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Tampa Electric's growth falls sharply

TAMPA — Weighed down by the sagging housing market, Tampa Electric expects its lowest customer growth in nearly a decade, company executives said Tuesday afternoon.

Retail energy sales dropped more than 2 percent, driving a net income dip of nearly $6-million, or 27 percent, in the first three months of the year compared to last year. Customer growth slowed to 0.6 percent — far lower than the 2.5 percent average growth the utility has seen since 2000.

"The economic situation in Florida and the Tampa area is weaker than we anticipated," said Gordon Gillette, executive vice president and chief financial officer for TECO Energy, parent company of both Tampa Electric and Peoples Gas. TECO announced first-quarter earnings Tuesday afternoon.

Peoples Gas had similar results, as the weak housing market slowed production at housing-related industries like wallboard. First-quarter earnings dropped $1-million, or 9 percent. Sales dipped due to mild weather, and customer growth was sluggish.

TECO doesn't expect a turnaround until next year, and predicted that a robust 2-plus percent growth won't return until 2010, Gillette said. Slower growth will force the company to re-evaluate construction of new power plants.

"Basically, we've been monitoring extraordinarily closely the developments in the Tampa economy and the housing market in our area," Gillette said.

The dismal first quarter for the two utilities may portend similarly slowed growth at Progress Energy Florida. The St. Petersburg utility's results will be announced next week.

Asjylyn Loder can be reached at aloder@sptimes.com or

(813) 225-3117.

TECO Energy

TECO Energy's first quarter earnings fell dramatically, in large part due to the discontinued synthetic fuel income and the loss of revenue from the operations of TECO Transport, which the company sold last year. Slower growth at its two utilities, Tampa Electric and Peoples Gas, also contributed to the decline. Net income fell from $21.8-million to $15.9-million at Tampa Electric and from $11-million to $10-million at Peoples Gas.

1st Qtr Year ago

Revenue $791.7M $821.3M

Net income $30.8M $72.8M

Per share 15 cents 35 cents

Tampa Electric's growth falls sharply 04/29/08 [Last modified: Thursday, May 1, 2008 11:05am]
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