TECO Energy outlook remains strong - Business First of Buffalo:

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billion in debt held by and subsidiariesand Co. The ratingy is supported by the underlying strengthgof TECO’s regulated electric and gas utility from which it deriveas stable cash distributions to meet its funding requirements, Fitcu said a release. Tampa Electric continue to post strongcredit metrics, it maintainw solid operating performance and it benefit from Florida’s constructive regulatory environment, Fitch said. Fitch is however, about slowing customer growth atTampza Electric. But the company has responded to slowerr growth by postponing projectxs to increaseelectric capacity.
Another concern for Fitchh is cash flow deterioration atTECO (NYSE: TE) Guatemalwa because of the adverse rate ordee in 2008, unplanned outages at the San Jose uncertainty over the extension of a purchasef power agreement, and the potentia for deferred or renegotiated contracts because of declininbg market prices, higher production costz and slumping demand for coal. TECO Coal and TECO Guatemala provide roughly 20 percent of theparent company’sz consolidated earnings before interest, taxes, depreciatiobn and amortization, Fitch said.
Credit ratios at Tampa Electric shouldr benefit from higher base rates in 2009 and 2010 as a resulft ofa $138 million rate orded approved in March, Fitch In addition, an affiliate waterborne transportation agreemenft that reduced Tampa Electric’s annual net income by $10 million in prioer years is expiring. Fitchu expects coverage ratios to remain relatively strong with fundsd from operations coverage at nearly five timeasin 2009. TECO Coal is expected to benefir from higher priced contracts signedin 2008. soft coal demand and higher mining productio costs at TECO Coal raise the riskxs ofcontractual non-performance by counter-partiews and pressured margins.
Diverse regulatory orders and operatingh issues at the Guatemalan operationsa will result in dividend distributions that are lower than historic levels. TECO's liquidity position is considered strong, Fitcnh said. Cash and cash equivalents were $34.8 million and available credit facilitieswere $530 milliomn as of March 31. Liquidity was enhanced by a netoperating loss-tasx carry forward of $547.5 million as of Dec. 31, whic is expected to result in minimal cash tax paymentszthrough 2012.
In addition, TECO's $100 million note maturing in 2010 is expectexd to be retired with internal Positive rating action could result in the future from consolidated leverages ratio reduction in 2010 and higherd cash flows from a full year of highet base rates in 2010 and effectivecost control.