TVA Board Meeting - FY24 Financial plan and budget- Reso-Memo
Board of Directors Page 2 August 18, 2023
a final decision has not yet been made as of the date the Board approves the proposed resolution, the CEO will inform the Board prior to making the final decision.
The new transmission projects requiring land acquisition are listed in Attachment 3. Money has been included in Transmission & Power Supply’s FY 2024 budget for the portion of each listed project (and transmission projects similarly listed in prior budgets)that will be performed in FY 2024. All of the projects have gone through Transmission & Power Supply’s budget approval process. Some projects will require further approval by the CEO. The Board is being asked to approve only the acquisition of the land rights associated with performing these projects, and approval to proceed with the projects themselves is contingent upon the CEO’s further approval, as may be necessary. The requested approval includes acquisition of land rights associated with these projects by condemnation, if necessary. The FY 2024Commercial TransactionsContracting Plan (FY 2024Contracting Plan), included in Attachment 4, which is confidential, has been reviewed by the Audit, Finance, Risk, and Cybersecurity Committee. Guidance contained in the applicable TVA Board Practice anticipates that the FY 2024 Contracting Plan will be reflected in the Board budget review and approval process. Board approval of the FY 2024Contracting Plan as a related matter to the Board’s approval of the FY 2024 budget satisfies the guidance included in this TVA Board Practice. The Contracting Plan includes certain specific delegations of authority to the CEO (1) to enter into contracts for wholesale power and energy purchases and other forward capacity agreements and (2) to enter into contractual arrangements to purchase and sell renewable energy and renewable energy certificates (RECs)in quantities sufficient to meet the needs of LPC-served and TVA directly served customers. In accordance with the authority granted to the Board under Section 26 of the TVA Act, we recommend that the Board approve retaining for use in the operation of the TVA power system the entire margin of net power proceeds remaining at the conclusion of FY 2024. We recommend that TVA continue its allowance for funds used during construction (AFUDC) policy as outlined in Attachment 5. In addition, we recommend that the Board approve the continued recognition of regulatory assets and regulatory liabilities as permitted under Accounting Standards Codification 980, Regulated Operations, and that TVA account for certain regulatory accounting matters as described in Attachment 5. Attachment 5 includes a summary of (1) TVA’s AFUDC policy, (2) the regulatory assets for which we recommend future rates be established to recover such costs, and (3) the regulatory liabilities which represent amounts we recommend be refunded in future rates. We recommend that the Board approve extending for FY 2024 the previously-approved End- User Exemption from the Dodd-Frank Wall Street Reform and Consumer Protection Act’s mandatory clearing requirement. As required under Section 9B of the Rules and Regulations of the TVA Retirement System (Retirement System), the Retirement System Board of Directors has informed the Board of Directors of the minimum required FY 2024contribution to the Retirement System. After consideration of the minimum required contribution and the amendments to the Rules and Regulations of the Retirement System that became effective on October 1, 2016, TVA management is recommending that the Board of Directors approve a $300 million contribution to the Retirement System for FY 2024. This contribution level is sufficient to meet the
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