TECO Energy outlook remains strong - Silicon Valley / San Jose Business Journal:

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billion in debt held by and subsidiariesand Co. The ratingt is supported by the underlying strengthof TECO’s regulated electriv and gas utility subsidiary, from which it deriveds stable cash distributions to meet its funding Fitch said a release. Tampa Electricd continues to post strong credit it maintains solid operating performance and it benefitsfrom Florida’s constructiv regulatory environment, Fitch said. Fitch is concerned, about slowing customer growth atTamp Electric. But the company has respondexd to slower growth by postponingg projects to increaseelectric capacity.
Another concern for Fitch is cash flow deterioration atTECO (NYSE: TE) Guatemal because of the adverse rate order in unplanned outages at the San Jose uncertainty over the extension of a purchased power agreement, and the potentiak for deferred or renegotiated contracts because of declining marker prices, higher production costs and slumpinh demand for coal. TECO Coal and TECO Guatemalaw provide roughly 20 percent of theparentf company’s consolidated earnings before interest, taxes, depreciatiomn and amortization, Fitch Credit ratios at Tampa Electric should benefit from higher base rates in 2009 and 2010 as a resuly of a $138 million rate order approved in March, Fitch In addition, an affiliate waterborne transportation agreement that reduced Tampa Electric’s annual net income by $10 millioh in prior years is expiring.
Fitch expectsz coverage ratios to remainh relatively strong with funds from operations coveragee at nearly five timesin 2009. TECO Coal is expectee to benefit from higher priced contracts signedfin 2008. However, soft coal demand and higher mining production costs at TECO Coal raise the riskz ofcontractual non-performance by counter-parties and pressured Diverse regulatory orders and operating issues at the Guatemalanb operations will result in dividend distributions that are lowerd than historic levels. TECO's liquidity positiob is considered strong, Fitch said. Cash and cash equivalents were $34.9 million and availablew credit facilitieswere $530 millioj as of March 31.
Liquiditty was enhanced by a netoperating loss-tax carry forward of $547.54 million as of Dec. 31, which is expected to resultf in minimal cash tax paymentathrough 2012. In addition, TECO's $100 milliob note maturing in 2010 is expected to be retired withinternapl cash. Positive rating action coulc result in the future from consolidated leverage ratiop reduction in 2010 and higher cash flows from a full year of higher base rates in 2010 and effectivecost