TAMPA, Fla., Dec. 2 /PRNewswire-FirstCall/ -- TECO Energy, Inc. (NYSE: TE)
announced that its subsidiaries have signed an agreement to sell Frontera
Generation Limited Partnership, the owner of the Frontera Power Station in
Texas, for $134 million to a subsidiary of Centrica plc. The Frontera Power
Station is a 477-megawatt natural gas fired, combined-cycle merchant power
plant located near McAllen, Texas, operating in the Electric Reliability
Council of Texas (ERCOT) market. The sale is expected to close by the end of
2004, subject to certain regulatory approvals.
Chairman and CEO Sherrill Hudson said, "This agreement marks a further
reduction in TECO Energy's exposure to the merchant power markets, which is
consistent with our strategy to focus on our Florida utilities and our
profitable unregulated businesses. The cash from this sale is incremental to
our recent cash flow forecasts and adds to our ability to extinguish our 2007
TECO Energy debt maturities."
The sale is expected to be slightly accretive to earnings in 2005. In
addition, the disposition of the investment is expected to generate
approximately $40 million of tax benefits, which will be used to reduce future
cash tax payments. TECO Energy's fourth quarter results will include the
write-off of the difference between the book value and the sale price, which
will result in an after-tax charge of approximately $28 million.
TECO Energy, Inc. (NYSE: TE) is an integrated energy-related holding
company with core businesses in the utility sector, complemented by a family
of unregulated businesses. Its principal subsidiary, Tampa Electric Company,
is a regulated utility with both electric and gas divisions (Tampa Electric
and Peoples Gas System). Other subsidiaries are engaged in waterborne
transportation, coal and synthetic fuel production and independent power.
Additional information related to the company and its operations is
available at TECO Energy's web site at http://www.teconergy.com.
Note: This press release contains forward-looking statements, which are
subject to the inherent uncertainties in predicting future results and
conditions, relating to the company's cash flow projections and expected tax
benefits. Certain factors that could impact actual results include the
company's ability to successfully close the transaction in the anticipated
time, to achieve the expected levels of cash flow, and to utilize tax credits
which are dependent on taxable income. Additional information is contained
under "Investment Considerations" filed as an exhibit to the company's
Quarterly Report on Form 10-Q for the period ended September 30, 2004.
SOURCE TECO Energy, Inc.
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Related links:
http://www.tecoenergy.com
CONTACT:
Media, Laura Plumb, +1-813-228-1572, or
Investor Relations, Mark Kane, +1-813-228-1772, both of TECO
Energy, Inc.
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