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News Release

Tampa Electric files forecasted 2008 fuel, environmental and conservation costs with Florida Public Service Commission

Company projects a slight decrease in the average customer bill

TAMPA, September 4, 2007

Tampa Electric made its annual fuel, environmental and conservation costs filing today with the Florida Public Service Commission (FPSC), projecting a slight decrease in customer bills for 2008. The company projects costs for the fuels used to produce electricity, as well as purchased power, will continue to be relatively high, but expects them to be less volatile than they have been over the past few years.

The filing today also reflects Tampa Electric’s substantial investment in pollution control equipment, most recently the installation of selective catalytic reduction equipment to dramatically reduce nitrogen oxide emissions at the company’s Big Bend Power Station. The continued financial benefits of the company’s environmental improvements help to offset the costs of these activities – environmental credits have helped mitigate the impact of fuel costs by $100 million in 2007 and 2008.

2008 fuel and purchased power costs

Tampa Electric estimates that its expenses for buying fuel and purchased power will be less volatile than the past few years. The company’s filing also indicates that the under-recovered fuel costs for 2006 expenses have been fully collected. Upon approval by the FPSC in November, a residential electric bill would decrease by 16 cents per month for 1,000 kilowatt-hours of usage, down from $114.54 to $114.38.

While 1,000 kilowatt-hours per month has been used for decades as the most common measure of typical residential electricity consumption, 1,250 kilowatt-hours per month is more realistic for a Tampa Electric residential customer due to the weather and high saturation of all-electric homes . Thus, a customer with this electricity usage would have a bill of $140.80 based on today’s filing, a decrease of 22 cents from 2007.

If approved by the FPSC, the average commercial and industrial customer bills would decrease by 0.9 and 2.8 percent, respectively. The decrease will be reflected in customers’ bills beginning Jan. 1, 2008.

President Chuck Black said, “All of Tampa Electric’s team members are working hard to maintain a cost-effective, diverse fuel mix and to develop the latest technologies that will allow us to safely and reliably produce and deliver electricity at the absolute lowest possible costs to our customers.”

“Fuel costs in general have been increasing since 2003, which has been a frustration for all of us, because these costs are borne by our customers. At this point, we are pleased to see that they finally appear to be stabilizing; we expect that they will remain at current levels for the balance of 2007 and throughout 2008,” added Black.

Impacts of commodity prices

Although fuel costs and commodity prices appear to be stabilizing, uncontrollable severe weather events and increasing global demand for fuel can result in future price increases. Industry-wide, fuel and purchased power costs account for about 50 percent of a customer’s cost of electricity. Since 1999, natural gas prices have increased more than 200 percent.

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 is separate from the company’s base rates. Tampa Electric has not requested a base rate increase in 15 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. A diverse generation portfolio enhances reliability and provides for relatively stable pricing.

Our commitment to the environment

Tampa Electric committed in 1999 to an environmental program to reduce emissions from its power plants. 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.

“Tampa Electric’s philosophy is to balance our need to protect the environment with our need to safely provide affordable, reliable electricity to our customers,” 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 recovered by the utilities. At Tampa Electric, those improvements are already built into rates, 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 helped reduce the overall impact of higher fuel and purchased power costs for 2007 and 2008 by almost $100 million.

Expanding energy efficiency programs

“We are committed to partnering with our customers to minimize our shared impact on the environment. In addition to dramatic environmental improvements on our own system, we are dedicated to expanding the ways we show customers how to save energy, which will save them on their monthly energy costs and reduce environmental impact,” Black said. “We encourage our customers to learn about the proven ways to be more energy efficient in their homes and businesses.”

Tampa Electric recently received approval from the Florida Public Service Commission to expand its highly successful innovative Energy Planner Pilot Program to all new qualified customers. Energy Planner allows customers to make energy consumption decisions based on energy prices by using a programmable thermostat provided at no charge.

The company has also recently filed for FPSC approval to expand its offerings of energy efficiency programs to include new conservation programs such as:

  • A Low Income Program that provides no cost items to low-income families to help them conserve energy.
  • An Energy Awareness Pilot Program that partners with area schools at the eighth grade level to teach energy efficiency at home and school.

The recent FPSC filing also includes plans to add new features or enhancements to its existing residential and commercial energy conservation programs, to include:

  • A Telephone Audit that will provide more convenience to customers
  • Window Replacement/Upgrades that pay incentives up to $350
  • A Window Film program that pays incentives up to $1 per square foot
  • A Home Energy Audit that will provide participating customers with six compact fluorescent lamps
  • Heating & Cooling program incentives of up to $275
  • Ceiling Insulation incentives up to $200
  • Reduced Duct Repair fees of $50 (from $79)
  • Commercial Cooling enhancements – including increased incentives and expansion to include larger units
  • A Commercial Energy Efficient Motors program that will provide $2.50 incentive per horsepower for energy efficient motor upgrades

For more energy efficiency tips or information about our energy-saving programs, visit the website’s “$ave 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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