Tennessee-Tombigbee Waterway Development Opportunities Conference

1. AUTOMOTIVE DISTRIBUTION FOOD LIFE SCIENCES Tennessee-Tombigbee Waterway Development Opportunities Conference PLASTICS

2. Trends/UpdatesTVA ED ProgramsWhat Can You Do? Economic Development

3. Trends in Economic Development • Automotive Market in Transition

4. U.S. Automotive Market – 2008 vs. 2007 (7 months) • Ford 15 % • GM 18% • Chrysler 23% • Honda 3% • Hyundai • Nissan • Toyota 7.5% Return

5. Trends in Economic Development • Automotive Market in Transition • Competitiveness continues to increase on all projects • Megaprojects - still the holy grail • Project Timelines Accelerating • Heavy Capital Investment, but jobs difficult to come by • Cash incentives rather than tax credits • Weak Dollar attracting foreign producers to U.S. • Fuel prices offer advantage to water transportation • Also forces businesses closer to their customers • Energy Efficiency and Renewables from environmental pressures • LEED – Leadership in Energy and Environmental Design • Green

6. TVA Operation Update Power • Coal TransportationLogistics

7. How is Coal Transported? Percent of Total Coal Receipts Truck 7% Barge 22% Rail/Barge37% Rail 34% Next 7

8. TVA Fossil Plants Coal Basins used by TVA Other Coal Basins Where Does TVA Buy Coal? TVA Spends $3 – 4 Billion Annually on Coal PRB-24% ILB-41% CAPP-13% Uinta-22% PRB = Powder River Basin, Wyoming Uinta = Colorado and Utah ILB = Western KY and Illinois CAPP = Eastern KY and WV & VA Return 8

9. TVA Operation Update Power • Coal TransportationLogistics • Coal continues to play major role in future generation • River transport may play larger role in mix • Watts Bar 2 (TN) – 12 months into 54 month construction schedule • Bellefonte (AL) - Under review River/Land Management • Industrial Development of Land – Yellow Creek Port • Continued Rainfall Below Normal (74%) • Operating at Minimum Flows for navigation

10. The Drought Continues….. Next

11. Services and Tools - Marketing We offer one-stop site selection services • “TVA’s Megasites Certification program should now be considered the gold standard for large economic development projects.” • Eddie Lehner, SeverCorr CFO Certified Megasites

13. Services and Tools - Marketing Megasite Program Results (so far) • 4 Sites Sold • Direct Jobs – 5000 • Capital Investment – $4 Billion • “Best Community Development Program we have ever done” – John Bradley, SVP TVA

14. Services and Tools – CommunityReadiness • Building the Local ED Organization • Responding to RFP’s • Preparing for Prospect Visit • Technology grants • Spec Building program • ARC Infrastructure project administration

15. Services and Tools – Technical Services • Site Mapping • Concept Plans • Virtual Spec Building • Renderings - Existing Building • “TVA has gone from an economic development bystander to an economic development leader in the south.” • Southern Business & Development Magazine

16. What Can You Do…..In Times Like These? • Regional Cooperation increases your influence and reach • Targeted Recruitment to increase spending impact • Work with Existing Industries for Opportunities • Build your Recruitment Team • Community Preparedness • Know Your Product - Improve YourProduct • Site Readiness is key to competitiveness • Understand your Client’s Needs • Make the Business Case

17. Put the TVA Economic Development team to work for your community

18. Services and Tools - Marketing We’re focusing on specific high-growth targets Economic research was conducted to target growing sectors that are best suited for the Tennessee Valley • Automotive • Distribution & warehousing • Food industry • Plastics

19. System Inflows Above Chattanooga in 2007/2008 1,800 1,600 D0 1,400 D1 Median Cumulative Weekly Inflow (1000 cfs) . D2 1,200 D3 1,000 800 D4 2008 600 2007 400 200 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec The Drought Continues….. Return