Mild, dry winter hurts TVA sales

Net income is running about $53 million less than budgeted through the first half of the fiscal year, TVA President and CEO Tom Kilgore said in a report to TVA’s board of directors.

Electricity sales and operating revenue are both well below normal, he said.

The self-supporting agency operates on a budget of around $9 billion. TVA will release its second-quarter earnings in May.

Kilgore said hydroelectric generation, TVA’s cheapest source of power, is 25 percent below normal because of the dry weather.

The three-month period of January-March 2007 was the driest on record for the Tennessee Valley. That followed a December-February period that was the driest on record for the valley above Chattanooga, which includes most of the tributaries feeding the Tennessee River system.

Kilgore said the effects of the weather along with higher fuel costs and a higher-than-expected forced outage rate for maintenance at TVA power plants have hurt the agency’s projected costs for delivering power.