10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File No.	Exact name of each Registrant as specified in its charter, state of incorporation, address of principal executive offices, telephone number	I.R.S. Employer Identification Number
1-8180	TECO ENERGY, INC.	59-2052286
	(a Florida corporation)
	TECO Plaza
	702 N. Franklin Street
	Tampa, Florida 33602
	(813) 228-1111
1-5007	TAMPA ELECTRIC COMPANY	59-0475140
	(a Florida corporation)
	TECO Plaza
	702 N. Franklin Street
	Tampa, Florida 33602
	(813) 228-1111

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.    YES  x    NO  ¨

Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files).    YES  x    NO  ¨

Indicate by check mark whether TECO Energy, Inc. is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether Tampa Electric Company is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	¨

Indicate by check mark whether TECO Energy, Inc. is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

Indicate by check mark whether Tampa Electric Company is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

The number of shares of TECO Energy, Inc.’s common stock outstanding as of Jul. 29, 2010 was 214,589,531. As of Jul. 29, 2010, there were 10 shares of Tampa Electric Company’s common stock issued and outstanding, all of which were held, beneficially and of record, by TECO Energy, Inc.

Tampa Electric Company meets the conditions set forth in General Instruction (H) (1) (a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format.

This combined Form 10-Q represents separate filings by TECO Energy, Inc. and Tampa Electric Company. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Each registrant makes representations only as to information relating to itself and its subsidiaries.

Page 1 of 58

Index to Exhibits appears on page 58.

PART I. FINANCIAL INFORMATION

Item 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

TECO ENERGY, INC.

In the opinion of management, the unaudited consolidated condensed financial statements include all adjustments that are of a recurring nature and necessary to state fairly the financial position of TECO Energy, Inc. and subsidiaries as of Jun. 30, 2010 and Dec. 31, 2009, and the results of their operations and cash flows for the periods ended Jun. 30, 2010 and 2009. The financial statements for the periods ended Jun. 30, 2010 include the financial position, results of operations and cash flows for two power generation projects in Guatemala, previously reflected as unconsolidated affiliates, that were reconsolidated effective Jan. 1, 2010 in accordance with new accounting guidance. The results of operations for the three month and six month periods ended Jun. 30, 2010 are not necessarily indicative of the results that can be expected for the entire fiscal year ending Dec. 31, 2010. References should be made to the explanatory notes affecting the consolidated financial statements contained in TECO Energy, Inc.’s Annual Report on Form 10-K for the year ended Dec. 31, 2009 and to the notes on pages 9 through 29 of this report.

INDEX TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

	Page No.
Consolidated Condensed Balance Sheets, Jun. 30, 2010 and Dec. 31, 2009	3-4
Consolidated Condensed Statements of Income for the three month and six month periods ended Jun. 30, 2010 and 2009	5-6
Consolidated Condensed Statements of Comprehensive Income for the three month and six month periods ended Jun. 30, 2010 and 2009	7
Consolidated Condensed Statements of Cash Flows for the six month periods ended Jun. 30, 2010 and 2009	8
Notes to Consolidated Condensed Financial Statements	9-29

2

TECO ENERGY, INC.

Consolidated Condensed Balance Sheets

Unaudited

Assets (millions, except for share amounts)	Jun. 30, 2010			Dec. 31, 2009
Current assets
Cash and cash equivalents	$	97.8		$	46.0
Short-term investments		0.0			0.8
Receivables, less allowance for uncollectibles of $3.6 and $3.0 at Jun. 30, 2010 and Dec. 31, 2009, respectively		359.5			277.4
Inventories, at average cost
Fuel		166.2			124.3
Materials and supplies		76.9			65.7
Current derivative asset		0.5			0.8
Current regulatory assets		84.0			109.2
Prepayments and other current assets		30.0			25.7
Income tax receivables		2.1			1.7
Total current assets		817.0			651.6
Property, plant and equipment
Utility plant in service
Electric		6,490.3			6,079.5
Gas		1,030.5			1,017.2
Construction work in progress		239.0			304.5
Other property		388.9			377.2
Property, plant and equipment		8,148.7			7,778.4
Accumulated depreciation		(2,366.0	)		(2,234.3	)
Total property, plant and equipment, net		5,782.7			5,544.1
Other assets
Deferred income taxes		150.7			222.7
Long-term regulatory assets		330.6			335.6
Long-term derivative assets		0.0			0.2
Investment in unconsolidated affiliates		145.3			279.3
Goodwill		59.4			59.4
Deferred charges and other assets		141.8			126.6
Total other assets		827.8			1,023.8
Total assets	$	7,427.5		$	7,219.5

The accompanying notes are an integral part of the consolidated condensed financial statements.

3

TECO ENERGY, INC.

Consolidated Condensed Balance Sheets – continued

Unaudited

Liabilities and Capital (millions, except for share amounts)	Jun. 30, 2010			Dec. 31, 2009
Current liabilities
Long-term debt due within one year
Recourse	$	67.4		$	106.5
Non-recourse		10.0			1.4
Notes payable		77.0			55.0
Accounts payable		266.7			251.4
Customer deposits		154.1			151.2
Current regulatory liabilities		71.1			85.4
Current derivative liabilities		38.0			34.0
Interest accrued		52.3			45.3
Taxes accrued		50.2			20.5
Other current liabilities		17.4			20.6
Total current liabilities		804.2			771.3
Other liabilities
Investment tax credits		10.6			10.8
Long-term regulatory liabilities		612.1			602.6
Long-term derivative liabilities		4.9			3.6
Deferred credits and other liabilities		539.6			544.2
Long-term debt, less amount due within one year
Recourse		3,279.0			3,195.4
Non-recourse		39.6			6.2
Total other liabilities		4,485.8			4,362.8
Commitments and contingencies (see Note 10)
Capital
Common equity (400.0 million shares authorized; par value $1; 214.6 million and 213.9 million shares outstanding at Jun. 30, 2010 and Dec. 31, 2009, respectively);		214.6			213.9
Additional paid in capital		1,533.4			1,530.8
Retained earnings		410.3			365.7
Accumulated other comprehensive loss		(21.4	)		(25.0	)
TECO Energy Stockholders’ Equity		2,136.9			2,085.4
Noncontrolling Interest		0.6			0.0
Total equity		2,137.5			2,085.4
Total liabilities and capital	$	7,427.5		$	7,219.5

The accompanying notes are an integral part of the consolidated condensed financial statements.

4

TECO ENERGY, INC.

Consolidated Condensed Statements of Income

Unaudited

	Three months ended Jun. 30,
(millions, except per share amounts)	2010			2009
Revenues
Regulated electric and gas (includes franchise fees and gross receipts taxes of $28.1 in 2010 and $28.2 in 2009)	$	665.2		$	662.9
Unregulated		233.6			162.3
Total revenues		898.8			825.2
Expenses
Regulated operations
Fuel		185.4			225.5
Purchased power		49.1			56.1
Cost of natural gas sold		59.4			50.9
Other		96.5			81.0
Operation other expense
Mining related costs		137.6			110.9
Guatemalan power generation		17.7			3.2
Other		1.5			1.1
Maintenance		47.8			46.2
Depreciation and amortization		77.9			71.3
Taxes, other than income		56.0			55.9
Total expenses		728.9			702.1
Income from operations		169.9			123.1
Other income (expense)
Allowance for other funds used during construction		0.3			2.5
Other income		2.2			6.1
Loss on debt extinguishment		(6.6	)		0.0
Income from equity investments		4.2			12.9
Total other income		0.1			21.5
Interest charges
Interest expense		58.4			57.4
Allowance for borrowed funds used during construction		(0.2	)		(1.0	)
Total interest charges		58.2			56.4
Income before provision for income taxes		111.8			88.2
Provision for income taxes		36.1			27.3
Net income		75.7			60.9
Less: Net income attributable to noncontrolling interest		(0.2	)		0.0
Net income attributable to TECO Energy	$	75.5		$	60.9
Average common shares outstanding – Basic		212.5			211.7
– Diluted		214.7			212.5
Earnings per share attributable to TECO Energy – Basic	$	0.35		$	0.29
– Diluted	$	0.35		$	0.29
Dividends paid per common share outstanding	$	0.205		$	0.200

The accompanying notes are an integral part of the consolidated condensed financial statements.

5

TECO ENERGY, INC.

Consolidated Condensed Statements of Income

Unaudited

(millions, except per share amounts)	Six months ended Jun. 30,
	2010			2009
Revenues
Regulated electric and gas (includes franchise fees and gross receipts taxes of $59.0 in 2010 and $58.3 in 2009)	$	1,371.7		$	1,316.7
Unregulated		439.4			332.5
Total revenues		1,811.1			1,649.2
Expenses
Regulated operations
Fuel		349.4			454.2
Purchased power		106.3			98.3
Cost of natural gas sold		175.4			139.2
Other		184.4			158.0
Operation other expense
Mining related costs		255.2			229.4
Guatemalan power generation		32.9			6.3
Other		3.1			2.1
Maintenance		92.5			98.6
Depreciation and amortization		154.9			141.0
Restructuring charges		1.5			0.0
Taxes, other than income		116.7			116.3
Total expenses		1,472.3			1,443.4
Income from operations		338.8			205.8
Other income (expense)
Allowance for other funds used during construction		1.3			5.8
Other income		5.6			20.1
Loss on debt extinguishment		(33.0	)		0.0
Income from equity investments		6.9			21.7
Total other income		(19.2	)		47.6
Interest charges
Interest expense		118.3			115.0
Allowance for borrowed funds used during construction		(0.8	)		(2.3	)
Total interest charges		117.5			112.7
Income before provision for income taxes		202.1			140.7
Provision for income taxes		70.4			45.1
Net income		131.7			95.6
Less: Net income attributable to noncontrolling interest		(0.4	)		0.0
Net income attributable to TECO Energy	$	131.3		$	95.6
Average common shares outstanding – Basic		212.4			211.6
– Diluted		214.5			212.3
Earnings per share attributable to TECO Energy – Basic	$	0.61		$	0.45
– Diluted	$	0.61		$	0.45
Dividends paid per common share outstanding	$	0.405		$	0.400

The accompanying notes are an integral part of the consolidated condensed financial statements.

6

TECO ENERGY, INC.

Consolidated Condensed Statements of Comprehensive Income

Unaudited

	Three months ended Jun. 30,					Six months ended Jun. 30,
(millions)	2010			2009		2010			2009
Net income	$	75.7		$	60.9	$	131.7		$	95.6
Other comprehensive income (loss), net of tax
Net unrealized (loss) gains on cash flow hedges		(0.4	)		8.1		0.4			10.5
Amortization of unrecognized benefit costs and other		0.5			0.4		2.3			0.7
Recognized benefit costs due to settlement		0.0			0.0		0.9			0.0
Reclassification to earnings - loss on available-for-sale securities		0.0			0.0		0.0			1.7
Other comprehensive (loss) income, net of tax		0.1			8.5		3.6			12.9
Comprehensive income		75.8			69.4		135.3			108.5
Comprehensive income attributable to noncontrolling interests		(0.2	)		0.0		(0.4	)		0.0
Comprehensive income attributable to TECO Energy, Inc.	$	75.6		$	69.4	$	134.9		$	108.5

The accompanying notes are an integral part of the consolidated condensed financial statements.

7

TECO ENERGY, INC.

Consolidated Condensed Statements of Cash Flows

Unaudited

(millions)	Six months ended Jun. 30,
	2010			2009
Cash flows from operating activities
Net income	$	131.7		$	95.6
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		154.9			141.0
Deferred income taxes		72.6			45.5
Investment tax credits, net		(0.2	)		(0.2	)
Allowance for funds used during construction		(1.3	)		(5.8	)
Non-cash stock compensation		3.4			4.7
Gain on sale of business/assets, pretax		(0.6	)		(18.6	)
Non-cash debt extinguishment, pretax		0.9			0.0
Equity in earnings of unconsolidated affiliates, net of cash distributions on earnings		(1.2	)		0.3
Deferred recovery clauses		12.9			83.3
Receivables, less allowance for uncollectibles		(70.0	)		(23.8	)
Inventories		(36.9	)		(47.4	)
Prepayments and other current assets		(2.8	)		0.7
Taxes accrued		27.2			27.2
Interest accrued		3.9			3.0
Accounts payable		39.4			(9.6	)
Other		(6.3	)		32.1
Cash flows from operating activities		327.6			328.0
Cash flows from investing activities
Capital expenditures		(275.1	)		(367.8	)
Allowance for funds used during construction		1.3			5.8
Net proceeds from sale of business/assets		0.9			29.2
Net cash increase from consolidation		24.1			0.0
Restricted cash		0.0			0.2
Contributions to unconsolidated affiliates		(1.3	)		0.0
Other investments		0.8			9.7
Cash flows used in investing activities		(249.3	)		(322.9	)
Cash flows from financing activities
Dividends		(86.7	)		(85.3	)
Proceeds from the sale of common stock		3.0			2.4
Proceeds from long-term debt		543.5			0.0
Repayment of long-term debt/Purchase in lieu of redemption		(507.6	)		(1.4	)
Dividend to noncontrolling interest		(0.7	)		0.0
Net increase in short-term debt		22.0			95.0
Cash flows (used in) from financing activities		(26.5	)		10.7
Net increase in cash and cash equivalents		51.8			15.8
Cash and cash equivalents at beginning of period		46.0			12.2
Cash and cash equivalents at end of period	$	97.8		$	28.0

The accompanying notes are an integral part of the consolidated condensed financial statements.

8

TECO ENERGY, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

UNAUDITED

1. Summary of Significant Accounting Policies

The significant accounting policies for both utility and diversified operations include:

Principles of Consolidation and Basis of Presentation

The consolidated condensed financial statements include the accounts of TECO Energy, Inc., its majority-owned and controlled subsidiaries, and the accounts of variable interest entities (VIEs) for which it is the primary beneficiary (TECO Energy or the company). TECO Energy is considered to be the primary beneficiary of VIEs if it has both 1) the power to direct the activities of a VIE that most significantly impact the entity's economic performance and 2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. Effective Jan. 1, 2010, amended accounting standards on consolidation resulted in the reconsolidation of two projects in Guatemala. Prior periods presented in this quarterly report were not restated. (See Note 16.)

All significant intercompany balances and intercompany transactions have been eliminated in consolidation. Generally, the equity method of accounting is used to account for investments in partnerships or other arrangements in which TECO Energy is not the primary beneficiary but is able to exert significant influence. In the opinion of management, the unaudited consolidated condensed financial statements include all adjustments that are of a recurring nature and necessary to state fairly the financial position of TECO Energy, Inc. and subsidiaries as of Jun. 30, 2010 and Dec. 31, 2009, and the results of operations and cash flows for the periods ended Jun. 30, 2010 and 2009. The results of operations for the three and six month periods ended Jun. 30, 2010 are not necessarily indicative of the results that can be expected for the entire fiscal year ending Dec. 31, 2010.

The use of estimates is inherent in the preparation of financial statements in accordance with generally accepted accounting principles (GAAP). Actual results could differ from these estimates. The year-end condensed balance sheet data was derived from audited financial statements, however this quarterly report on Form 10-Q does not include all year-end disclosures required for an annual report on Form 10-K by GAAP in the United States of America.

Revenues

As of Jun. 30, 2010 and Dec. 31, 2009, unbilled revenues of $65.6 million and $51.6 million, respectively, are included in the “Receivables” line item on the Consolidated Condensed Balance Sheets.

Accounting for Franchise Fees and Gross Receipts

The regulated utilities (Tampa Electric and Peoples Gas System (PGS)) are allowed to recover from customers certain costs incurred through rates approved by the Florida Public Service Commission (FPSC). The amounts included in customers’ bills for franchise fees and gross receipt taxes are included as revenues on the Consolidated Condensed Statements of Income. These amounts totaled $28.1 million and $59.0 million, respectively, for the three and six months ended Jun. 30, 2010, compared to $28.2 million and $58.3 million, respectively, for the three and six months ended Jun. 30, 2009. Franchise fees and gross receipt taxes payable by the regulated utilities are included as an expense on the Consolidated Condensed Statements of Income in “Taxes, other than income”. These totaled $28.0 million and $58.8 million, respectively, for the three and six months ended Jun. 30, 2010, compared to $28.2 million and $58.2 million, respectively, for the three and six months ended Jun. 30, 2009.

Purchased Power

Tampa Electric purchases power on a regular basis to meet the needs of its customers. Tampa Electric purchased power from entities not affiliated with TECO Energy at a cost of $49.1 million and $106.3 million, respectively, for the three and six months ended Jun. 30, 2010, compared to $56.1 million and $98.3 million, respectively, for the three and six months ended Jun. 30, 2009. Prudently incurred purchased power costs at Tampa Electric have historically been recoverable through FPSC-approved cost recovery clauses.

Cash Flows Related to Derivatives and Hedging Activities

The company classifies cash inflows and outflows related to derivative and hedging instruments in the appropriate cash flow sections associated with the item being hedged. In the case of heating oil swaps which are used to mitigate the fluctuations in the price of diesel fuel, primarily at TECO Coal, the cash inflows and outflows are included in the operating section. For natural gas, primarily at Tampa Electric and PGS, and ongoing interest rate swaps, the cash inflows and outflows are included in the operating section. For interest rate swaps that settle coincident with the debt issuance, the cash inflows and outflows are treated as premiums or discounts and included in the financing section of the Consolidated Condensed Statements of Cash Flows.

9

2. New Accounting Pronouncements

Subsequent Events

In February 2010, the Financial Accounting Standards Board (FASB) issued additional guidance related to subsequent event disclosure. The guidance was effective upon issuance and has no effect on the company’s results of operations, statement of position or cash flows.

Fair Value Measures and Disclosures

In January 2010, the FASB issued guidance that requires entities to disclose more information regarding the movements between Levels 1 and 2 of the fair value hierarchy. The guidance was effective for fiscal years that begin after Dec. 15, 2010, and for interim periods within that year. This guidance will not have any effect on the company’s results of operations, statement of position or cash flows.

3. Regulatory

Tampa Electric’s and PGS’s retail businesses are regulated by the FPSC. Tampa Electric also is subject to regulation by the Federal Energy Regulatory Commission (FERC) under the Public Utility Holding Company Act of 2005 (PUHCA 2005). However, pursuant to a waiver granted in accordance with the FERC’s regulations, TECO Energy is not subject to certain accounting, record-keeping and reporting requirements prescribed by the FERC’s regulations under PUHCA 2005. The operations of PGS are regulated by the FPSC separately from the regulation of Tampa Electric. The FPSC has jurisdiction over rates, service, issuance of securities, safety, accounting and depreciation practices and other matters. In general, the FPSC sets rates at a level that allows utilities such as Tampa Electric and PGS to collect total revenues (revenue requirements) equal to their cost of providing service, plus a reasonable return on invested capital.

Stipulation with Intervenors – Tampa Electric

As previously reported in the company’s Annual Report on Form 10-K for the period ended Dec. 31, 2009, the FPSC, in connection with Tampa Electric’s 2008 base rate request, approved a $25.7 million increase in base rates effective Jan. 1, 2010 (step increase), subject to refund, for certain capital additions placed in service in 2009.

In connection with the base rate request, the FPSC had rejected the intervenors’ arguments that the approved 2010 increase violated the intervenors’ due process rights, Florida Statutes or FPSC rules. The intervenors filed an appeal with the Florida Supreme Court in September 2009 and Tampa Electric opposed this appeal.

In July 2010, Tampa Electric entered into a stipulation with intervenors to resolve all issues related to the 2008 base rate case including the 2010 step increase, as well as the intervenors’ appeal to the Florida Supreme Court. Under the terms of the stipulation, the $25.7 million step increase remains in effect for 2010, and Tampa Electric will make a one-time reduction of $24.0 million to customer’s bills in 2010. Effective Jan. 1, 2011, and for subsequent years, rates of $24.4 million (a $1.3 million reduction from the $25.7 million in effect for 2010) related to the step increase will be in effect.

The stipulation is subject to final approval by the FPSC, and a vote on this matter is expected in August 2010.

Wholesale and Transmission Rate Cases

In July 2010, Tampa Electric filed wholesale and transmission rate cases with the FERC. Tampa Electric’s last wholesale requirements rate case was in 1991 and the associated service agreements were approved by the FERC in the mid-1990s. The transmission rates charged by Tampa Electric were last updated in 2003. The proposed rates, as filed with the FERC, could become effective, subject to refund, later this year or in the first quarter of 2011, and are not expected to have a material impact on Tampa Electric’s results.

Storm Damage Cost Recovery

Tampa Electric accrues $8.0 million annually effective May 2009, an increase of $4.0 million from the prior year, to a FERC-authorized and FPSC-approved self-insured storm damage reserve. This reserve was created after Florida’s investor owned utilities (IOUs) were unable to obtain transmission and distribution insurance coverage due to destructive acts of nature. Tampa Electric’s storm reserve was $33.4 million and $29.3 million as of Jun. 30, 2010 and Dec. 31, 2009, respectively.

Regulatory Assets and Liabilities

Tampa Electric and PGS maintain their accounts in accordance with recognized policies of the FPSC. In addition, Tampa Electric maintains its accounts in accordance with recognized policies prescribed or permitted by the FERC.

Tampa Electric and PGS apply the accounting standards for regulated operations. Areas of applicability include: deferral of revenues under approved regulatory agreements; revenue recognition resulting from cost recovery clauses that provide for monthly billing charges to reflect increases or decreases in fuel, purchased power, conservation and environmental costs; and the deferral of costs as regulatory assets to the period that the regulatory agency recognizes them when cost recovery is ordered over a period longer than a fiscal year.

10

Details of the regulatory assets and liabilities as of Jun. 30, 2010 and Dec. 31, 2009 are presented in the following table:

Regulatory Assets and Liabilities

(millions)	Jun. 30, 2010		Dec. 31, 2009
Regulatory assets:
Regulatory tax asset (1)	$	68.4	$	69.0
Other:
Cost recovery clauses		66.9		89.4
Postretirement benefit asset		222.8		229.1
Deferred bond refinancing costs (2)		16.1		18.0
Environmental remediation		21.6		21.2
Competitive rate adjustment		3.0		3.1
Other		15.8		15.0
Total other regulatory assets		346.2		375.8
Total regulatory assets		414.6		444.8
Less: Current portion		84.0		109.2
Long-term regulatory assets	$	330.6	$	335.6
Regulatory liabilities:
Regulatory tax liability (1)	$	17.6	$	19.6
Other:
Cost recovery clauses		47.4		61.4
Environmental remediation		19.9		19.9
Transmission and delivery storm reserve		33.4		29.3
Deferred gain on property sales (3)		1.8		2.8
Accumulated reserve-cost of removal		562.2		554.3
Other		0.9		0.7
Total other regulatory liabilities		665.6		668.4
Total regulatory liabilities		683.2		688.0
Less: Current portion		71.1		85.4
Long-term regulatory liabilities	$	612.1	$	602.6

(1) Primarily related to plant life and derivative positions.

(2) Amortized over the term of the related debt instrument.

(3) Amortized over a 4 or 5-year period with various ending dates.

All regulatory assets are being recovered through the regulatory process. The following table further details the regulatory assets and the related recovery periods:

Regulatory assets

(millions)	Jun. 30, 2010		Dec. 31, 2009
Clause recoverable (1)	$	69.9	$	92.5
Components of rate base (2)		232.5		238.1
Regulatory tax assets (3)		68.4		69.0
Capital structure and other (3)		43.8		45.2
Total	$	414.6	$	444.8

(1) To be recovered through cost recovery clauses approved by the FPSC on a dollar-for-dollar basis in the next year.

(2) Primarily reflects allowed working capital, which is included in rate base and earns a rate of return as permitted by the FPSC.

(3) “Regulatory tax assets” and “Capital structure and other” regulatory assets have a recoverable period longer than a fiscal year and are recognized over the period authorized by the regulatory agency. Also included are unamortized loan costs, which are amortized over the life of the related debt instruments. See footnotes 1 and 2 in the prior table for additional information.

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4. Income Taxes

The company’s U.S. subsidiaries join in the filing of a U.S. federal consolidated income tax return. The Internal Revenue Service (IRS) concluded its examination of the company’s 2008 consolidated federal income tax return during 2009. There is one open issue for the 2008 tax return for which an Appeals Conference took place in June 2010. The company expects to receive a proposed settlement amount during the third quarter of 2010. The U.S. federal statute of limitations remains open for the year 2006 and onward. Years 2009 and 2010 are currently under examination by the IRS under the Compliance Assurance Program, a program in which the company is a participant. The company does not expect the settlement of current IRS examinations to significantly change the total amount of unrecognized tax benefits by the end of 2010. Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from three to five years from the filing of an income tax return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. Years still open to examination by tax authorities in major state and foreign jurisdictions include 2004 and forward.

During the second quarter of 2010, the company finalized the settlements of certain state items that were under appeal. As a result, the company recorded a $1.6 million after-tax benefit, excluding interest. During the six months ending Jun. 30, 2010, the company recorded a $4.0 million after-tax benefit, excluding interest, for these state items.

The company recognizes interest and penalties associated with uncertain tax positions in the Consolidated Condensed Statements of Income in accordance with standards for accounting for uncertainty in income taxes. During the six month periods ended Jun. 30, 2010 and 2009, the company recorded ($1.3) million and $0.5 million, respectively, of pre-tax (income) charges for interest only. During the second quarter of 2010, as a result of finalizing the settlement of certain state items, the company recorded pre-tax interest income of $0.6 million for a total of $2.0 million pre-tax interest income for the six months ended Jun. 30, 2010. No amounts have been recorded for penalties for the six month periods ended Jun. 30, 2010 or 2009.

The effective tax rate increased to 34.84% for the six months ended Jun. 30, 2010 from 32.06% for the same period in 2009, primarily due to an additional $5.9 million valuation allowance related to our updated, anticipated ability to use foreign tax credits.

5. Employee Postretirement Benefits

Included in the table below is the periodic expense for pension and other postretirement benefits offered by the company.

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Pension Expense

(millions) Three months ended Jun. 30,	Pension Benefits						Other Postretirement Benefits
	2010			2009			2010		2009
Components of net periodic benefit expense
Service cost	$	3.9		$	3.9		$	0.8	$	0.7
Interest cost on projected benefit obligations		8.4			8.5			2.5		2.8
Expected return on assets		(9.2	)		(9.4	)		0.0		0.0
Amortization of:
Transition obligation		0.0			0.0			0.6		0.6
Prior service (benefit) cost		(0.1	)		(0.1	)		0.2		0.2
Actuarial loss		3.2			2.5			0.0		0.0
Pension expense		6.2			5.4			4.1		4.3
Settlement cost		0.1			0.0			0.0		0.0
Net pension expense recognized in the TECO Energy Consolidated Condensed Statements of Income	$	6.3		$	5.4		$	4.1	$	4.3
Six months ended Jun. 30,
Components of net periodic benefit expense
Service cost	$	8.1		$	7.8		$	1.6	$	1.5
Interest cost on projected benefit obligations		16.7			16.8			5.4		5.6
Expected return on assets		(18.2	)		(18.9	)		0.0		0.0
Amortization of:
Transition obligation		0.0			0.0			1.2		1.1
Prior service (benefit) cost		(0.2	)		(0.2	)		0.4		0.4
Actuarial loss		6.2			4.3			0.0		0.0
Pension expense		12.6			9.8			8.6		8.6
Settlement cost		1.6			0.0			0.0		0.0
Net pension expense recognized in the TECO Energy Consolidated Condensed Statements of Income	$	14.2		$	9.8		$	8.6	$	8.6

For the fiscal 2010 plan year, TECO Energy assumed an expected long-term return on plan assets of 8.25% and a discount rate of 5.75% for pension benefits under its qualified pension plan, and a discount rate of 5.60% for its other postretirement benefits as of their Jan. 1, 2010 measurement dates. Additionally, TECO Energy assumed a discount rate of 5.75% for its Supplemental Executive Retirement Plan (SERP) benefits as of its Mar. 1 and Jan. 1, 2010 measurement dates.

Effective Dec. 31, 2006, in accordance with the accounting standard for defined benefit plans and other postretirement benefits, TECO Energy adjusted its postretirement benefit obligations and recorded other comprehensive income (loss) to reflect the unamortized transition obligation, prior service cost, and actuarial gains and losses of its postretirement benefit plans. The adjustment to other comprehensive income was net of amounts that, for purposes prescribed by accounting standards for regulated operations, were recorded as regulatory assets for Tampa Electric Company. For the three months and six months ended Jun. 30, 2010, TECO Energy and its subsidiaries reclassed $0.6 million and $1.2 million, respectively, of unamortized transition obligation, prior service cost and actuarial gains and losses from accumulated other comprehensive income to net income as part of periodic benefit expense. In addition, during the three months and six months ended Jun. 30, 2010, Tampa Electric Company reclassed $3.3 million and $6.4 million, respectively, of unamortized transition obligation, prior service cost and actuarial losses from regulatory assets to net income as part of periodic benefit expense.

In connection with the restructuring events that occurred in the third quarter of 2009 that changed the senior management structure, TECO Energy recognized settlement charges of $0.1 million and $1.6 million, respectively, for the three months and six months ended Jun. 30, 2010 for pay-outs from its SERP.

In 2010, TECO Energy expects to make a contribution to its qualified pension plan of approximately $34.6 million.

In March 2010, the Patient Protection and Affordable Care Act and a companion bill, The Health Care and Education Reconciliation Act (the Acts) were signed into law. Among other things, the Acts reduce the tax benefits available to an employer that receives the Medicare Part D subsidy, resulting in a write-off of any associated deferred tax asset. As a result, TECO Energy reduced its deferred tax asset by $6.4 million and recorded a corresponding charge of $1.1 million and a regulatory tax asset of $5.3 million. TECO Energy is reviewing certain other aspects of the Acts that could impact the cost of medical benefits provided to retirees and active employees. These impacts are not expected to be material to the company’s future results of operations, statement of position or cash flows.

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6. Short-Term Debt

At Jun. 30, 2010 and Dec. 31, 2009, the following credit facilities and related borrowings existed:

Credit Facilities

	Jun. 30, 2010						Dec. 31, 2009
(millions)	Credit Facilities		Borrowings Outstanding  (1)		Letters of Credit Outstanding		Credit Facilities		Borrowings Outstanding  (1)		Letters of Credit Outstanding
Tampa Electric Company:
5-year facility	$	325.0	$	0.0	$	0.9	$	325.0	$	55.0	$	0.7
1-year accounts receivable facility		150.0		77.0		0.0		150.0		0.0		0.0
TECO Energy/TECO Finance:
5-year facility (2)		200.0		0.0		6.7		200.0		0.0		6.9
Total	$	675.0	$	77.0	$	7.6	$	675.0	$	55.0	$	7.6

(1) Borrowings outstanding are reported as notes payable.

(2) TECO Finance is the borrower and TECO Energy is the guarantor of this facility.

These credit facilities require commitment fees ranging from 7.0 to 60.0 basis points. The weighted-average interest rate on outstanding amounts payable under the credit facilities at Jun. 30, 2010 and Dec. 31, 2009 was 0.74% and 0.66%, respectively.

Tampa Electric Company Accounts Receivable Facility

On Feb. 19, 2010, Tampa Electric Company and TEC Receivables Corp. (TRC), a wholly-owned subsidiary of Tampa Electric Company, amended their $150 million accounts receivable collateralized borrowing facility, entering into Amendment No. 8 to the Loan and Servicing Agreement with certain lenders named therein and Citicorp North America, Inc. as Program Agent. The amendment (i) extends the maturity date to Feb. 18, 2011, (ii) provides that TRC will pay program and liquidity fees, which, pursuant to the amendment, will total 100 basis points, (iii) provides that the interest rates on the borrowings will be based on prevailing asset-backed commercial paper rates, unless such rates are not available from conduit lenders, in which case the rates will be at an interest rate equal to, at Tampa Electric Company’s option, either Citibank’s prime rate (or the federal funds rate plus 50 basis points, if higher) or a rate based on the London interbank offer rate (if available) plus a margin and (iv) makes other technical changes.

7. Long-Term Debt

Issuance of TECO Finance, Inc. 4.00% Notes due 2016 and 5.15% Notes due 2020

On Mar. 15, 2010, TECO Finance, Inc. issued $250 million aggregate principal amount of 4.00% Notes due Mar. 15, 2016 and $300 million aggregate principal amount of 5.15% Notes due Mar. 15, 2020. The 2016 Notes were priced at 99.594% of the principal amount to yield 4.077% to maturity, and the 2020 Notes were priced at 99.552% of the principal amount to yield 5.208% to maturity. TECO Finance is a wholly-owned subsidiary of TECO Energy whose business activities consist solely of providing funds to TECO Energy for its diversified activities. The TECO Finance notes are fully and unconditionally guaranteed by TECO Energy.

The offering resulted in net proceeds to TECO Finance (after deducting underwriting discounts and commissions and estimated offering expenses) of approximately $543.5 million. TECO Finance used a portion of these net proceeds to fund the cash purchase of the TECO Energy and TECO Finance notes tendered in March 2010 (see “TECO Energy, Inc. and TECO Finance, Inc. Tender Offers” below) and to fund the redemptions of the TECO Energy Floating Rate Notes due 2010 and 7.20% Notes due 2011 in April 2010. TECO Finance may redeem some or all of the notes at its option at any time and from time to time at a redemption price equal to the greater of (i) 100% of the principal amount of Notes to be redeemed or (ii) the sum of the present value of the remaining payments of principal and interest on the Notes to be redeemed, discounted at an applicable treasury rate (as defined in the Indenture), plus 25 basis points; in either case, the redemption price would include accrued and unpaid interest to the redemption date.

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TECO Energy, Inc. and TECO Finance, Inc. Tender Offers

On Mar. 22, 2010, TECO Energy and TECO Finance completed debt tender offers which resulted in the purchase of approximately $70 million principal amount of TECO Energy notes for cash and approximately $230 million principal amount of TECO Finance notes for cash.

The tender offers resulted in the purchase and retirement of approximately:

• $43.0 million principal amount of TECO Energy 7.2% notes due 2011

• $27.0 million principal amount of TECO Energy 7.0% notes due 2012

• $156.9 million principal amount of TECO Finance 7.2% notes due 2011

• $73.1 million principal amount of TECO Finance 7.0% notes due 2012

In connection with these debt tender transactions, $25.5 million of premiums and fees were expensed, and are included in “Loss on debt extinguishment” on the Consolidated Condensed Statements of Income and as part of the “Cash flows from operating activities” in the Consolidated Condensed Statements of Cash Flows for the six months ended Jun. 30, 2010. “Loss on debt extinguishment” also includes remaining unamortized debt issue costs of $0.9 million.

Redemption of TECO Energy, Inc. Floating Rate Notes due 2010

On Apr. 14, 2010, TECO Energy redeemed all of the outstanding $100 million aggregate principal amount of its Floating Rate Notes due 2010. The redemption price was equal to 100% of the principal amount of notes redeemed, plus accrued and unpaid interest on the redeemed notes up to the redemption date.

Redemption of TECO Energy, Inc. 7.2% Notes due 2011

On Apr. 22, 2010, TECO Energy redeemed $100 million aggregate principal amount of its 7.2% Notes due 2011. The redemption price was equal to $1,066.38 per $1,000 principal amount of notes redeemed, plus accrued and unpaid interest on the redeemed notes up to the redemption date. In connection with this transaction, $6.6 million of premiums and fees were expensed, and are included in “Loss on debt extinguishment” on the Consolidated Condensed Statements of Income and as part of the “Cash flows from operating activities” in the Consolidated Condensed Statements of Cash Flows for the six months ended Jun. 30, 2010.

Reconsolidation of TCAE and CGESJ

Effective Jan. 1, 2010, new accounting standards for consolidations amended the determination of the primary beneficiaries for variable interest entities. As a result of adopting these standards, TECO Guatemala, Inc., a wholly-owned subsidiary of TECO Energy, was determined to be the primary beneficiary of, and therefore required to consolidate, both the Tampa Centro Americana de Electricidad (TCAE) and Central Generadora Eléctrica San José (CGESJ) projects in Guatemala. (See Note 16.) The consolidation resulted in a net $44.4 million increase of non-recourse debt.

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8. Other Comprehensive Income

TECO Energy reported the following other comprehensive income (OCI) for the three months and six months ended Jun. 30, 2010 and 2009, related to changes in the fair value of cash flow hedges, amortization of unrecognized benefit costs associated with the company’s pension plans and unrecognized gains and losses on available-for-sale securities:

Other Comprehensive Income

	Three months ended Jun. 30,									Six months ended Jun. 30,
(millions)	Gross			Tax			Net			Gross			Tax			Net
2010
Unrealized loss on cash flow hedges	($	1.9	)	$	0.8		($	1.1	)	($	1.4	)	$	0.4		($	1.0	)
Less: Loss reclassified to net income		1.1			(0.4	)		0.7			2.2			(0.8	)		1.4
(Loss) gain on cash flow hedges		(0.8	)		0.4			(0.4	)		0.8			(0.4	)		0.4
Amortization of unrecognized benefit costs and other		0.8			(0.3	)		0.5			1.4			0.9			2.3
Recognized benefit costs due to settlement		(0.6	)		0.6			0.0			0.9			0.0			0.9
Total other comprehensive income	($	0.6	)	$	0.7		$	0.1		$	3.1		$	0.5		$	3.6
2009
Unrealized gain on cash flow hedges	$	6.3		($	2.3	)	$	4.0		$	3.2		($	1.2	)	$	2.0
Plus: Loss reclassified to net income		6.5			(2.4	)		4.1			13.5			(5.0	)		8.5
Gain on cash flow hedges		12.8			(4.7	)		8.1			16.7			(6.2	)		10.5
Amortization of unrecognized benefit costs		0.6			(0.2	)		0.4			1.1			(0.4	)		0.7
Reclassification to earnings loss on available-for-sale securities		0.0			0.0			0.0			1.7			0.0			1.7
Total other comprehensive income	$	13.4		($	4.9	)	$	8.5		$	19.5		($	6.6	)	$	12.9

Accumulated Other Comprehensive Loss

(millions)	Jun. 30, 2010			Dec. 31, 2009
Unrecognized pension losses and prior service costs(1)	($	26.1	)	($	27.8	)
Unrecognized other benefit gains, prior service costs and transition obligations(2)		11.6			10.1
Net unrealized losses from cash flow hedges(3)		(6.9	)		(7.3	)
Total accumulated other comprehensive loss	($	21.4	)	($	25.0	)

(1) Net of tax benefit of $16.1 million and $17.1 million as of Jun. 30, 2010 and Dec. 31, 2009, respectively.

(2) Net of tax expense of $4.6 million and $6.0 million as of Jun. 30, 2010 and Dec. 31, 2009, respectively.

(3) Net of tax benefit of $4.1 million and $4.5 million as of Jun. 30, 2010 and Dec. 31, 2009, respectively.

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9. Earnings Per Share

Earnings Per Share

	Three months ended Jun. 30,						Six months ended Jun. 30,
(millions, except per share amounts)	2010			2009			2010			2009
Basic earnings per share
Net income	$	75.7		$	60.9		$	131.7		$	95.6
Less: Income attributable to noncontrolling interest		(0.2	)		0.0			(0.4	)		0.0
Less: Amount allocated to nonvested participating shareholders		(0.5	)		(0.6	)		(1.0	)		(0.8	)
Net Income attributable to TECO Energy available to common shareholders - basic	$	75.0		$	60.3		$	130.3		$	94.8
Average shares outstanding common		212.5			211.7			212.4			211.6
Basic earnings per share attributable to TECO Energy available to common shareholders	$	0.35		$	0.29		$	0.61		$	0.45
Diluted earnings per share
Net income	$	75.7		$	60.9		$	131.7		$	95.6
Less: Income attributable to noncontrolling interest		(0.2	)		0.0			(0.4	)		0.0
Less: Amount allocated to nonvested participating shareholders		(0.5	)		(0.6	)		(1.0	)		(0.8	)
Net income attributable to TECO Energy available to common shareholders - diluted	$	75.0		$	60.3		$	130.3		$	94.8
Average shares outstanding common		212.5			211.7			212.4			211.6
Assumed conversions of stock options, unvested restricted stock and contingent performance shares, net		2.2			0.8			2.1			0.7
Adjusted average shares outstanding common - diluted		214.7			212.5			214.5			212.3
Diluted earnings per share attributable to TECO Energy available to common shareholders	$	0.35		$	0.29		$	0.61		$	0.45
Anti-dilutive shares		8.4			5.9			9.1			6.5

10. Commitments and Contingencies

Legal Contingencies

From time to time, TECO Energy and its subsidiaries are involved in various legal, tax and regulatory proceedings before various courts, regulatory commissions and governmental agencies in the ordinary course of its business. Where appropriate, accruals are made in accordance with accounting standards for contingencies to provide for matters that are probable of resulting in an estimable, material loss. While the outcome of such proceedings is uncertain, management does not believe that their ultimate resolution will have a material adverse effect on the company’s results of operations or financial condition.

Superfund and Former Manufactured Gas Plant Sites

Tampa Electric Company, through Tampa Electric and PGS, is a potentially responsible party (PRP) for certain superfund sites and, through PGS, for certain former manufactured gas plant sites. While the joint and several liability associated with these sites presents the potential for significant response costs, as of Jun. 30, 2010, Tampa Electric Company has estimated its ultimate financial liability to be approximately $19.9 million, primarily at PGS, and this amount has been accrued in the company’s financial statements. The environmental remediation costs associated with these sites, which are expected to be paid over many years, are not expected to have a significant impact on customer prices.

The estimated amounts represent only the estimated portion of the cleanup costs attributable to Tampa Electric Company. The estimates to perform the work are based on Tampa Electric Company’s experience with similar work adjusted for site specific conditions and agreements with the respective governmental agencies. The estimates are made in current dollars, are not discounted and do not assume any insurance recoveries.

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Allocation of the responsibility for remediation costs among Tampa Electric Company and other PRPs is based on each party’s relative ownership interest in or usage of a site. Accordingly, Tampa Electric Company’s share of remediation costs varies with each site. In virtually all instances where other PRPs are involved, those PRPs are considered creditworthy.

Factors that could impact these estimates include the ability of other PRPs to pay their pro-rata portion of the cleanup costs, additional testing and investigation which could expand the scope of the cleanup activities, additional liability that might arise from the cleanup activities themselves or changes in laws or regulations that could require additional remediation. These costs are recoverable through customer rates established in subsequent base rate proceedings.

Guarantees and Letters of Credit

A summary of the face amount or maximum theoretical obligation under TECO Energy’s and Tampa Electric Company’s letters of credit and guarantees as of Jun. 30, 2010 is as follows:

Letters of Credit and Guarantees-TECO Energy

(millions) Letters of Credit and Guarantees for the Benefit of:	2010		2011-2014		After(1) 2014		Total		Liabilities Recognized at Jun. 30, 2010
Tampa Electric
Guarantees:
Fuel purchase/energy management (2)	$	0.0	$	0.0	$	20.0	$	20.0	$	4.2
		0.0		0.0		20.0		20.0		4.2
TECO Coal
Letters of credit		0.0		0.0		6.7		6.7		0.0
Guarantees: Fuel purchase related (2)		0.0		0.0		1.4		1.4		1.0
		0.0		0.0		8.1		8.1		1.0
Other subsidiaries
Guarantees:
Fuel purchase/energy management (2)		0.0		0.0		109.7		109.7		1.3
Total	$	0.0	$	0.0	$	137.8	$	137.8	$	6.5
Letters of Credit-Tampa Electric Company
(millions) Letters of Credit for the Benefit of:	2010		2011-2014		After(1) 2014		Total		Liabilities Recognized at Jun. 30, 2010
Tampa Electric
Letters of credit	$	0.0	$	0.0	$	0.9	$	0.9	$	0.0
Total	$	0.0	$	0.0	$	0.9	$	0.9	$	0.0

(1) These letters of credit and guarantees renew annually and are shown on the basis that they will continue to renew beyond 2014.

(2) The amounts shown are the maximum theoretical amounts guaranteed under current agreements. Liabilities recognized represent the associated obligation of TECO Energy under these agreements at Jun. 30, 2010. The obligations under these letters of credit and guarantees include net accounts payable and net derivative liabilities.

Financial Covenants

In order to utilize their respective bank facilities, TECO Energy, TECO Finance and Tampa Electric Company must meet certain financial tests as defined in the applicable agreements. In addition, TECO Energy, TECO Finance, Tampa Electric Company and other operating companies have certain restrictive covenants in specific agreements and debt instruments. At Jun. 30, 2010, TECO Energy, TECO Finance, Tampa Electric Company and the other operating companies were in compliance with all applicable financial covenants.

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11. Segment Information

TECO Energy is an electric and gas utility holding company with significant diversified activities. Segments are determined based on how management evaluates, measures and makes decisions with respect to the operations of the entity. The management of TECO Energy reports segments based on each subsidiary’s contribution of revenues, net income and total assets, as required by the accounting guidance for disclosures about segments of an enterprise and related information. All significant intercompany transactions are eliminated in the Consolidated Condensed Financial Statements of TECO Energy, but are included in determining reportable segments.

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Segment Information ⁽¹⁾

(millions) Three months ended Jun. 30,	Tampa Electric		Peoples Gas		TECO Coal		TECO (2) Guatemala		Other & Eliminations			TECO Energy
2010
Revenues - external	$	552.8	$	112.4	$	200.6	$	32.9	$	0.1		$	898.8
Sales to affiliates		0.4		3.7		0.0		0.0		(4.1	)		0.0
Total revenues		553.2		116.1		200.6		32.9		(4.0	)		898.8
Equity earnings of unconsolidated affiliates		0.0		0.0		0.0		4.8		(0.6	)		4.2
Depreciation		53.6		11.4		11.0		1.8		0.1			77.9
Total interest charges(1)		30.8		4.6		1.8		4.4		16.6			58.2
Internally allocated interest (1)		0.0		0.0		1.7		3.2		(4.9	)		0.0
Provision (benefit) for taxes		33.8		3.3		4.5		2.8		(8.3	)		36.1
Net income (loss) attributable to TECO Energy	$	56.8	$	5.1	$	20.7	$	10.6	($	17.7	)	$	75.5
2009
Revenues - external	$	563.2	$	99.7	$	160.2	$	2.0	$	0.1		$	825.2
Sales to affiliates		0.4		3.4		0.0		0.0		(3.8	)		0.0
Total revenues		563.6		103.1		160.2		2.0		(3.7	)		825.2
Equity earnings of unconsolidated affiliates		0.0		0.0		0.0		12.9		0.0			12.9
Depreciation		49.3		11.0		10.8		0.2		0.0			71.3
Total interest charges(1)		28.7		4.8		1.9		3.1		17.9			56.4
Internally allocated interest (1)		0.0		0.0		1.7		3.1		(4.8	)		0.0
Provision (benefit) for taxes		27.8		2.9		1.7		0.0		(5.1	)		27.3
Net income (loss) attributable to TECO Energy	$	48.5	$	4.6	$	10.1	$	7.9	($	10.2	)	$	60.9
(millions) Six months ended Jun. 30,	Tampa Electric		Peoples Gas		TECO Coal		TECO (2) Guatemala		Other & Eliminations			TECO Energy
2010
Revenues - external	$	1,077.6	$	294.1	$	372.6	$	66.7	$	0.1		$	1,811.1
Sales to affiliates		0.7		14.9		0.0		0.0		(15.6	)		0.0
Total revenues		1,078.3		309.0		372.6		66.7		(15.5	)		1,811.1
Equity earnings of unconsolidated affiliates		0.0		0.0		0.0		8.0		(1.1	)		6.9
Depreciation		106.6		22.8		21.8		3.6		0.1			154.9
Restructuring charges		0.0		0.0		0.0		0.0		1.5			1.5
Total interest charges(1)		61.1		9.2		3.6		9.0		34.6			117.5
Internally allocated interest (1)		0.0		0.0		3.5		6.5		(10.0	)		0.0
Provision (benefit) for taxes		61.6		14.5		6.9		6.8		(19.4	)		70.4
Net income (loss) attributable to TECO Energy	$	104.9	$	23.0	$	37.5	$	21.0	($	55.1	)	$	131.3
2009
Revenues - external	$	1,070.5	$	246.2	$	328.3	$	4.1	$	0.1		$	1,649.2
Sales to affiliates		0.7		9.9		0.0		0.0		(10.6	)		0.0
Total revenues		1,071.2		256.1		328.3		4.1		(10.5	)		1,649.2
Equity earnings of unconsolidated affiliates		0.0		0.0		0.0		21.7		0.0			21.7
Depreciation		97.3		21.8		21.4		0.4		0.1			141.0
Total interest charges(1)		56.9		9.5		3.7		6.3		36.3			112.7
Internally allocated interest (1)		0.0		0.0		3.2		6.2		(9.4	)		0.0
Provision (benefit) for taxes		37.2		10.1		3.0		9.6		(14.8	)		45.1
Net income (loss) attributable to TECO Energy	$	66.8	$	15.8	$	18.1	$	21.1	($	26.2	)	$	95.6
At Jun. 30, 2010
Goodwill	$	0.0	$	0.0	$	0.0	$	59.4	$	0.0		$	59.4
Investment in unconsolidated affiliates		0.0		0.0		0.0		145.0		0.3			145.3
Total assets	$	5,837.3	$	876.5	$	338.3	$	445.6	($	70.2	)	$	7,427.5
At Dec. 31, 2009
Goodwill	$	0.0	$	0.0	$	0.0	$	59.4	$	0.0		$	59.4
Investment in unconsolidated affiliates		0.0		0.0		0.0		279.2		0.1			279.3
Total assets	$	5,697.9	$	870.1	$	326.6	$	380.7	($	55.8	)	$	7,219.5

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(1) Segment net income is reported on a basis that includes internally allocated financing costs. Total interest charges include internally allocated interest costs that for 2010 and 2009 were at a pretax rate of 7.15% based on an average of each subsidiary’s equity and indebtedness to TECO Energy assuming a 50/50 debt/equity capital structure.

(2) Revenues for 2009 are exclusive of entities deconsolidated as a result of the accounting guidance for variable interest entities. Total revenues for unconsolidated affiliates, attributable to TECO Guatemala based on ownership percentages, were $12.7 million and $31.4 million for the three and six months ended Jun. 30, 2009. Net income attributable to TECO Energy for the six months ended Jun. 30, 2009 includes the gain on the sale of a 16.5% interest in the Central American fiber optic telecommunication provider Navega. Entities were consolidated as of Jan. 1, 2010 as a result of accounting guidance effective on that date. See Note 16 for more information.

12. Accounting for Derivative Instruments and Hedging Activities

From time to time, TECO Energy and its affiliates enter into futures, forwards, swaps and option contracts for the following purposes:

• To limit the exposure to price fluctuations for physical purchases and sales of natural gas in the course of normal operations at Tampa Electric and PGS;

• To limit the exposure to interest rate fluctuations on debt securities at TECO Energy and its affiliates; and

• To limit the exposure to price fluctuations for physical purchases of fuel at TECO Coal.

TECO Energy and its affiliates use derivatives only to reduce normal operating and market risks, not for speculative purposes. The company’s primary objective in using derivative instruments for regulated operations is to reduce the impact of market price volatility on ratepayers.

The risk management policies adopted by TECO Energy provide a framework through which management monitors various risk exposures. Daily and periodic reporting of positions and other relevant metrics are performed by a centralized risk management group which is independent of all operating companies.

The company applies the accounting standards for derivative instruments and hedging activities. These standards require companies to recognize derivatives as either assets or liabilities in the financial statements, to measure those instruments at fair value, and to reflect the changes in the fair value of those instruments as either components of OCI or in net income, depending on the designation of those instruments. The changes in fair value that are recorded in OCI are not immediately recognized in current net income. As the underlying hedged transaction matures or the physical commodity is delivered, the deferred gain or loss on the related hedging instrument must be reclassified from OCI to earnings based on its value at the time of the instrument’s settlement. For effective hedge transactions, the amount reclassified from OCI to earnings is offset in net income by the market change of the amount paid or received on the underlying physical transaction.

New accounting standards for disclosures became effective for financial statements issued for fiscal years and interim periods beginning after Nov. 15, 2008. This new standard requires enhanced disclosures about a company’s derivative activities and how the related hedged items affect a company’s financial position, financial performance and cash flows. The new requirements include quantitative disclosures about the company’s fair value amounts of gains and losses associated with derivative instruments, as well as disclosures about credit-risk-related contingent features in derivative agreements. The company adopted this new standard effective Jan. 1, 2009.

The company applies the accounting standards for regulated operations to financial instruments used to hedge the purchase of natural gas for its regulated companies. These standards, in accordance with the FPSC, permit the changes in fair value of natural gas derivatives to be recorded as regulatory assets or liabilities to reflect the impact of hedging activities on the fuel recovery clause. As a result, these changes are not recorded in OCI (see Note 3).

A company’s physical contracts qualify for the normal purchase/normal sale (NPNS) exception to derivative accounting rules, provided they meet certain criteria. Generally, NPNS applies if the company deems the counterparty creditworthy, if the counterparty owns or controls resources within the proximity to allow for physical delivery of the commodity, if the company intends to receive physical delivery and if the transaction is reasonable in relation to the company’s business needs. As of Jun. 30, 2010, all of the company’s physical contracts qualify for the NPNS exception.

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The following table presents the derivatives that are designated as cash flow hedges at Jun. 30, 2010 and Dec. 31, 2009:

Total Derivatives⁽¹⁾

(millions)	Jun. 30, 2010		Dec. 31, 2009
Current assets	$	0.5	$	0.8
Long-term assets		0.0		0.2
Total assets	$	0.5	$	1.0
Current liabilities	$	38.0	$	34.0
Long-term liabilities		4.9		3.6
Total liabilities	$	42.9	$	37.6

(1) Amounts presented above are on a gross basis, with asset and liability positions netted by counterparty in accordance with accounting standards for derivatives and hedging.

The following table presents the derivative hedges of heating oil contracts at Jun. 30, 2010 and Dec. 31, 2009 to limit the exposure to changes in the market price for diesel fuel used in the production of coal:

Heating Oil Derivatives

(millions)	Jun. 30, 2010		Dec. 31, 2009
Current assets	$	0.0	$	0.0
Long-term assets		0.0		0.2
Total assets	$	0.0	$	0.2
Current liabilities	$	1.3	$	0.9
Long-term liabilities		0.1		0.0
Total liabilities	$	1.4	$	0.9

The following table presents the derivative hedges of natural gas contracts at Jun. 30, 2010 and Dec. 31, 2009 to limit the exposure to changes in market price for natural gas used to produce energy and natural gas purchased for resale to customers:

Natural Gas Derivatives

(millions)	Jun. 30, 2010		Dec. 31, 2009
Current assets	$	0.5	$	0.8
Long-term assets		0.0		0.0
Total assets	$	0.5	$	0.8
Current liabilities	$	36.2	$	33.1
Long-term liabilities		4.8		3.6
Total liabilities	$	41.0	$	36.7

The ending balance in accumulated other comprehensive income (AOCI) related to the cash flow hedges and previously settled interest rate swaps at Jun. 30, 2010 is a net loss of $6.1 million after tax and accumulated amortization. This compares to a net loss of $7.3 million in AOCI after tax and accumulated amortization at Dec. 31, 2009.

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The following table presents the derivative hedges of interest rate swaps at Jun. 30, 2010 and Dec. 31, 2009 to limit the exposure to market changes in interest rates on outstanding debt:

Interest Rate Swaps

(millions)	Jun. 30, 2010		Dec. 31, 2009 (1)
Current assets	$	0.0	$	0.0
Long-term assets		0.0		0.0
Total assets	$	0.0	$	0.0
Current liabilities	$	0.5	$	0.0
Long-term liabilities		0.0		0.0
Total liabilities	$	0.5	$	0.0

(1) Interest rate swaps residing on the balance sheet of TECO Guatemala, Inc. were deconsolidated at Dec. 31, 2009. See Note 16.

The following table presents the fair values and locations of derivative instruments recorded on the balance sheet at Jun. 30, 2010:

Derivatives Designated As Hedging Instruments

	Asset Derivatives			Liability Derivatives
(millions) at Jun. 30, 2010	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity Contracts:
Heating oil derivatives:
Current	Derivative assets	$	0.0	Derivative liabilities	$	1.3
Long-term	Derivative assets		0.0	Derivative liabilities		0.1
Natural gas derivatives:
Current	Derivative assets		0.5	Derivative liabilities		36.2
Long-term	Derivative assets		0.0	Derivative liabilities		4.8
Interest rate swaps:
Current	Derivative assets		0.0	Derivative liabilities		0.5
Long-term	Derivative assets		0.0	Derivative liabilities		0.0
Total derivatives designated as hedging instruments		$	0.5		$	42.9

The following table presents the effect of energy related derivatives on the fuel recovery clause mechanism in the Consolidated Condensed Balance Sheet as of Jun. 30, 2010:

Energy Related Derivatives

	Asset Derivatives			Liability Derivatives
(millions) at Jun. 30, 2010	Balance Sheet Location(1)	Fair Value		Balance Sheet Location(1)	Fair Value
Commodity Contracts:
Natural gas derivatives:
Current	Regulatory liabilities	$	0.5	Regulatory assets	$	36.2
Long-term	Regulatory liabilities		0.0	Regulatory assets		4.8
Total		$	0.5		$	41.0

(1) Natural gas derivatives are deferred, in accordance with accounting standards for regulated operations and all increases and decreases in the cost of natural gas supply are passed on to customers with the fuel recovery clause mechanism. As gains and losses are realized in future periods, they will be recorded as fuel costs in the Consolidated Condensed Statements of Income.

Based on the fair value of the instruments at Jun. 30, 2010, net pretax losses of $35.7 million are expected to be reclassified from regulatory assets or liabilities to the Consolidated Condensed Statements of Income within the next twelve months.

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The following tables present the effect of hedging instruments on OCI and income for the three months and six months ended Jun. 30:

For the three months ended Jun. 30: (millions)	Amount of Gain/(Loss) on Derivatives Recognized in OCI			Location of Gain/(Loss) Reclassified From AOCI Into Income	Amount of Gain/(Loss) Reclassified From AOCI Into Income
Derivatives in Cash Flow Hedging Relationships	Effective Portion(1)				Effective Portion(1)
2010
Interest rate contracts:	$	0.0		Interest expense	($	0.4	)
Commodity contracts:
Heating oil derivatives		(1.1	)	Mining related costs		(0.3	)
Total	($	1.1	)		($	0.7	)
2009
Interest rate contracts:	$	0.0		Interest expense	($	0.6	)
Commodity contracts:
Heating oil derivatives		4.0		Mining related costs		(3.3	)
Natural gas derivatives		0.0		Mining related costs		(0.2	)
Total	$	4.0			($	4.1	)

(1) Changes in OCI and AOCI are reported in after-tax dollars.

For the six months ended Jun. 30: (millions)	Amount of Gain/(Loss) on Derivatives Recognized in OCI			Location of Gain/(Loss) Reclassified From AOCI Into Income	Amount of Gain/(Loss) Reclassified From AOCI Into Income
Derivatives in Cash Flow Hedging Relationships	Effective Portion(1)				Effective Portion(1)
2010
Interest rate contracts:	($	0.1	)	Interest expense	($	0.9	)
Commodity contracts:
Heating oil derivatives		(0.9	)	Mining related costs		(0.5	)
Total	($	1.0	)		($	1.4	)
2009
Interest rate contracts:	$	0.0		Interest expense	($	1.1	)
Commodity contracts:
Heating oil derivatives		2.6		Mining related costs		(7.0	)
Natural gas derivatives		(0.5	)	Mining related costs		(0.4	)
Total	$	2.1			($	8.5	)

(1) Changes in OCI and AOCI are reported in after-tax dollars.

For derivative instruments that meet cash flow hedge criteria, the effective portion of the gain or loss on the derivative is reported as a component of OCI and reclassified into earnings in the same period or period during which the hedged transaction affects earnings. Gains and losses on the derivatives representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. For the three months and six months ended Jun. 30, 2010 and 2009, all hedges were effective.

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The following table presents the derivative activity for instruments classified as qualifying cash flow hedges for the six months ended Jun. 30:

For the six months ended Jun 30: (millions)	Fair Value Asset/(Liability)			Amount of Gain/(Loss) Recognized in OCI(1)			Amount of Gain/(Loss) Reclassified From AOCI Into Income
2010
Interest rate swaps	($	0.5	)	($	0.1	)	($	0.9	)
Heating oil derivatives		(1.4	)		(0.9	)		(0.5	)
Natural gas derivatives		(40.5	)		0.0			0.0
Total	($	42.4	)	($	1.0	)	($	1.4	)
2009
Interest rate swaps	$	0.0		$	0.0		($	1.1	)
Heating oil derivatives		(10.5	)		2.6			(7.0	)
Natural gas derivatives		(112.7	)		(0.5	)		(0.4	)
Total	($	123.2	)	$	2.1		($	8.5	)

(1) Changes in OCI and AOCI are reported in after-tax dollars.

The maximum length of time over which the company is hedging its exposure to the variability in future cash flows extends to Dec. 31, 2012 for both financial natural gas and financial heating oil fuel contracts. The following table presents by commodity type the company’s derivative volumes that, as of Jun. 30, 2010, are expected to settle during the 2010, 2011 and 2012 fiscal years:

	Heating Oil Contracts		Natural Gas Contracts
(millions)	(Gallons)		(MMBTUs)
Year	Physical	Financial	Physical	Financial
2010	0.0	4.6	0.0	20.5
2011	0.0	4.5	0.0	13.9
2012	0.0	0.0	0.0	2.3
Total	0.0	9.1	0.0	36.7

The company is exposed to credit risk primarily through entering into derivative instruments with counterparties to limit its exposure to the commodity price fluctuations associated with diesel fuel and natural gas. Credit risk is the potential loss resulting from a counterparty’s nonperformance under an agreement. The company manages credit risk with policies and procedures for, among other things, counterparty analysis, exposure measurement, and exposure monitoring and mitigation.

It is possible that volatility in commodity prices could cause the company to have material credit risk exposures with one or more counterparties. If such counterparties fail to perform their obligations under one or more agreements, the company could suffer a material financial loss. However, as of Jun. 30, 2010, substantially all of the counterparties with transaction amounts outstanding in the company’s energy portfolio are rated investment grade by the major rating agencies. The company assesses credit risk internally for counterparties that are not rated.

The company has entered into commodity master arrangements with its counterparties to mitigate credit exposure to those counterparties. The company generally enters into the following master arrangements: (1) Edison Electric Institute agreements (EEI) - standardized power sales contracts in the electric industry; (2) International Swaps and Derivatives Association agreements (ISDA) - standardized financial gas and electric contracts; and (3) North American Energy Standards Board agreements (NAESB) - standardized physical gas contracts. The company believes that entering into such agreements reduces the risk from default by creating contractual rights relating to creditworthiness, collateral and termination.

The company has implemented procedures to monitor the creditworthiness of our counterparties and to consider nonperformance in valuing counterparty positions. The company monitors counterparties’ credit standing, including those that are experiencing financial problems, have significant swings in credit default swap rates, have credit rating changes by external rating agencies or have changes in ownership. Net liability positions are generally not adjusted as the company uses derivative transactions as hedges and has the ability and intent to perform under each of these contracts. In the instance of net asset positions, the company considers general market conditions and the observable financial health and outlook of specific counterparties, forward looking data such as credit default swaps, when available, and historical default probabilities from credit rating agencies in evaluating the potential impact of nonperformance risk to derivative positions. As of Jun. 30, 2010, substantially all positions with counterparties are net liabilities.

Certain TECO Energy derivative instruments contain provisions that require the company’s debt, or in the case of derivative instruments where Tampa Electric Company is the counterparty, Tampa Electric Company’s debt, to maintain an investment grade credit rating from any or all of the major credit rating agencies. If debt ratings, including Tampa Electric

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Company’s, were to fall below investment grade, it could trigger these provisions, and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. The company has no other contingent risk features associated with any derivative instruments.

The table below presents the fair value of the overall contractual contingent liability positions for the company’s derivative activity at Jun. 30, 2010:

Contingent Features

(millions) At Jun. 30, 2010	Fair Value Asset/ (Liability)			Derivative Exposure Asset/ (Liability)			Posted Collateral
Credit Rating	($	41.8	)	($	41.8	)	$	0.0

13. Fair Value Measurements

Items Measured at Fair Value on a Recurring Basis

The following tables set forth by level within the fair value hierarchy the company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of Jun. 30, 2010 and Dec. 31, 2009. As required by accounting standards for fair value measurements, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. For natural gas, interest rate and heating oil swaps, the market approach was used in determining fair value.

Recurring Fair Value Measures

	At fair value as of Jun. 30, 2010
(millions)	Level 1		Level 2		Level 3		Total
Assets
Natural gas swaps	$	0.0	$	0.5	$	0.0	$	0.5
Heating oil swaps		0.0		0.0		0.0		0.0
Total	$	0.0	$	0.5	$	0.0	$	0.5
Liabilities
Natural gas swaps	$	0.0	$	41.0	$	0.0	$	41.0
Interest rate swaps		0.0		0.5		0.0		0.5
Heating oil swaps		0.0		1.4		0.0		1.4
Total	$	0.0	$	42.9	$	0.0	$	42.9

	At fair value as of Dec. 31, 2009
(millions)	Level 1		Level 2		Level 3		Total
Assets
Natural gas swaps	$	0.0	$	0.8	$	0.0	$	0.8
Heating oil swaps		0.0		0.2		0.0		0.2
Total	$	0.0	$	1.0	$	0.0	$	1.0
Liabilities
Natural gas swaps	$	0.0	$	36.7	$	0.0	$	36.7
Heating oil swaps		0.0		0.9		0.0		0.9
Total	$	0.0	$	37.6	$	0.0	$	37.6

Natural gas and heating oil swaps are over-the-counter swap instruments. The primary pricing inputs in determining the fair value of these swaps are the New York Mercantile Exchange (NYMEX) quoted closing prices of exchange-traded instruments. These prices are applied to the notional amounts of active positions to determine the reported fair value.

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The primary pricing inputs in determining the fair value of interest rate swaps are LIBOR swap rates as reported by Bloomberg. For each instrument, the projected forward swap rate is used to determine the stream of cash flows over the life of the contract. The cash flows are then discounted using a spot discount rate to determine the fair value.

Fair Value of Debt Outstanding

At Jun. 30, 2010, total long-term debt had a carrying amount of $3,396.0 million and an estimated fair market value of $3,674.9 million. At Dec. 31, 2009, total long-term debt had a carrying amount of $3,309.7 million and an estimated fair market value of $3,500.3 million.

14. Asset Dispositions

Sale of Navega

On Mar. 13, 2009, TECO Guatemala sold its 16.5% interest in the Central American fiber optic telecommunications provider, Navega. The sale resulted in a pretax gain of $18.3 million and total proceeds of $29.0 million.

15. Restructuring Charges

On Jul. 30, 2009, TECO Energy, Inc. announced organizational changes and a new senior management structure as part of its response to industry changes, economic uncertainties and its commitment to maintain a lean and efficient organization. As a second step in response to these factors, on Aug. 31, 2009, the company decided on a total reduction in force of 229 jobs. The reduction in force was substantially completed by Dec. 31, 2009. In connection with this reduction in force, the company incurred total costs of $26.6 million related to severance and other benefits. For the three months ended Mar. 31, 2010, the remaining $1.5 million of these costs were recognized on the Consolidated Condensed Statements of Income under “Restructuring Charges”. The company’s wholly-owned subsidiary, Tampa Electric Company, incurred $23.1 million of such costs, all of which were recognized in the year ended Dec. 31, 2009. The total cash payments related to these actions were $28.4 million; including $4.9 million for the settlement of pension obligations. As of Mar. 31, 2010, all restructuring charges were paid or settled.

Restructuring Charges Incurred

(millions)				Termination of Benefits			Other Costs			Total
Total costs expected to be incurred				$	26.6		$	0.6		$	27.2
Costs incurred in 2009					(25.1	)		(0.6	)		(25.7	)
Costs incurred in 2010					(1.5	)		0.0			(1.5	)
Total costs remaining				$	0.0		$	0.0		$	0.0
Accrued Liability for Restructuring Charges
(millions)				Termination of Benefits			Other Costs			Total
Beginning balance, Jul. 1, 2009				$	0.0		$	0.0		$	0.0
Costs incurred and charged to expense					26.6			0.6			27.2
Costs paid/settled					(22.9	)		(0.6	)		(23.5	)
Non-cash expense					(3.7	)		0.0			(3.7	)
Ending balance, Jun. 30, 2010				$	0.0		$	0.0		$	0.0
Restructuring Charges by Segment
(millions)	Tampa Electric			PGS			Other(1)			Total
Total costs expected to be incurred	$	18.4		$	4.7		$	4.1		$	27.2
Costs incurred in 2009		(18.4	)		(4.7	)		(2.6	)		(25.7	)
Costs incurred in 2010		0.0			0.0			(1.5	)		(1.5	)
Total costs remaining	$	0.0		$	0.0		$	0.0		$	0.0

(1) Restructuring costs incurred at the parent company.

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16. Variable Interest Entities

The company formed TCAE to own and construct the Alborada Power Station and the company formed CGESJ to own and construct the San José Power Station. Both power stations are located in Guatemala and both projects obtained long-term power purchase agreements (PPAs) with Empresa Eléctrica de Guatemala, S.A. (EEGSA), a distribution utility in Guatemala. The terms of the two separate PPAs include EEGSA’s right to the full capacity of the plants for 15 years, U.S. dollar based capacity payments, certain terms for providing fuel, and certain other terms including the right to extend the Alborada and San José contracts. Under prior accounting standards for consolidation, management believed that EEGSA was the primary beneficiary of the variable interests in TCAE and CGESJ due to the terms of the PPAs. Accordingly, both entities were deconsolidated as of Jan. 1, 2004. The TCAE deconsolidation resulted in the initial removal of $25.0 million of debt and $15.1 million of net assets from TECO Energy’s Consolidated Balance Sheet. The CGESJ deconsolidation resulted in the initial removal of $65.5 million of debt and $106.6 million of net assets from TECO Energy’s Consolidated Balance Sheet. The results of operations for the two projects were classified as “Income from equity investments” on TECO Energy’s Consolidated Statements of Income since the date of deconsolidation through Dec. 31, 2009.

Effective Jan. 1, 2010, the accounting standards for consolidation of VIEs were amended. The most significant amendment was the determination of a VIE’s primary beneficiary. Under the amended standard, the primary beneficiary is the enterprise that has both 1) the power to direct the activities of a VIE that most significantly impact the entity's economic performance and 2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. As a result of adopting this amendment, the company reconsolidated both TCAE and CGESJ.

The following table summarizes combined income statement information for the TCAE and CGESJ projects for the three months and six months ended Jun. 30, 2010, which were consolidated, and Jun. 30, 2009, which were not consolidated:

Summary Results for TCAE and CGESJ

	For the three months ended Jun. 30,				For the six months ended Jun. 30,
(millions)	2010		2009		2010		2009
Revenues	$	32.9	$	12.7	$	65.6	$	31.4
Operating expenses		19.3		4.4		35.7		14.7
Project level income(1)		10.8		6.3		24.3		12.0

(1) Excludes taxes, allocated interest expense and administrative and general expenses. Includes project level interest.

The following table summarizes combined balance sheet information for the TCAE and CGESJ projects for the periods ended Jun. 30, 2010, which is now consolidated, and Dec. 31, 2009, which were not consolidated:

Summary Results for TCAE and CGESJ

(millions)	Jun. 30, 2010		Dec. 31, 2009
Current assets	$	60.8	$	58.1
Long-term assets and other deferred debits		157.5		161.2
Total assets	$	218.3	$	219.3
Current liabilities	$	21.6	$	17.6
Long-term liabilities and other deferred credits		43.8		51.2
Equity		152.9		150.5
Total liabilities and equity	$	218.3	$	219.3

Tampa Electric Company has entered into multiple PPAs with wholesale energy providers in Florida to ensure the ability to meet customer energy demand and to provide lower cost options in the meeting of this demand. These agreements range in size from 121 MW to 370 MW of available capacity, are with similar entities and contain similar provisions. Because some of these provisions provide for the transfer or sharing of a number of risks inherent in the generation of energy, these agreements meet the definition of being variable interest entities. These risks include: operating and maintenance; regulatory; credit; commodity/fuel; and energy market risk. Tampa Electric Company has reviewed these risks and has determined that the owners of these entities have retained the majority of these risks over the expected life of the underlying generating assets, have the power to direct the most significant activities, the obligation or right to absorb losses or benefits and hence remain the primary beneficiaries. As a result, Tampa Electric Company is not required to consolidate any of these entities. Tampa Electric Company purchased $49.1 million and $56.1 million, and $106.3 million and $98.3 million, under these PPAs for the three months and six months ended Jun. 30, 2010 and 2009, respectively.

In one instance Tampa Electric Company’s agreement with the entity for 370 MW of capacity was entered into prior to Dec. 31, 2003, the effective date of these standards. Under the standards, the company is required to make an exhaustive effort to

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obtain sufficient information to determine if this entity is a VIE and which holder of the variable interests is the primary beneficiary. The owners of this entity are not willing to provide the information necessary to make these determinations, have no obligation to do so and the information is not available publicly. As a result, the company is unable to determine if this entity is a VIE and if so, which variable interest holder, if any, is the primary beneficiary. The company has no obligation to this entity beyond the purchase of capacity; therefore, the maximum exposure for the company is the obligation to pay for such capacity under terms of the PPA at rates that could be unfavorable to the wholesale market. The company purchased $17.6 million and $11.2 million, and $30.3 million and $17.4 million under this PPA for the three months and six months ended Jun. 30, 2010 and 2009, respectively.

The company does not provide any material financial or other support to any of the VIEs it is involved with, nor is the company under any obligation to absorb losses associated with these VIEs. Other than the Guatemalan projects previously mentioned, in the normal course of business, our involvement with the remaining VIEs does not affect our Consolidated Condensed Balance Sheets, Statements of Income or Cash Flows.

17. Subsequent Events

Stipulation with Intervenors – Tampa Electric

In July 2010, Tampa Electric entered into a stipulation with intervenors to resolve all issues related to the 2008 base rate proceedings including the 2010 step increase, as well as the intervenors’ appeal to the Florida Supreme Court. The stipulation is subject to final approval by the FPSC, and a vote on this matter is expected in August 2010. If approved, Tampa Electric Company will make a one-time reduction of $24.0 million to customer bills in 2010. See Note 3 for further discussion.

Alborada Power Purchase Agreement Extension

In July 2010, TCAE, the owner of the Alborada power station and a subsidiary of TECO Guatemala, executed a document confirming the 5-year extension of a power purchase agreement that was scheduled to expire on Sep. 14, 2010. As a result, the capacity payment for the extension period will be reduced. The company does not anticipate that this capacity payment change will have a significant impact on the recorded goodwill associated with this generation project.

29

TAMPA ELECTRIC COMPANY

In the opinion of management, the unaudited consolidated condensed financial statements include all adjustments that are of a recurring nature and necessary to state fairly the financial position of Tampa Electric Company as of Jun. 30, 2010 and Dec. 31, 2009, and the results of operations and cash flows for the periods ended Jun. 30, 2010 and 2009. The results of operations for the three months and six months ended Jun. 30, 2010 are not necessarily indicative of the results that can be expected for the entire fiscal year ending Dec. 31, 2010. References should be made to the explanatory notes affecting the consolidated financial statements contained in Tampa Electric Company’s Annual Report on Form 10-K for the year ended Dec. 31, 2009 and to the notes on pages 36 through 46 of this report.

INDEX TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

	Page No.
Consolidated Condensed Balance Sheets, Jun. 30, 2010 and Dec. 31, 2009	31-32
Consolidated Condensed Statements of Income and Comprehensive Income for the three month and six month periods ended Jun. 30, 2010 and 2009	33-34
Consolidated Condensed Statements of Cash Flows for the six month periods ended Jun. 30, 2010 and 2009	35
Notes to Consolidated Condensed Financial Statements	36-46

30

TAMPA ELECTRIC COMPANY

Consolidated Condensed Balance Sheets

Unaudited

Assets (millions)	Jun. 30, 2010			Dec. 31, 2009
Property, plant and equipment
Utility plant in service
Electric	$	6,274.4		$	6,065.9
Gas		1,030.5			1,017.2
Construction work in progress		188.0			303.0
Property, plant and equipment, at original costs		7,492.9			7,386.1
Accumulated depreciation		(2,032.9	)		(1,988.1	)
		5,460.0			5,398.0
Other property		4.6			4.4
Total property, plant and equipment, net		5,464.6			5,402.4
Current assets
Cash and cash equivalents		7.4			5.5
Receivables, less allowance for uncollectibles of $2.3 and $1.6 at Jun. 30, 2010 and Dec. 31, 2009, respectively		287.7			228.6
Inventories, at average cost
Fuel		124.7			85.8
Materials and supplies		58.1			55.8
Current regulatory assets		84.0			109.2
Current derivative assets		0.5			0.8
Taxes receivable		0.0			16.8
Prepayments and other current assets		13.3			12.0
Total current assets		575.7			514.5
Deferred debits
Unamortized debt expense		18.7			20.1
Long-term regulatory assets		330.6			335.6
Other		13.2			1.2
Total deferred debits		362.5			356.9
Total assets	$	6,402.8		$	6,273.8

The accompanying notes are an integral part of the consolidated condensed financial statements.

31

TAMPA ELECTRIC COMPANY

Consolidated Balance Sheets -continued

Unaudited

Liabilities and Capital (millions)	Jun. 30, 2010			Dec. 31, 2009
Capital
Common stock	$	1,852.4		$	1,802.4
Accumulated other comprehensive loss		(5.7	)		(6.1	)
Retained earnings		316.2			307.5
Total capital		2,162.9			2,103.8
Long-term debt, less amount due within one year		1,994.4			1,994.4
Total capitalization		4,157.3			4,098.2
Current liabilities
Long-term debt due within one year		3.7			3.7
Notes payable		77.0			55.0
Accounts payable		206.9			206.1
Customer deposits		154.1			151.2
Current regulatory liabilities		71.1			85.4
Current derivative liabilities		36.2			33.1
Current deferred income taxes		8.0			15.9
Interest accrued		31.9			27.7
Taxes accrued		38.2			12.1
Other		11.9			16.5
Total current liabilities		639.0			606.7
Deferred credits
Non-current deferred income taxes		576.7			543.8
Investment tax credits		10.6			10.8
Long-term derivative liabilities		4.8			3.6
Long-term regulatory liabilities		612.1			602.6
Other		402.3			408.1
Total deferred credits		1,606.5			1,568.9
Total liabilities and capital	$	6,402.8		$	6,273.8

The accompanying notes are an integral part of the consolidated condensed financial statements.

32

TAMPA ELECTRIC COMPANY

Consolidated Condensed Statements of Income and Comprehensive Income

Unaudited

	Three months ended Jun. 30,
(millions)	2010			2009
Revenues
Electric (includes franchise fees and gross receipts taxes of $21.8 in 2010 and $22.7 in 2009)	$	553.1		$	563.5
Gas (includes franchise fees and gross receipts taxes of $6.3 in 2010 and $5.5 in 2009)		112.4			99.7
Total revenues		665.5			663.2
Expenses
Operations
Fuel		185.4			225.5
Purchased power		49.1			56.1
Cost of natural gas sold		59.4			50.9
Other		96.5			80.9
Maintenance		31.6			31.8
Depreciation		65.0			60.3
Taxes, federal and state		37.0			30.4
Taxes, other than income		45.2			44.2
Total expenses		569.2			580.1
Income from operations		96.3			83.1
Other income
Allowance for other funds used during construction		0.3			2.5
Taxes, non-utility federal and state		(0.1	)		(0.3	)
Other income, net		0.8			1.2
Total other income		1.0			3.4
Interest charges
Interest on long-term debt		32.8			31.4
Other interest		2.8			3.0
Allowance for borrowed funds used during construction		(0.2	)		(1.0	)
Total interest charges		35.4			33.4
Net income	$	61.9		$	53.1
Other comprehensive income, net of tax
Net unrealized gain on cash flow hedges		0.2			0.1
Total other comprehensive income, net of tax		0.2			0.1
Comprehensive income	$	62.1		$	53.2

The accompanying notes are an integral part of the consolidated condensed financial statements.

33

TAMPA ELECTRIC COMPANY

Consolidated Condensed Statements of Income and Comprehensive Income

Unaudited

	Six months ended Jun. 30,
(millions)	2010			2009
Revenues
Electric (includes franchise fees and gross receipts taxes of $43.2 in 2010 and $44.8 in 2009)	$	1,078.1		$	1,071.0
Gas (includes franchise fees and gross receipts taxes of $15.8 in 2010 and $13.5 in 2009)		294.1			246.2
Total revenues		1,372.2			1,317.2
Expenses
Operations
Fuel		349.4			454.2
Purchased power		106.3			98.3
Cost of natural gas sold		175.4			139.2
Other		184.2			157.8
Maintenance		61.6			68.0
Depreciation		129.4			119.1
Taxes, federal and state		75.8			46.9
Taxes, other than income		94.5			92.4
Total expenses		1,176.6			1,175.9
Income from operations		195.6			141.3
Other income
Allowance for other funds used during construction		1.3			5.8
Taxes, non-utility federal and state		(0.3	)		(0.4	)
Other income, net		1.6			2.2
Total other income		2.6			7.6
Interest charges
Interest on long-term debt		65.5			62.8
Other interest		5.6			5.8
Allowance for borrowed funds used during construction		(0.8	)		(2.3	)
Total interest charges		70.3			66.3
Net income	$	127.9		$	82.6
Other comprehensive income, net of tax
Net unrealized gain on cash flow hedges		0.4			0.3
Total other comprehensive income, net of tax		0.4			0.3
Comprehensive income	$	128.3		$	82.9

The accompanying notes are an integral part of the consolidated condensed financial statements.

34

TAMPA ELECTRIC COMPANY

Consolidated Condensed Statements of Cash Flows

Unaudited

	Six months ended Jun. 30,
(millions)	2010			2009
Cash flows from operating activities
Net income	$	127.9		$	82.6
Adjustments to reconcile net income to net cash from operating activities:
Depreciation		129.4			119.1
Deferred income taxes		23.5			17.3
Investment tax credits, net		(0.2	)		(0.2	)
Allowance for funds used during construction		(1.3	)		(5.8	)
Deferred recovery clause		12.9			83.3
Receivables, less allowance for uncollectibles		(59.1	)		(20.0	)
Inventories		(41.2	)		(24.5	)
Prepayments		(1.3	)		0.8
Taxes accrued		42.9			16.1
Interest accrued		4.2			4.0
Accounts payable		27.9			(12.1	)
Gain on sale of assets, pretax		(0.2	)		(0.3	)
Other		(4.9	)		22.5
Cash flows from operating activities		260.5			282.8
Cash flows from investing activities
Capital expenditures		(212.7	)		(339.3	)
Allowance for funds used during construction		1.3			5.8
Net proceeds from sale of assets		0.0			0.1
Cash flows used in investing activities		(211.4	)		(333.4	)
Cash flows from financing activities
Common stock		50.0			0.0
Net increase in short-term debt		22.0			130.0
Dividends		(119.2	)		(77.4	)
Cash flows (used in) from financing activities		(47.2	)		52.6
Net increase in cash and cash equivalents		1.9			2.0
Cash and cash equivalents at beginning of period		5.5			3.6
Cash and cash equivalents at end of period	$	7.4		$	5.6

The accompanying notes are an integral part of the consolidated condensed financial statements.

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TAMPA ELECTRIC COMPANY

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

UNAUDITED

1. Summary of Significant Accounting Policies

The significant accounting policies for Tampa Electric Company include:

Principles of Consolidation and Basis of Presentation

Tampa Electric Company is a wholly-owned subsidiary of TECO Energy, Inc., and is comprised of the Electric division, generally referred to as Tampa Electric, the Natural Gas division, generally referred to as Peoples Gas System (PGS) and the accounts of variable interest entities (VIEs) for which it is the primary beneficiary. Tampa Electric Company is considered to be the primary beneficiary of VIEs if it has both 1) the power to direct the activities of a VIE that most significantly impact the entity's economic performance and 2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. (See Note 12.)

All significant intercompany balances and intercompany transactions have been eliminated in consolidation. In the opinion of management, the unaudited consolidated condensed financial statements include all adjustments that are of a recurring nature and necessary to state fairly the financial position of Tampa Electric Company and subsidiaries as of Jun. 30, 2010 and Dec. 31, 2009, and the results of operations and cash flows for the periods ended Jun. 30, 2010 and 2009. The results of operations for the three and six month periods ended Jun. 30, 2010 are not necessarily indicative of the results that can be expected for the entire fiscal year ending Dec. 31, 2010.

The use of estimates is inherent in the preparation of financial statements in accordance with generally accepted accounting principles (GAAP). Actual results could differ from these estimates. The year-end consolidated condensed balance sheet data was derived from audited financial statements, however this quarterly report on Form 10-Q does not include all year-end disclosures required for an annual report on Form 10-K by GAAP in the United States of America.

Revenues

As of Jun. 30, 2010 and Dec. 31, 2009, unbilled revenues of $65.6 million and $51.6 million, respectively, are included in the “Receivables” line item on the Consolidated Condensed Balance Sheets.

Accounting for Franchise Fees and Gross Receipts

The regulated utilities (Tampa Electric and PGS) are allowed to recover from customers certain costs incurred through rates approved by the Florida Public Service Commission (FPSC). The amounts included in customers’ bills for franchise fees and gross receipt taxes are included as revenues on the Consolidated Condensed Statements of Income. These amounts totaled $28.1 million and $59.0 million, respectively, for the three and six months ended Jun. 30, 2010, compared to $28.2 million and $58.3 million, respectively, for the three and six months ended Jun. 30, 2009. Franchise fees and gross receipt taxes payable by the regulated utilities are included as an expense on the Consolidated Condensed Statements of Income in “Taxes, other than income”. These totaled $28.0 million and $58.8 million, respectively, for the three and six months ended Jun. 30, 2010, compared to $28.2 million and $58.2 million, respectively, for the three and six months ended Jun. 30, 2009.

Purchased Power

Tampa Electric purchases power on a regular basis to meet the needs of its customers. Tampa Electric purchased power from entities not affiliated with TECO Energy at a cost of $49.1 million and $106.3 million, respectively, for the three and six months ended Jun. 30, 2010, compared to $56.1 million and $98.3 million, respectively, for the three and six months ended Jun. 30, 2009. Prudently incurred purchased power costs at Tampa Electric have historically been recoverable through FPSC-approved cost recovery clauses.

Cash Flows Related to Derivatives and Hedging Activities

Tampa Electric Company classifies cash inflows and outflows related to derivative and hedging instruments in the appropriate cash flow sections associated with the item being hedged. For natural gas and ongoing interest rate swaps, the cash inflows and outflows are included in the operating section. For interest rate swaps that settle coincident with the debt issuance, the cash inflows and outflows are treated as premiums or discounts and included in the financing section of the Consolidated Condensed Statements of Cash Flows.

2. New Accounting Pronouncements

Subsequent Events

In February 2010, the Financial Accounting Standards Board (FASB) issued additional guidance related to subsequent event disclosure. The guidance was effective upon issuance and has no effect on the company’s results of operations, statement of position or cash flows.

36

Fair Value Measures and Disclosures

In January 2010, the FASB issued guidance that requires entities to disclose more information regarding the movements between Levels 1 and 2 of the fair value hierarchy. The guidance was effective for fiscal years that begin after Dec. 15, 2010, and for interim periods within that year. This guidance will not have any effect on the company’s results of operations, statement of position or cash flows.

3. Regulatory

Tampa Electric’s and PGS’s retail businesses are regulated by the FPSC. Tampa Electric also is subject to regulation by the Federal Energy Regulatory Commission (FERC) under the Public Utility Holding Company Act of 2005 (PUHCA 2005). However, pursuant to a waiver granted in accordance with the FERC’s regulations, Tampa Electric is not subject to certain accounting, record-keeping and reporting requirements prescribed by the FERC’s regulations under PUHCA 2005. The operations of PGS are regulated by the FPSC separately from the regulation of Tampa Electric. The FPSC has jurisdiction over rates, service, issuance of securities, safety, accounting and depreciation practices and other matters. In general, the FPSC sets rates at a level that allows utilities such as Tampa Electric and PGS to collect total revenues (revenue requirements) equal to their cost of providing service, plus a reasonable return on invested capital.

Stipulation with Intervenors – Tampa Electric

As previously reported in Tampa Electric Company’s Annual Report on Form 10-K for the period ended Dec. 31, 2009, the FPSC, in connection with Tampa Electric’s 2008 base rate request, approved a $25.7 million increase in base rates effective Jan. 1, 2010 (step increase), subject to refund, for certain capital additions placed in service in 2009.

In connection with the base rate request, the FPSC had rejected the intervenors’ arguments that the approved 2010 increase violated the intervenors’ due process rights, Florida Statutes or FPSC rules. The intervenors filed an appeal with the Florida Supreme Court in September 2009 and Tampa Electric opposed this appeal.

In July 2010, Tampa Electric entered into a stipulation with intervenors to resolve all issues related to the 2008 base rate case including the 2010 step increase, as well as the intervenors’ appeal to the Florida Supreme Court. Under the terms of the stipulation, the $25.7 million step increase remains in effect for 2010, and Tampa Electric will make a one-time reduction of $24.0 million to customer’s bills in 2010. Effective Jan. 1, 2011, and for subsequent years, rates of $24.4 million (a $1.3 million reduction from the $25.7 million in effect for 2010) related to the step increase will be in effect.

The stipulation is subject to final approval by the FPSC, and a vote on this matter is expected in August 2010.

Wholesale and Transmission Rate Cases

In July 2010, Tampa Electric filed wholesale and transmission rate cases with the FERC. Tampa Electric’s last wholesale requirements rate case was in 1991 and the associated service agreements were approved by the FERC in the mid-1990s. The transmission rates charged by Tampa Electric were last updated in 2003. The proposed rates, as filed with the FERC, could become effective, subject to refund, later this year or in the first quarter of 2011, and are not expected to have a material impact on Tampa Electric’s results.

Storm Damage Cost Recovery

Tampa Electric accrues $8.0 million annually effective May 2009, an increase of $4.0 million from the prior year, to a FERC-authorized and FPSC-approved self-insured storm damage reserve. This reserve was created after Florida’s investor owned utilities (IOUs) were unable to obtain transmission and distribution insurance coverage due to destructive acts of nature. Tampa Electric’s storm reserve was $33.4 million and $29.3 million as of Jun. 30, 2010 and Dec. 31, 2009, respectively.

Regulatory Assets and Liabilities

Tampa Electric and PGS maintain their accounts in accordance with recognized policies of the FPSC. In addition, Tampa Electric maintains its accounts in accordance with recognized policies prescribed or permitted by the FERC.

Tampa Electric and PGS apply the accounting standards for regulated operations. Areas of applicability include: deferral of revenues under approved regulatory agreements; revenue recognition resulting from cost recovery clauses that provide for monthly billing charges to reflect increases or decreases in fuel, purchased power, conservation and environmental costs; and the deferral of costs as regulatory assets to the period that the regulatory agency recognizes them when cost recovery is ordered over a period longer than a fiscal year.

37

Details of the regulatory assets and liabilities as of Jun. 30, 2010 and Dec. 31, 2009 are presented in the following table:

Regulatory Assets and Liabilities

(millions)	Jun. 30, 2010		Dec. 31, 2009
Regulatory assets:
Regulatory tax asset (1)	$	68.4	$	69.0
Other:
Cost recovery clauses		66.9		89.4
Postretirement benefit asset		222.8		229.1
Deferred bond refinancing costs (2)		16.1		18.0
Environmental remediation		21.6		21.2
Competitive rate adjustment		3.0		3.1
Other		15.8		15.0
Total other regulatory assets		346.2		375.8
Total regulatory assets		414.6		444.8
Less: Current portion		84.0		109.2
Long-term regulatory assets	$	330.6	$	335.6
Regulatory liabilities:
Regulatory tax liability (1)	$	17.6	$	19.6
Other:
Cost recovery clauses		47.4		61.4
Environmental remediation		19.9		19.9
Transmission and delivery storm reserve		33.4		29.3
Deferred gain on property sales (3)		1.8		2.8
Accumulated reserve-cost of removal		562.2		554.3
Other		0.9		0.7
Total other regulatory liabilities		665.6		668.4
Total regulatory liabilities		683.2		688.0
Less: Current portion		71.1		85.4
Long-term regulatory liabilities	$	612.1	$	602.6

(1) Primarily related to plant life and derivative positions.

(2) Amortized over the term of the related debt instrument.

(3) Amortized over a 4 or 5-year period with various ending dates.

All regulatory assets are being recovered through the regulatory process. The following table further details the regulatory assets and the related recovery periods:

Regulatory assets

(millions)	Jun. 30, 2010		Dec 31, 2009
Clause recoverable (1)	$	69.9	$	92.5
Components of rate base (2)		232.5		238.1
Regulatory tax assets (3)		68.4		69.0
Capital structure and other (3)		43.8		45.2
Total	$	414.6	$	444.8

(1) To be recovered through cost recovery clauses approved by the FPSC on a dollar-for-dollar basis in the next year.

(2) Primarily reflects allowed working capital, which is included in rate base and earns a rate of return as permitted by the FPSC.

(3) “Regulatory tax assets” and “Capital structure and other” regulatory assets have a recoverable period longer than a fiscal year and are recognized over the period authorized by the regulatory agency. Also included are unamortized loan costs, which are amortized over the life of the related debt instruments. See footnotes 1 and 2 in the prior table for additional information.

38

4. Income Taxes

Tampa Electric Company is included in the filing of a consolidated federal income tax return with TECO Energy and its affiliates. Tampa Electric Company’s income tax expense is based upon a separate return computation. Tampa Electric Company’s effective tax rates for the six months ended Jun. 30, 2010 and Jun. 30, 2009 differ from the statutory rate principally due to state income taxes, the domestic activity production deduction and the equity portion of Allowance for Funds Used During Construction.

The Internal Revenue Service (IRS) concluded its examination of the company’s consolidated federal income tax return for the 2008 year during 2009. There is one open issue for the 2008 tax return for which an Appeals Conference took place in June 2010. The company expects to receive a proposed settlement amount during the third quarter of 2010. The U.S. federal statute of limitations remains open for the year 2006 and onward. Years 2009 and 2010 are currently under examination by the IRS under the Compliance Assurance Program, a program in which TECO Energy is a participant. TECO Energy does not expect the settlement of current IRS examinations to significantly change the total amount of unrecognized tax benefits by the end of 2010. Florida’s statute of limitations is three years from the filing of an income tax return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. Years still open to examination by Florida’s tax authorities include 2006 and onward. The company does not expect the settlement of audit examinations to significantly change the total amount of unrecognized tax benefits within the next 12 months.

5. Employee Postretirement Benefits

Tampa Electric Company is a participant in the comprehensive retirement plans of TECO Energy. Amounts allocable to all participants of the TECO Energy retirement plans are found in Note 5, Employee Postretirement Benefits, in the TECO Energy, Inc. Notes to Consolidated Condensed Financial Statements. Tampa Electric Company’s portion of the net pension expense for the three months ended Jun. 30, 2010 and 2009, respectively, was $4.4 million and $4.2 million for pension benefits, and $3.3 million and $3.4 million for other postretirement benefits. For the six months ended Jun. 30, 2010 and 2009, respectively, net benefit expenses were $9.3 million and $7.6 million for pension benefits and $6.9 million and $6.8 million for other postretirement benefits.

For the fiscal 2010 plan year, TECO Energy assumed an expected long-term return on plan assets of 8.25% and a discount rate of 5.75% for pension benefits under its qualified pension plan, and a discount rate of 5.60% for its other postretirement benefits as of their Jan. 1, 2010 measurement dates. Additionally, TECO Energy assumed a discount rate of 5.75% for its Supplemental Executive Retirement Plan (SERP) benefits as of its Mar. 1 and Jan. 1, 2010 measurement dates.

Effective Dec. 31, 2006, in accordance with the accounting standard for defined benefit plans and other postretirement benefits, Tampa Electric Company adjusted its postretirement benefit obligations and recorded regulatory assets to reflect the unamortized transition obligation, prior service cost, and actuarial gains and losses of its postretirement benefit plans. Included in the benefit expenses discussed above, for the three months and six months ended Jun. 30, 2010, Tampa Electric Company reclassed $3.3 million and $6.4 million, respectively, of unamortized transition obligation, prior service cost and actuarial losses from regulatory assets to net income.

In 2010, TECO Energy expects to make a contribution to its qualified pension plan of approximately $34.6 million. Tampa Electric Company’s portion of this contribution is approximately $29.1 million.

In March 2010, the Patient Protection and Affordable Care Act and a companion bill, The Health Care and Education Reconciliation Act (the Acts) were signed into law. Among other things, the Acts reduce the tax benefits available to an employer that receives the Medicare Part D subsidy, resulting in a write-off of any associated deferred tax asset. As a result, Tampa Electric Company reduced its deferred tax asset by $5.3 million and recorded a corresponding regulatory tax asset. Tampa Electric Company is reviewing certain other aspects of the Acts that could impact the cost of medical benefits provided to retirees and active employees. These impacts are not expected to be material to the company’s future results of operations, statement of position or cash flows.

39

6. Short-Term Debt

At Jun. 30, 2010 and Dec. 31, 2009, the following credit facilities and related borrowings existed:

Credit Facilities

	Jun. 30, 2010						Dec. 31, 2009
(millions)	Credit Facilities		Borrowings Outstanding  (1)		Letters of Credit Outstanding		Credit Facilities		Borrowings Outstanding  (1)		Letters of Credit Outstanding
Tampa Electric Company:
5-year facility	$	325.0	$	0.0	$	0.9	$	325.0	$	55.0	$	0.7
1-year accounts receivable facility		150.0		77.0		0.0		150.0		0.0		0.0
Total	$	475.0	$	77.0	$	0.9	$	475.0	$	55.0	$	0.7

(1) Borrowings outstanding are reported as notes payable.

These credit facilities require commitment fees ranging from 7.0 to 60.0 basis points. The weighted-average interest rate on outstanding amounts payable under the credit facilities at both Jun. 30, 2010 and Dec. 31, 2009 was 0.74% and 0.64%, respectively.

Tampa Electric Company Accounts Receivable Facility

On Feb. 19, 2010, Tampa Electric Company and TEC Receivables Corp. (TRC), a wholly-owned subsidiary of Tampa Electric Company, amended their $150 million accounts receivable collateralized borrowing facility, entering into Amendment No. 8 to the Loan and Servicing Agreement with certain lenders named therein and Citicorp North America, Inc. as Program Agent. The amendment (i) extends the maturity date to Feb. 18, 2011, (ii) provides that TRC will pay program and liquidity fees, which, pursuant to the amendment, will total 100 basis points, (iii) provides that the interest rates on the borrowings will be based on prevailing asset-backed commercial paper rates, unless such rates are not available from conduit lenders, in which case the rates will be at an interest rate equal to, at Tampa Electric Company’s option, either Citibank’s prime rate (or the federal funds rate plus 50 basis points, if higher) or a rate based on the London interbank offer rate (if available) plus a margin and (iv) makes other technical changes.

7. Other Comprehensive Income

Other Comprehensive Income

(millions)	Three months ended Jun. 30,							Six months ended Jun. 30,
	Gross		Tax			Net		Gross		Tax			Net
2010
Unrealized gain on cash flow hedges	$	0.0	$	0.0		$	0.0	$	0.0	$	0.0		$	0.0
Add: Loss reclassified to net income		0.3		(0.1	)		0.2		0.6		(0.2	)		0.4
Gain on cash flow hedges		0.3		(0.1	)		0.2		0.6		(0.2	)		0.4
Total other comprehensive income	$	0.3	($	0.1	)	$	0.2	$	0.6	($	0.2	)	$	0.4
2009
Unrealized gain on cash flow hedges	$	0.0	$	0.0		$	0.0	$	0.0	$	0.0		$	0.0
Add: Loss reclassified to net income		0.2		(0.1	)		0.1		0.5		(0.2	)		0.3
Gain on cash flow hedges		0.2		(0.1	)		0.1		0.5		(0.2	)		0.3
Total other comprehensive income	$	0.2	($	0.1	)	$	0.1	$	0.5	($	0.2	)	$	0.3

Accumulated Other Comprehensive Loss

(millions)	Jun. 30, 2010			Dec. 31, 2009
Net unrealized losses from cash flow hedges (1)	($	5.7	)	($	6.1	)
Total accumulated other comprehensive loss	($	5.7	)	($	6.1	)

(1) Net of tax benefit of $3.6 million and $3.8 million as of Jun. 30, 2010 and Dec. 31, 2009, respectively.

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8. Commitments and Contingencies

Legal Contingencies

From time to time, Tampa Electric Company and its subsidiaries are involved in various legal, tax and regulatory proceedings before various courts, regulatory commissions and governmental agencies in the ordinary course of its business. Where appropriate, accruals are made in accordance with accounting standards for contingencies to provide for matters that are probable of resulting in an estimable, material loss. While the outcome of such proceedings is uncertain, management does not believe that their ultimate resolution will have a material adverse effect on the company’s results of operations or financial condition.

Superfund and Former Manufactured Gas Plant Sites

Tampa Electric Company, through Tampa Electric and PGS, is a potentially responsible party (PRP) for certain superfund sites and, through PGS, for certain former manufactured gas plant sites. While the joint and several liability associated with these sites presents the potential for significant response costs, as of Jun. 30, 2010, Tampa Electric Company has estimated its ultimate financial liability to be approximately $19.9 million, primarily at PGS, and this amount has been accrued in the company’s financial statements. The environmental remediation costs associated with these sites, which are expected to be paid over many years, are not expected to have a significant impact on customer prices.

The estimated amounts represent only the estimated portion of the cleanup costs attributable to Tampa Electric Company. The estimates to perform the work are based on Tampa Electric Company’s experience with similar work adjusted for site specific conditions and agreements with the respective governmental agencies. The estimates are made in current dollars, are not discounted and do not assume any insurance recoveries.

Allocation of the responsibility for remediation costs among Tampa Electric Company and other PRPs is based on each party’s relative ownership interest in or usage of a site. Accordingly, Tampa Electric Company’s share of remediation costs varies with each site. In virtually all instances where other PRPs are involved, those PRPs are considered creditworthy.

Factors that could impact these estimates include the ability of other PRPs to pay their pro-rata portion of the cleanup costs, additional testing and investigation which could expand the scope of the cleanup activities, additional liability that might arise from the cleanup activities themselves or changes in laws or regulations that could require additional remediation. These costs are recoverable through customer rates established in subsequent base rate proceedings.

Letters of Credit

At Jun. 30, 2010, Tampa Electric Company had $0.9 million of letters of credit outstanding.

Letters of Credit -Tampa Electric Company

(millions) Letters of Credit for the Benefit of:	2010		2011-2014		After 2014		Total		Liabilities Recognized at Jun. 30, 2010
Tampa Electric
Letters of credit	$	0.0	$	0.0	$	0.9	$	0.9	$	0.0
Total	$	0.0	$	0.0	$	0.9	$	0.9	$	0.0

Financial Covenants

In order to utilize its bank credit facilities, Tampa Electric Company must meet certain financial tests as defined in the applicable agreements. In addition, Tampa Electric Company has certain restrictive covenants in specific agreements and debt instruments. At Jun. 30, 2010, Tampa Electric Company was in compliance with applicable financial covenants.

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9. Segment Information

Tampa Electric Company segments are determined based on how management evaluates, measures and makes decisions with respect to the operations of the entity. The management of Tampa Electric Company reports segments based on each subsidiary’s contribution of revenues, net income and total assets, as required by the accounting guidance for disclosures about segments of an enterprise and related information. All significant intercompany transactions are eliminated in the Consolidated Condensed Financial Statements of Tampa Electric Company, but are included in determining reportable segments.

(millions) Three months ended Jun. 30,	Tampa Electric		Peoples Gas		Other & Eliminations			Tampa Electric Company
2010
Revenues - external	$	552.8	$	112.4	$	0.0		$	665.2
Sales to affiliates		0.4		3.7		(3.8	)		0.3
Total revenues		553.2		116.1		(3.8	)		665.5
Depreciation		53.6		11.4		0.0			65.0
Total interest charges		30.8		4.6		0.0			35.4
Provision for taxes		33.8		3.3		0.0			37.1
Net income		56.8		5.1		0.0			61.9
2009
Revenues - external	$	563.2	$	99.7	$	0.0		$	662.9
Sales to affiliates		0.4		3.4		(3.5	)		0.3
Total revenues		563.6		103.1		(3.5	)		663.2
Depreciation		49.3		11.0		0.0			60.3
Total interest charges		28.6		4.8		0.0			33.4
Provision for taxes		27.8		2.9		0.0			30.7
Net income		48.5		4.6		0.0			53.1
Six months ended Jun. 30,
2010
Revenues - external	$	1,077.6	$	294.1	$	0.0		$	1,371.7
Sales to affiliates		0.7		14.9		(15.1	)		0.5
Total revenues		1,078.3		309.0		(15.1	)		1,372.2
Depreciation		106.6		22.8		0.0			129.4
Total interest charges		61.1		9.2		0.0			70.3
Provision for taxes		61.6		14.5		0.0			76.1
Net income		104.9		23.0		0.0			127.9
Total assets at Jun. 30, 2010	$	5,589.6	$	830.7	($	17.5	)	$	6,402.8
2009
Revenues - external	$	1,070.5	$	246.2	$	0.0		$	1,316.7
Sales to affiliates		0.7		9.9		(10.1	)		0.5
Total revenues		1,071.2		256.1		(10.1	)		1,317.2
Depreciation		97.3		21.8		0.0			119.1
Total interest charges		56.8		9.5		0.0			66.3
Provision for taxes		37.2		10.1		0.0			47.3
Net income		66.8		15.8		0.0			82.6
Total assets at Dec. 31, 2009	$	5,457.5	$	826.0	($	9.7	)	$	6,273.8

10. Accounting for Derivative Instruments and Hedging Activities

From time to time, Tampa Electric Company enters into futures, forwards, swaps and option contracts for the following purposes:

• To limit the exposure to price fluctuations for physical purchases and sales of natural gas in the course of normal operations; and

• To limit the exposure to interest rate fluctuations on debt securities.

Tampa Electric Company uses derivatives only to reduce normal operating and market risks, not for speculative purposes. Tampa Electric Company’s primary objective in using derivative instruments for regulated operations is to reduce the impact of market price volatility on ratepayers.

The risk management policies adopted by Tampa Electric Company provide a framework through which management monitors various risk exposures. Daily and periodic reporting of positions and other relevant metrics are performed by a centralized risk management group which is independent of all operating companies.

Tampa Electric Company applies the accounting standards for derivatives and hedging. These standards require companies to recognize derivatives as either assets or liabilities in the financial statements, to measure those instruments at fair

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value, and to reflect the changes in the fair value of those instruments as either components of other comprehensive income (OCI) or in net income, depending on the designation of those instruments. The changes in fair value that are recorded in OCI are not immediately recognized in current net income. As the underlying hedged transaction matures or the physical commodity is delivered, the deferred gain or loss on the related hedging instrument must be reclassified from OCI to earnings based on its value at the time of the instrument’s settlement. For effective hedge transactions, the amount reclassified from OCI to earnings is offset in net income by the market change of the amount paid or received on the underlying physical transaction.

New accounting standards for disclosures became effective for financial statements issued for fiscal years and interim periods beginning after Nov. 15, 2008. This new standard requires enhanced disclosures about a company’s derivative activities and how the related hedged items affect a company’s financial position, financial performance and cash flows. The new requirements include qualitative disclosures about the company’s fair value amounts of gains and losses associated with derivative instruments, as well as disclosures about credit-risk-related contingent features in derivative agreements. Tampa Electric Company adopted this new standard effective Jan. 1, 2009.

Tampa Electric Company applies accounting standards for regulated operations to financial instruments used to hedge the purchase of natural gas for the regulated companies. These standards, in accordance with the FPSC, permit the changes in fair value of natural gas derivatives to be recorded as regulatory assets or liabilities to reflect the impact of hedging activities on the fuel recovery clause. As a result, these changes are not recorded in OCI (see Note 3).

A company’s physical contracts qualify for the normal purchase/normal sale (NPNS) exception to derivative accounting rules, provided they meet certain criteria. Generally, NPNS applies if the company deems the counterparty creditworthy, if the counterparty owns or controls resources within the proximity to allow for physical delivery of the commodity, if the company intends to receive physical delivery and if the transaction is reasonable in relation to the company’s business needs. As of Jun. 30, 2010, all of Tampa Electric Company’s physical contracts qualify for the NPNS exception.

The following table presents the derivative hedges of natural gas contracts at Jun. 30, 2010 and Dec. 31, 2009 to limit the exposure to changes in the market price for natural gas used to produce energy and natural gas purchased for resale to customers:

Natural Gas Derivatives ⁽¹⁾

(millions)	Jun. 30, 2010		Dec. 31, 2009
Current assets	$	0.5	$	0.8
Long-term assets		0.0		0.0
Total assets	$	0.5	$	0.8
Current liabilities(1)	$	36.2	$	33.1
Long-term liabilities		4.8		3.6
Total liabilities	$	41.0	$	36.7

(1) Amounts presented above are on a gross basis, with asset and liability positions netted by counterparty in accordance with accounting standards for derivatives and hedging.

The ending balance in accumulated other comprehensive income (AOCI) related to previously settled interest rate swaps at Jun. 30, 2010 is a net loss of $5.7 million after tax and accumulated amortization. This compares to a net loss of $6.1 million in AOCI after tax and accumulated amortization at Dec. 31, 2009.

The following table presents the effect of energy related derivatives on the fuel recovery clause mechanism in the Consolidated Condensed Balance Sheet as of Jun. 30, 2010:

Energy Related Derivatives

	Asset Derivatives			Liability Derivatives
(millions) at Jun. 30, 2010	Balance  Sheet Location(1)	Fair Value		Balance  Sheet Location(1)	Fair Value
Commodity Contracts:
Natural gas derivatives:
Current	Regulatory liabilities	$	0.5	Regulatory assets	$	36.2
Long-term	Regulatory liabilities		0.0	Regulatory assets		4.8
Total		$	0.5		$	41.0

(1) Natural gas derivatives are deferred in accordance with accounting standards for regulated operations and all increases and decreases in the cost of natural gas supply are passed on to customers with the fuel recovery clause mechanism. As gains and losses are realized in future periods, they will be recorded as fuel costs in the Consolidated Condensed Statements of Income.

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Based on the fair value of the instruments at Jun. 30, 2010, net pretax losses of $35.7 million are expected to be reclassified from regulatory assets to the Consolidated Condensed Statements of Income within the next twelve months.

The following table presents the effect of hedging instruments on OCI and income for the three and six months ended Jun. 30:

(millions) Derivatives in Cash Flow Hedging Relationships	Location of Gain/(Loss) Reclassified From AOCI Into Income	Amount of  Gain/(Loss) Reclassified From AOCI Into Income
	Effective Portion(1)	Three months ended Jun. 30:			Six months ended Jun. 30:
2010
Interest rate contracts:	Interest expense	($	0.2	)	($	0.4	)
Total		($	0.2	)	($	0.4	)
2009
Interest rate contracts:	Interest expense	($	0.1	)	($	0.3	)
Total		($	0.1	)	($	0.3	)

(1) Changes in OCI and AOCI are reported in after-tax dollars.

For derivative instruments that meet cash flow hedge criteria, the effective portion of the gain or loss on the derivative is reported as a component of OCI and reclassified into earnings in the same period or period during which the hedged transaction affects earnings. Gains and losses on the derivatives representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. For the three months and six months ended Jun. 30, 2010 and 2009, all hedges were effective.

The maximum length of time over which the company is hedging its exposure to the variability in future cash flows extends to Dec. 31, 2012 for the financial natural gas contracts. The following table presents by commodity type the company’s derivative volumes that, as of Jun. 30, 2010, are expected to settle during the 2010, 2011 and 2012 fiscal years:

(millions) Year	Natural Gas Contracts (MMBTUs)
	Physical	Financial
2010	0.0	20.5
2011	0.0	13.9
2012	0.0	2.3
Total	0.0	36.7

Tampa Electric Company is exposed to credit risk primarily through entering into derivative instruments with counterparties to limit its exposure to the commodity price fluctuations associated with natural gas. Credit risk is the potential loss resulting from a counterparty’s nonperformance under an agreement. Tampa Electric Company manages credit risk with policies and procedures for, among other things, counterparty analysis, exposure measurement, and exposure monitoring and mitigation.

It is possible that volatility in commodity prices could cause Tampa Electric Company to have material credit risk exposures with one or more counterparties. If such counterparties fail to perform their obligations under one or more agreements, Tampa Electric Company could suffer a material financial loss. However, as of Jun. 30, 2010, substantially all of the counterparties with transaction amounts outstanding in Tampa Electric Company’s energy portfolio are rated investment grade by the major rating agencies. Tampa Electric Company assesses credit risk internally for counterparties that are not rated.

Tampa Electric Company has entered into commodity master arrangements with its counterparties to mitigate credit exposure to those counterparties. The company generally enters into the following master arrangements: (1) Edison Electric Institute agreements (EEI) - standardized power sales contracts in the electric industry; (2) International Swaps and Derivatives Association agreements (ISDA) - standardized financial gas and electric contracts; and (3) North American Energy Standards Board agreements (NAESB) - standardized physical gas contracts. Tampa Electric Company believes that entering into such agreements reduces the risk from default by creating contractual rights relating to creditworthiness, collateral and termination.

Tampa Electric Company has implemented procedures to monitor the creditworthiness of our counterparties and to consider nonperformance in valuing counterparty positions. Tampa Electric Company monitors counterparties’ credit standing, including those that are experiencing financial problems, have significant swings in credit default swap rates, have credit rating

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changes by external rating agencies, or have changes in ownership. Net liability positions are generally not adjusted as Tampa Electric Company uses derivative transactions as hedges and has the ability and intent to perform under each of these contracts. In the instance of net asset positions, Tampa Electric Company considers general market conditions and the observable financial health and outlook of specific counterparties, forward looking data such as credit default swaps, when available, and historical default probabilities from credit rating agencies in evaluating the potential impact of nonperformance risk to derivative positions. As of Jun. 30, 2010, substantially all positions with counterparties are net liabilities.

Certain of Tampa Electric Company’s derivative instruments contain provisions that require Tampa Electric Company’s debt to maintain an investment grade credit rating from any or all of the major credit rating agencies. If debt ratings were to fall below investment grade, it could trigger these provisions, and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. Tampa Electric Company has no other contingent risk features associated with any derivative instruments.

The table below presents the fair value of the overall contractual contingent liability positions for Tampa Electric Company’s derivative activity at Jun. 30, 2010:

(millions) At Jun. 30, 2010	Fair Value Asset/ (Liability)			Derivative Exposure Asset/ (Liability)			Posted Collateral
Credit Rating	($	40.5	)	($	40.5	)	$	0.0

11. Fair Value Measurements

Items Measured at Fair Value on a Recurring Basis

The following tables set forth, by level within the fair value hierarchy, Tampa Electric Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of Jun. 30, 2010 and Dec. 31, 2009. As required by accounting standards for fair value measurements, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Tampa Electric Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. For all assets and liabilities presented below the market approach was used in determining fair value.

Recurring Derivative Fair Value Measures

	At fair value as of Jun. 30, 2010
(millions)	Level 1		Level 2		Level 3		Total
Assets
Natural gas swaps	$	0.0	$	0.5	$	0.0	$	0.5
Total	$	0.0	$	0.5	$	0.0	$	0.5
Liabilities
Natural gas swaps	$	0.0	$	41.0	$	0.0	$	41.0
Total	$	0.0	$	41.0	$	0.0	$	41.0
	At fair value as of Dec. 31, 2009
(millions)	Level 1		Level 2		Level 3		Total
Assets
Natural gas swaps	$	0.0	$	0.8	$	0.0	$	0.8
Total	$	0.0	$	0.8	$	0.0	$	0.8
Liabilities
Natural gas swaps	$	0.0	$	36.7	$	0.0	$	36.7
Total	$	0.0	$	36.7	$	0.0	$	36.7

Natural gas swaps are over-the-counter swap instruments. The primary pricing inputs in determining the fair value of natural gas swaps are the New York Mercantile Exchange (NYMEX) quoted closing prices of exchange-traded instruments. These prices are applied to the notional amounts of active positions to determine the reported fair value.

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Tampa Electric Company considered the impact of nonperformance risk in determining the fair value of derivatives. Tampa Electric Company considered the net position with each counterparty, past performance of both parties and the intent of the parties, indications of credit deterioration, and whether the markets in which we transact have experienced dislocation. At Jun. 30, 2010, the fair value of derivatives was not materially affected by nonperformance risk. Tampa Electric Company's net positions with substantially all counterparties were liability positions.

Fair Value of Long-Term Debt

At Jun. 30, 2010, Tampa Electric Company’s total long-term debt had a carrying amount of $1,998.1 million and an estimated fair market value of $2,193.7 million. At Dec. 31, 2009, total long-term debt had a carrying amount of $1,999.4 million and an estimated fair market value of $2,115.4 million.

12. Variable Interest Entities

Tampa Electric Company accounts for VIEs under accounting standards for consolidations. In accordance with these standards, Tampa Electric Company evaluates for consolidation all long-term agreements with VIEs in which contractual, ownership or other pecuniary interests in that entity change with changes in the fair value of the entity’s net assets. A party to an agreement that has both 1) the power to direct the activities of a VIE that most significantly impact the entity's economic performance and 2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE, is considered to be the primary beneficiary and is required to consolidate that entity.

Tampa Electric Company has entered into multiple PPAs with wholesale energy providers in Florida to ensure the ability to meet customer energy demand and to provide lower cost options in the meeting of this demand. These agreements range in size from 121 MW to 370 MW of available capacity, are with similar entities and contain similar provisions. Because some of these provisions provide for the transfer or sharing of a number of risks inherent in the generation of energy, these agreements meet the definition of being variable interest entities. These risks include: operating and maintenance; regulatory; credit; commodity/fuel; and energy market risk. Tampa Electric Company has reviewed these risks and has determined that the owners of these entities have retained the majority of these risks over the expected life of the underlying generating assets, have the power to direct the most significant activities, the obligation or right to absorb losses or benefits and hence remain the primary beneficiaries. As a result, Tampa Electric Company is not required to consolidate any of these entities. Tampa Electric Company purchased $49.1 million and $56.1 million, and $106.3 million and $98.3 million, under these PPAs for the three months and six months ended Jun. 30, 2010 and 2009, respectively.

In one instance Tampa Electric Company’s agreement with the entity for 370 MW of capacity was entered into prior to Dec. 31, 2003, the effective date of consolidation standards. Under the standards, Tampa Electric Company is required to make an exhaustive effort to obtain sufficient information to determine if this entity is a VIE and which holder of the variable interests is the primary beneficiary. The owners of this entity are not willing to provide the information necessary to make these determinations, under the contract have no obligation to do so and the information is not available publicly. As a result, Tampa Electric Company is unable to determine if this entity is a VIE and, if so, which variable interest holder, if any, is the primary beneficiary. Tampa Electric Company has no obligation to this entity beyond the purchase of capacity; therefore, the maximum exposure for Tampa Electric Company is the obligation to pay for such capacity under terms of the PPA at rates that could be unfavorable to the wholesale market. The Tampa Electric Company purchased $17.6 million and $11.2 million, and $30.3 million and $17.4 million under this PPA for the three months and six months ended Jun. 30, 2010 and 2009, respectively.

Tampa Electric Company does not provide any material financial or other support to any of the VIEs it is involved with, nor is it under any obligation to absorb losses associated with these VIEs. Tampa Electric Company’s involvement with these VIEs does not affect our Consolidated Condensed Balance Sheets, Statements of Income or Cash Flows.

13. Subsequent Events

Stipulation with Intervenors – Tampa Electric

In July 2010, Tampa Electric entered into a stipulation with intervenors to resolve all issues related to the 2008 base rate proceedings including the 2010 step increase, as well as the intervenors’ appeal to the Florida Supreme Court. The stipulation is subject to final approval by the FPSC, and a vote on this matter is expected in August 2010. If approved, Tampa Electric Company will make a one-time reduction of $24.0 million to customer bills in 2010. See Note 3 for further discussion.

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Item 2. MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS

This Management’s Discussion & Analysis contains forward-looking statements, which are subject to the inherent uncertainties in predicting future results and conditions. Actual results may differ materially from those forecasted. The forecasted results are based on the company’s current expectations and assumptions, and the company does not undertake to update that information or any other information contained in this Management’s Discussion & Analysis, except as may be required by law. Factors that could impact actual results include: regulatory actions by federal, state or local authorities; the approval of Tampa Electric’s regulatory stipulation before the FPSC, or if the stipulation is not approved the hearing before the FPSC on Tampa Electric’s 2010 portion of rates approved in 2009, and the intervenor’s appeal of that rate change to the Florida Supreme Court; unexpected capital needs or unanticipated reductions in cash flow that affect liquidity; the ability to access the capital and credit markets when required; the availability of adequate rail transportation capacity for the shipment of TECO Coal’s production; general economic conditions affecting energy sales at the utility companies; economic conditions, both national and international, affecting the Florida economy and demand for TECO Coal’s production; weather variations and changes in customer energy usage patterns affecting sales and operating costs at Tampa Electric and Peoples Gas and the effect of extreme weather conditions or hurricanes; operating conditions, commodity prices; operating cost and environmental or safety rule changes affecting the production levels and margins at TECO Coal; fuel cost recoveries and related cash at Tampa Electric and natural gas demand at Peoples Gas; the ability of TECO Energy’s subsidiaries to operate equipment without undue accidents, breakdowns or failures; changes in the U.S. federal tax code on earnings from foreign investments that could reduce earnings; and the ultimate outcome of efforts to revise the significantly lower EEGSA VAD tariff rates implemented by regulatory authorities in Guatemala effective Aug. 1, 2008 affecting TECO Guatemala’s results. Additional information is contained under “Risk Factors” in TECO Energy, Inc.’s Annual Report on Form 10-K for the period ended Dec. 31, 2009, and as updated by Item 1A “Risk Factors” of Part II of its Report on Form 10-Q for the quarter ended Mar. 31, 2010.

Earnings Summary - Unaudited

	Three months ended Jun. 30,		Six months ended Jun. 30,
(millions, except per share amounts)	2010	2009	2010	2009
Consolidated revenues	898.8	825.2	1,811.1	1,649.2
Net income	75.7	60.9	131.7	95.6
Average common shares outstanding
Basic	212.5	211.7	212.4	211.6
Diluted	214.7	212.5	214.5	212.3
Earnings per share - basic
Earnings per share - basic	0.35	0.29	0.61	0.45
Earnings per share - diluted
Earnings per share - diluted	0.35	0.29	0.61	0.45

Operating Results

Three Months Ended Jun. 30, 2010

TECO Energy, Inc. reported second quarter net income attributable to TECO Energy of $75.5 million or $0.35 per share, compared to $60.9 million or $0.29 per share in the second quarter of 2009. Results in the second quarter of 2010 were reduced by a $4.1 million charge related to early debt retirement completed in April.

Six Months Ended Jun. 30, 2010

Year-to-date net income and earnings per share were $131.3 million or $0.61 per share in 2010, compared to $95.6 million or $0.45 per share in the same period in 2009. Year-to-date results in 2010 were reduced by charges of $20.3 million for early debt retirement and $0.9 million for restructuring; results in the 2009 year-to-date period benefited from $5.1 million of net charges and gains, primarily the gain on the sale of the Guatemalan telecommunications provider, Navega.

Operating Company Results

All amounts included in the operating company and Parent/other results discussions are after tax, unless otherwise noted.

Due to an accounting rule change related to variable interest entities (VIEs), effective Jan. 1, 2010 the San José and Alborada power stations at TECO Guatemala were consolidated in the financial statements of TECO Energy. Prior periods have not been restated to reflect this change, which did not affect net income.

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Tampa Electric Company – Electric Division

Net income for the second quarter was $56.8 million, compared with $48.5 million for the same period in 2009. Results for the quarter reflected higher base rates effective in May 2009 and the 2010 portion of rates approved by the Florida Public Service Commission (FPSC) in December 2009. Results also reflected a 0.7% higher average number of customers, higher earnings on nitrogen oxide (NOx) control projects, and higher operations and maintenance expenses. Net income included $0.3 million of Allowance for Funds Used During Construction (AFUDC) - equity, which represents allowed equity cost capitalized to construction costs, related to the installation of the final NO^x control project at the Big Bend Station, compared with $2.5 million in the 2009 period.

Total retail energy sales increased 2.0% in the second quarter of 2010, compared to the same period in 2009. Total degree days in Tampa Electric's service area were 12% above normal and 6% higher than in the second quarter of 2009. Pretax base revenue increased between $3 and $5 million from warmer spring weather in the second quarter of 2010, compared to the same period last year. Pretax base revenues increased between $13 and $17 million in the second quarter of 2010, due to the new base rates approved by the FPSC for Tampa Electric effective in May 2009 and January 2010.

Sales to the weather-sensitive residential customer segment increased 3.7% due to the warmer-than-normal spring weather. Sales to the commercial and industrial-other customer segments decreased 0.9% and 4.0% respectively, in the second quarter, primarily due to the economic conditions in the Tampa area. Sales to industrial-phosphate customers increased 23% in the second quarter of 2010, driven by higher demand for fertilizer products and lower self-generation at their facilities.

Operations and maintenance expense, excluding all FPSC-approved cost recovery clauses, increased $2.4 million, driven primarily by the accrual of performance-based incentive compensation for all employees based on year-to-date financial results.

Compared to the second quarter of 2009, depreciation and amortization expense increased $2.7 million, reflecting additions to facilities to serve customers including peaking combustion turbines, SCR projects and coal rail unloading facilities. Interest expense at Tampa Electric increased slightly due to higher long-term debt balances.

Year-to-date net income was $104.9 million, compared with $66.8 million in the 2009 period, driven primarily by higher base revenues from favorable weather, new base rates, 0.5% higher average number of customers, higher earnings on NOx control projects, and lower operations and maintenance expenses. Net income included $1.3 million of AFUDC - equity related to the installation of NOx control equipment, compared with $5.8 million in the 2009 period for NOx control projects and peaking combustion turbines. Sales to other utilities declined 15% from the 2009 period, reflecting lower natural gas prices.

Total degree days in Tampa Electric's service area were 20% above normal and 15% above the prior year-to-date period. Pretax base revenue increased between $18 and $25 million from favorable weather in 2010 compared to the same period last year. Pretax base revenues increased between $40 and $50 million in the 2010 year-to-date period due to the new base rates approved by the FPSC for Tampa Electric effective in May 2009 and January 2010.

In the 2010 year-to-date period, total retail energy sales increased 4.6%, compared to the 2009 period, driven primarily by favorable weather and the 0.5% increase in the average number of customers. Favorable weather in the period contributed to a 10.6% increase in sales to the weather-sensitive residential customer class. Sales to commercial and industrial-other customers declined by 1.0% and 7.3% respectively, primarily due to economic conditions. Operations and maintenance expense, excluding all FPSC-approved cost recovery clauses, decreased $2.7 million. Lower spending on planned generating unit outages and lower costs to operate the distribution system were partially offset by the accrual of performance-based incentive compensation for all employees.

Compared to the 2009 year-to-date period, depreciation and amortization expense increased $5.8 million, reflecting the additions to facilities to serve customers discussed above. Interest expense at Tampa Electric increased slightly due to higher long-term debt balances.

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A summary of Tampa Electric’s operating statistics for the three months and six months ended Jun. 30, 2010 and 2009 follows:

	Operating Revenues							Kilowatt-hour sales
(millions, except average customers)	2010		2009			% Change		2010	2009	% Change
Three months ended Jun. 30,
By Customer Type
Residential	$	255.7	$	257.6		(0.7	)	2,133.8	2,057.1	3.7
Commercial		161.3		173.3		(6.9	)	1,549.3	1,563.6	(0.9	)
Industrial – Phosphate		23.5		19.9		18.1		271.2	220.3	23.1
Industrial – Other		26.8		29.3		(8.5	)	275.4	287.1	(4.1	)
Other sales of electricity		46.9		50.5		(7.1	)	438.7	450.3	(2.6	)
Deferred and other revenues (1)		16.4		7.4		121.6		0.0	0.0	0.0
Total		530.6		538.0		(1.4	)	4,668.4	4,578.4	2.0
Sales for resale		10.3		13.1		(21.4	)	132.9	121.1	9.7
Other operating revenue		12.2		12.4		(1.6	)	0.0	0.0	0.0
SO2 Allowance sales		0.1		0.1		0.0		0.0	0.0	0.0
Total	$	553.2	$	563.6		(1.8	)	4,801.3	4,699.5	2.2
Average customers (thousands)		671.0		666.4		0.7
Retail output to line (kilowatt hours)								5,331.3	5,100.7	4.5
Six months ended Jun. 30,
By Customer Type
Residential	$	522.9	$	508.7		2.8		4,363.8	3,944.8	10.6
Commercial		308.4		339.5		(9.2	)	2,934.5	2,963.5	(1.0	)
Industrial – Phosphate		45.0		40.8		10.3		514.9	467.1	10.2
Industrial – Other		50.8		58.6		(13.3	)	518.2	559.2	(7.3	)
Other sales of electricity		93.2		100.5		(7.3	)	869.5	864.8	0.5
Deferred and other revenues (1)		13.0		(25.1	)	(151.8	)	0.0	0.0	0.0
Total		1,033.3		1,023.0		1.0		9,200.9	8,799.4	4.6
Sales for resale		20.1		25.2		(20.2	)	227.1	266.7	(14.8	)
Other operating revenue		24.6		22.9		7.4		0.0	0.0	0.0
SO2 Allowance sales		0.1		0.1		0.0		0.0	0.0	0.0
NOx Allowance sales		0.2		0.0		0.0		0.0	0.0	0.0
Total	$	1,078.3	$	1,071.2		0.7		9,428.0	9,066.1	4.0
Average customers (thousands)		670.5		666.8		0.6
Retail output to line (kilowatt hours)								9,967.5	9,463.4	5.3

(1) Primarily reflects the timing of environmental and fuel clause recoveries.

Tampa Electric Company – Natural Gas Division (Peoples Gas)

Peoples Gas reported net income of $5.1 million for the second quarter, compared to $4.6 million in the same period in 2009. Quarterly results reflect a 0.5% higher average number of customers, lower sales to residential customers due to milder late spring weather and increased sales to commercial and interruptible customers due to the return to service of several higher volume customers that were idle in the 2009 period. Pretax base revenues increased approximately $4 million due to the higher base rates which became effective in June 2009. Non-fuel operations and maintenance expense increased, due to the accrual of performance-based incentive compensation for all employees based on year-to-date financial results and a provision related to potential earnings above the top of the allowed return on equity (ROE) range, discussed below. Results also reflect increased depreciation expense due to routine plant additions.

In 2010, as a result of the unprecedented cold winter weather, Peoples Gas expects to earn above the top of its allowed ROE range of 9.75% to 11.75%. As a result, in the second quarter of 2010, Peoples Gas recorded a provision related to these potential earnings. The disposition of any earnings above the top of the allowed range would be determined by the FPSC.

Peoples Gas reported net income of $23.0 million for the year-to-date period, compared to $15.8 million in the same period in 2009. Results reflect a 0.4% higher average number of customers. Residential customer usage increased due to colder first quarter winter weather in 2010. Pretax base revenues increased approximately $10 million due to the unusually cold winter weather and approximately $5 million due to the higher base rates which became effective in June 2009. Increased sales to commercial and industrial customers reflect the colder-than-normal winter weather, the return to service of several higher volume customers that were idle in the 2009 period and generally higher usage by those customers. Gas transported for power generation customers increased over the 2009 year-to-date period due to higher power demand in the first quarter. Non-fuel operations and maintenance expense increased, due to the same factors as in the second quarter.

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A summary of PGS’ regulated operating statistics for the three months and six months ended Jun. 30, 2010 and 2009 follows:

	Operating Revenues						Therms
(millions, except average customers)	2010		2009		% Change		2010	2009	% Change
Three months ended Jun. 30,
By Customer Type
Residential	$	29.2	$	27.1	7.7		13.5	13.7	(1.5	)
Commercial		34.6		33.2	4.2		96.2	91.6	5.0
Industrial		2.2		1.8	22.2		48.5	45.4	6.8
Off system sales		36.0		26.3	36.9		72.7	62.2	16.9
Power generation		2.2		2.6	(15.4	)	143.9	144.9	(0.7	)
Other revenues		9.7		10.0	(3.0	)	0.0	0.0	0.0
Total	$	113.9	$	101.0	12.8		374.8	357.8	4.8
By Sales Type
System supply	$	81.1	$	69.5	16.7		98.1	89.0	10.2
Transportation		23.1		21.5	7.4		276.7	268.8	2.9
Other revenues		9.7		10.0	(3.0	)	0.0	0.0	0.0
Total	$	113.9	$	101.0	12.8		374.8	357.8	4.8
Average customers (thousands)		337.2		335.5	0.5
Six months ended Jun. 30,
By Customer Type
Residential	$	100.7	$	86.5	16.4		59.7	46.8	27.6
Commercial		84.6		80.5	5.1		221.5	201.7	9.8
Industrial		4.8		4.0	20.0		103.2	92.3	11.8
Off system sales		87.4		52.7	65.8		155.1	113.2	37.0
Power generation		4.5		5.3	(15.1	)	272.8	253.0	7.8
Other revenues		22.4		23.0	(2.6	)	0.0	0.0	0.0
Total	$	304.4	$	252.0	20.8		812.3	707.0	14.9
By Sales Type
System supply	$	230.0	$	183.2	25.5		244.2	191.2	27.7
Transportation		52.0		45.8	13.5		568.1	515.8	10.1
Other revenues		22.4		23.0	(2.6	)	0.0	0.0	0.0
Total	$	304.4	$	252.0	20.8		812.3	707.0	14.9
Average customers (thousands)		336.8		335.5	0.4

TECO Coal

TECO Coal reported second quarter net income of $20.7 million on sales of 2.4 million tons, compared to $10.1 million on sales of 2.2 million tons in the same period in 2009. Results in 2010 included a $2.0 million benefit from the settlement of state income tax issues recorded in prior years. In 2009, net income for the quarter included $2.0 million related to a payment for a contract renegotiation with a steam coal customer, which resulted in higher selling prices in 2009 in exchange for deferred deliveries of contracted tons into 2010 and 2011.

In 2010, results reflect an average net per-ton selling price, excluding transportation allowances, of almost $77 per ton, approximately 9% higher than in 2009, and above prior guidance due to a sales mix that was more heavily weighted to metallurgical and PCI coal. Second quarter 2010 metallurgical and PCI coal sales were above prior projections due to recovery in the steel industry and the shift of previously deferred steam coal tons to the PCI market. In the second quarter of 2010, the all-in total per-ton cost of production increased to almost $67 per ton, which is within the cost guidance range previously provided. TECO Coal's effective income tax rate in the second quarter of 2010 was a more normal 24%, excluding the effect of the $2 million state income tax settlement discussed above, compared to 14% in the 2009 period.

TECO Coal recorded year-to-date net income of $37.5 million on sales of 4.6 million tons in 2010, compared to $18.1 million on sales of 4.5 million tons in the 2009 period. Year-to-date net income includes a $5.3 million benefit from the settlement of state income tax issues recorded in prior years. The year-to-date sales mix was driven by the same factors as in the second quarter. The 2010 year-to-date average net per-ton selling price and the all-in total per-ton cost of production were similar to those reported for the second quarter. TECO Coal's effective income tax rate was a more normal 23%, excluding the effect of the state income tax settlements discussed above, compared to 14% in the 2009 year-to-date period.

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TECO Guatemala

TECO Guatemala reported second quarter net income of $10.6 million in 2010, compared to $7.9 million in the 2009 period. Year-to-date 2010 net income was $21.0 million, compared to $21.1 million in the 2009 period. Year-to-date net income in 2009 included an $8.7 million gain on the sale of the telecommunication company, Navega. Results in the 2010 quarter for the distribution utility (EEGSA) and affiliated companies included an $0.8 million benefit related to an adjustment to previously estimated year-end equity balances, compared to a similar $2.5 million benefit in 2009.

Higher contract and spot energy sales at the San José Power Station increased net income $4.7 million in the second quarter of 2010 from normal operations of the plant. Because the capacity payment for the San José Power Station is calculated on a rolling 12-month average, it was reduced by similar amounts in both the 2010 and 2009 quarters due to unplanned outages in 2009. The San José Power Station did not operate in the second quarter of 2009 due to the extended unplanned outage as a result of a generator rotor failure. The repairs were completed and the unit returned to service July 2, 2009.

Parent & Other

The cost for Parent & other in the second quarter of 2010 was $17.7 million, compared to a cost of $10.2 million in the same period in 2009. In 2010, the cost for Parent & other included the $4.1 million charge for parent debt retirement. Results in 2010 included a $0.7 million negative valuation adjustment to foreign tax credits based on estimated foreign source income and projected timing of the utilization of the net operating loss (NOL) carry forwards. Results in 2009 included a $2.6 million benefit from a sale of property by TECO Properties. The year-to-date Parent & other cost was $55.1 million in 2010, compared to $26.2 million in the 2009 period. The 2010 year-to-date cost included $20.3 million of debt retirement charges and $0.9 million of final restructuring charges. The 2009 year-to-date Parent & other cost included the $3.6 million valuation adjustment recorded in the first quarter on auction rate securities held at TECO Energy. In 2010, the year-to-date cost for Parent & other also included negative valuation adjustments to foreign tax credits totaling $5.9 million, and a $1.1 million charge to adjust deferred tax balances related to the Medicare Part D subsidies as a result of the Patient Protection and Affordable Care Act enacted in the first quarter.

Income Taxes

The provisions for income taxes from continuing operations for the six month periods ended Jun. 30, 2010 and 2009 were $70.4 million and $45.1 million, respectively.

Liquidity and Capital Resources

The table below sets forth the Jun. 30, 2010 consolidated liquidity and cash balances, the cash balances at the operating companies and TECO Energy parent, and amounts available under the TECO Energy/TECO Finance and Tampa Electric Company credit facilities.

	Balances as of Jun. 30, 2010
(millions)	Consolidated		Tampa Electric Company		Other		Parent
Credit facilities	$	675.0	$	475.0	$	0.0	$	200.0
Drawn amounts / LCs		84.6		77.9		0.0		6.7
Available credit facilities		590.4		397.1		0.0		193.3
Cash and short-term investments		97.8		7.4		45.9		44.5
Total liquidity	$	688.2	$	404.5	$	45.9	$	237.8

In the first quarter, TECO Energy and TECO Finance tendered for, purchased and retired a total of $300 million aggregate principal amount of 7.00% and 7.20% TECO Energy and TECO Finance notes, and TECO Finance issued $250 million aggregate principal amount of 4.00% notes due in 2016 and $300 million aggregate principal amount of 5.15% notes due in 2020, which notes are fully and unconditionally guaranteed by TECO Energy. In April 2010, TECO Energy redeemed all of the outstanding $100 million aggregate principal amount of its floating rate notes due May 2010 and $100 million aggregate principal amount of its 7.20% notes due in 2011.

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Covenants in Financing Agreements

In order to utilize their respective bank credit facilities, TECO Energy, TECO Finance and Tampa Electric Company must meet certain financial tests as defined in the applicable agreements. In addition, TECO Energy, TECO Finance, Tampa Electric Company and other operating companies have certain restrictive covenants in specific agreements and debt instruments. At Jun. 30, 2010, TECO Energy, TECO Finance, Tampa Electric Company and the other operating companies were in compliance with all applicable financial covenants. The table that follows lists the covenants and the performance relative to them at Jun. 30, 2010. Reference is made to the specific agreements and instruments for more details.

Significant Financial Covenants

(millions, unless otherwise indicated) Instrument	Financial Covenant (1)	Requirement/Restriction	Calculation at Jun. 30, 2010
Tampa Electric Company
Credit facility ( 2)	Debt/capital	Cannot exceed 65%	49.0%
Accounts receivable credit facility ( 2)	Debt/capital	Cannot exceed 65%	49.0%
6.25% senior notes	Debt/capital	Cannot exceed 60%	49.0%
	Limit on liens  (3 )	Cannot exceed $700	$0 liens outstanding
Insurance agreement relating to 5% refunding bonds	Limit on liens  (3 )	Cannot exceed $438 (7.5% of net assets)	$0 liens outstanding
TECO Energy/TECO Finance
Credit facility ( 2)	EBITDA/interest  (4 )	Minimum of 2.6 times	4.3 times
TECO Energy and TECO Finance 6.75% notes	Restrictions on secured debt ( 5)	(6 )	(6 )
CGESJ
Non-recourse project debt-dividend restriction	EBITDA/debt service  (4)	Minimum of 1.3 times	4.0 times

(1) As defined in each applicable instrument.

(2) See description of credit facilities in Note 6 to the 2009 TECO Energy, Inc. Annual Report on Form 10-K.

(3) If the limitation on liens is exceeded, the company is required to provide ratable security to the holders of these notes.

(4) EBITDA generally represents EBIT before depreciation and amortization. However, the term is subject to the definition prescribed under the relevant agreement.

(5) These limitations would not include first mortgage bonds of Tampa Electric Company if any were outstanding.

(6) The indentures for these notes contain restrictions which limit secured debt of TECO Energy if secured by Principal Property or Capital Stock or indebtedness of directly held subsidiaries (with exceptions as defined in the indentures) without equally and ratably securing these notes.

Credit Ratings of Senior Unsecured Debt at Jun. 30, 2010

	Standard & Poor’s	Moody’s	Fitch
Tampa Electric Company	BBB	Baa1	BBB+
TECO Energy/TECO Finance	BBB-	Baa3	BBB-

Standard & Poor’s, Moody’s and Fitch describe credit ratings in the BBB or Baa category as representing adequate capacity for payment of financial obligations. The lowest investment grade credit ratings for Standard & Poor’s is BBB-, for Moody’s is Baa3 and for Fitch is BBB-; thus all three credit rating agencies assign TECO Energy, TECO Finance and Tampa Electric Company’s senior unsecured debt investment grade ratings.

A credit rating agency rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Any future downgrades in credit ratings may affect our ability to borrow and may increase financing costs, which may decrease earnings.

Off-Balance Sheet Financing

Unconsolidated affiliates have project debt balances as follows at Jun. 30, 2010. TECO Energy has no debt payment obligations with respect to these financings. Although the company is not directly obligated on the debt, the equity interest in those unconsolidated affiliates is at risk if those projects are not operated successfully.

(millions)	Long-term Debt		Ownership Interest
DECA II	$	176.8	24	%

2010 Guidance and Business Drivers

TECO Energy indicated in February its outlook for 2010 earnings to be within a range of $1.20 and $1.35 per share, excluding charges and gains. As announced on July 20, TECO Energy now expects earnings to be within a range of $1.25 and $1.35 per share including the effects of the regulatory stipulation announced that day and excluding charges and gains.

The guidance was provided in the form of a range to allow for varying outcomes with respect to important variables, such as the strength of the economic recovery in 2010, weather and customer usage at the Florida utilities, demand for production and the potential for deferral of contracted tons at TECO Coal. The February guidance range included TECO Coal’s sales forecast of between 8.3 and 8.7 million tons, at an average selling price of $75 per ton and an average all-in, total cost of production in a range between $65 and $69 per ton. At the same time, Tampa Electric and Peoples Gas forecasted no customer growth and that energy sales would be below 2009 levels, primarily due to lower sales to commercial and industrial customers.

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Tampa Electric has entered into a stipulation with the intervenors (the Office of Public Counsel, the State of Florida Office of the Attorney General, the Florida Industrial Power Users Group and the Florida Retail Federation) in FPSC Docket No. 090368-EI “Review of the continuing need and cost associated with Tampa Electric Company’s 5 Combustion Turbines and Big Bend Rail Facility” and Tampa Electric’s 2008 base rate proceeding. This stipulation resolves all issues in the above docket, and all issues in the intervenors appeal of the FPSC’s 2009 decision in Tampa Electric’s base rate proceeding pending before the Florida Supreme Court, thereby enabling the docket related to the base rate proceeding to be closed.

Under the terms of the stipulation, the $25.7 million step increase remains in effect for 2010, and Tampa Electric will make a one-time reduction of $24.0 million to customer’s bills in 2010. Effective Jan. 1, 2011, and for subsequent years, rates of $24.4 million (a $1.3 million reduction from the $25.7 million in effect for 2010) related to the step increase will be in effect.

With the effects of the regulatory stipulation included, which is subject to FPSC approval, Tampa Electric expects to earn near the midpoint of its allowed ROE range of 10.25% to 12.25%. Taking into account the disposition of earnings above the top of its allowed ROE range, Peoples Gas expects to earn at the top of its allowed ROE range of 9.75% to 11.75% for the year primarily as a result of the abnormally cold winter weather. In the first half of 2010, Tampa Electric and Peoples Gas have recorded actual customer growth of 0.5% and 0.4%, respectively, and 4.6% higher retail electric sales and 14.9% higher therm sales, respectively, due to favorable weather and customer growth. The utilities expect to benefit from the year-to-date actual customer growth for the remainder of the year. Future customer growth is uncertain as the year-to-date growth appears to have been heavily influenced by the home-buyer tax credit program. This guidance assumes normal weather for the remainder of the year.

TECO Coal now expects to sell 9 million tons at an average price of almost $77 per ton. The all-in total cost of production is expected to be within the previously provided range but towards the high end reflecting higher contract miner costs, and the negative impact on productivity of increased safety inspections. The higher sales are driven by the improved domestic and world-wide demand for metallurgical coal. The utility steam coal market remains weak for new contract activity, but customers are taking delivery of existing contract amounts in 2010. TECO Coal’s effective income tax rate is expected to be the normal 25% for 2010.

TECO Guatemala expects 2010 earnings to be above 2009’s level. The San José Power Station is operating normally and the capacity payments are back to normal pre-outage levels. With the resumption of normal rainfall, the ability to make spot energy sales at good margins, which favorably impacted year-to-date results, is expected to be limited in the second half of the year. EEGSA continues to experience customer and energy sales growth and has partially mitigated the negative impacts of the lower Value Added Distribution (VAD). This issue remains unresolved and no resolution is expected in 2010. As previously reported, TECO Guatemala was in discussions with the Guatemalan regulatory authorities regarding the five-year extension of the power sales contract for the Alborada Power Station. Effective September 14, the contract will be extended for five years at rates approximately 55%, or $7.0 million after tax on an annual basis, below the current contract level. The 2010 impact of the lower capacity payments is included in the earnings outlook.

Parent & other expects to benefit from lower interest rates in the second half of 2010 as a result of the debt refinancing completed in April.

Fair Value Measurements

All natural gas derivatives were entered into by the regulated utilities to manage the impact of natural gas prices on customers. As a result of applying accounting standards for regulated operations, the changes in value of natural gas derivatives of Tampa Electric and PGS are recorded as regulatory assets or liabilities to reflect the impact of the risks of hedging activities in the fuel recovery clause. Because the amounts are deferred and ultimately collected through the fuel clause, the unrealized gains and losses associated with the valuation of these assets and liabilities do not impact our results of operations.

Heating oil hedges are used to mitigate the fluctuations in the price of diesel fuel which is a significant component in the cost of coal production at TECO Coal and its subsidiaries.

The valuation methods we used to determine fair value are described in Note 13 to the TECO Energy, Inc. Consolidated Condensed Financial Statements. In addition, the company considered the impact of nonperformance risk in determining the fair value of derivatives. The company considered the net position with each counterparty, past performance of both parties and the intent of the parties, indications of credit deterioration, and whether the markets in which we transact have experienced dislocation. At Jun. 30, 2010 the fair value of derivatives was not materially affected by nonperformance risk. Our net positions with substantially all counterparties were liability positions.

Critical Accounting Policies and Estimates

Our critical accounting policies relate to deferred income taxes, employee postretirement benefits, long-lived assets and regulatory accounting. For further discussion of our critical accounting policies, see our Annual Report on Form 10-K for the year ended Dec. 31, 2009.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We are exposed to changes in interest rates primarily as a result of our borrowing activities. We may enter into futures, swaps and option contracts, in accordance with the approved risk management policies and procedures, to moderate this exposure to interest rate changes and achieve a desired level of fixed and variable rate debt.

Commodity Risk

We face varying degrees of exposure to commodity risks including coal, natural gas, fuel oil and other energy commodity prices. Any changes in prices could affect the prices these businesses charge, their operating costs and the competitive position of their products and services, and affect the net fair value of derivatives. We assess and monitor risk using a variety of measurement tools based on the degree of exposure of each operating company to commodity risk. Our most significant commodity risk exposure for the remainder of 2010 is the potential effect of high natural gas prices on our cash flows. Prudently incurred costs for natural gas are recoverable through FPSC-approved cost recovery clauses, and therefore do not affect our earnings. However, higher than expected prices for natural gas can affect the timing of recovery and thus impact cash flows.

The change in fair value of derivatives is largely due to the decrease in the price of natural gas of approximately 16% from Dec. 31, 2009 to Jun. 30, 2010. For natural gas, the company maintains a similar volume hedged as of Jun. 30, 2010 from Dec. 31, 2009.

The following tables summarize the changes in and the fair value balances of derivative assets (liabilities) for the six months ended Jun. 30, 2010:

Changes in Fair Value of Derivatives (millions)

Net fair value of derivatives as of Dec. 31, 2009	$	(36.6	)
Additions and net changes in unrealized fair value of derivatives		(50.4	)
Changes in valuation techniques and assumptions		0.0
Realized net settlement of derivatives		44.6
Net fair value of derivatives as of Jun. 30, 2010	$	(42.4	)

Roll-Forward of Derivative Net Assets (Liabilities) (millions)

Total derivative net liabilities as of Dec. 31, 2009	$	(36.6	)
Change in fair value of net derivative assets:
Recorded as regulatory assets and liabilities or other comprehensive income		(50.4	)
Recorded in earnings		0.0
Realized net settlement of derivatives		44.6
Net option premium payments		0.0
Net purchase (sale) of existing contracts		0.0
Net fair value of derivatives as of Jun. 30, 2010	$	(42.4	)

Below is a summary table of sources of fair value, by maturity period, for derivative contracts at Jun. 30, 2010:

Maturity and Source of Derivative Contracts Net Assets (Liabilities) at Jun. 30, 2010 (millions)

Contracts Maturing in	Current			Non-current			Total Fair Value
Source of fair value
Actively quoted prices	$	0.0		$	0.0		$	0.0
Other external sources (1)		(37.5	)		(4.9	)		(42.4	)
Model prices (2)		0.0			0.0			0.0
Total	$	(37.5	)	$	(4.9	)	$	(42.4	)

(1) Reflects over-the-counter natural gas or heating oil swaps for which the primary pricing inputs in determining fair value are NYMEX quoted closing prices of exchange traded instruments.

(2) Model prices are used for determining the fair value of energy derivatives where price quotes are infrequent or the market is illiquid. Significant inputs to the models are derived from market-observable data and actual historical experience.

For all unrealized derivative contracts, the valuation is an estimate based on the best available information. Actual cash flows could be materially different from the estimated value upon maturity.

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Item 4. CONTROLS AND PROCEDURES

TECO Energy, Inc.

(a) Evaluation of Disclosure Controls and Procedures. TECO Energy’s management, with the participation of its principal executive officer and principal financial officer, has evaluated the effectiveness of TECO Energy’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this quarterly report (the Evaluation Date). Based on such evaluation, TECO Energy’s principal financial officer and principal executive officer have concluded that, as of the Evaluation Date, TECO Energy’s disclosure controls and procedures are effective.

(b) Changes in Internal Controls. There was no change in TECO Energy’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of TECO Energy’s internal control over financial reporting that occurred during TECO Energy’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, such controls.

Tampa Electric Company

(a) Evaluation of Disclosure Controls and Procedures. Tampa Electric Company’s management, with the participation of its principal executive officer and principal financial officer, has evaluated the effectiveness of Tampa Electric Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the Evaluation Date. Based on such evaluation, Tampa Electric Company’s principal financial officer and principal executive officer have concluded that, as of the Evaluation Date, Tampa Electric Company’s disclosure controls and procedures are effective.

(b) Changes in Internal Controls. There was no change in Tampa Electric Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of Tampa Electric Company’s internal control over financial reporting that occurred during Tampa Electric Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, such controls.

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PART II. OTHER INFORMATION

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table shows the number of shares of TECO Energy common stock deemed to have been repurchased by TECO Energy:

	(a) Total Number of Shares  (or Units) Purchased (1)	(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares  (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
Apr. 1, 2010 – Apr. 30, 2010	132,325	$	15.90	0	0
May 1, 2010 – May 31, 2010	46,169	$	16.72	0	0
Jun. 1, 2010 – Jun. 30, 2010	394	$	15.84	0	0
Total 2nd Quarter 2010	178,888	$	16.11	0	0

(1) These shares were not repurchased through a publicly announced plan or program, but rather relate to compensation or retirement plans of the company. Specifically, these shares represent shares delivered in satisfaction of the exercise price and/or tax withholding obligations by holders of stock options who exercised options (granted under TECO Energy’s incentive compensation plans), shares delivered or withheld (under the terms of grants under TECO Energy’s incentive compensation plans) to offset tax withholding obligations associated with the vesting of restricted shares and shares purchased by the TECO Energy Group Retirement Savings Plan pursuant to directions from plan participants or dividend reinvestment.

Item 6. EXHIBITS

Exhibits - See index on page 58.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TECO ENERGY, INC.
	(Registrant)
Date:        August 6, 2010	By:	/s/    S. W. CALLAHAN
		S. W. CALLAHAN
		Vice President-Finance and Accounting         and Chief Financial Officer
		(Chief Accounting Officer)
		(Principal Financial and Accounting Officer)
	TAMPA ELECTRIC COMPANY
	(Registrant)
Date:        August 6, 2010	By:	/s/    S. W. CALLAHAN
		S. W. CALLAHAN
		Vice President-Finance and Accounting         and Chief Financial Officer
		(Chief Accounting Officer)         (Principal Financial and Accounting Officer)

57

INDEX TO EXHIBITS

Exhibit No.	Description
3.1	Articles of Incorporation of TECO Energy, Inc., as amended on Apr. 20, 1993 (Exhibit 3, Form 10-Q for the quarter ended Mar. 31, 1993 of TECO Energy, Inc.).	*
3.2	Bylaws of TECO Energy, Inc., as amended effective Oct. 29, 2009 (Exhibit 3.1, Form 8-K dated Oct. 29, 2009 of TECO Energy, Inc.).	*
3.3	Articles of Incorporation of Tampa Electric Company (Exhibit 3 to Registration Statement No. 2-70653 of Tampa Electric Company).	*
3.4	Bylaws of Tampa Electric Company, as amended effective Jan. 30, 2008 (Exhibit 3.4, Form 10-K for 2007 of TECO Energy, Inc. and Tampa Electric Company).	*
10.1	TECO Energy, Inc. 2010 Equity Incentive Plan (Exhibit 10.1, Post-Effective Amendment No. 1 to Form S-8 Registration Statement No. 333-115954 dated May 5, 2010 of TECO Energy, Inc.).	*
10.2	Form of Performance Shares Agreement between TECO Energy, Inc. and certain officers under the TECO Energy, Inc. 2010 Equity Incentive Plan.
10.3	Form of Restricted Stock Agreement between TECO Energy, Inc. and certain officers under the TECO Energy, Inc. 2010 Equity Incentive Plan.
10.4	Form of Restricted Stock Agreement between TECO Energy, Inc. and certain directors under the TECO Energy, Inc. 2010 Equity Incentive Plan.
12.1	Ratio of Earnings to Fixed Charges – TECO Energy, Inc.
12.2	Ratio of Earnings to Fixed Charges – Tampa Electric Company.
31.1	Certification of the Chief Executive Officer of TECO Energy, Inc. pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer of TECO Energy, Inc. pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3	Certification of the Chief Executive Officer of Tampa Electric Company pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.4	Certification of the Chief Financial Officer of Tampa Electric Company pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer and Chief Financial Officer of TECO Energy, Inc. pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)
32.2	Certification of the Chief Executive Officer and Chief Financial Officer of Tampa Electric Company pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(1)
101.INS	XBRL Instance Document.**
101.SCH	XBRL Taxonomy Extension Schema Document.**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.**
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.**
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.**

(1) This certification accompanies the Quarterly Report on Form 10-Q and is not filed as part of it.

* Indicates exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference. Exhibits filed with periodic reports of TECO Energy, Inc. and Tampa Electric Company were filed under Commission File Nos. 1-8180 and 1-5007, respectively.

** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

58

EX-10.2

Exhibit 10.2

TECO ENERGY, INC.

2010 EQUITY INCENTIVE PLAN

Performance Shares Agreement

TECO Energy, Inc. (the “Company”) and                      (the “Grantee”) have entered into this Performance Shares Agreement (the “Agreement”) dated                      under the Company’s 2010 Equity Incentive Plan (the “Plan”). Capitalized terms not otherwise defined herein have the meanings given to them in the Plan.

1. Grant of Performance Shares. Pursuant to the Plan and subject to the terms and conditions set forth in this Agreement, the Company hereby grants, issues and delivers to the Grantee                      shares of its Common Stock (the “Target Performance Shares”) as of the date of this Agreement. The Target Performance Shares, if not previously forfeited, will vest based on the achievement of the Performance Measurement determined pursuant to Section 2 hereof. In addition to the Target Performance Shares, after the end of the Performance Period (defined below), the Grantee may receive additional shares of the Company’s Common Stock based on the achievement of the Performance Measurement determined pursuant to Section 2 hereof. These additional shares of Common Stock are referred to in this Agreement as the “Additional Performance Shares”, and together with the Target Performance Shares, are referred to as the “Performance Shares”.

2. Vesting of Performance Shares. At the end of the Performance Period, the number of Performance Shares, if any, that will vest on the Vesting Date, as defined in Section 5, will be determined in accordance with the following formula:

Number of Vested Performance Shares =

Performance Reward Percentage multiplied by Target Performance Shares

The “Performance Reward Percentage” is the percentage shown in column B corresponding to the Performance Measurement in column A in the table below, and is based on the Company’s Total Shareholder Return relative to that of the Peer Group for the Performance Period. The Performance Measurement is determined by the Company’s ranking within the Peer Group. If the Performance Measurement is between the 25^th Percentile and the median, or between the median and top 10% of the Peer Group, the Performance Reward Percentage will be interpolated in proportion to the corresponding placement in column A.

A Performance Measurement	B Performance  Reward Percentage
Bottom 25% of the Peer Group	0	%
25th Percentile of the Peer Group	25	%
Equal to the median of the Peer Group	100	%
Top 10% of the Peer Group	150	%

The “Performance Period” is the period beginning April 1, 2010 and ending on March 31, 2013, unless terminated earlier pursuant to Section 6 or 7.

“Total Shareholder Return” is the amount obtained by dividing (1) the sum of (a) the amount of dividends with respect to the Performance Period, assuming dividend reinvestment, and (b) the difference between the share price at the end and beginning of the Performance Period, by (2) the closing share price at the beginning of the Performance Period, with the share price in each case being determined by using the average closing price during the 20 trading days preceding (and inclusive of) the date of determination. The share price will be equitably adjusted for stock splits and other similar corporate actions affecting the stock. In the event the Performance Period ends as a result of a Change in Control, as defined in Section 7, the Total Shareholder Return will be calculated as set forth in the preceding sentence, except that the share price used at the end of the Performance Period will be determined by using the average closing price of the Company’s stock during the 20 trading days preceding (and exclusive of) the date of the Change in Control.

The “Performance Measurement” is a measurement of the relative performance of the Company’s Common Stock calculated by assuming the Company was included in the group of companies identified as the Dow Jones electricity group and multiutility group, or the successors to those two groups as may be determined by the Committee (such groups being collectively defined herein as the “Peer Group”) and then ordering the Peer Group (as constituted at the end of the Performance Period) by Total Shareholder Return from highest to lowest.

Upon the Vesting Date, the restrictions on the Performance Shares will terminate. Any Target Performance Shares that do not vest in accordance with this Section will be forfeited and returned to the Company as of the Vesting Date. The Additional Performance Shares, if any, will be issued, granted and delivered to the Grantee no later than 30 days after the end of the Performance Period.

3. Dividends. Each time that the Company declares a dividend on its shares of common stock, an amount equal to the declared dividend multiplied by the number of Target Performance Shares outstanding on the record date associated with such dividend will be accrued on Grantee’s behalf on the payment date of such dividend, subject to forfeiture as set forth in the last sentence of this paragraph. If the Performance Shares vest in accordance with Section 2, Grantee will also receive a cash payment equal to the amount of any dividends accrued over the Performance Period multiplied by the same Performance Reward Percentage used to determine the amount of the Performance Shares that vest. Any dividends earned pursuant to this Section will be paid in cash to the Grantee when the vested Performance Shares are delivered or as soon as practicable thereafter. Any dividends accrued with respect to the Performance Shares will be forfeited if the related Performance Shares are forfeited.

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4. Restrictions on Performance Shares. Until the Performance Shares, if any, vest, unless otherwise determined by the Committee:

(a) the Performance Shares may not be sold, assigned, pledged or transferred by the Grantee; and

(b) all Performance Shares and accrued dividends will be forfeited and returned to the Company and the Grantee will cease to have any right to receive any Performance Shares or dividends pursuant to this Agreement, if the Grantee ceases to be an employee of the Company or any business entity in which the Company owns directly or indirectly 50% or more of the total voting power or has a significant financial interest as determined by the Committee (an “Affiliate”), other than terminations of employment covered by Sections 6(b), (c) or 7 hereunder.

5. Certification and Vesting Date. Promptly after the end of the Performance Period, the Company will calculate the number of Performance Shares that will vest and the amount of dividends payable to Grantee pursuant to this Agreement. If the Performance Period ends on March 31, 2013 (that is, if the Performance Period was not terminated earlier pursuant to Section 6 or 7, below), the Company will submit its calculation regarding the Performance Measurement and the corresponding Performance Reward Percentage to the Compensation Committee of the Board for certification. Subject to any restrictions on distributions of shares under the Plan, and subject to Section 13 of this Agreement, the Performance Shares, if any, will vest on the date of the Compensation Committee’s certification (the “Vesting Date”). If pursuant to Section 6 or 7, below, the Performance Period ends with respect to the Grantee prior to March 31, 2013, then the Performance Shares earned under the Award, if any, will vest as soon as practicable after the end of the Performance Period, or on the Compensation Committee certification date, if such certification is required under Section 162(m) of the Internal Revenue Code. In no event will the Vesting Date be more than 30 days after the end of the Performance Period.

6. Termination of Employment.

(a) Voluntary Termination or Termination with Cause. If before March 31, 2013, Grantee terminates his or her employment with the Company or any Affiliate and Section 6(c) does not apply to such termination, or the Company or any Affiliate terminates Grantee’s employment for Cause (defined below), all of Grantee’s Target Performance Shares will be cancelled as of the date of such termination and any dividends accrued with respect to Grantee’s Target Performance Shares will be forfeited. The Grantee will not be entitled to any Additional Performance Shares

(b) Termination Other than for Cause. If the Company or any Affiliate terminates Grantee’s employment other than for Cause before March 31, 2013, Grantee’s Target Performance Shares will be prorated based on the number of months Grantee was employed (with partial months rounded up to the nearest whole month) beginning on the date of this Agreement to the date of termination, divided by 36 (the “Prorated Target Performance Shares”). On the date of such termination, the Performance Period will end and the number of Performance Shares that vest pursuant to this Agreement, if any, will be determined based on the application of the formula defined in Section 2, with the Prorated Target Performance Shares substituted for the Target Performance Shares in such formula. All other outstanding Target Performance Shares that do not vest pursuant to that formula will be cancelled and forfeited, and any associated accrued dividends will be forfeited and retained by the Company.

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“Cause” means (i) the willful and continued failure by Grantee to substantially perform Grantee’s duties with the Company (other than any such failure resulting from Grantee’s incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination by Grantee for Good Reason, each as defined in Section 7 after a written demand for substantial performance is delivered to Grantee by the Board, which demand specifically identifies the manner in which the Board believes that Grantee has not substantially performed Grantee’s duties, or (ii) the willful engaging by Grantee in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of this Subsection, no act, or failure to act, on Grantee’s part will be deemed “willful” unless done, or omitted to be done, by Grantee not in good faith and without reasonable belief that Grantee’s action or omission was in the best interest of the Company. Notwithstanding the foregoing, Grantee will not be deemed to have been terminated for Cause unless and until there will have been delivered to Grantee a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice to Grantee and an opportunity for Grantee, together with Grantee’s counsel, to be heard before the Board), finding that in the good faith opinion of the Board Grantee were guilty of conduct set forth above in this Subsection and specifying the particulars thereof in detail;

(c) Death, Disability or Retirement. If Grantee’s employment with the Company or any Affiliate is terminated at any time prior to March 31, 2013 due to death, a disability that would entitle the Grantee to benefits under the long-term disability benefits program of the Company for which the Grantee is eligible, or retirement at or after attainment of the age that is three years before the Grantee’s Social Security Normal Retirement Age, or any earlier date that the Committee determines will constitute a normal retirement for purposes of this Agreement, Grantee will be entitled to receive a prorated award as calculated under this Section. Grantee’s Target Performance Shares will be prorated based on the number of months Grantee was employed (with partial months rounded up to the nearest whole month) beginning on the date of this Agreement to the date Grantee’s employment terminated, divided by 36 (the “Prorated Target Performance Shares”). On the date of such termination, the Performance Period will end and the number of Performance Shares that vest pursuant to this Agreement, if any, will be determined based on the application of the formula defined in Section 2, with the Prorated Target Performance Shares substituted for the Target Performance Shares in such formula. All other outstanding Target Performance Shares that do not vest pursuant to that formula will be cancelled and forfeited, and any associated accrued dividends will be forfeited and retained by the Company.

7. Change in Control. If, prior to March 31, 2013, Grantee’s employment is terminated other than by the Company for Cause or by Grantee without Good Reason within 24 months following a Change in Control (as defined below), or prior to a Change in Control under circumstances described in the next sentence, then Grantee’s Performance Shares will vest as determined under Section 2 of this Agreement. For purposes of this Agreement, Grantee’s employment will be deemed to have been terminated following a Change in Control of the Company by the Company without Cause or by Grantee with Good Reason, if (i) Grantee’s employment is terminated by the Company without Cause prior to a Change in Control of the

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Company (whether or not such a Change in Control ever occurs) and such termination was at the request or direction of a “person” (as defined below) who has entered into an agreement with the Company the consummation of which would constitute a Change in Control of the Company, (ii) Grantee terminates Grantee’s employment for Good Reason prior to a Change in Control of the Company (whether or not such a Change in Control ever occurs) and the circumstance or event which constitutes Good Reason occurs at the request or direction of such person, or (iii) Grantee’s employment is terminated by the Company without Cause or by Grantee for Good Reason and such termination or the circumstance or event which constitutes Good Reason is otherwise in connection with or in anticipation of a Change in Control of the Company (whether or not such a Change in Control ever occurs).

(i) A “Change in Control” means a Change in Control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is in fact required to comply therewith; provided, that, without limitation, such a Change in Control will be deemed to have occurred if:

(a) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding securities;

(b) the following individuals cease to constitute a majority of the number of directors then serving: individuals who on the date hereof constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose election by the Board or nomination for election by the shareholders of the Company was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof;

(c) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation resulting in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no “person” (as hereinabove defined) acquires 30% or more of the combined voting power of the Company’s then outstanding securities; or

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(d) the shareholders of the Company approve a plan of complete liquidation of the Company or there is consummated the sale or disposition by the Company of all or substantially all of the Company’s assets.

(ii) “Good Reason” for termination by Grantee of Grantee’s employment will mean the occurrence (without Grantee’s express written consent) after any Change in Control of the Company, or prior to a Change in Control of the Company under the circumstances described in the second sentence of Section 7 hereof (treating all references in paragraphs (a) through (h) below to a “Change in Control of the Company” as references to a “potential Change in Control of the Company”), of any one of the following acts by the Company, or failures by the Company to act:

(a) the assignment to Grantee of any duties inconsistent (except in the nature of a promotion) with the position in the Company that Grantee held immediately prior to the Change in Control of the Company or a substantial adverse alteration in the nature or status of Grantee’s position or responsibilities or the conditions of Grantee’s employment from those in effect immediately prior to the Change in Control of the Company;

(b) a reduction by the Company in Grantee’s annual base salary as in effect on the date hereof or as the same may be increased from time to time;

(c) the Company’s requiring Grantee to be based more than fifty (50) miles from the Company’s offices at which Grantee were principally employed immediately prior to the date of the Change in Control of the Company except for required travel on the Company’s business to an extent substantially consistent with Grantee’s present business travel obligations;

(d) the failure by the Company to pay to Grantee any portion of Grantee’s current compensation or compensation under any deferred compensation program of the Company, within seven (7) days of the date such compensation is due;

(e) the failure by the Company to continue in effect any material compensation or benefit plan in which Grantee participate immediately prior to the Change in Control of the Company unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue Grantee’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of Grantee’s participation relative to other participants, than existed at the time of the Change in Control;

(f) the failure by the Company to continue to provide Grantee with benefits substantially similar to those enjoyed by Grantee under any of the Company’s pension, life insurance, medical, health and accident, or disability plans in which Grantee were participating at the time of the Change in Control of the Company, the taking of any action by the

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Company which would directly or indirectly materially reduce any of such benefits or deprive Grantee of any material fringe benefit enjoyed by Grantee at the time of the Change in Control of the Company, or the failure by the Company to provide Grantee with the number of paid vacation days to which Grantee are entitled on the basis of Grantee’s years of service with the Company in accordance with the Company’s normal vacation policy in effect at the time of the Change in Control of the Company;

(g) the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 6 hereof; or

(h) any purported termination of Grantee’s employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Subsection (iii) below (and, if applicable, the requirements of Subsection 6(c) above), which purported termination will not be effective for purposes of this Agreement.

Grantee’s right to terminate Grantee’s employment pursuant to this Subsection will not be affected by Grantee’s incapacity due to physical or mental illness. Grantee’s continued employment will not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason hereunder.

(iii) A “Notice of Termination” will mean a notice which will indicate the specific termination provision in this Agreement relied upon and will set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Grantee’s employment under the provision so indicated.

8. Minimum Performance Period. If any event specified under Section 6 or 7 above occurs on a date that would cause the Performance Period to be shorter than four times as long as the period between the beginning of the Performance Period and the date of this Agreement, then the Performance Period will end on the first date after that period of time has elapsed

9. Rights as Shareholder. Subject to the restrictions and other limitations and conditions provided in this Agreement, the Grantee as owner of the Target Performance Shares will have all the rights of a shareholder, including but not limited to the right to vote the Target Performance Shares and the right to receive dividends and other distributions, except as otherwise specifically provided in this Agreement; and provided that dividends and other distributions paid on shares of Performance Shares shall be held by the Company on Grantee’s behalf and shall be subject to the same vesting conditions applicable to the Performance Shares, as provided in Section 3 hereof.

10. Book Entry. The Target Performance Shares will be registered in the name of the Grantee and held by the Company’s transfer agent in uncertificated form in a restricted account. As soon as practicable after the Vesting Date, the Company will cause unrestricted shares to be transferred electronically to Grantee’s brokerage account (or to the account of such Grantee’s legal representative, beneficiary or heir) equal to the number of Target Performance Shares and any Additional Performance Shares that vest pursuant to this Agreement, subject to the tax withholding provision of Section 13.

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11. Adjustment of Terms. In the event of corporate transactions affecting the Company’s outstanding Common Stock, the Committee will equitably adjust the number and kind of Performance Shares subject to this Agreement to the extent provided by the Plan.

12. Notice of Election Under Section 83(b). If the Grantee makes an election under Section 83(b) of the Internal Revenue Code of 1986, as amended, with respect to Performance Shares, he or she will provide a copy thereof to the Company within 30 days of the filing of such election with the Internal Revenue Service.

13. Withholding Taxes. The Grantee will pay to the Company, or make provision satisfactory to the Committee for payment of, any taxes required by law to be withheld in respect of the Performance Shares no later than the Vesting Date. Such tax obligations may be paid in whole or in part in vested Performance Shares, valued at fair market value on the Vesting Date (which is defined as the closing price on the New York Stock Exchange on the previous trading day). The Company and its Affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Grantee.

14. The Committee. Any determination by the Committee under, or interpretation of the terms of, this Agreement or the Plan will be final and binding on the Grantee.

15. Limitation of Rights. The Grantee will have no right to continued employment by virtue of this Agreement.

16. Amendment. The Company may amend, modify or terminate this Agreement, including substituting another Award of the same or a different type and changing the date of realization, provided that the Grantee’s consent to such action will be required unless the action, taking into account any related action, would not adversely affect the Grantee, and further provided that in no event will the Agreement be amended in any manner that would cause the issuance of Shares under this Agreement to fail to qualify as excluded from the calculation of Internal Revenue Code Section 162(m) covered compensation.

17. Governing Law. This Agreement will be governed by and interpreted in accordance with the laws of Florida.

TECO ENERGY, INC.
By:
	Clinton E. Childress
	Chief Human Resources Officer
Grantee

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EX-10.3

Exhibit 10.3

TECO ENERGY, INC.

2010 EQUITY INCENTIVE PLAN

Restricted Stock Agreement

TECO Energy, Inc. (the “Company”) and                                                   (the “Grantee”) have entered into this Restricted Stock Agreement (the “Agreement”) dated                      under the Company’s 2010 Equity Incentive Plan (the “Plan”). Capitalized terms not otherwise defined herein have the meanings given to them in the Plan.

1. Grant of Restricted Stock. Pursuant to the Plan and subject to the terms and conditions set forth in this Agreement, the Company hereby grants, issues and delivers to the Grantee             shares of its Common Stock (the “Restricted Stock”).

2. Restrictions on Stock. Until the restrictions terminate under Section 3, unless otherwise determined by the Committee:

(a) the Restricted Stock may not be sold, assigned, pledged or transferred by the Grantee; and

(b) all shares of Restricted Stock will be forfeited and returned to the Company if the Grantee ceases to be an employee of the Company or any business entity in which the Company owns directly or indirectly 50% or more of the total voting power or has a significant financial interest as determined by the Committee (an “Affiliate”).

3. Termination of Restrictions. The restrictions on shares of Restricted Stock will terminate on the earliest to occur of the following events, as follows:

(a) on the third anniversary of the date of this Agreement, the restrictions on all shares of Restricted Stock will terminate;

(b) upon the termination of Grantee’s employment with the Company or any Affiliate because of a disability that would entitle the Grantee to benefits under the long-term disability benefits program of the Company for which the Grantee is eligible, as determined by the Committee, the restrictions on a prorated portion of shares of Restricted Stock will terminate based on the number of months Grantee was employed (with partial months rounded up to the nearest whole month) beginning on the date of this Agreement to the date of termination, divided by 36;

(c) upon the termination by the Company or any Affiliate of Grantee’s employment other than for Cause, the restrictions on a prorated portion of shares of Restricted Stock will terminate based on the number of months Grantee was employed (with partial months rounded up to the nearest whole month) beginning on the date of this Agreement to the date of termination, divided by 36. “Cause” means (i) the willful and continued failure by Grantee to substantially perform Grantee’s duties with the Company (other than any such failure resulting from Grantee’s incapacity due to physical or mental illness or any such actual or anticipated failure after the

issuance of a Notice of Termination by Grantee for Good Reason, each as defined in Section 3(f)) after a written demand for substantial performance is delivered to Grantee by the Board, which demand specifically identifies the manner in which the Board believes that Grantee has not substantially performed Grantee’s duties, or (ii) the willful engaging by Grantee in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of this Subsection, no act, or failure to act, on Grantee’s part shall be deemed “willful” unless done, or omitted to be done, by Grantee not in good faith and without reasonable belief that Grantee’s action or omission was in the best interest of the Company. Notwithstanding the foregoing, Grantee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to Grantee a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice to Grantee and an opportunity for Grantee, together with Grantee’s counsel, to be heard before the Board), finding that in the good faith opinion of the Board Grantee were guilty of conduct set forth above in this Subsection and specifying the particulars thereof in detail;

(d) upon a termination of Grantee’s employment that the Committee determines will constitute a normal retirement for purposes of this Agreement, the restrictions on a prorated portion of shares of Restricted Stock will terminate based on the number of months Grantee was employed (with partial months rounded up to the nearest whole month) beginning on the date of this Agreement to the date of termination, divided by 36;

(e) upon the Grantee’s death, the restrictions on a prorated portion of shares of Restricted Stock will terminate based on the number of months Grantee was employed (with partial months rounded up to the nearest whole month) beginning on the date of this Agreement to the date of Grantee’s death, divided by 36; or

(f) the restrictions on all shares of Restricted Stock will terminate upon the termination of Grantee’s employment other than by the Company for Cause or by Grantee without Good Reason within 24 months following a Change in Control, or prior to a Change in Control under circumstances described in the next sentence. For purposes of this Agreement, Grantee’s employment shall be deemed to have been terminated following a Change in Control of the Company by the Company without Cause or by Grantee with Good Reason, if (i) Grantee’s employment is terminated by the Company without Cause prior to a Change in Control of the Company (whether or not such a Change in Control ever occurs) and such termination was at the request or direction of a “person” (as defined in Section 4) who has entered into an agreement with the Company the consummation of which would constitute a Change in Control of the Company, (ii) Grantee terminates Grantee’s employment for Good Reason prior to a Change in Control of the Company (whether or not such a Change in Control ever occurs) and the circumstance or event which constitutes Good Reason occurs at the request or direction of such person, or (iii) Grantee’s employment is terminated by the Company without Cause or by Grantee for Good Reason and such termination or the circumstance or event which constitutes Good Reason is otherwise in connection with or in anticipation of a Change in Control of the Company (whether or not such a Change in Control ever occurs).

2

(i) A “Change in Control” means a Change in Control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is in fact required to comply therewith; provided, that, without limitation, such a Change in Control shall be deemed to have occurred if:

(a) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding securities;

(b) the following individuals cease to constitute a majority of the number of directors then serving: individuals who on the date hereof constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose election by the Board or nomination for election by the shareholders of the Company was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof;

(c) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation resulting in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no “person” (as hereinabove defined) acquires 30% or more of the combined voting power of the Company’s then outstanding securities; or

(d) the shareholders of the Company approve a plan of complete liquidation of the Company or there is consummated the sale or disposition by the Company of all or substantially all of the Company’s assets.

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(ii) “Good Reason” for termination by Grantee of Grantee’s employment shall mean the occurrence (without Grantee’s express written consent) after any Change in Control of the Company, or prior to a Change in Control of the Company under the circumstances described in the second sentence of Section 3(f) hereof (treating all references in paragraphs (a) through (h) below to a “Change in Control of the Company” as references to a “potential Change in Control of the Company”), of any one of the following acts by the Company, or failures by the Company to act:

(a) the assignment to Grantee of any duties inconsistent (except in the nature of a promotion) with the position in the Company that Grantee held immediately prior to the Change in Control of the Company or a substantial adverse alteration in the nature or status of Grantee’s position or responsibilities or the conditions of Grantee’s employment from those in effect immediately prior to the Change in Control of the Company;

(b) a reduction by the Company in Grantee’s annual base salary as in effect on the date hereof or as the same may be increased from time to time;

(c) the Company’s requiring Grantee to be based more than fifty (50) miles from the Company’s offices at which Grantee were principally employed immediately prior to the date of the Change in Control of the Company except for required travel on the Company’s business to an extent substantially consistent with Grantee’s present business travel obligations;

(d) the failure by the Company to pay to Grantee any portion of Grantee’s current compensation or compensation under any deferred compensation program of the Company, within seven (7) days of the date such compensation is due;

(e) the failure by the Company to continue in effect any material compensation or benefit plan in which Grantee participate immediately prior to the Change in Control of the Company unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue Grantee’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of Grantee’s participation relative to other participants, than existed at the time of the Change in Control;

(f) the failure by the Company to continue to provide Grantee with benefits substantially similar to those enjoyed by Grantee under any of the Company’s pension, life insurance, medical, health and accident, or disability plans in which Grantee were participating at the time of the Change in Control of the Company, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive Grantee of any material fringe benefit enjoyed by Grantee at the time of the Change in Control of the Company, or the failure by the Company to provide Grantee with the number of paid vacation days to which Grantee are entitled on the basis of Grantee’s years of service with the Company in accordance with the Company’s normal vacation policy in effect at the time of the Change in Control of the Company;

(g) the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 6 hereof; or

4

(h) any purported termination of Grantee’s employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Subsection (iii) below (and, if applicable, the requirements of Subsection 3(c) above), which purported termination shall not be effective for purposes of this Agreement.

Your right to terminate Grantee’s employment pursuant to this Subsection shall not be affected by Grantee’s incapacity due to physical or mental illness. Your continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason hereunder.

(iii) A “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Grantee’s employment under the provision so indicated.

4. Rights as Shareholder. Subject to the restrictions and other limitations and conditions provided in this Agreement, the Grantee as owner of the Restricted Stock will have all the rights of a shareholder, including but not limited to the right to receive all dividends paid on, and the right to vote, such Restricted Stock.

5. Book Entry. The Restricted Stock will be registered in the name of the Grantee and held by the Company’s transfer agent in uncertificated form in a restricted account. Upon the termination of the restrictions imposed under this Agreement as to any shares of Restricted Stock held by the Company’s transfer agent hereunder, the Company will cause the unrestricted shares to be transferred electronically to Grantee’s brokerage account (or to the account of such Grantee’s legal representative, beneficiary or heir), subject to the withholding provision of Section 8.

6. Adjustment of Terms. In the event of corporate transactions affecting the Company’s outstanding Common Stock, the Committee will equitably adjust the number and kind of shares subject to this Agreement to the extent provided by the Plan.

7. Notice of Election Under Section 83(b). If the Grantee makes an election under Section 83(b) of the Internal Revenue Code of 1986, as amended, he or she will provide a copy thereof to the Company within thirty days of the filing of such election with the Internal Revenue Service.

8. Withholding Taxes. The Grantee will pay to the Company, or make provision satisfactory to the Committee for payment of, any taxes required by law to be withheld in respect of the Restricted Stock no later than the date of the event creating the tax liability. In the Committee’s discretion, such tax obligations may be paid in whole or in part in shares of Common Stock, including the Restricted Stock, valued at Fair Market Value on the date of delivery (which is defined as the closing price on the New York Stock Exchange on the previous trading day). Provided, however, that if any of the events in Section 3 occurs on a date that is not a Business Day, the restrictions on the shares of Restricted Stock shall be deemed to have terminated for the purposes of this Section on the Business Day immediately preceding the date of such event. “Business Day” means any day other than a Saturday or Sunday that is not a day on which the New York Stock

5

Exchange is authorized or required by law or regulations to be closed. The Company and its Affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Grantee.

9. The Committee. Any determination by the Committee under, or interpretation of the terms of, this Agreement or the Plan will be final and binding on the Grantee.

10. Limitation of Rights. The Grantee will have no right to continued employment by virtue of this grant of Restricted Stock.

11. Amendment. The Company may amend, modify or terminate this Agreement, including substituting another Award of the same or a different type and changing the date of realization, provided that the Grantee’s consent to such action will be required unless the action, taking into account any related action, would not adversely affect the Grantee.

12. Governing Law. This Agreement will be governed by and interpreted in accordance with the laws of Florida.

TECO ENERGY, INC.
By:
	C.E. Childress
	Chief Human Resources Officer

6

EX-10.4

Exhibit 10.4

TECO ENERGY, INC.

2010 EQUITY INCENTIVE PLAN

Restricted Stock Agreement

TECO Energy, Inc. (the “Company”) and                                                   (the “Grantee”) have entered into this Restricted Stock Agreement (the “Agreement”) dated                      under the Company’s 2010 Equity Incentive Plan (the “Plan”). Capitalized terms not otherwise defined herein have the meanings given to them in the Plan.

1. Grant of Restricted Stock. Pursuant to the Plan and subject to the terms and conditions set forth in this Agreement, the Company hereby grants, issues and delivers to the Grantee 3,000 shares of its Common Stock (the “Restricted Stock”).

2. Restrictions on Stock. Until the restrictions terminate under Section 3, unless otherwise determined by the Board:

(a) the Restricted Stock may not be sold, assigned, pledged or transferred by the Grantee; and

(b) all shares of Restricted Stock will be forfeited and returned to the Company if the Grantee ceases to be a Director of the Company.

3. Termination of Restrictions. The restrictions on all shares of Restricted Stock will terminate on the earliest to occur of the following events:

(a) as to 1,000 shares, on each of the first, second and third anniversary of the date of this Agreement,

(b) upon the completion of Grantee’s term on the Board after reaching the age at which reelection is not considered appropriate, as such age is specified in the Company’s Corporate Governance Guidelines, or upon a resignation from the Board under such circumstances that the Board determines in its sole discretion that the removal of restrictions is appropriate; or

(c) the Grantee’s death.

4. Rights as Shareholder. Subject to the restrictions and other limitations and conditions provided in this Agreement, the Grantee as owner of the Restricted Stock will have all the rights of a shareholder, including but not limited to the right to receive all dividends paid on, and the right to vote, such Restricted Stock.

5. Book Entry. The Restricted Stock will be registered in the name of the Grantee and held by the Company’s transfer agent in uncertificated form in a restricted account. Upon the termination of the restrictions imposed under this Agreement as to any shares of Restricted Stock held by the Company’s transfer agent hereunder, the Company will cause the unrestricted shares to be transferred electronically to Grantee’s brokerage account (or to the account of such Grantee’s legal representative, beneficiary or heir).

6. Adjustment of Terms. In the event of corporate transactions affecting the Company’s outstanding Common Stock, the Board will equitably adjust the number and kind of shares subject to this Agreement to the extent provided by the Plan.

7. Notice of Election Under Section 83(b). If the Grantee makes an election under Section 83(b) of the Internal Revenue Code of 1986, as amended, he or she will provide a copy thereof to the Company within thirty days of the filing of such election with the Internal Revenue Service.

8. The Board. Any determination by the Board under, or interpretation of the terms of, this Agreement or the Plan will be final and binding on the Grantee.

9. Limitation of Rights. The Grantee will have no right to be retained as a director of the Company by virtue of this grant of Restricted Stock.

10. Amendment. The Company may amend, modify or terminate this Agreement, including substituting another Award of the same or a different type and changing the date of realization, provided that the Grantee’s consent to such action will be required unless the action, taking into account any related action, would not adversely affect the Grantee.

11. Governing Law. This Agreement will be governed by and interpreted in accordance with the laws of Florida.

TECO ENERGY, INC.
By:
	David E. Schwartz
	Secretary

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EX-12.1

Exhibit 12.1

TECO ENERGY, INC.

RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth TECO Energy’s ratio of earnings to fixed charges for the periods indicated.

(millions)	3-months ended Jun. 30,			12-months ended Jun. 30,		Year Ended Dec. 31,
	2010			2010		2009		2008		2007		2006		2005
Income from continuing operations, before income taxes	$	111.6		$	373.6	$	312.5	$	256.8	$	613.1	$	363.1	$	312.9
Add:
Interest expense		61.4			239.7		236.5		234.6		270.1		289.1		298.4
Amortization of capitalized interest		0.0			0.0		0.0		0.0		0.0		0.0		0.1
Deduct:
Capitalized interest		0.0			0.0		0.0		0.0		0.0		0.0		0.1
Income from equity investments, net		(1.5	)		5.8		4.3		22.8		18.0		3.4		60.4
Earnings before taxes and without fixed charges	$	174.5		$	607.5	$	544.7	$	468.6	$	865.2	$	648.8	$	550.9
Interest expense	$	61.4		$	239.7	$	236.5	$	234.6	$	270.1	$	289.1	$	298.4
Total fixed charges	$	61.4		$	239.7	$	236.5	$	234.6	$	270.1	$	289.1	$	298.4
Ratio of earnings to fixed charges		2.84x			2.53x		2.30x		2.00x		3.20x		2.24x		1.85x

For the purposes of calculating these ratios, earnings consist of income from continuing operations before income taxes, income or loss from equity investments (net of distributions) and fixed charges, less capitalized interest. Fixed charges consist of interest expense on indebtedness and interest capitalized, amortization of debt premium, and an estimate of the interest component of rentals. Interest expense includes total interest expensed and capitalized excluding AFUDC, and an estimate of the interest component of rentals. TECO Energy, Inc. does not have any preferred stock outstanding, and there were no preferred stock dividends paid or accrued during the periods presented.

EX-12.2

Exhibit 12.2

TAMPA ELECTRIC COMPANY

RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth Tampa Electric Company’s ratio of earnings to fixed charges for the periods indicated.

(millions)	3-months ended Jun. 30,		12-months ended Jun. 30,		Year Ended Dec. 31,
	2010		2010		2009		2008		2007		2006		2005
Income from continuing operations, before income tax	$	204.0	$	377.9	$	303.7	$	261.9	$	278.4	$	264.7	$	285.7
Interest expense		71.9		143.6		141.2		135.8		131.4		124.9		114.3
Earnings before taxes and without fixed charges	$	275.9	$	521.5	$	444.9	$	397.7	$	409.8	$	389.6	$	400.0
Interest expense	$	71.9	$	143.6	$	141.2	$	135.8	$	131.4	$	124.9	$	114.3
Total fixed charges	$	71.9	$	143.6	$	141.2	$	135.8	$	131.4	$	124.9	$	114.3
Ratio of earnings to fixed charges		3.84x		3.63x		3.15x		2.93x		3.12x		3.12x		3.50x

For the purposes of calculating these ratios, earnings consist of income from continuing operations before income taxes and fixed charges. Fixed charges consist of interest expense on indebtedness, amortization of debt premium and an estimate of the interest component of rentals. Interest expense includes total interest expense, excluding AFUDC, and an estimate of the interest component of rentals.

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, John B. Ramil, certify that:

1. I have reviewed this quarterly report on Form 10-Q of TECO Energy, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2010	/s/  J.B. RAMIL
	J.B. RAMIL
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Sandra W. Callahan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of TECO Energy, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2010	/s/  S.W. CALLAHAN
	S.W. CALLAHAN
	Vice President-Finance and Accounting  and Chief Financial Officer
	(Chief Accounting Officer)
	(Principal Financial and Accounting Officer)

EX-31.3

Exhibit 31.3

CERTIFICATIONS

I, John B. Ramil, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Tampa Electric Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2010	/s/  JOHN B. RAMIL
	JOHN B. RAMIL
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.4

Exhibit 31.4

CERTIFICATIONS

I, Sandra W. Callahan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Tampa Electric Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2010	/s/  S. W. CALLAHAN
	S. W. CALLAHAN
	Vice President-Finance and Accounting  and Chief Financial Officer
	(Chief Accounting Officer)
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

TECO ENERGY, INC

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

Each of the undersigned officers of TECO Energy, Inc. (the “Company”) certifies, under the standards set forth in and solely for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge, the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2010 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 6, 2010	/s/  J.B. RAMIL
	J.B. RAMIL
	President and Chief Executive Officer
	(Principal Executive Officer)
Dated: August 6, 2010	/s/  S. W. CALLAHAN
	S. W. CALLAHAN
	Vice President-Finance and Accounting  and Chief Financial Officer
	(Chief Accounting Officer)
	(Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Form 10-Q and shall not be considered filed as part of the Form 10-Q.

EX-32.2

Exhibit 32.2

TAMPA ELECTRIC COMPANY

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

Each of the undersigned officers of Tampa Electric Company (the “Company”) certifies, under the standards set forth in and solely for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge, the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2010 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 6, 2010	/s/  J.B. RAMIL
	J.B. RAMIL
	Chief Executive Officer
	(Principal Executive Officer)
Dated: August 6, 2010	/s/  S. W. CALLAHAN
	S. W. CALLAHAN
	Vice President-Finance and Accounting  and Chief Financial Officer
	(Chief Accounting Officer)
	(Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Form 10-Q and shall not be considered filed as part of the Form 10-Q.