TECO Energy defines company's role in energy trading and power marketing
TAMPA, May 21, 2002
TECO Energy affirmed today that the company has never traded in the California energy markets, and that none of its subsidiaries has been involved in any region of the country in so-called “wash” or “round-trip” trades that have been widely reported.
Senior Vice President-Finance and CFO Gordon Gillette said, “With the media spotlight on companies with extensive energy trading and power marketing activities, we’ve seen some investors become concerned about the energy sector in general. There are major differences between pure energy merchants/traders and integrated, asset-intense companies like TECO Energy, and investors need to be able to distinguish between the two to make educated investment decisions. Unlike companies that are solely energy traders, TECO Energy has the physical assets to deliver the power.”
Gillette outlined critical differences between pure energy traders and TECO Energy, including the fact that TECO Energy does not trade energy or gas on a speculative basis. The company’s TECO Power Services subsidiary (TPS) only sells power from its physical assets. Further, TECO Energy’s businesses engaged in gas sales are focused on selling gas to end-use customers. These companies include Peoples Gas System, Prior Energy and TECO Gas Services.
None of TECO Energy’s subsidiaries has engaged in any “wash” or “round trip” energy trading activities. Policies and procedures are in place to prevent any such trades and to detect them immediately, if any were to occur.
TPS is actively selling ancillary services at the company’s Frontera Power Station, as well as hedging and seeking longer-term contracts for the plant’s capacity. Hedging activities for other plants, now under construction, are currently underway. The company maintains a balanced book of fuel purchases measured against energy sales.
In addition, the company reported that it was not a participant in the California energy markets in 2000 or 2001, nor was it one of the 100 companies asked by the Federal Energy Regulatory Commission to provide information on their activities in that market.
TECO Energy is an integrated electric and gas utility holding company with important energy-related unregulated operations including independent power generation; marine transportation; coal mining and synthetic fuel production; production of gas from coal seams; and energy engineering/construction services. In 2001, almost 60 percent of TECO Energy’s net income was derived from regulated utility operations.
TECO Energy (NYSE: TE) is a diversified, energy-related holding company headquartered in Tampa. Its common stock is included in the S&P 500 Index. The company's principal businesses are Tampa Electric, Peoples Gas System, TECO Power Services, TECO Transport, TECO Coal, TECO Coalbed Methane, and TECO Solutions.