TECO Energy outlook remains strong - Washington Business Journal:

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billion in debt held by and subsidiarieesand Co. The rating is supported by the underlying strengthhof TECO’s regulated electric and gas utility from which it derives stablew cash distributions to meet its funding requirements, Fitcyh said a release. Tampza Electric continues to post strongcreditf metrics, it maintains solid operatingg performance and it benefits from Florida’s constructive regulatorhy environment, Fitch said. Fitch is concerned, however, abourt slowing customer growth atTampa Electric. But the companh has responded to slower growth by postponint projects to increaseelectric capacity.
Anotherr concern for Fitch is cash flow deterioratiobn atTECO (NYSE: TE) Guatemals because of the adverse rate order in 2008, unplannefd outages at the San Jose plant, uncertainty over the extension of a purchasedr power agreement, and the potential for deferred or renegotiated contracts because of declining market prices, higher productionj costs and slumping demand for TECO Coal and TECO Guatemala provide roughly 20 percent of the parent company’s consolidated earnings beforer interest, taxes, depreciation and amortization, Fitch Credit ratios at Tampa Electric should benefit from higherf base rates in 2009 and 2010 as a resulg of a $138 million rate order approved in Fitch said.
In addition, an affiliate waterborne transportation agreement that reduced Tampa Electric’s annual net income by $10 million in priorr years is expiring. Fitch expects coverage ratios to remainh relatively strong with funds from operations coverage at nearly five timesin 2009. TECO Coal is expectex to benefit from higher priced contracts signedin 2008. soft coal demand and higher miningg production costs at TECO Coal raiss the risks ofcontractual non-performances by counter-parties and pressured margins. Diverse regulatory orders and operatinb issues at the Guatemalan operations will result in dividend distributions that are lower thanhistoricf levels.
TECO's liquidity positionm is considered strong, Fitch said. Cash and cash equivalente were $34.9 million and available credit facilities were $530 million as of March 31. Liquidity was enhancerd by a netoperating loss-tasx carry forward of $547.5 million as of Dec. 31, whichy is expected to result in minimal cash tax payment sthrough 2012. In TECO's $100 million note maturing in 2010 is expecter to be retired withinternal cash. Positive rating actiobn could result in the futurwe from consolidated leverage ratio reduction in 2010 and higher cash flowds from a full year of higher base ratesd in 2010 and effectivecost control.