TMCnet News
More profits, bonuses for utility Tennessee Valley Authority(Knoxville News-Sentinel, The (TN) (KRT) Via Thomson Dialog NewsEdge) Dec. 13--Despite the challenges of a record drought and an August heat wave, TVA saw profits and employee bonuses rise in fiscal 2007. In an annual financial report filed Wednesday with the Securities and Exchange Commission, the federal utility reported net income of $383 million on operating revenues of $9.24 billion for the fiscal year ending Sept. 30. Those totals were up from $329 million in profits and $9.17 billion in operating revenues in fiscal 2006. In a separate report to the U.S. Office of Management and Budget, TVA detailed incentive payments greater than $25,000 to 54 top executives. TVA President and CEO Tom Kilgore earned total compensation of $1.84 million for the fiscal year, up from $1.59 million last year. Kilgore is eligible to make $2.7 million next year under a compensation plan approved last month by TVA's board. Other top earners for 2007 were Chief Operating Officer Bill McCollum ($1.76 million), Vice President of Nuclear Generation Development and Construction Ashok Bhatnagar ($1.04 million) and Chief Nuclear Officer Bill Campbell ($1 million). TVA said each executive is paid less than executives in similar positions with utilities in the private sector. The financial report showed that TVA paid nearly $1.7 million during fiscal 2007 to former Chief Financial Officer Michael Rescoe, who left TVA in November 2006 to work for a travel services company, under the terms of his severance agreement. Two other former executives, Karl Singer and Joe Bynum, were paid bonuses after leaving TVA, according to an earlier report with the SEC. Singer, the former chief nuclear officer, received bonuses of $724,000 under a separation agreement negotiated in March, while Bynum, the former head of fossil operations, was paid bonuses of $401,421 and continued to receive his $413,992 annual salary after resigning in June. TVA spokesman John Moulton said the agency paid out $48.9 million in bonuses to TVA's 12,359 employees. That amount was up from $40 million last year, a 22-percent improvement that reflected TVA's meeting six of nine agency-wide performance measures. TVA met its goals in the categories of safe workplace, connection point interruptions, customer satisfaction, economic development, delivered cost of power and equivalent availability factor, a measure of the efficiency of TVA's fleet of power plants. TVA missed its goals for productivity, environmental impact and fuel cost adjustment expenses. The annual financial report revealed for the first time the extent of cost overruns during the restart of Unit 1 at Browns Ferry Nuclear Plant in Alabama. TVA said the five-year project exceeded its budget by $90 million -- five percent of the projected cost of $1.8 billion. The agency blamed the overruns on a greater-than-expected scope of work for a power uprate, or increase of the plant's output. According to TVA, 2007 was the driest year in the eastern Tennessee Valley in 118 years, with rainfall at 66 percent of normal and runoff 54 percent of normal. The drought cut into TVA's hydroelectric production and also -- in combination with an August heat wave -- forced the utility to cut back power production at some nuclear and coal plants to avoid heating the Tennessee River to unacceptable levels. TVA also saw record-high demand for electricity during the heat wave. The conditions contributed to a $141 million increase in operating expenses, but TVA also saw operating revenues rise by $69 million, driven by higher rates for TVA's directly served industrial customers. The agency reported that total power sales decreased by about 1 percent from 2006. The increase in profits largely reflected the effects of a $109 million charge for an accounting change that TVA recorded in 2006. To see more of The Knoxville News-Sentinel or to subscribe to the newspaper, go to http://www.knoxnews.com. Copyright (c) 2007, The Knoxville News-Sentinel, Tenn. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |