TAMPA — TECO Energy Inc. unveiled a high-level management shake-up on Thursday that serves as the prelude for the company combining its two largest business units, Tampa Electric and Peoples Gas.
The combination expected to unfold in the next few months will lead to the elimination of duplicate functions and likely job cuts that company officials declined to outline.
Gordon Gillette, previously chief financial officer of the parent company, was installed as president of both Tampa Electric and Peoples Gas units.
He replaces Bill Cantrell, who capped a 34-year career at the company as president of Peoples Gas, and Chuck Black, president of Tampa Electric who is a 36-year TECO veteran. Both announced their retirements.
Along with shuffling four other high level jobs, TECO comptroller Phil Barringer takes over Gillette's post as chief financial officer of the parent company.
Tampa Electric employs about 2,500 and Peoples Gas, about 600, most of whom work in the Tampa Bay area.
Although the utility's fortunes improved after recent rate increases for both electricity and gas, TECO got less than asked and the request was based on population growth that has yet to appear. Meanwhile, residential customers trying to economize have trimmed electric and gas use.
"Both Chuck and Bill leave a legacy of extraordinary contributions to TECO Energy," said John Ramil, president and chief operating officer of the parent holding company.
After buying Peoples Gas more than a decade ago from Lykes Brothers Inc. TECO has kept the natural gas supplier with 345,000 Central Florida customers relatively intact, until now.
In the quarter ended June 30, TECO reported improved earnings of 29 cents a share, or $61 million, up from $51 million, or 24 cents a year ago. That exceeded analyst expectations of 23 cents a share. But revenues slipped to $825 million, down from $887 million.
The squeeze comes from TECO's reliance on the growth prospects of Tampa Electric, a utility that only serves Hillsborough and small parts of three surrounding counties and is hemmed in on all sides by much bigger rivals.
TECO had a $40 million shortfall between what the rate increase and population growth was supposed to generate. As a result the company chopped $140 million from capital spending this year by deferring many projects and is working on a new business model. The company had been averaging 2.5 percent customer growth a year from the flow of new residents into its market. But there's been virtually no growth for two years and the company is trimming its business model to accommodate 1.5 to 2 percent population growth long term even once the economy recovers.
Meanwhile, cost cutting has been in the works since May in operations and maintenance.
The reshuffling was not announced until after the market closed Thursday. TECO's shares, which hit bottom at $8.41 in March, closed Thursday at $13.42, up 25 cents.