First-quarter 2009 non-GAAP results from continuing operations, which exclude charges and gains, were $29.6 million compared to non-GAAP results of $31.4 million in the year-ago quarter.

First-quarter 2009 net income included an $8.7 million net gain on the sale of TECO Guatemala’s 16.5% interest in the Central American fiber optic telecommunications provider Navega, and a $3.6 million valuation adjustment charge to student loan securities held at TECO Energy parent. The year-ago quarter net income included a $0.6 million charge for adjustments to earlier estimated costs associated with the sale of TECO Transport.

Sherrill Hudson, TECO Energy chairman and chief executive officer said, TECO Energy delivered good results despite the current economic challenges. The higher base rates recently approved by the Florida Public Service Commission for Tampa Electric will take effect in May and are expected to enable it to earn a more appropriate return on the investments that have been made and are continuing to be made to meet regulatory requirements and to serve customers. The Commission is expected to make its final decision on the revenue requirements in the Peoples Gas base rate request next week. At TECO Coal, we expect the higher prices from contracts signed in 2008 to drive improved results this year; however the metallurgical coal market remains very uncertain for both volume and price due to the world-wide economic slow down this year. TECO Guatemala is facing a challenging year with the lower tariff rates at the distribution utility, EEGSA, and unplanned outages at the San José Power Station.

Operating Company Results

Tampa Electric

Tampa Electric has reported a net income for the first quarter of $18.3 million, compared with $15.9 million in the year-ago quarter. Results for the quarter reflected slightly higher retail energy sales, a 0.2% lower average number of customers, and higher operations and maintenance expenses. Net income included $3.3 million of Allowance for funds used during construction (AFUDC) – equity, which represents allowed equity cost capitalized to construction costs, related to the setting up of nitrogen oxide pollution control equipment and combustion turbines for peak loads, compared with $1.3 million in the year-ago quarter. Sales to other utilities declined 23% from the 2008 period, reflecting lower demand and lower natural gas prices.

In the first quarter of 2009, there was no decrease in net income due to the waterborne transportation disallowance for the transportation of solid fuel, compared to a $1.6 million decrease in the year-ago quarter. In November 2008, the Florida public service commission (FPSC) approved Tampa Electric’s fuel adjustment filing, which comprised of full recovery of waterborne transportation costs under new contracts effective Jan. 1, 2009. This approval removes the annual decrease in net income that occurred in 2004 through 2008 during the prior transportation contract.

Total retail energy sales raised 0.1%, driven mainly by higher sales to weather-sensitive residential customers partly counterbalanced by lower sales to commercial and non-phosphate industrial customers. Sales to the residential customer segment raised 6.2% in the first quarter mainly due to colder winter weather patterns. Total degree days in Tampa Electric’s service area were 3% above normal and 14% above the year-ago quarter. Pretax base revenues raised $4.8 million in the quarter mainly due to the colder winter weather; other operating income was basically unchanged from the 2008 period, as higher earnings on the new selective catalytic reduction equipment through the environmental cost recovery clause and increased by-product sales were offset primarily by lower off-system sales of electricity.

Operations and maintenance expense, excluding all FPSC-approved cost recovery clauses, raised $2.9 million. The increase included $0.8 million related to maintenance on power generating equipment, $0.3 million higher bad-debt expense, $1 million of higher employee benefit related costs, mainly pension, and $0.6 million higher distribution system maintenance expense.

Compared to the year-ago quarter, depreciation expense increased $1.7 million, reflecting additions to facilities to serve customers. Interest expense at Tampa Electric declined slightly due to lower interest on tax-exempt debt remarketed in March 2008, which more than equalized the impact of higher long-term debt balances outstanding, and interest income decreased due to lower under-recovered fuel balances on which interest is accrued.

Peoples Gas:

Peoples Gas has reported a net income of $11.2 million for the first quarter of 2009, compared to $10 million in the year-ago quarter. Quarterly results reflect a 0.2% lower average number of customers, raised sales to residential and commercial customers due to colder winter weather, and higher base rates due to an interim rate increase of $2.4 million (annual) granted in October 2008. Gas transported for power generation customers increased over the first quarter of 2008, when volumes were reduced due to mild weather and the use of other fuels for power generation. Non-fuel operations and maintenance expense increased, mainly due to higher spending on pipeline integrity inspections partly counterbalanced by lower medical claims costs. Results also reflect higher depreciation expense due to routine plant additions.

TECO Guatemala:

TECO Guatemala has reported a first-quarter net income of $13.2 million in 2009, compared to $10.5 million in the year-ago quarter. TECO Guatemala had non-GAAP results of $4.5 million in 2009, which excluded the $8.7 million gain on the sale of Navega, compared to $10.5 million in 2008. The 2009 results reflect $2 million of lower net income from the distribution utility (EEGSA) as a result of the decrease in the value added distribution tariff (VAD) in August 2008, which was partly counterbalanced by customer and energy sales growth. The 2009 results also reflect considerably lower contract and spot energy sales by the San jose power station, due to unplanned outages for most of the first quarter as a result of turbine and generator problems.

Parent / other:

The cost for parent/other in the first quarter was $16 million compared to a cost of $13.1 million in the year-ago quarter. In 2009, the non-GAAP parent/other cost was $12.4 million excluding the $3.6 million valuation adjustment on student-loan securities held at TECO Energy parent. In 2008, the non-GAAP cost for parent/other in the first quarter was $12.5 million excluding the $0.6 million after-tax adjustment to previously estimated transaction costs related to the sale of TECO Transport.