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TWST: Could you begin with a brief historical sketch and an overview of
TECO Energy, Inc.?
Mr. Fagan: We're a multi-faceted energy company that is more than 100
years old. The company started with Tampa Electric, the original
electric utility serving the Tampa area. Interestingly enough, the
company began with a streetcar system in downtown Tampa and since that
time, we've grown into an international energy company. If you look at
the facets of the company right now, many of them grew directly from the
electric company ' in fact, maybe the easiest way to tell our story is
to start there. Our largest subsidiary is Tampa Electric, which we still
own today. A natural progression from Tampa Electric was the move into
other areas of energy, like coal and transportation. We were primarily a
coal-based electric utility at that time, so it was a vertical expansion
for us to go into the coal business. As a result of that, we have, in
addition to Tampa Electric, TECO Coal, a subsidiary based in Kentucky.
Originally, the output of the mines served the electric company, but now
we serve a vast number of customers ' both on the utility side and on
the industrial side. As a matter of fact, Tampa Electric is no longer a
significant customer of the coal company, despite the fact that this was
the way the relationship started. We also have a transportation company
that was used originally for transporting coal down the river on barges
and then across the Gulf of Mexico from New Orleans to our facilities,
here, in Tampa. Just as we had with the TECO Coal, we have also branched
out into other areas. Now, not only do we have a large river barge
company which delivers coal south and other products upstream, we also
have a transportation shipping business that brings coal across the
Gulf, and we've expanded beyond that to include an international fleet,
which is actually the largest dry bulk US flag fleet operating today.
TECO Transport carries PL40, which is a government aid grain program,
around the world to places like Indonesia and St. Petersburg, Russia.
This is clearly an international oceangoing fleet. Also in the expansion
of our energy industry business, we entered the coalbed methane
business. Our TECO Coalbed Methane subsidiary produces natural gas from
coal seams in Alabama's Black Warrior Basin. This gives us additional
fuel diversity, as we have access to not only coal but to natural gas. A
more recent and non traditional expansion was our growth in the state of
Florida with the acquisition of Peoples Gas System, the largest LDC in
Florida. Peoples Gas serves more than 260,000 customers in all the
metropolitan areas in Florida such as Jacksonville, Miami, Tallahassee,
Orlando and Tampa. We have expanded that business since we purchased it
in 1997, to supply not only those regions, but also customers all the
way down Southwest Florida to the rapidly growing Naples area. Our
fastest growing business, the one that we've been focusing on more
recently, is our independent power business. We've taken advantage of
the deregulation of the traditional regulated utility business, which
has been transforming itself over almost a 20-year period. The
accelerated deregulation over the last 10 years enabled us to expand
into markets outside of Florida through TECO Power Services, a
generation company that also serves customers in Central America,
primarily in Guatemala. In the United States, we have projects now being
built that will allow us to serve 18 states outside of Florida, as well
as Mexico. The electric company primarily serves the Hillsborough County
area, which is the county surrounding Tampa and we have about 570,000
customers in the electric company, making us the third largest investor-
owned utility in Florida.
Tickers included in this excerpt: TE
For more information call (212) 952 7400. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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