TVA Board Meeting - FY24 Financial plan and budget- Reso-Memo
August 18, 2023 Financial Services
Board of Directors
SUBJECT
Recommend TVA Board approval of the proposed fiscal year (FY) 2024 TVA budget and related matters described in this Memorandum.
BACKGROUND
Under Section 2(g)(1)(D) of the TVA Act, the TVA Board is required to adopt an annual budget. The FY 2024budget, which includes an operating budget and a capital budget, is based on projected approved expenditures and includes detailed organizational inputs. The proposed budget and the related requests have been reviewed by the Audit, Finance, Risk, and Cybersecurity Committee.
ALTERNATIVES CONSIDERED
Management evaluated the spending levels and capital projects included in the FY 2024budget request. These spending levels and projects were evaluated on the basis of their criticality to maintain the overall health of the operations of the agency and long-term benefits for the ratepayers. It was determined by management that these levels of expenditure are needed to maintain the effective operation of the agency through FY 2024.
RECOMMENDED ACTION AND POTENTIAL IMPACTS
The FY 2024budget provides for allocation and utilization of projected revenues to recover projected costs of service. In addition, the FY 2024 budget provides for expansion and environmental capital expenditures. Attachment 1 includes the electric revenue requirements for FY 2024for rate-setting purposes. The revenue requirements specify the power proceeds necessary to produce gross revenues sufficient to provide funds for operation, maintenance, and administration of the power system; power system projects not funded by debt; payments to states and counties in lieu of taxes; debt service on outstanding bonds; payments to the U.S. Treasury as a return on the appropriation investment; and additional margin as the Board may consider desirable for investment in power system assets, retirement of outstanding bonds in advance of maturity, and other power purposes. Attachment 2 includes a list of capital projects that each exceed $200 million. The identified projects would not adversely impact TVA operations, and all required program, legal, and environmental reviews have been or will be completed before final decisions to proceed with projects are made. In accordance with the TVA Board Practice, Capital Projects Approvals , approval of the budget authorizes approval of the specified projects and, by its approval, the Board delegates to the Chief Executive Officer (CEO) the authority (1) to determine whether all required reviews have been completed and (2) to make the final decision to proceed with an identified project subject to the budget approved by the Board. For each capital project for which
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