Tampa Electric focuses on plans for 2002, 2003
TAMPA, September 24, 2002
TECO Energy announced Monday that it expects 2002 earnings per share to increase over 2001, and that net income is expected to grow by more than 10 percent. The company also provided its initial 2003 outlook.
Tampa Electric Company, the principal subsidiary of TECO Energy, is projected to complete its third straight year of increased net income. In 1999, Tampa Electric’s net income, excluding one-time charges, was $138.8 million. In 2000, it increased net income by 4 percent to $144.5 million. In 2001, it increased net income to $154 million, a 6.6 percent increase over the previous year. For 2002, Tampa Electric expects net income to increase again by more than 6 percent.
Restructuring activity at Tampa Electric is also part of TECO Energy’s 2003 business plan. The company will be making personnel reductions of about 5 percent, on top of a 2 percent reduction earlier this year. Personnel reductions at Tampa Electric are not expected to affect service to customers.
President John Ramil said, “Our reductions are largely in line with what others in the industry are doing to as a result of productivity improvements and technology applications. We are primarily eliminating managerial and administrative jobs. It’s possible that some of those whose jobs are being eliminated will be placed in our Customer Service area, where we are planning to add employees soon to serve our customers better and improve our operation.”
In 2003, Tampa Electric expects continued retail energy sales growth of about 2.5 percent and significant operations and maintenance cost savings from the reduction in the number of coal-fired units at Gannon Station, and the completion of Bayside Unit 1.
“We have made a large financial commitment to construction, including $1 billion for our Bayside project and state-of-the-art emissions control technology at our Big Bend power plant, in order to meet the most stringent environmental requirements,” said Ramil.
“With the Bayside conversion to natural gas, we can expect to reduce sulfur dioxide and nitrogen oxide emissions at that plant by over 95 percent each from 1998 levels. The environmental equipment added to our Big Bend Station will achieve a 95 percent sulfur dioxide removal efficiency. By 2010, nitrogen oxide (NOx) emissions from Big Bend will be reduced by over 85 percent from 1998 emission levels. Besides that, we will invest up to $11 million for early NOx reductions and for demonstrating innovative technologies for reducing NOx emissions at Big Bend and our other plants. We are continuing these and other technology and expansion-related investments, because it helps us serve our growing customer base in a way that is highly efficient and that meets modern-day environmental standards,” Ramil added.
Long-term, the company feels it is well-positioned with assets that will serve future energy needs. “Though 2003 is going to be a transitional year for us, that is in keeping with the long-term view we have taken about our business and our proven core assets,” said Bob Fagan, chairman and CEO of Tampa Electric’s parent company, TECO Energy.
Tampa Electric is the principal subsidiary of TECO Energy, Inc. (NYSE: TE), an energy-related holding company based in Tampa. In addition to Tampa Electric, TECO Energy’s mix of regulated utility operations and unregulated businesses includes Peoples Gas, TECO Power Services, TECO Transport, TECO Coal, TECO Coalbed Methane and TECO Solutions.
Note: This press release contains forward-looking statements, which are subject to the inherent uncertainties in predicting future results and conditions. These forward-looking statements include references to our anticipated results of operations, growth rates, capital investments, financing requirements, project completion dates, future transactions and other plans. Certain factors that could cause actual results to differ materially from those projected in these forward-looking statements include the following: energy price changes affecting TPS’ merchant plants; TPS’ ability to sell the output of the merchant plants operating or under construction at a premium to the forward curve prices and to obtain power contracts to reduce earnings volatility; TPS’ ability to successfully resolve its dispute and enter into a service contract with ERCOT; any unanticipated need for additional equity capital that might results from lower than expected cash flow or higher than projected capital requirements; TECO Energy’s ability to successfully complete the monetization of its synthetic fuel and gasification facilities, the sale of gas properties and other financial transactions in its new business plan; and TECO Energy’s ability to maintain credit ratings sufficient to avoid posting letters of credit relating to its construction loans and to avoid providing additional assurances to counterparties. Others factors include: general economic conditions, particularly those in Tampa Electric’s service area affecting energy sales; weather variations affecting energy sales and operating costs; potential competitive changes in the electric and gas industries, particularly in the area of retail competition; regulatory actions affecting Tampa Electric, Peoples Gas System or TECO Power Services; commodity price changes affecting the competitive positions of Tampa Electric and Peoples Gas System, as well as the margins at TECO Coalbed Methane and TECO Coal; changes in and compliance with environmental regulations that may impose additional costs or curtail some activities; TPS’ ability to successfully construct, finance and operate its projects on schedule and within budget; the ability of TECO Energy’s subsidiaries to operate equipment without undue accidents, breakdowns or failures; interest rates, credit ratings and other factors that could impact TECO Energy’s ability to obtain access to sufficient capital on satisfactory terms; and TECO Coal’s ability to successfully operate its synthetic fuel production facilities in a manner qualifying for Section 29 federal income tax credits, which could be impacted by changes in law, regulation or administration. Some of these factors and others are discussed more fully under “Investment Considerations” in the company’s Annual Report on Form 10-K for the year ended December 31, 2001, and in the company’s Registration Statement on Form S-3 (Registration No. 333-83958).