Project Action Timeline

1. TVA Restricted Information – Deliberative and Pre-Decisional Privileged Project Action Timeline V13 TVA Restricted Information – Deliberative and Pre-Decisional Attorney-Client Privileged and Confidential

2. TVA Strategic Alignment TVA Board Strategy Strategic Practices Financial Practices Operational Guidelines Environmental Policy TVA Management Vision for Action Test Vision robustness through IRP Operational Program Decisions Transmission Expansion EEDR New Generation Markets & Acquisitions Clean & Renewable Asset Retirements Environmental Controls Long Term Financial and Operational Plan 2 TVA Restricted Information – Deliberative and Pre-Decisional Privileged

3. Executive Summary Strategy Options IRP Evaluation Minimize regrets to decisions Other Alternatives Business as Usual Cleaner and Greener TVA Vision Extreme Change Environmental Future • Board’s Integrated Resource Plan (IRP) decision in Spring 2011 will set forth a renewed energy vision for TVA • IRP portfolio decision will lead to a continuum of specific project decisions • Near term decisions on critical projects (clean air, potential plant purchases, etc.) will influence future portfolio • Several major planning decisions may need to be addressed within the next 18-24 months before IRP is finalized 3 TVA Restricted Information – Deliberative and Pre-Decisional Attorney-Client Privileged and Confidential

4. Interim Project Decisions • Project decisions made before TVA’s IRP update is complete will be accounted for in the IRP final product • These incremental decisions will define a path or maintain flexibility that is critical due to future requirements or uncertainty • Interim project recommendations will be based on: • Existing IRP (circa 1995) • TVA Strategic Plan • TVA Environmental Policy • TVA’s directional Vision framework • Sound financial principles • All actions will be consistent with the Board’s strategic direction to reduce the environmental footprint of the TVA system TVA Restricted Information – Deliberative and Pre-Decisional Attorney-Client Privileged and Confidential

5. Decisions Needed • Near Term Project Decisions – required before IRP is finalized: • Definitive: “do” or “not do” - result is a formal decision and path forward • Positioning: buys time, maintains flexibility, and/or captures economic opportunities – consistent with TVA’s mission to provide reliable, low-cost power • In many situations, not considering the issue in a timely fashion may result in a decision evolving by default – no decision becomes a decision TVA Restricted Information – Deliberative and Pre-Decisional Attorney-Client Privileged and Confidential

6. Actions and Drivers TVA Restricted Information – Deliberative and Pre-Decisional Attorney-Client Privileged and Confidential 6

7. Examples • Construction • Nuclear - Bellefonte • East Mississippi CT • New Pumped Hydro • Gleason CT / CC • Clean Air vs. Retirement • COF 5 • WCF 1-6 • JSF 1-4 • JOF 1-10 • SHF 1-9 • COF 1-4 • ALF 1-3 • Asset Purchase • Decatur Energy Center (DEC) • K-Gen Murray • Magnolia • Other • Renewable Purchases • EE&DR – EnerNoc/ Energy Efficiency • Rate Designs • Transmission Upgrade • PPA Contract/Lease • Magnolia • DEC • Tapoco • Suez • Batesville 7 TVA Restricted Information – Deliberative and Pre-Decisional Attorney-Client Privileged and Confidential

8. Conclusion • Near-term project decisions will be directionally consistent and accounted for in the forthcoming IRP • Individual projects will be brought to the Board for approval – or the board will be advised they are being executed under existing Board delegations • First project for consideration by the Board is anticipated in early 2010 TVA Restricted Information – Deliberative and Pre-Decisional Attorney-Client Privileged and Confidential 8

9. Appendix TVA Restricted Information – Deliberative and Pre-Decisional Attorney-Client Privileged and Confidential 9

10. Potential Future Portfolios Business As Usual (2,000 MW Fossil Mothballed or Retired) Cleaner & Greener (3,000 MW Fossil Mothballed or Retired in accelerated fashion) Extreme Change (7,000 MW Fossil Mothballed or Retired in accelerated fashion) • Additions: • 3 nuclear units • 15 gas plants – CC dominant • 1 pumped storage plant • EE & DR - aggressive • Renewables - aggressive • PPA’s – used to cover gaps Mothball/Retire/Repower: • JSF 1-4 • WCF 1-6 • JOF 1-10 • SHF 10 • COF 5 • Additions: • 3 nuclear units • 12 gas plants – CT dominant • 0 pumped storage plant • EE & DR - moderate • Renewables - moderate • PPA’s – used to cover gaps • Mothball/Retire/Repower: • JSF 1-2 • WCF 1-6 • JOF 1-10 • Additions: • 3 nuclear units • 12 gas plants – CC dominant • 1 pumped storage plant • EE & DR - expanded • Renewables - expanded • PPA’s – used to cover gaps Mothball/Retire/Repower: • JSF 1-2 • WCF 1-6 • JOF 1-10 • JSF 3-4 • COF 5 • SHF 10 • ALF 1-3 • GAF 1-4 • SHF 1-9 • COF 1-4 *All Additions, Mothballs & Retirements are Transmission Dependent 10 TVA Restricted Information – Deliberative and Pre-Decisional Privileged

11. Project Decision Timelines Generation/Fleet Decision Point Time to bring new Projects online – after Final Board Approval New Nuclear Plant: 8-10 yrs Pumped Storage: 8-10 yrs New Gas Gen: 4-5 yrs IPP Purchase: < 1 yr New Major Transmission: 3-10 yrs Clean Air Projects: 3-5 yrs 2010 2020 Note - All above decisions need to consider transmission timelines • Board’s IRP decision in Spring 2011 will establish TVA’s energy vision • IRP portfolio decision will lead to a continuum of specific project decisions • Near term decisions on critical projects (clean air, potential plant purchases, etc.) • will substantially influence future portfolio 11 TVA Restricted Information – Deliberative and Pre-Decisional Attorney-Client Privileged and Confidential

12. Decision Timeline • Q3 FY10 – SHF 1-9 SCR • Q1 FY11 -- ALF Scrubbers • Q1 FY11 – COF 1-4 Scrubbers • Q3 FY11 – COF 5 Scrubber/Retirement • Q3 FY11 – GAF Scrubbers, Baghouses, • and SCRS • Clean Air /Retirement Decisions • Q2 FY10 – WC1-6 Retirement • Q2 FY10 – JOF retirement • Q2 FY10 – JSF 1-2 Retirement • Q2 FY10 – JSF 3-4 Controls/Retirement • Q3 FY10 – COF 1-4 SCR • Construction Assets • Q2 FY10 – New nuclear Bellefonte decision (isd : 2018) • _______ - East Mississippi CT plant (isd: 2014) • _______ - Rorex Creek Pumped Hydro (isd: 2022) • ________- Gleason CT refurbishment (isd: 2013/2014) TVA Restricted Information – Deliberative and Pre-Decisional Attorney-Client Privileged and Confidential

13. Decision Timeline • Potential Asset Purchase • _____ – Magnolia 922 MW ($580 M) • _____ - Decatur Energy Center (DEC) 720 MW ($450 M) • Or other competitive acquisitions • PPA Renewals / Lease/ New Contracts • ____ – Magnolia 20 year tolling agreement (1/10-12/29) 922 MW • ____ - DEC 15 year tolling extension (9/12-8/27) 720 MW • ____ - Suez 650 MW 8 year tolling extension (1/13 -12/20) 650MW • And/or other competitive deals TVA Restricted Information – Deliberative and Pre-Decisional Attorney-Client Privileged and Confidential

14. Decision Timeline • Additional Renewable Purchases • _____ - approval for levels >2000 Mw or > $0 REC cost over competitive pricing • Expanded Level of Support for EE&DR • ______ - EnerNoc contract extension • ______ - funding for additional energy efficiency programs TVA Restricted Information – Deliberative and Pre-Decisional Attorney-Client Privileged and Confidential