Tampa Electric Company
11/06/2026 | Press release | Distributed by Public on 11/06/2026 05:06
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS
Operating Company Results
Amounts included below are pre-tax, except net income and income taxes.
TEC's net income for the third quarter of 2026 was $217 million, compared with $220 million for the same period in 2025. Results primarily reflected higher base revenues resulting from the subsequent year adjustment in the 2024 rate case, offset by a one-time reduction in recoverable fuel and purchased power costs (see Note 3 of the TEC Condensed Financial Statements for further information), higher depreciation and higher taxes. Base revenues are energy sales excluding revenues from clauses, gross receipts taxes and franchise fees. Clauses, gross receipts taxes and franchise fees do not have a material effect on net income as these revenues substantially represent a dollar-for-dollar recovery of clause and other pass-through costs.
Revenues for the third quarter of 2026 were $28 million lower than in the same period in 2025, driven by the reduction of storm surcharge revenue and unfavorable weather compared to the same period in 2025, partially offset by higher base revenue due to new base rates as a result of the subsequent year adjustment in the 2024 rate case and customer growth. Total degree days (a measure of heating and cooling demand) in TEC's service area in the third quarter of 2026 were consistent with normal (a 20-year statistical degree day average) and 5% below the 2025 period, reflecting milder weather in the third quarter of 2026 compared to 2025.
O&M expense for the third quarter of 2026 was $60 million lower than in 2025 primarily due to lower storm cost recognition of $62 million related to storm surcharge revenue (offset in revenue). Depreciation and amortization expense increased $6 million for the third quarter of 2026 compared to 2025 as a result of additions to facilities and the in-service of capital projects, partially offset by the approval of the revised Bayside Station depreciation rates (see Note 3 of the TEC Condensed Financial Statements for further information).
TEC's net income year-to-date 2026 was $537 million, compared with $522 million for the same period in 2025. Results primarily reflected higher base revenues resulting from the subsequent year adjustment in the 2024 rate case and additional storm protection plan return on investment, partially offset by higher depreciation, interest and operational expenses.
Revenues were $148 million higher than year-to-date 2025 primarily driven by higher base revenue due to new base rates as a result of the subsequent year adjustment in the 2024 rate case, increased off-system sales, increased regulatory deferral revenue, customer growth, and favorable weather compared to the same period in 2025. Total degree days (a measure of heating and cooling demand) in TEC's service area year-to-date 2026 were 8% above normal (a 20-year statistical degree day average) and 1% above the 2025 period, reflecting favorable weather year-to-date in 2026 compared to 2025. Results also reflect a 1% increase in the number of customers year-to-date in 2026 compared to the same period in 2025.
O&M expense was $8 million lower than year-to-date 2025 due to lower storm cost recognition of $15 million related to storm surcharge revenue (offset in revenue) and decreased regulatory deferrals of $6 million, partially offset by increased operational expenses of $13 million. The increase in operating expenses was primarily due to generation outages. Depreciation and amortization expense increased $31 million year-to-date 2026 compared to the same period in 2025 primarily due to additions to facilities and the in-service of capital projects.
TEC's regulated operating statistics for the three and nine months ended September 30, 2026 and 2025 were as follows:
|
(millions, except total degree days) |
Operating Revenues |
Kilowatt-Hours Billed |
||||||||||||||||||||||
|
Three months ended September 30, |
2026 |
2025 |
% Change |
2026 |
2025 |
% Change |
||||||||||||||||||
|
By Customer Type |
||||||||||||||||||||||||
|
Residential (1) |
$ |
561 |
$ |
572 |
(2 |
) |
3,278 |
3,249 |
1 |
|||||||||||||||
|
Commercial (1) |
233 |
234 |
(0 |
) |
1,905 |
1,872 |
2 |
|||||||||||||||||
|
Industrial (1) |
50 |
51 |
(2 |
) |
532 |
544 |
(2 |
) |
||||||||||||||||
|
Other (1) |
68 |
69 |
(1 |
) |
539 |
546 |
(1 |
) |
||||||||||||||||
|
Regulatory deferrals and unbilled revenue (2) |
(40 |
) |
(25 |
) |
60 |
|||||||||||||||||||
|
Total retail sales of electricity |
872 |
901 |
(3 |
) |
6,254 |
6,211 |
1 |
|||||||||||||||||
|
Off system sales of electricity |
4 |
1 |
300 |
95 |
59 |
61 |
||||||||||||||||||
|
Other operating revenue |
17 |
19 |
(11 |
) |
||||||||||||||||||||
|
Total revenues |
$ |
893 |
$ |
921 |
(3 |
) |
6,349 |
6,270 |
1 |
|||||||||||||||
|
By Sales Type |
||||||||||||||||||||||||
|
Base |
$ |
520 |
$ |
496 |
5 |
|||||||||||||||||||
|
Clause |
256 |
248 |
3 |
|||||||||||||||||||||
|
Capital cost recovery for early retired assets |
20 |
21 |
(5 |
) |
||||||||||||||||||||
|
Storm surcharge |
32 |
94 |
(66 |
) |
||||||||||||||||||||
|
Gross receipts taxes and franchise fees |
43 |
43 |
0 |
|||||||||||||||||||||
|
Other |
22 |
19 |
16 |
|||||||||||||||||||||
|
Total revenues |
$ |
893 |
$ |
921 |
(3 |
) |
||||||||||||||||||
|
Retail net energy for load (kilowatt hours) |
6,496 |
6,549 |
(1 |
) |
||||||||||||||||||||
|
Total degree days |
1,718 |
1,806 |
(5 |
) |
||||||||||||||||||||
|
(millions, except customers and total degree days) |
Operating Revenues |
Kilowatt-Hours Billed |
||||||||||||||||||||||
|
Nine months ended September 30, |
2026 |
2025 |
% Change |
2026 |
2025 |
% Change |
||||||||||||||||||
|
By Customer Type |
||||||||||||||||||||||||
|
Residential (1) |
$ |
1,451 |
$ |
1,370 |
6 |
8,051 |
7,967 |
1 |
||||||||||||||||
|
Commercial (1) |
653 |
615 |
6 |
4,992 |
4,931 |
1 |
||||||||||||||||||
|
Industrial (1) |
148 |
146 |
1 |
1,532 |
1,597 |
(4 |
) |
|||||||||||||||||
|
Other (1) |
197 |
188 |
5 |
1,479 |
1,483 |
(0 |
) |
|||||||||||||||||
|
Regulatory deferrals and unbilled revenue (2) |
(17 |
) |
21 |
(181 |
) |
- |
||||||||||||||||||
|
Total retail sales of electricity |
2,432 |
2,340 |
4 |
16,054 |
15,978 |
0 |
||||||||||||||||||
|
Off system sales of electricity |
60 |
15 |
300 |
347 |
328 |
6 |
||||||||||||||||||
|
Other operating revenue |
65 |
54 |
20 |
|||||||||||||||||||||
|
Total revenues |
$ |
2,557 |
$ |
2,409 |
6 |
16,401 |
16,306 |
1 |
||||||||||||||||
|
By Sales Type |
||||||||||||||||||||||||
|
Base |
$ |
1,396 |
$ |
1,320 |
6 |
|||||||||||||||||||
|
Clause |
692 |
668 |
4 |
|||||||||||||||||||||
|
Capital cost recovery for early retired assets |
52 |
53 |
(2 |
) |
||||||||||||||||||||
|
Storm surcharge |
176 |
191 |
(8 |
) |
||||||||||||||||||||
|
Gross receipts taxes and franchise fees |
115 |
109 |
6 |
|||||||||||||||||||||
|
Other |
126 |
68 |
85 |
|||||||||||||||||||||
|
Total revenues |
$ |
2,557 |
$ |
2,409 |
6 |
|||||||||||||||||||
|
Customers at September 30, (thousands) |
873 |
864 |
1 |
|||||||||||||||||||||
|
Retail net energy for load (kilowatt-hours) |
17,077 |
17,052 |
0 |
|||||||||||||||||||||
|
Total degree days |
3,902 |
3,868 |
1 |
|||||||||||||||||||||
(1)
Reflects a billing cycle measurement.
(2)
Primarily reflects unbilled revenue, which incorporates a calendar measurement, and postings for clause recovery deferrals.
Other Income
For the third quarter of 2026 and 2025, respectively, TEC's other income was $14 million and $14 million, which included AFUDC-equity of $9 million and $7 million and other income of $5 million and $7 million. For the year-to-date periods in 2026 and 2025, respectively, TEC's other income was $39 million and $47 million, which included AFUDC-equity of $24 million and $28 million and other income of $15 million and $19 million. The increase in AFUDC-equity in the third quarter of 2026 compared to the third quarter of 2025 is due primarily due to the timing of solar and the Big Bend Unit 1 modernization project. The decrease in AFUDC-equity in year-to-date compared to the same period in 2025 is due to the in-service of resiliency projects no longer under construction.
Interest Expense
For the third quarter of 2026 and 2025, TEC's interest expense, excluding AFUDC-debt, was $62 million and $59 million, respectively. For the year-to-date periods in 2026 and 2025, TEC's interest expense, excluding AFUDC-debt, was $186 million and $171 million, respectively. The increase is due to higher borrowings, primarily in support of TEC's capital program.
Income Taxes
The provisions for income taxes were $43 million and $37 million for the three months ended September 30, 2026 and 2025, respectively, and $93 million and $88 million for the nine months ended September 30, 2026 and 2025, respectively. Compared to the 2025 periods, the increase in the provision for income taxes for the three and nine months ended September 30, 2026 was primarily due to higher pre-tax income and a valuation allowance recorded for the discount on PTCs to be sold (as discussed further in Note 4 of the TEC Condensed Financial Statements), partially offset by higher benefit from production tax credits related to solar facilities.
Liquidity and Capital Resources
The table below sets forth the September 30, 2026 liquidity, cash balances and amounts available under the TEC credit facilities.
|
(millions) |
|||||
|
Credit facilities/ commercial paper |
$ |
1,200 |
|||
|
Drawn amounts/letters of credit |
(886 |
) |
|||
|
Available credit facilities |
314 |
||||
|
Cash |
11 |
||||
|
Total liquidity |
$ |
325 |
|||
Cash Impacts Related to Operating Activities
Cash flows from operating activities in the nine months ended September 30, 2026 were $1,071 million, an increase of $439 million compared to the same period in 2025. Increases to cash from operations were primarily due to higher 2025 payments related to the 2024 storm season and lower fuel costs in 2026.
Cash Impacts Related to Financing Activities
Cash flows from financing activities for the nine months ended September 30, 2026 resulted in net cash inflows of $177 million. TEC received $470 million of equity contributions from Parent and $112 million of net receipts of short-term debt with maturities of 90 days or less, partially offset by $405 million of dividends to Parent.
Covenants in Financing Agreements
In order to utilize its bank credit facilities, TEC must meet certain financial tests as defined in the applicable agreements. In addition, TEC has certain restrictive covenants in specific agreements and debt instruments. As of September 30, 2026, TEC was in compliance with all applicable financial covenants. The following table contains the significant financial covenant and the performance relative to it as of September 30, 2026.
Significant Financial Covenants
|
Calculation at |
||||||
|
Instrument (1) |
Financial Covenant (2) |
Requirement/Restriction |
September 30, 2026 |
|||
|
Credit facility - $1,200 million |
Debt/capital |
Cannot exceed 65% |
45.6% |
(1)
See Note 6 to the TEC Condensed Financial Statements for details of the credit facility.
(2)
As defined in the instrument.
Credit Ratings of Senior Unsecured Debt as of September 30, 2026
|
S&P |
Moody's |
Fitch |
|||||
|
Credit ratings of senior unsecured debt |
BBB+ |
A3 |
A |
||||
|
Credit ratings outlook |
Stable |
Stable |
Stable |
Certain of TEC's derivative instruments contain provisions that require TEC's debt to maintain investment-grade credit ratings.
Commitments and Contingencies
See Note 8 to the TEC Condensed Financial Statements for information regarding TEC's commitments and contingencies as of September 30, 2026.
Regulatory Matters
See Note 3 to the TEC Condensed Financial Statements for information regarding TEC's regulatory matters.
Fair Value Measurements
TEC considered the impact of nonperformance risk in determining the fair value of derivatives. TEC considered the net position with each counterparty, past performance and the intent of the parties, indications of credit deterioration and whether the markets in which TEC transacts have experienced dislocation. As of September 30, 2026, the fair value of derivatives was not materially affected by nonperformance risk.
Critical Accounting Policies and Estimates
Critical accounting policies and estimates have not materially changed in 2026. For further discussion of critical accounting policies and estimates, see TEC's Annual Report on Form 10-K for the year ended December 31, 2025.
Tampa Electric Company published this content on November 06, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 06, 2026 at 11:07 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]