During the nine months ended June 30, 2025, TVA's total asset retirement obligations ("ARO") liability increased $118 million as a result of increases from periodic accretion, partially offset by revisions in estimate and settlements related to retirement projects that were conducted during the period. The nuclear and non-nuclear accretion amounts were deferred as regulatory assets. During the nine months ended June 30, 2025, $165 million of the related regulatory assets were amortized into expense as these amounts were collected in rates. See Note 9 — Regulatory Assets and Liabilities. TVA maintains investment trusts to help fund its decommissioning obligations. See Note 15 — Fair Value Measurements — Investment Funds and Note 21 — Contingencies and Legal Proceedings — Contingencies — Decommissioning Costs for a discussion of the trusts' objectives and the current balances of the trusts.


Asset Retirement Obligation Activity (in millions)
	Nuclear		Non-nuclear		Total
Balance at September 30, 2024	$	3,814	$	6,992	$	10,806	(1)
Settlements	(9)		(178)		(187)
Revisions in estimate (non-cash)	2		(24)		(22)


Accretion (recorded as regulatory asset)	130		197		327

Balance at June 30, 2025	$	3,937	$	6,987	$	10,924	(1)

Revisions in non-nuclear estimates decreased the liability balance by $24 million for the nine months ended June 30, 2025. The decrease was primarily attributable to a change in closure liabilities of $34 million at Paradise Fossil Plant based on scope changes, new vendor bids, and updated cost estimates for activities associated with final closure. The decrease was partially offset by increased revisions in estimates of $16 million related to the final legacy coal combustion residual rule ("Legacy CCR Rule").