News Release

TECO Energy addresses synfuel issues

TAMPA, July 7, 2004

A press release earlier today by another synfuel industry participant disclosed an IRS audit issue on the subject of when that firm’s synfuel production facilities were “placed in-service.” In response to inquiries, TECO Energy (NYSE: TE) today clarified the status of the facilities at its subsidiary TECO Coal.

Since TECO Coal’s purchase of its two synfuel production facilities, which utilize the Headwaters (Covol) process, TECO Coal has received a series of confirmatory Private Letter Rulings related to the facilities. The IRS audited TECO’s synthetic fuel operations as a normal part of its audit of TECO Energy’s year 2000 federal income tax return. As part of that audit, the IRS fully reviewed the issue of “placed-in-service,” among others. The IRS concluded this audit cycle with no adjustments with respect to Section 29. The final audit report, successfully closing the audit process, was issued on November 10, 2003. 

TECO Energy, Inc. is a diversified energy-related holding company headquartered in Tampa, Florida. Its principal businesses are Tampa Electric, Peoples Gas System, TECO Transport, TECO Coal and TECO Wholesale Generation.