The Tennessee Valley Authority announced Thursday an initiative to support increased flexibility for local power companies who are responding to urgent community and customer needs during the COVID-19 outbreak.

TVA will make up to $1 billion of credit support available as an option to local power companies through the deferral of wholesale power payments based on the needs of individual local power companies.

“The impact of the COVID-19 outbreak on the communities we serve is unprecedented and creates a degree of economic uncertainty in the weeks and months ahead,” said TVA President and CEO Jeff Lyash. “We recognize that we have a responsibility to leverage TVA’s resources and expertise to provide local power companies the stability and flexibility to address the unique challenges faced by their customers.”

Lyash said detailed plans will be customized for each participating local power company based on individual needs and financial impacts. A portion of the local power company’s monthly TVA wholesale power payments would be deferred for a period during the ongoing COVID-19 response and an appropriate repayment plan will be put in place.

Because many businesses and industries temporarily closed due to the COVID-19 epidemic, the utilities that served them have experienced an unexpected loss of income, yet they still owe their regular wholesale power payment to TVA, which provides the power to utilities.

Some utilities may also still be owed money from businesses and industries that they cannot reasonably expect to collect at this time because of the current financial situation. Also, many residential power customers may not be able to pay their bills on time because they are temporarily out of work. Utilities have already recognized these situations and have agreed not to cut power to these customers during the crisis.

“The strength of public power is a passionate commitment to serve people over balance sheets,” Lyash said. “This is perhaps more critical today than it has ever been.

“Just as they have through February flooding and March storm recovery, our TVA team remains committed to working with all 154 of our local power company partners to benefit the communities and customers we jointly serve, especially during these challenging times.”