TVA officials said they would seek to cut fewer than 1,000 positions in an effort to trim spending.
The electric supplier brought in nearly $2.6 billion in revenue during the three-month period ending in March, a drop of more than 12 percent compared to the same period last year, according to federal filings. Power sales were down about 7 percent for the quarter.
The electric supplier blamed the bulk of those losses on an unusually warm winter, which cut both the demand for electricity and the prices that TVA can charge for it. TVA officials stood by the board's recent decision to approve adding $1.5 billion to $2 billion to the estimated cost of building a second nuclear reactor at its Watts Bar power plant in Spring City, Tenn. That brings the final cost of the project to as much as $4.5 billion.
"While we still believe that will be a low-cost option and help balance our portfolio for our fleet, the increased spending on that certainly is a hard spot," said John Thomas, the TVA's chief financial officer, in a conference call with reporters and analysts.
Seeking to trim its expenses, Thomas said the TVA anticipates it will spend roughly half a billion less on capital projects. One example is the TVA's decision to scale back funding for engineering work to complete the Bellefonte nuclear plant in Hollywood, Ala. TVA earlier decided it would not start construction on Bellefonte until the Watts Bar project is complete.
The TVA plans to save an estimated $100 million by cutting 1,000 positions among both employees and contractors, Janet Herrin, TVA's executive vice president and chief administrative officer, told workers in a memo. Some of those positions are now vacant. Of the full-time TVA workers targeted in the job cuts so far, about half have been moved to other positions within the authority, Herrin said.
CEO Tom Kilgore said the TVA would do a better job managing the nuclear construction project at Watts Bar and measuring progress. While the price of natural gas has plummeted, Kilgore said the TVA still needs a mix of power plants — what utilities call a portfolio — because it cannot predict what various fuels will cost deep into the future.
"We think that keeping this balance with having nuclear be a base part of the portfolio is still a good decision," Kilgore said, adding that the new Watts Bar reactor is expected to produce electricity at less than the cost of TVA's current wholesale power rates.
TVA provides electricity to about 9 million people in Tennessee, Kentucky, Mississippi, Alabama, Georgia, North Carolina and Virginia.