TECO Energy currently owns no operating assets but holds all of the common stock
of Tampa Electric Company and directly, or through its subsidiary TECO Diversified,
Inc., the other subsidiaries listed below. Unless otherwise indicated by the context,
“TECO Energy” means the holding company, TECO Energy, Inc., and its subsidiaries,
and references to individual subsidiaries of TECO Energy, Inc. refer to that company
and its respective subsidiaries. TECO Energy is a public utility holding company
exempt from registration under the Public Utility Holding Company Act of 1935.
Tampa Electric Company, a Florida corporation and TECO Energy’s largest subsidiary,
through its Tampa Electric division (Tampa Electric) provides retail electric
service to more than 612,000 customers in West Central Florida with a net system
generating capability of 3,256 megawatts (MW).
TECO Transport Corporation, a Florida corporation, owns no operating assets
but owns all of the common stock of four subsidiaries which provide waterborne
transportation, storage and transfer services of coal and other dry-bulk commodities.
TECO Coal Corporation, a Kentucky corporation, owns no operating assets but
owns all of the common stock of nine subsidiaries which own mineral rights,
and own or operate surface and underground mines, synthetic fuel production
facilities, and coal processing and loading facilities in eastern Kentucky,
Tennessee and southwestern Virginia.
TECO Wholesale Generation, Inc. (TWG) (formerly TECO Power Services Corporation),
a Florida corporation, has subsidiaries that have interests in independent power
projects in Florida, Virginia, Hawaii, Arkansas, Mississippi, Texas, Arizona
and Guatemala, and has investments in unconsolidated affiliates that participate
in independent power projects and electric distribution in other parts of the
United States (U.S.) and Guatemala. As part of its renewed focus on core utility
operations, TECO Energy revised its internal reporting information used for
evaluating, measuring and making decisions with respect to the components which
previously comprised the TECO Power Services (TPS) operating segment.
The revised operating segment, TWG Merchant, is comprised of all merchant operations
which include the results of operations for the Frontera, Commonwealth Chesapeake,
Dell and McAdams power plants, as well as the equity investment in other U.S.
plants, and TECO EnergySource, Inc. (TES), the energy marketing operation for
the merchant plants. The non-merchant assets that were formerly reported with
TPS include the company’s interests in Florida, Hawaii and Guatemala and are
now reported with Other Unregulated Companies.
TECO Energy’s other unregulated companies with continuing operations include
the non-merchant operations of TECO Wholesale Generation as described above,
TECO Solutions, Inc. (TECO Solutions), TECO Properties, Inc. (TECO Properties),
and TECO Investments, Inc. The TECO Solutions’ subsidiaries provide mechanical
contracting, air conditioning, electrical and plumbing systems and repair and
maintenance services in Florida.
There is presently competition in Florida’s wholesale power markets, increasing
largely as a result of the Energy Policy Act of 1992 and related federal initiatives.
However, the state’s Power Plant Siting Act, which sets the state’s electric
energy and environmental policy and governs the building of new generation involving
steam capacity of 75 megawatts or more, requires that applicants demonstrate
that a plant is needed prior to receiving construction and operating permits.
In 2003, the FPSC implemented rules that modified rules from 1994 that required
investor-owned electric utilities (IOUs) to issue RFP’s prior to filing a petition
for Determination of Need for construction of a power plant with a steam cycle
greater than 75 megawatts.
PGS is not in direct competition with any other regulated distributors of natural
gas for customers within its service areas. At the present time, the principal
form of competition for residential and small commercial customers is from companies
providing other sources of energy, including electricity. In general, PGS faces
competition from other energy source suppliers offering fuel oil, electricity
and in some cases, propane. PGS has taken actions to retain and expand its commodity
and transportation business, including managing costs and providing high quality
service to customers.
The U.S. power plants that TWG indirectly owns and operates and those for which
construction has been suspended are located in markets with a history of high
load growth. However, the general U.S. economic slowdown over the past several
years has slowed the growth in demand for power in some of these markets. In
addition, the slowdown of electricity deregulation initiatives across the United
States, including the markets that these facilities serve, caused in part by
the failure of deregulation in California and other events, has allowed the
traditional, incumbent utilities to continue to operate older, less efficient
generating facilities in lieu of purchasing power from newer, more efficient
independent power plants.
These factors have combined with aggressive plans by the independent power
industry to add merchant power facilities to cause excess generating capacity
that is either being built or has come on line in many markets. This excess
supply has depressed both spot and forward prices. Accordingly, TWG has ceased
work on any new power plant developments, and is active in its efforts to reduce
its merchant exposure.
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