Tennessee Valley Authority (TVE)

Price$23.40Cached quoteAs of 2026-09-17 21:31 UTC

AI: Fair-priced

Price checkThe listed security trades slightly below its twenty-five dollar face value, offering steady but capped returns.

TVE is not an ordinary share; it is a power bond TVA sold in 1999, repayable at twenty-five dollars in spring 2029. It recently changed hands for roughly ninety-four cents per dollar of that face value. Interest is fixed at about 2.2% a year and can only ever be reset downward, so nearly all expected return comes from collecting interest plus the gradual climb back to face value — about a mid-four-percent annual return if held to maturity. Top-tier credit ratings and tiny price swings mean the market prices in neither distress nor a bargain, which supports a fair-priced verdict.

Big pictureThis bond is a loan to America's largest government-owned utility, whose growing electricity sales stand behind it.

TVA is a federally chartered utility selling electricity to about ten million people across seven states through more than one hundred fifty local power companies; customer bills, not taxes or shareholders, fund it. It issues no ordinary stock, so these bondholders simply hold a loan with a claim ahead of any growth story. Revenue still matters: sales climbed eleven percent last fiscal year to $13.7 billion, helped by large computing facilities that already consume roughly a tenth of its power and could double their demand by 2030. Stronger sales enlarge the revenue stream standing behind every debt payment.

Business strengthCash generation covers obligations comfortably, and top-tier credit ratings reflect one of the safest utility balance sheets.

Cash flow from operations — money generated after running the system — reached $3.3 billion last fiscal year, up from $3.0 billion, while net income rose to $1.36 billion from $1.14 billion; the first nine months of the new fiscal year added $965 million, up $220 million. Debt stands near $24.6 billion against a legal $30 billion ceiling, and building spending of $4.5 billion last year exceeded operating cash flow, so borrowing continues and interest costs creep up. Even so, independent credit-quality scores of Aa1 and AA+ sit just below or alongside the federal government's own, making repayment risk very small.

What could change the storyA legal debt ceiling shapes everything: growth must be financed by partners, and interest rates set the bond's appeal.

Congress caps TVA's borrowings at $30 billion, so planned reactors depend on outside money — Japanese banks, technology partners, and large customers sharing costs. If those deals stall, growth slows rather than credit weakening immediately; if they succeed, the revenue base widens without breaching the cap. For this bond specifically, the fixed interest can only be reset downward, and only if long-term Treasury yields fall far below today's levels — an event that would also let holders return bonds for full face value. Booming computing demand or an expensive nuclear stumble are the clearest ways the story shifts.

AI: News

New rate class for data centersThe board approved charging large computing facilities roughly ten percent more for power, protecting household bills.

At its board meeting this week in Memphis, directors voted unanimously to move data centers into their own rate class costing about ten percent more, phased in over three fiscal years and taking effect in early October. Such facilities already draw nearly a fifth of industrial power demand and may double that by 2030. The decision follows a White House pledge to shield households from cost shifts tied to artificial intelligence, locking in revenue from TVA's fastest-growing customers while defusing political backlash.

Steady fiscal third-quarter resultsNine-month revenues grew three percent and profit rose by about thirty percent, confirming stronger underlying earnings.

Reporting earlier this month, management booked $10.0 billion of revenue for the first nine months of its fiscal year, up three percent, with net income of $965 million, up $220 million. Growth came mainly from higher fuel-cost recovery and added sales to the data-processing sector, although pricier natural gas lifted fuel expenses by $253 million. Operating cash flow eased to $1.9 billion from $2.1 billion. For bondholders the message is that earnings comfortably cover rising interest expense, keeping repayment risk low even as building spending accelerates.

Nuclear buildout wins outside backersNegotiations advanced to build small reactors using partner and Japanese funding, sidestepping TVA's legal debt limit.

Earlier this month the interim chief executive described fast-paced negotiations to build small modular reactors — factory-assembled units far smaller than conventional plants — at the unfinished Bellefonte site in Alabama with GE Vernova Hitachi, plus separate talks involving Hartsville, Tennessee. Japan has committed up to $40 billion toward new regional reactors, and a construction permit decision for the Oak Ridge project could come within weeks. Management insists outside parties fund the work, shielding TVA's balance sheet beneath its $30 billion debt cap while adding capacity for data-center demand.

Leadership restored after turmoilA rebuilt board and an experienced interim leader ended a year of governance paralysis, enabling fresh strategy.

After several directors were fired last year, the board lacked a voting quorum for most of a year; four presidential appointees restored it at the start of this year. Veteran operations leader Mike Skaggs returned as interim chief executive this spring after Don Moul retired following a White House directive capping the job's pay at $500,000. Stabilized leadership aligned TVA with the administration's nuclear and affordability priorities, unlocking the long-stalled energy plan and the data-center rate vote — the reason strategic decisions are suddenly moving quickly.

Loading local price history

Revenue

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Net income

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Free cash flow

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Total cash / debt

CashTotal debt

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009
Revenue	$13.67B	$12.31B	$12.05B	$12.54B	$10.50B	$10.25B	$11.32B	$11.23B	$10.74B	$10.62B	$11.00B	$11.14B	$10.96B	$11.22B	$11.84B	$10.87B	$11.26B
Operating expenses	$11.10B	$10.09B	$10.36B	$10.13B	$7.66B	$7.54B	$8.51B	$8.66B	$8.01B	$8.29B	$8.79B	$9.55B	$9.50B	$9.92B	$10.40B	$8.63B	$9.28B
Operating income	$2.57B	$2.23B	$1.69B	$2.41B	$2.85B	$2.71B	$2.81B	$2.57B	$2.73B	$2.33B	$2.21B	$1.59B	$1.45B	$1.30B	$1.44B	$2.24B	$1.97B
Operating margin	18.79%	18.09%	14.05%	19.23%	27.09%	26.45%	24.84%	22.86%	25.45%	21.91%	20.13%	14.27%	13.26%	11.59%	12.14%	20.62%	17.53%
EBITDA	$4.86B	$4.39B	$3.93B	$4.49B	$4.40B	$4.56B	$4.80B	$5.12B	$4.50B	$4.21B	$4.29B	$3.48B	$3.18B	$3.25B	$3.23B	$3.98B	$3.59B
EBITDA margin	35.56%	35.63%	32.59%	35.78%	41.89%	44.48%	42.45%	45.60%	41.87%	39.64%	39.01%	31.22%	28.99%	28.94%	27.27%	36.65%	31.91%
Net income	$1.36B	$1.14B	$500.0M	$1.11B	$1.51B	$1.35B	$1.42B	$1.12B	$685.0M	$1.23B	$1.11B	$469.0M	$271.0M	$60.0M	$162.0M	$972.0M	$726.0M
Net profit margin	9.95%	9.22%	4.15%	8.84%	14.40%	13.19%	12.52%	9.96%	6.38%	11.61%	10.10%	4.21%	2.47%	0.53%	1.37%	8.94%	6.45%