Tampa Electric Files Rebuttal Testimony in Waterborne Coal Transportation Proceeding

Tampa Electric Files Rebuttal Testimony in Waterborne Coal
Transportation Proceeding
Contracts Between TECO Transport and the Utility Have Saved Customers More Than
$500 Million 


TALLAHASSEE, Fla., May 4  /PRNewswire-FirstCall/ -- Late yesterday, Tampa
Electric filed documents with the Florida Public Service Commission related to
its current contract for waterborne coal transportation, which is under review
by the Commission. In the filing, the company states that its dealings with
TECO Transport have saved Tampa Electric customers more than $500 million to
date.

The filing responds to testimony filed by the Office of Public Counsel (OPC),
the Florida Industrial Power Users Group (FIPUG), CSX Transportation (CSXT),
and attorney Mike Twomey. The company's filing today addresses "erroneous
assertions and unsubstantiated allegations of the witnesses presented in the
intervenors' testimony." A hearing on the matter is set for May 27 and 28, 2004
in Tallahassee.

In its rebuttal, Tampa Electric cites the testimony of Dr. Anatoly Hochstein,
one of the witnesses called by attorney Twomey in the case, who stated that,
"No carrier could reasonably offer rates equal to or lower than TECO
Transport."

Senior Vice President-External Affairs Richard Lehfeldt said, "Our contract
with TECO Transport is priced at or below market, and the intervenors' own
witness bears this out. Tampa Electric's customers continue to receive the most
efficient and cost-effective services for coal transportation."

In addition, Lehfeldt said, ocean rates have skyrocketed since TECO Transport
signed its current contract. "Tampa Electric has contracted for the best
service, at the best price, period. This whole case is an attempt by
disappointed bidders to confuse the public and regulators," Lehfeldt said.

The filing includes testimony from Joann Wehle, Tampa Electric's director of
Fuels and Wholesale Sales; Brent Dibner, an expert in the maritime industry;
Fred Murrell, a former CSXT executive and an expert in the coal and coal
transportation industry; and Paula Guletsky of Sargent and Lundy, a
professional engineering firm, who evaluated proposals submitted by CSXT.

OPC and FIPUG typically appear in proceedings that could impact customers'
rates. In this particular proceeding, CSXT, which was allowed to intervene
because of its status as a retail customer of Tampa Electric, has done so
mainly to complain that its proposal for rail services was not accepted.

According to expert witness Murrell, "It is clear that CSXT is attempting to
misuse this proceeding as a means of marketing its virtually unregulated rail
transportation service. From my perspective and experience, CSXT is asking this
Commission to help it put a foot in the door to establish new business in
Florida."

Attorney Twomey has intervened on behalf of nine residential customers. Last
month, Tampa Electric filed a motion with the FPSC asking Twomey to reveal who
he is truly representing and alleging that his funding comes from coal
suppliers and transportation companies. To date, he has refused to answer Tampa
Electric. Ironically, Twomey was the FPSC Staff attorney in 1988 who drafted
the benchmark against which he is now arguing.

Wehle, Tampa Electric's lead witness, writes in her rebuttal testimony,
"Through their theories, intervenors reach outrageous conclusions like: TECO
Transport might be overcharging Tampa Electric for waterborne transportation
services by as much as $40 million a year. Just to put into perspective how
outrageous these allegations are: according to TECO Energy's 2003 Annual
Report, TECO Transport's audited net income for 2003 was only $15.3 million and
revenues from Tampa Electric accounted for about 38 percent of the business'
total revenues!"

Wehle also references a FPSC staffer's memorandum that cites annual savings of
tens of millions of dollars to Tampa Electric's customers resulting from the
contract arrangement with TECO Transport. Overall, since TECO Transport has
served Tampa Electric, these savings total more than $500 million and counting.

"Tampa Electric's customers have continued to enjoy similar savings for each
and every year since the benchmark was established in 1988," said Wehle.

Background:

The testimony is part of a proceeding that was "spun out" of the annual fuel
cost recovery proceeding last November. At issue are the rates Tampa Electric's
affiliate, TECO Transport, charges the electric company and the continued
applicability of the benchmark utilized by the FPSC that sets the ceiling for
the rates that can be charged. In late 2003, Tampa Electric and TECO Transport
signed a new five-year contract for coal transportation services. The contract
includes rates that are lower than the prior five-year contract rates. 

DATASOURCE: TECO Energy, Inc.



CONTACT:  Laura Plumb, [phone], or Ross Bannister,

[phone], both of TECO Energy



Web site:  http://www.tecoenergy.com/ 

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