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Robert Trigaux

TECO: Signs of stability, if not much growth, in number of Tampa Electric customers



Wake up and good morning. Tampa's TECO Energy reported a doubling of its earnings in the fourth quarter of 2009 but it is the power company's reference to a slight increase in the average number of  its electric utility customers in the fourth quarter that may be the real news here. The bump, just 0.2 percent, was TECO-owned Tampa Electric's first increase since the second quarter of 2008. Said TECO:

"The average number of customers increased 0.2 percent in the 2009 fourth quarter as a result of what appear to be early signs of improvements in the Florida housing market and a stabilizing of economic conditions."

The increase or decrease in utility customers has proved a recent and important economic barometer for Florida. While a 0.2 percent is hardly grounds for cheering, Florida is happy to be looking for any return to positive territory when it comes to customers after some sharper declines in previous quarters.

SandraCallahan, CFO TECO Sandy Callahan (in photo), the TECO CFO substituting for CEO Sherrill Hudson in this quarter's earnings conference call, offered these remarks to analysts:

"The overall economic conditions in Florida and the Tampa area are more stable, but remain weak. For the state, at 11.8%, unemployment is higher than the national level, but it does appear to be leveling out. Tampa area unemployment is higher than the state, at 12.4%, but it too appears to be leveling. In the last six months of 2009, job losses in the Tampa area were about 40% of what the area experienced in the last six months of 2008.

"We are also seeing some improvement in the housing market for both existing home resale and new single-family building permits. Even with the potential early signs of improvement in the housing market though, our forecast and the forecasts of others anticipate a slow recovery."

Callahan also predicted a flat year in 2010 for customer growth, in keeping with broader forecasts of Florida's extremely gradual economic upturn:

"For 2010, Tampa Electric expects to have the seasonal influx of winter residents, which will give us a first-quarter boost, but for the year, we are planning for the likelihood that the number of customers remains essentially unchanged. We expect slightly lower energy sales in 2010 due to the effects of the economy, as residential customers continue to watch their energy dollars, except when it is very hot or very cold and we expect that sales to commercial and industrial customers could remain soft. We think the sales to phosphate customers may improve in 2010 however, as they are forecasting a better year for their products."

Here is a complete transcript of TECO executives' conference call on Friday.

-- Robert Trigaux, Times Business Columnist

[Last modified: Tuesday, June 1, 2010 11:27am]


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