017

Change in benefit obligation

Actuarial loss (gain)

$ (3)

Change in plan assets

Actual return on plan assets

$ 88

Amount related to experience loss

59

Defined Benefit Plan, Funded (Unfunded) Status of Plan [Abstract]

7

46

Pension Benefits

Change in benefit obligation

Benefit obligation

13,312

11,725

Defined Benefit Plan, Pension Plan with Projected Benefit Obligation in Excess of Plan Assets, Projected Benefit Obligation

11,725

12,601

Service cost

44

53

$ 60

Interest cost

499

473

$ 464

Plan participants' contributions

7

Change in Plan Assets due to Collections

^[1]

0

Collections

^[1]

0

Actuarial loss (gain)

1,756

(658)

Defined Benefit Plan, Benefit Obligation, Increase (Decrease) for Plan Amendment

7

0

Net transfers from variable fund/401(k) plan

1

(26)

Expenses paid

(6)

Benefits paid

721

719

Increase (Decrease) in Obligation, Other Postretirement Benefits

110

Defined Benefit Plan, Pension Plan with Projected Benefit Obligation in Excess of Plan Assets, Plan Assets

7,980

8,003

Change in plan assets

Fair value of net plan assets

8,003

Defined Benefit Plan, Plan with Accumulated Benefit Obligation in Excess of Plan Assets, Plan Assets

7,989

Actual return on plan assets

389

454

Employer contributions

307

304

Defined Benefit Plan, Funded (Unfunded) Status of Plan [Abstract]

Funded status

$ (5,332)

$ (3,722)

Discount rate

3.20%

4.35%

3.85%

Amount of defined benefit plan actuarial gain (loss) from discount rate change

$ (1,600)

$ (700)

Amount of defined benefit plan actuarial gain (loss) from change in mortality assumption

(14)

(138)

Benefit Plans Postretirement Benefit Costs Deferred as Regulatory Assets (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018
Defined Benefit Plan Disclosure
Regulatory assets	$ (8,763)	$ (6,612)
Non-current regulatory liabilities	0	104
Pension Benefits
Defined Benefit Plan Disclosure
Unrecognized prior service cost (credit)	(714)	(819)
Unrecognized net loss	5,350	3,842
Amount capitalized due to actions of regulator	(95)	(96)
Regulatory assets	(4,731)	(3,119)
Other Post-retirement Benefits
Defined Benefit Plan Disclosure
Unrecognized prior service cost (credit)	(135)	(159)
Unrecognized net loss	160	86
Amount capitalized due to actions of regulator	0	0
Regulatory assets		$ (73)
Non-current regulatory liabilities	$ 25

Benefit Plans Projected Benefit Obligations and Accumulated Benefit Obligations in Exess of Plan Assets (Details) - Pension Benefits - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018
Defined Benefit Plan Disclosure
Projected benefit obligation		$ 11,725
Accumulated benefit obligation	$ 13,246	11,659
Defined Benefit Plan, Pension Plan with Projected Benefit Obligation in Excess of Plan Assets, Plan Assets	7,980	8,003
Fair value of net plan assets	$ 8,003	$ 8,003

Benefit Plans Expected Amortization of Regulatory Assets in Next Fiscal Year (Details) $ in Millions	12 Months Ended
	Sep. 30, 2019 USD ($)
Defined Benefit Plan Disclosure
Prior service cost (credit)	$ (121)
Net actuarial loss	444
Pension Benefits
Defined Benefit Plan Disclosure
Prior service cost (credit)	(97)
Net actuarial loss	435
Other Post-retirement Benefits
Defined Benefit Plan Disclosure
Prior service cost (credit)	(24)
Net actuarial loss	$ 9

Benefit Plans Actuarial Assumptions (Details) - USD ($)	12 Months Ended
Benefit Plans Actuarial Assumptions (Details) - USD ($)	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Defined Benefit Plan Disclosure
Period during which actual company compensation experience study performed	5 years
Defined Benefit Plan, Cost of Living Adjustment Assumption	25.00%
Pension Benefits
Defined Benefit Plan Disclosure
Discount rate	4.35%	3.85%	3.65%
Discount rate	3.20%	4.35%	3.85%
Rate of compensation increase	4.00%	3.60%
Expected return on plan assets	7.00%	6.75%	7.00%
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Increase (Decrease) for Plan Amendment	$ 6.7500
Defined Benefit Plan, Cost of Living Adjustment Assumption	2.00%	2.00%	2.00%
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Rate of Compensation Increase	3.50%	5.34%	5.43%
COLA percentage increase (decrease)	600.00%
Other Post-retirement Benefits
Defined Benefit Plan Disclosure
Discount rate	4.40%	3.95%	3.70%
Discount rate	3.30%	4.40%
Defined Benefit Plan, Cost of Living Adjustment Assumption	2.00%	2.00%	2.00%
Minimum
Defined Benefit Plan Disclosure
Rate of compensation increase	2.50%
Maximum
Defined Benefit Plan Disclosure
Rate of compensation increase	14.00%
Pre-Medicare Eligible [Member] \| Other Post-retirement Benefits
Defined Benefit Plan Disclosure
Initial health care cost trend rate	6.25%	6.50%	6.50%
Ultimate health care cost trend rate	5.00%	5.00%	5.00%
Defined Benefit Plan, Year Health Care Cost Trend Rate Reaches Ultimate Trend Rate	2027	2024
Initial health care cost trend rate	$ 0.0675	$ 0.0625
Post-Medicare Eligible [Member] [Member] \| Other Post-retirement Benefits
Defined Benefit Plan Disclosure
Initial health care cost trend rate	0.00%	0.00%	0.00%
Ultimate health care cost trend rate	4.00%	4.00%	4.00%
Defined Benefit Plan, Year Health Care Cost Trend Rate Reaches Ultimate Trend Rate	2023	2021

Benefit Plans Asset Holdings (Details) - USD ($)	12 Months Ended
Benefit Plans Asset Holdings (Details) - USD ($)	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Defined Benefit Plan Disclosure
Target Allocation	100.00%
Plan Asset Allocations	100.00%	100.00%
Global public equity
Defined Benefit Plan Disclosure
Target Allocation	35.00%
Plan Asset Allocations	37.00%	44.00%
Public real assets
Defined Benefit Plan Disclosure
Target Allocation	15.00%
Plan Asset Allocations	15.00%	15.00%
Private equity
Defined Benefit Plan Disclosure
Target Allocation	8.00%
Plan Asset Allocations	10.00%	7.00%
Safety oriented fixed income
Defined Benefit Plan Disclosure
Target Allocation	17.00%
Plan Asset Allocations	18.00%	16.00%
Opportunistic fixed income
Defined Benefit Plan Disclosure
Target Allocation	15.00%
Plan Asset Allocations	12.00%	10.00%
Private real assets
Defined Benefit Plan Disclosure
Target Allocation	10.00%
Plan Asset Allocations	8.00%	8.00%
Other Post-retirement Benefits
Defined Benefit Plan Disclosure
Actuarial assumption COLA	$ 0.0221	$ 1.8400	$ 0.9900

Benefit Plans Estimated Future Benefit Payments (Details) $ in Millions	Sep. 30, 2019 USD ($)
Pension Benefits
Defined Benefit Plan Disclosure
Defined Benefit Plan, Expected Future Benefit Payments, Next Twelve Months	$ 782
Defined Benefit Plan, Expected Future Benefit Payments, Year Two	779
Defined Benefit Plan, Expected Future Benefit Payments, Year Three	778
Defined Benefit Plan, Expected Future Benefit Payments, Year Four	775
Defined Benefit Plan, Expected Future Benefit Payments, Year Five	771
Defined Benefit Plan, Expected Future Benefit Payment, Five Fiscal Years Thereafter	3,786
Other Post-retirement Benefits
Defined Benefit Plan Disclosure
Defined Benefit Plan, Expected Future Benefit Payments, Next Twelve Months	29
Defined Benefit Plan, Expected Future Benefit Payments, Year Two	27
Defined Benefit Plan, Expected Future Benefit Payments, Year Three	25
Defined Benefit Plan, Expected Future Benefit Payments, Year Four	24
Defined Benefit Plan, Expected Future Benefit Payments, Year Five	22
Defined Benefit Plan, Expected Future Benefit Payment, Five Fiscal Years Thereafter	$ 111

Benefit Plans Contributions (Details) - USD ($)	12 Months Ended
Benefit Plans Contributions (Details) - USD ($)	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Defined Benefit Plan Disclosure
Defined contribution plan contribution amount	$ 88,000,000	$ 84,000,000	$ 80,000,000
Other postretirement benefit contributions		36,000,000	25,000,000
Contribution related to TVARS case		4,000,000	15,000,000
Expected Payment for Postretirement Benefits	29,000,000
Supplemental Employee Retirement Plans, Defined Benefit
Defined Benefit Plan Disclosure
Defined Benefit Plan, Expected Payments Related to SERP	5,000,000
Defined Benefit Plan, Related to SERP		7,000,000	4,000,000
Other Post-retirement Benefits
Defined Benefit Plan Disclosure
Employer contributions		36,000,000	36,000,000
Pension Benefits
Defined Benefit Plan Disclosure
Employer contributions		307,000,000	$ 304,000,000
Other Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Employer contributions		300,000,000
Minimum \| Other Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Employer contributions		$ 300,000,000
Scenario, Forecast \| Other Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Employer contributions	$ 300,000,000

Commitments and Contingencies Commitments and Contingencies - Energy Prepayment Obligations (Details) $ in Millions	Sep. 30, 2019 USD ($)
Interest Payments relating to energy prepayment obligations
Obligations
2019	$ 4

Commitments and Contingencies Commitments and Contingencies - Membership Interests of VIE Subject to Mandatory Redemption (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018	Aug. 09, 2013
Long-term Purchase Commitment
Membership interests of VIE subject to mandatory redemption (including current portion)	$ 37	$ 37	$ 40
2018	3
Total	282
2019	3
2020	3
2021	2
2022	$ 1

Commitments and Contingencies Commitments and Contingencies - Purchase Obligations (Details) $ in Millions	12 Months Ended
	Sep. 30, 2019 USD ($) megawatts Megawatts	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)
Obligations
Megawatts provided under power purchase obligations	2,230
Remaining terms of the agreements, high end of range	13 years
Megawatts provided under transmission obligations \| megawatts	1,450
Power purchased under agreement \| $	$ 195	$ 188	$ 178
Maximum term length for the purchase, storage, and transportation of natural gas	four
Purchase Agreements Required by Federal Law
Obligations
Megawatts provided under power purchase obligations	263

Commitments and Contingencies Commitments and Contingencies - Legal Proceedings (Details) $ in Millions	12 Months Ended
	Sep. 30, 2019 USD ($) megawatts Units Groups Agreements	Sep. 30, 2018 USD ($)
Legal Proceedings
Possible additional future costs for compliance with CCR requirements	$ 1,181
Amount spent under environmental agreements	279
Contribution related to TVARS case	4	$ 15
Possible additional future costs for compliance with Clean Water requirements.	278
Amount to Pay Consent Decree	0
General
Legal Proceedings
Legal loss contingency accrual	$ 14
Environmental Agreements
Legal Proceedings
Number of similar environmental agreements entered into \| Agreements	2
Number of environmental agreements entered into with the EPA \| Agreements	1
Number of environmental agreements entered into with environmental advocacy groups \| Groups	3
Number of units to be idled \| Units	18
Megawatts option 1 \| megawatts	2,200
Megawatts option 2	3,500
Amount to be invested in certain environmental projects	$ 290
Amount to be provided to fund environmental projects	60
Amount to pay civil penalties	10
Other long-term liabilities \| General
Legal Proceedings
Legal loss contingency accrual	12
Accounts payable and accrued liabilities \| General
Legal Proceedings
Legal loss contingency accrual	$ 2

Revenue (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
Revenue (Details) - USD ($) $ in Millions	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Revenue Recognition and Deferred Revenue [Abstract]
Sales of Electricity (subtotal)									$ 11,155	$ 11,079	$ 10,602
Electric revenue									(11,159)	(11,075)	(10,586)
Off-system sales									4	7	6
Other revenue									159	158	153
Revenue from sales of electricity	$ 3,239	$ 2,604	$ 2,750	$ 2,725	$ 3,185	$ 2,707	$ 2,792	$ 2,549	$ 11,318	$ 11,233	$ 10,739

Revenue Revenue (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
Revenue Revenue (Details) - USD ($) $ in Millions	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2004
Electric revenue									$ 11,159	$ 11,075	$ 10,586
Percentage of total operating revenues [Abstract]
Other revenue									159	158	153
Revenues	$ 3,239	$ 2,604	$ 2,750	$ 2,725	$ 3,185	$ 2,707	$ 2,792	$ 2,549	$ 11,318	$ 11,233	10,739
MLGW's % of operating revenues									9.00%
NES's % of operating revenues									8.00%
MLGW prepayment												$ 1,500
MLGW
Percentage of total operating revenues [Abstract]
Deferred Revenue, Description									10	100		100
Federal agencies and other [Member]
Electric revenue									$ 122	$ 129	132
20-year contract arrangement [Member]
Electric revenue									6,350
10-year contract arrangement [Member]
Electric revenue									938
5-year contract arrangement [Member]
Electric revenue									3,063
Local Power Company [Member]
Electric revenue									10,351	10,262	9,741
Industries Directly Served [Member]
Electric revenue									686	695	735
Capitalized revenue during pre-commercial plant operations [Member]
Electric revenue									$ 0	$ 11	$ 22

Subsequent Events Subsequent Events (Details) $ in Millions	12 Months Ended
Subsequent Events Subsequent Events (Details) $ in Millions	Sep. 30, 2019 USD ($)
Debt Instrument, Redemption [Line Items]
Amount of bonds redeemed	$ 217

Plant Closures (Details) $ in Millions	12 Months Ended
Plant Closures (Details) $ in Millions	Sep. 30, 2019 USD ($)
Property, Plant and Equipment [Abstract]
Write-offs related to retirement of plants	$ 151
Write-offs materials and supplies	19
Accelerated depreciation	$ 566