Data center power sales drive $220M increase in TVA’s net income

The Tennessee Valley Authority’s net income increased by $220 million in the first three quarters of this year, primarily due to higher operating revenue associated with an increase in power sales which was largely driven by the data processing, web hosting and related services sector, TVA’s CFO and executive vice president Tom Rice said during a Tuesday third-quarter earnings call.

Despite milder weather, TVA’s power sales increased 1% year-over-year, Rice said. The federal utility’s total operating revenue grew to $10 billion over the first nine months of the fiscal year, up 3% year-over-year. TVA’s net income jumped to $965 million in that period, from $745 million in the year-ago period, the utility said in a release.

TVA’s fuel revenue increased $144 million year-over-year, driven in part by a $115 million increase in fuel rates from higher natural gas prices, Rice said, and those higher natural gas prices — along with higher purchased power market prices — also drove TVA’s fuel and power purchase expenses up $253 million year-over-year.

BY THE NUMBERS: TVA Q3 ‘26

$965M

TVA’s net income over the first nine months of the fiscal year, a $220 million increase year-over-year.

$26M

The amount of cash TVA realized from Inflation Reduction Act tax credits over the last three quarters.

3,770 MW

TVA’s pipeline of new generation, which stayed the same from Q2 to Q3.

“Operating and maintenance expenses decreased by $76 million over the same period last year, driven primarily by tax credits,” Rice said. In TVA’s third-quarter report, the utility said that last year it applied for Inflation Reduction Act credits including the 48E investment tax credit for qualifying hydroelectric improvements and the 45U production tax credit for generation from its existing nuclear units.

The net book value of the IRA credits was $112 million as of June 30, up from $72 million last September, according to TVA’s 10-Q filing with the U.S. Securities and Exchange Commission, and over the last three quarters the utility received $26 million in cash associated with those credits.

TVA’s construction pipeline of new generation remains at 3,770 MW, where it was last quarter, said the utility’s interim President and CEO Mike Skaggs. The combined-cycle gas plant TVA is building at its Cumberland site is on schedule to be commissioned later this year, Skaggs said, and the new gas plant at its Kingston site is expected to come online next year.

TVA also has new gas units “planned at New Caledonia in Mississippi and at our Allen site in Memphis,” Skaggs said. In addition, the utility is entering long-term commercial agreements “to further expand capacity and support reliability across the valley,” with resources including battery storage and advanced nuclear.

Skaggs closed out the earnings call by reaffirming TVA’s “support for and alignment with the Trump administration's desire for U.S. energy dominance, especially in the areas of extending coal generation and advancing our nation's nuclear industry.”