TECO Energy Inc TE
Q3 2010 Earnings Call Transcript

Operator: Daniel Eggers, Credit Suisse

Daniel Eggers - Credit Suisse: Just real quick couple of questions on the '11 guidance. Number one, can you remind us the process for reviewing the over earnings at that Peoples Gas for yearend given where you guys are so far?

Sandra W. Callahan - VP, Finance and Accounting and CFO, CAO and Assistant Secretary: Yes, and just to give you an outlook for Peoples Gas. The Peoples Gas will record earnings for 2010 that reflects that capping out at the top of their allowed ROE range, which is 11.75%. The way that we go about that is at the end of each quarter beginning with the second quarter in 2010, we look at what our expectation is for that overearning and book to provision as of that point in time, but the important thing to remember is for the full year that's where they'll be and not higher.

Daniel Eggers - Credit Suisse: I guess there's a lot of moving pieces in Guatemala at this point in time with DECA going away and Alborada and that sort of thing. So, just to make sure I have this right in guidance for 2010, Alborada is going to have three and a half months of the new tariff of which the reduction will be $7 million of net income on a full-year run rate basis, so not quite all of that goes down next year.

Sandra W. Callahan - VP, Finance and Accounting and CFO, CAO and Assistant Secretary: Right, we'll have about a quarter of that this year.

Daniel Eggers - Credit Suisse: In San Jos�, I mean, there has been so many moving pieces around your capacity payments and energy value, what should we think about is a quarterly normalized run rate if hydrology is normal and you realize all your capacity payments for an 85% or better availability rate.

John B. Ramil - President and CEO: I think we talked about Guatemala in the past once we did the Alborada contract extension being around us, a low 30s net income all in without the DECA II investment and taking away some of the allocated interest from the parent that number is more like about a $20 million net income business moving ahead, and above that obviously comes from San Jos�.

Daniel Eggers - Credit Suisse: Then I guess the last question, just kind of given what’s going on with the coal business, the 8.5 million to 9 million tons next year. That's like a sustainable growth or run rate or are we in a world where that number is going to continue to decline giving some of the challenges to get all the permits done.

John B. Ramil - President and CEO: Dan, it's going to depend up on what happens with the log jam for permitting. We've been talking about that for a couple of years now, and we have been talking about it not impacting our ability to produce at or around 9 million tons, and that's still the case for 2011 but we're starting to see it affects us in the form of non-optimum mining, and that’s part of what's driving our cost up. As the backlog of permitting continues, it could start to effect production, not only for us but for the entire industry. We're seeing the states getting more and more frustrated with the backlog, they are worried about the economy and what’s happening there. They are going to get more active and hopefully that will start to break lose, but it is having effect on the entire industry.

Daniel Eggers - Credit Suisse: If this role would have exist for another year with kind of the slow play you saw in 2010, is there the ability to just keep putting more money into operating cost, keep volumes the same or do you – are you guys at the end of the rainbow as far as getting less efficient to the quality production?