Tennessee Valley Authority (TVC) risk factors, FY2024 10-K

REGULATORY, LEGISLATIVE, AND LEGAL RISKS

1. 01TVA may become subject to additional environmental regulations or may be required to expend significant funds in the future to comply with current regulations
2. 02New, existing, or amended laws, regulations, and administrative or executive orders, or congressional actions or inactions, create certain risks due to unique aspects of TVA’s structure and business
3. 03TVA's governmental status may interfere with its ability to quickly respond to the needs of its current or potential customers or to act solely in the interest of its ratepayers
4. 04TVA is involved in various legal and administrative proceedings, the outcomes of which may affect TVA's finances and operations
5. 05TVA could lose its protected service territory
6. 06TVA may become subject to additional NERC requirements

OPERATIONAL RISKS

1. 07TVA's management and operation of CCR facilities expose it to additional costs and risks
2. 08TVA relies on certain assumptions about the future that may prove inaccurate, including when determining the appropriate mix of generation assets
3. 09TVA may not be able to meet its carbon reduction aspirations, which may result in additional capital expenditures or higher operating expense
4. 10TVA may experience delays and incur additional costs in its major projects or may be unable to obtain necessary regulatory approval for them
5. 11TVA faces certain risks arising solely from its operation of nuclear units
6. 12as an equipment manufacturer's inability to meet a guideline, specification, or requirement
7. 13If TVA were to have to make additional contributions to the NDT, the contributions may negatively affect TVA's cash flows, results of operations, and financial condition
8. 14TVA may not be able to operate one or more of its nuclear power units
9. 15Physical attacks, threats, or other interference could damage or interfere with TVA's facilities and operations
10. 16TVA's assets or their supporting infrastructure may not operate as planned
11. 17TVA's operations present significant safety risks that are not able to be completely eliminated
12. 18TVA's service reliability could be affected by problems at other utilities or at TVA facilities, or by the increase in intermittent sources of power
13. 19TVA's supplies of fuel, purchased power, or other critical items may be disrupted or obtained at a higher cost than planned
14. 20Global conflicts, terrorist activities, or military actions could adversely affect TVA’s business

CYBERSECURITY AND INFORMATION TECHNOLOGY RISKS

1. 21TVA’s facilities and information infrastructure may not operate as planned due to cyber threats to TVA’s assets and operations
2. 22cybersecurity, negatively affect TVA’s cash flows, results of operations, financial condition, and reputation, and pose health and safety risks to TVA personnel and the customers and communities that TVA serves
3. 23Cyber attacks on third parties or the failure of their technology infrastructure could interfere with or harm TVA
4. 24The failure of TVA’s information technology systems could have adverse consequences to TVA
5. 25The emergence of artificial intelligence technology could create challenges for TVA, and TVA may not be able to adopt the use of technology in step with private utilities

FINANCIAL, ECONOMIC, AND MARKET RISKS

1. 26Demand for electricity could be higher or lower in the future than TVA currently expects or is financially planning for
2. 27TVA could have to make significant future contributions to fund its qualified pension plan, and the increasing costs of the plan and employee benefits could adversely affect TVA's results of operations, financial condition, or cash flows
3. 28TVA’s reliance on debt markets may make TVA more vulnerable to being unable to meet cash requirements than private utilities that can issue equity securities
4. 29TVA's debt ceiling may limit TVA's ability to carry out its business in the event that TVA were to approach or reach it
5. 30TVA, together with owners of TVA securities, may be impacted by downgrades of TVA's credit ratings
6. 31Changes in technology could affect relationships with customers, require TVA to change how it conducts its operations, or impact TVA's financial condition
7. 32TVA could lose its competitive edge if it fails to keep up with changes in technology
8. 33TVA is subject to a variety of market risks that may negatively affect TVA's cash flows, results of operations, and financial condition
9. 34The market for TVA Bonds might be limited
10. 35Payment of principal and interest on TVA securities is not guaranteed by the U.S government

HUMAN CAPITAL AND MANAGEMENT RISKS

1. 36Failure to attract and retain an appropriately qualified, diverse, and inclusive workforce may negatively affect TVA's results of operations
2. 37Changes in the membership of the TVA Board and TVA senior management could impact how TVA operates
3. 38Loss of a quorum of the TVA Board could limit TVA's ability to adapt to changing business conditions

RISKS RELATED TO THE ENVIRONMENT AND CATASTROPHIC EVENTS

1. 39Weather conditions may hamper TVA's ability to supply power or negatively impact net revenue, and weather conditions may cause customers' demand for power to exceed TVA's then-present power supply capabilities
2. 40Events that affect the supply or quality of water from the Tennessee River system and Cumberland River system, or elsewhere, may interfere with TVA's ability to generate power
3. 41Catastrophic events are an ever present risk of financial loss and disruption to TVA's business
4. 42TVA's financial control system cannot guarantee that all control issues and instances of fraud or errors will be prevented or detected
5. 43TVA may be unable to use regulatory accounting for some or all costs
6. 44TVA may not be able to implement its business strategy successfully
7. 45TVA's cost reduction efforts may not be successful
8. 46TVA's organizational structure may not adequately support TVA's anticipated business needs or enable it to meet the needs of its current or potential customers
9. 47TVA may have difficulty adapting its business model to changes in the utility industry and customer preferences
10. 48TVA's reputation may be negatively impacted