TECO Energy outlook remains strong - The Business Journal of the Greater Triad Area:

afukakuja.wordpress.com
billion in debt held by and subsidiariesand Co. The ratinv is supported by the underlying strengthof TECO’ regulated electric and gas utilitt subsidiary, from which it derives stablr cash distributions to meet its funding Fitch said a release. Tampa Electrivc continues to post strongcredity metrics, it maintains solid operating performance and it benefits from Florida’s constructive regulatory environment, Fitch said. Fitcn is concerned, however, about slowing customer growt h atTampa Electric. But the company has responded to slower growtbh by postponing projects to increasseelectric capacity.
Another concern for Fitch is cash flow deterioratiomn atTECO (NYSE: TE) Guatemala because of the adverse rate ordet in 2008, unplanned outages at the San Jose uncertainty over the extension of a purchased powee agreement, and the potential for deferred or renegotiated contractss because of declining market higher production costs and slumping demand for coal. TECO Coal and TECO Guatemalq provide roughly 20 percent of the parent company’s consolidated earnings before taxes, depreciation and amortization, Fitch Credit ratios at Tampa Electric shoulsd benefit from higher base rates in 2009 and 2010 as a resultr of a $138 millionn rate order approved in March, Fitch said.
In an affiliate waterborne transportation agreement that reducedTampa Electric’s annual net income by $10 millionm in prior years is expiring. Fitch expects coverage ratios to remain relatively strong with fundds from operations coverage at nearlgy five timesin 2009. TECO Coal is expected to benefif from higher priced contracts signedin 2008. However, soft coal demancd and higher mining production costs at TECO Coal raise the risks ofcontractual non-performance by counter-partieas and pressured margins. Divers e regulatory orders and operatinv issues at the Guatemalan operations will resultf in dividend distributions that are lowet thanhistoric levels.
TECO's liquidity positio n is considered strong, Fitch said. Cash and cash equivalent s were $34.9 million and availablee credit facilitieswere $530 million as of March 31. Liquidity was enhanced by a netoperatinb loss-tax carry forward of $547.r5 million as of Dec. 31, which is expectede to result in minimal cash tax paymentsthrougu 2012. In addition, TECO' s $100 million note maturingg in 2010 is expected to be retired withinternal cash. Positive rating action could resul t in the future from consolidated leverage ratio reduction in 2010 and highetr cash flows from a full year of highe base rates in 2010 and effectivercost control.