KNOXVILLE, Tenn., Aug. 5 /EMWNews/ -- TVA announced today that it

will revise its financial statements for the 2006 and 2007 fiscal years and

for quarterly periods during the 2007 and 2008 fiscal years. TVA has

determined that the method used to estimate unbilled revenues for these

periods resulted in errors that should be corrected.



    The restatements involve accounting estimates in the affected periods

and will not impact TVA's operations or net cash flow from operating

activities. The revisions will affect financial statements for fiscal years

that ended Sept. 30, 2006 and 2007 and the quarters ending Dec. 31, 2006;

March 31, 2007; June 30, 2007; Dec. 31, 2007; and March 31, 2008.



    "These revisions do not change our financial health," said TVA Chief

Financial Officer Kim Greene. "The restatements involve accounting

estimates that have no impact on TVA's cash position or its ability to meet

obligations to creditors, customers, investors or other stakeholders."



    TVA provides wholesale power to distributors who resell the power to

business, commercial and residential customers. TVA also sells power

directly to about 60 large industrial customers.



    Because of the delay between TVA's delivery of power to distributors

and when distributors report their subsequent sales, TVA must estimate

unbilled revenue at the end of each financial reporting period. In

September 2006 TVA implemented a new estimating procedure for unbilled

revenue. This new procedure resulted in an increase of $232 million in

unbilled revenue for fiscal year 2006. TVA has now determined that the

procedure overestimated the number days of revenue outstanding and

therefore the estimate of unbilled revenue.



    TVA's initial estimate is that the errors resulted in an overstatement

of net income for the fiscal year ended Sept. 30, 2006, and understatements

of net income for the fiscal year ended Sept. 30, 2007, and the six months

ended March 31, 2008.



    TVA will perform additional analysis on unbilled revenue estimates,



    expand management review of the assumptions that go into the estimates,

and



    further document procedures for managing changes to the process for

estimating unbilled revenue.



    In the course of the restatement process, TVA will file amended reports

with the Securities and Exchange Commission (SEC) for the impacted periods.



    The public may read financial reports and other information that TVA

files with the SEC from the SEC's website at http://www.sec.gov, or from TVA's

website at http://www.tva.com/finance. Copies of any reports may be requested by

calling TVA toll-free at (888) 882-4975, or (888) 882-4967 from outside the

United States, or by sending an email to [email protected].



    TVA is the nation's largest public power provider and is completely

self-financing. TVA provides power to large industries and 159 power

distributors that serve approximately 8.8 million consumers in seven

southeastern states. TVA also manages the Tennessee River and its

tributaries to provide multiple benefits, including flood damage reduction,

navigation, water quality and recreation.



    (This release and TVA reports filed with the SEC may contain

forward-looking statements relating to future events and future

performance. Although TVA believes that the assumptions underlying the

forward-looking statements are reasonable, numerous factors could cause

actual results to differ materially from those in the forward-looking

statements. Some of these factors are discussed on pages 4 and 5 of TVA's

annual report on Form 10-K filed with the SEC.)



    Media Contact: John Moulton, (865) 632-8048



    TVA News Bureau, Knoxville, (865) 632-6000



    http://www.tva.com/newsroom



    Investor Contacts:



    TVA Investor Relations (toll-free), Knoxville, (888) 882-4975



    TVA Investor Relations (toll-free International), (888) 882-4967



    On the web, http://www.tva.com/finance