Tennessee Valley Authority Announces FY2027 Incentive Goals, LTIP Targets

What Happened
On August 20, 2026, the Tennessee Valley Authority (TVA) Board approved FY2027 performance measures and goals for the Enterprise Scorecard used in the Winning Performance Team Incentive Plan (WPTIP) and Executive Annual Incentive Plan (EAIP), and set performance measures/goals for the FY2027–FY2029 Long-Term Incentive Plan (LTIP). The Board also revised measures and goals for the SBU Controllable O&M and Base Capital Spend metric for FY2026 (WPTIP/EAIP) and updated Total Spend goals for LTIP cycles FY2024–FY2026, FY2025–FY2027 and FY2026–FY2028. The 8-K was filed August 25, 2026 and signed by Thomas C. Rice, Executive VP & CFO.

Key Details

• Enterprise Scorecard for FY2027 (WPTIP & EAIP) — weights: Personal Safety 15%, Nuclear Reliability 15%, Transmission Reliability 15%, Generation Reliability 15%, Cost Performance 40%. Example thresholds/targets/stretch for Personal Safety: 0.03 / 0.01 / 0.00 (Serious Injury Incident Rate).
• Transmission sub-metrics (Transmission Reliability): Load Not Served weight 60% (threshold/target/stretch 4.4 / 3.6 / 2.7 system minutes); Outages per Hundred Miles/Year weight 20% (2.87 / 2.61 / 1.98); Connection Point Interruption Frequency weight 20% (0.64 / 0.53 / 0.34).
• Generation sub-metrics (Generation Reliability): Combined Cycle EFOR 45% (2.5% / 1.7% / 1.1%), Hydro EFOR 25% (3.7% / 2.3% / 1.9%), Coal EFOR 25% (4.0% / 3.0% / 2.0%), Combustion Turbine start reliability 5% (99.1% / 99.3% / 99.5%).
• LTIP FY2027–FY2029 measures and weights: Stakeholder Survey 20% (76.0 / 80.0 / 84.0), Project Milestones 20% (80% / 90% / 100%), Total Spend 60% (threshold = 3% Non‑Fuel O&M, Inventory & Cloud / 5% Capital over FY2027–FY2029 budget; target = FY2027-budget-based cumulative spend; stretch = 3% Non‑Fuel O&M, Inventory & Cloud / 5% Capital under budget).
• Changes to prior cycles: FY2026 SBU Controllable O&M & Base Capital Spend (weight 40%) set at $4,794 / $4,679 / $4,565 (threshold/target/stretch); LTIP total-spend updates for FY2024–FY2026 ($18,399 / $17,844 / $17,289), FY2025–FY2027 ($26,064 / $25,290 / $24,515), FY2026–FY2028 ($23,258 / $22,582 / $21,907) as reported in the filing.

Why It Matters
These Board actions set the performance targets that determine employee and executive incentive payouts for FY2027 and the FY2027–FY2029 long-term cycle. The approved metrics emphasize safety, generation and transmission reliability, and cost control (Total Spend), signaling TVA’s operational priorities. For investors and stakeholders, these targets tie compensation to measurable outcomes that can influence operational focus, capital spending discipline, and ultimately service reliability and cost management — all factors that can affect TVA’s financial performance and stakeholder relations.