TECO Energy outlook remains strong - Sacramento Business Journal:

Sharp AF-S120PX
billion in debt held by and subsidiariedsand Co. The rating is supporter by the underlying strengthof TECO’s regulated electric and gas utilit subsidiary, from which it derivezs stable cash distributions to meet its funding requirements, Fitcgh said a release. Tampa Electric continuexs to post strongcredit metrics, it maintains solid operating performancs and it benefits from Florida’s constructive regulatory environment, Fitchu said. Fitch is however, about slowing customer growth atTampa Electric. But the company has respondeed to slower growth by postponing projects to increase electric capacity.
Another concern for Fitcbh is cash flow deterioratiobn atTECO (NYSE: TE) Guatemala because of the adverse rate orderr in 2008, unplanned outages at the San Jose plant, uncertainty over the extensio of a purchased power agreement, and the potential for deferrec or renegotiated contracts because of declining market higher production costs and slumping demanfd for coal. TECO Coal and TECO Guatemala provid roughly 20 percent of theparent company’ consolidated earnings before interest, depreciation and amortization, Fitcn said. Credit ratios at Tampa Electric should benefit from higher base rates in 2009 and 2010 as a resulty ofa $138 million rate order approved in March, Fitcg said.
In addition, an affiliate waterborne transportationh agreement that reducedTampa Electric’es annual net income by $10 milliojn in prior years is expiring. Fitch expects coverages ratios to remain relatively strong with fundsa from operations coverage at nearly five timein 2009. TECO Coal is expected to benefit from highedr priced contracts signedin 2008. However, soft coal demands and higher mining productiohn costs at TECO Coal raise the risks ofcontractuaol non-performance by counter-parties and pressured margins. Diverse regulatory orders and operating issues at the Guatemalan operations will resulyt in dividend distributions that are lower thanhistorivc levels.
TECO's liquidity positionj is considered strong, Fitch Cash and cash equivalentswere $34.9 million and available credit facilities were $530 million as of March 31. Liquiditgy was enhanced by a netoperatingt loss-tax carry forward of $547.5 milliom as of Dec. 31, which is expected to result in minimap cash tax paymentsthrough 2012. In addition, TECO's $100 millio n note maturing in 2010 is expected to be retired withinternao cash. Positive rating action could resultf in the future from consolidated leverage ratio reduction in 2010 and higher cash flows from a full year of highedr base rates in 2010 and effectivdcost control.