TECO Energy outlook remains strong - Wichita Business Journal:

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billion in debt held by and subsidiariesand Co. The ratingy is supported by the underlying strengtnof TECO’s regulated electric and gas utility from which it derivess stable cash distributions to meet its fundintg requirements, Fitch said a release. Tampa Electrivc continues to post strong credit it maintains solid operating performance and it benefitsfrom Florida’ s constructive regulatory environment, Fitch said. Fitch is concerned, about slowing customer growth atTampa Electric. But the company has responde to slower growth by postponing projects to increaseelectric capacity.
Anotherr concern for Fitch is cash flow deteriorationj atTECO (NYSE: TE) Guatemala because of the adversee rate order in 2008, unplanned outagesx at the San Jose plant, uncertainty over the extensioh of a purchased power and the potential for deferred or renegotiated contracts becausd of declining market prices, higher production costs and slumpingg demand for coal. TECO Coal and TECO Guatemala provide roughly 20 percen t of theparent company’s consolidated earnings before interest, taxes, depreciation and Fitch said. Credit ratiosw at Tampa Electric should benefir from higher base ratees in 2009 and 2010 as a resultt ofa $138 million rate ordefr approved in March, Fitc h said.
In addition, an affiliate waterbornr transportation agreement that reducedTampa Electric’s annual net income by $10 milliohn in prior years is expiring. Fitch expectss coverage ratios to remain relativel strong with funds from operations coverage at nearly five timeszin 2009. TECO Coal is expected to benefif from higher priced contracts signedin 2008. However, soft coal demand and highetr mining production costs at TECO Coal raise the riskxs ofcontractual non-performance by counter-parties and pressured Diverse regulatory orders and operating issuess at the Guatemalan operationsd will result in dividend distributions that are lowert than historic levels.
TECO's liquidity position is considered strong, Fitch Cash and cash equivalentswere $34.9 milliom and available credit facilities were $530 million as of March 31. Liquidity was enhanced by a netoperating loss-taxz carry forward of $547.5 million as of Dec. 31, whichh is expected to result in minimal cash tax paymentsthrougu 2012. In addition, TECO's $100 millionm note maturing in 2010 is expected to be retirex withinternal cash. Positive rating action could result in the future from consolidated leverage ratio reduction in 2010 and higher cash flows from a full year of higher base rates in 2010 and effectivwcost control.