TECO Unit Seeks Rate Hike - Analyst Blog

TECO Energy Inc. 's ( TE ) unit Tampa Electric Company plans to increase its electricity rate. The company has already filed its rate-hike request to the Public Service Commission (PSC). The rate increase will impact all customer categories, including residential, commercial and industrial.

At present, the average residential customers, consuming 1,000 kilowatt-hours (kwh) per month, pay $102.58 monthly. If the revised rates are approved by the commission, the customers will have to pay roughly $113 per month, up 10.1% from the last rate, effective Jan 2014. Tampa Electric also plans to increase the monthly electricity rate of the commercial and industrial customers by approximately 6%.

Tampa Electric tries to provide uninterrupted utility services to its customers at much lower prices than its peers. In spite of planning to increase the electricity rates, the residential bills would remain the lowest in the state of Florida. According to the Energy Information Administration, the bill will be roughly 5% lower than the national average of $118.90 in Jan 2013.

It is a normal practice of regulated utility providers to recoup their earlier invested funds through the filing of rate-hike to the commission. Last time in 2008, Tampa Electric requested a rate increase to recover its investments, utilized for the improvement in delivery reliability.

In the last couple of years, TECO Energy invested substantial amounts to upgrade its infrastructure at Polk Power Station and solid-fuel handling equipment at Big Bend, as well as to expand and improve its transmission assets.

Further, TECO Energy plans to invest $2.98 billion during the 2013-2017 period under the capital spending program to strengthen and modernize its utility generation and transmission systems. We appreciate the steps taken by the company to provide uninterrupted reliable utility to its customers at a lower price.

Tampa, FL-based TECO Energy Inc. is involved in the generation, purchase, transmission, distribution, and sale of electric energy in the state.

The company currently has a Zacks Rank #4 (Sell). Other stocks from the industry that are presently performing better include Brookfield Infrastructure Partners L.P. ( BIP ), Empresa Nacional de Electricidad S.A. ( EOC ) and Pike Electric Corporation ( PIKE ). All the three stocks carry a Zacks Rank #1 (Strong Buy).

BROOKFIELD INFR (BIP): Free Stock Analysis Report

ENDESA-CHILE (EOC): Free Stock Analysis Report

PIKE ELECTRIC (PIKE): Free Stock Analysis Report

TECO ENERGY (TE): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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