TECO posts unheard-of drop in utility customers

TAMPA — Tampa Electric lost more customers than it added in the third quarter, an unprecedented reversal that slashed the utility's profits and promises to delay power plant building.

"We've never seen this since I've been working at Tampa Electric," said Gordon Gillette, who has been with the company for 26 years and is vice president and chief financial officer of TECO Energy, the utility's parent.

Vacant and foreclosed homes turned out the lights, and fewer new customers replaced them, Gillette said. For the first time, the year-over-year quarterly growth was negative. The utility is hoping this quarter "hit bottom," and growth will return next year. But the days of 2 percent to 3 percent annual growth may not return until mid 2010, he said.

"A lot that got built, as we know now, turned out to be vacant properties, but they had electric meters," Gillette said. "We counted those properties as they were getting built as new customers. But guess what: Nobody moved in."

Another blow was cash-strapped customers cutting back on power use and mild weather depressing electricity sales. In all, quarterly energy sales dropped 6.7 percent, the utility reported. The utility's third quarter net income dropped by 22.5 percent from the year-ago quarter, falling to $50.6-million.

Peoples Gas likewise suffered a poor quarter. Quarterly net income dropped to $2.6-million from $3.8-million in the third quarter of 2007.

The numbers portend a similarly poor customer growth for Progress Energy Florida.

The St. Petersburg utility reports its third-quarter results today.

TECO Energy

The dismal Florida economy slashed revenue and income at TECO Energy, parent company of Tampa Electric and Peoples Gas. Tampa Electric lost customers, with disconnects outnumbering new customers. Industrial customers cut back production, and mild weather smothered household energy use.

3rd QtrYear Ago
Revenue$926.1M$990M
Net income$58.2M$92.8M
Per share, diluted27 cents44 cents

TECO posts unheard-of drop in utility customers 10/30/08 [Last modified: Friday, October 31, 2008 6:46pm]

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