TECO Energy raised its earnings forecast for this year and next,saying its core businesses are expected to post 10% growth, leadingto a 2000 upside for the company at 10 to 15 cents per share.

“Since we announced our three-pronged business strategy lastfall, our earnings growth has been even higher than anticipated.Each of our core businesses, our independent power business, ourFlorida operations and our transportation business, iswell-positioned to deliver solid growth going forward,” said TECOEnergy Chairman Robert Fagan. “Based on our outstanding results sofar in 2000, and the prospects for delivering strong results againin 2001, we are setting a target of 10% core business growth againfor 2002 and beyond.”

TECO’s independent power business, TECO Power Services, isexpected to double its earnings per share in 2000 and increaseearnings by 25% again in 2001. The subsidiary yesterday announced a$93 million investment with an affiliate of Panda EnergyInternational on two Texas projects totaling 2,000 gross megawatts.The gas-fired power projects are expected to be brought online inphases beginning December, with all the capacity in-service in thethird quarter of 2001. The deal provides TPS with an opportunityfor an economic interest in 50% of both projects. The investment isexpected to be slightly accretive to TECO Energy earnings in 2000and 2001, and to provide meaningful contributions beyond. TPSalready has net ownership in 1,000 MW of capacity either operatingor under construction, including 400 MW of capacity brought onlinein 2000.

TECO Energy’s Florida operations are benefiting from the strongFlorida economy. For flagship companies Tampa Electric and PeoplesGas, this has meant customer growth of 3% and 3.5% in 2000 so far,and sales volume growth of 7% and 15%, respectively. Both TampaElectric and Peoples Gas are expected to produce earnings growthabove customer growth from higher per customer volumes and haveincreased investments to serve customers. The companies’longer-term customer growth outlook is 2.5% for Tampa Electric and4 to 6% for Peoples.

The company’s other businesses also are expected to contributeto TECO’s growth. It’s shipping transportation business, TECOTransport, continues to provide solid earnings growth and is nowexpected to deliver 10% growth this year and 7 to 10% growth in2001. In addition, TECO Coal is expected to deliver an additional10 to 15 cents per share in 2000 as a result of increased syntheticfuel production.

Gillette also indicated that TECO Energy expects to makesignificant capital investments over the next five years to supportthe growth strategy and to use internally generated funds as wellas the capital markets to fund these investments. The companyexpects to use non-recourse project debt financing at TECO PowerServices. TECO’s stock rose $0.69 yesterday on the news to $26.69and is near the top end of a 52-week range.

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