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News Release

Tampa Electric files with Florida Public Service Commission for 2007 fuel costs reimbursement

TAMPA, September 1, 2006

Reflecting continued higher costs of purchasing natural gas, coal and oil used to produce electricity, Tampa Electric made its annual filing today with the Florida Public Service Commission (FPSC) seeking an increase in its fuel charge for 2007.

2007 electricity prices

Tampa Electric estimates that its expenses for buying fuel and purchased power will be more than $100 million higher than its estimates one year ago. The company requested the increase to recoup under-recovered fuel costs from 2005 and 2006 and to meet projected fuel costs in 2007. Upon approval by the FPSC in November, a residential electric bill will increase by $4.93 per month for 1,000 kilowatt-hours, from $109.61 to $114.54, a 4.5 percent increase.

While 1,000 kilowatt-hours per month has been used for decades as one measure of residential electricity consumption, a figure of 1,250 kilowatt-hours per month is the modern day typical average residential electric use for a Tampa Electric customer. A customer with this electricity usage would have a bill of $141.02 based on the filing today.

If approved by the FPSC, the average commercial and industrial customer bills would increase by 6.0 and 7.7 percent, respectively. The increase will be reflected in customers’ bills beginning Jan. 1, 2007.

“Just as our customers are frustrated by paying higher gasoline prices that they cannot control, we are also frustrated by having to pay fuel providers higher prices to run our power plants to generate electricity for our customers,” said president Chuck Black. “Our entire team is working very hard day-in, day-out to safely and reliably produce and deliver electricity at the absolute lowest possible costs to our customers.”

Impacts of commodity prices

Industry-wide, fuel and purchased power costs account for about 95 percent of the cost increases experienced by utilities in the last five years. Since 1999, natural gas prices have increased more than 300 percent. These prices are now at their highest level in modern history.

Tampa Electric does not profit financially from the fuel and purchased power costs recovered from its customers.  The fuel charge represents dollar for dollar the costs the company actually pays to third parties and it is separate from the company’s base rates. Tampa Electric has not requested a base rate increase in 14 years.

About half of the energy supplied by the company is generated by coal, the cost of which has risen, but not at the same rate as oil and gas. This fuel diversity helps to mitigate Tampa Electric’s fuel charge increases.

Our commitment to the environment

Tampa Electric set itself apart from the industry in 1999, when it embarked on a sweeping plan to improve the air emissions profile of its power plants. While others hesitated to make the improvements needed, Tampa Electric is close to completing the environmental improvements that have decreased its air emissions dramatically over 1998 levels. The company is known as an industry leader in the environmentally responsible production of electricity.

“Our strategy to quickly step forward to improve the air emissions profiles of our generating units was the most cost-effective and responsible long-term decision we could have made for our customers and our community,” said Black.

Black emphasized that, over the long term, all utilities will have to make substantial improvements (some as soon as 2009), and those improvements will be paid for through rates. At Tampa Electric, those improvements are already being built in, and the environmental benefits are already being experienced.

Tampa Electric’s environmental leadership has also helped partially offset the increase in fuel costs. Early adoption of pollution control technologies has earned the company environmental credits. These credits have helped reduce the overall impact of higher fuel costs by $70 million in the new filing.

Encouraging energy efficiency
“We are committed to keep the overall costs for our customers as low as possible,” Black said. “We encourage our customers to learn about the proven ways to be more energy efficient in their homes and businesses to save money.”

Examples of energy efficiency initiatives include:

  • Install a programmable thermostat. A ten-degree set back for eight to ten hours can save 10 to 20 percent on cooling costs.
  • Service cooling systems regularly and adjust for maximum efficiency to save up to 15 percent on cooling costs.
  • Increase summer thermostat setting to save 6 to 8 percent per degree on cooling costs for every degree over 78.
  • Turn thermostat off when home is unoccupied for extended periods of time and save up to 15 percent on cooling costs
  • Install flow-restricting devices in showers and faucets and save 5 to 10 percent on water heating use.
  • Seal leaks in HVAC ductwork and save 10 to 30 percent on cooling costs
  • Replace central air conditioner with a more efficient unit and save 14 to 40 percent on cooling costs.

For more energy efficiency tips or information about our energy-saving programs, visit the website’s “Save Energy” section

Tampa Electric Company is the principal subsidiary of TECO Energy, Inc. (NYSE: TE), an integrated energy-related holding company with core businesses in the utility sector, complemented by a family of unregulated businesses. Tampa Electric Company is a regulated utility with both electric and gas divisions (Tampa Electric and Peoples Gas System). Other subsidiaries are engaged in waterborne transportation, coal and synthetic fuel production and independent power.

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Tampa, Florida 33602
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