Tampa Electric Files Rebuttal Testimony in Waterborne Coal Transportation Proceeding Contracts Between TECO Transport and the Utility Have Saved Customers More Than $500 Million TALLAHASSEE, Fla., May 4 /PRNewswire-FirstCall/ -- Late yesterday, Tampa Electric filed documents with the Florida Public Service Commission related to its current contract for waterborne coal transportation, which is under review by the Commission. In the filing, the company states that its dealings with TECO Transport have saved Tampa Electric customers more than $500 million to date. The filing responds to testimony filed by the Office of Public Counsel (OPC), the Florida Industrial Power Users Group (FIPUG), CSX Transportation (CSXT), and attorney Mike Twomey. The company's filing today addresses "erroneous assertions and unsubstantiated allegations of the witnesses presented in the intervenors' testimony." A hearing on the matter is set for May 27 and 28, 2004 in Tallahassee. In its rebuttal, Tampa Electric cites the testimony of Dr. Anatoly Hochstein, one of the witnesses called by attorney Twomey in the case, who stated that, "No carrier could reasonably offer rates equal to or lower than TECO Transport." Senior Vice President-External Affairs Richard Lehfeldt said, "Our contract with TECO Transport is priced at or below market, and the intervenors' own witness bears this out. Tampa Electric's customers continue to receive the most efficient and cost-effective services for coal transportation." In addition, Lehfeldt said, ocean rates have skyrocketed since TECO Transport signed its current contract. "Tampa Electric has contracted for the best service, at the best price, period. This whole case is an attempt by disappointed bidders to confuse the public and regulators," Lehfeldt said. The filing includes testimony from Joann Wehle, Tampa Electric's director of Fuels and Wholesale Sales; Brent Dibner, an expert in the maritime industry; Fred Murrell, a former CSXT executive and an expert in the coal and coal transportation industry; and Paula Guletsky of Sargent and Lundy, a professional engineering firm, who evaluated proposals submitted by CSXT. OPC and FIPUG typically appear in proceedings that could impact customers' rates. In this particular proceeding, CSXT, which was allowed to intervene because of its status as a retail customer of Tampa Electric, has done so mainly to complain that its proposal for rail services was not accepted. According to expert witness Murrell, "It is clear that CSXT is attempting to misuse this proceeding as a means of marketing its virtually unregulated rail transportation service. From my perspective and experience, CSXT is asking this Commission to help it put a foot in the door to establish new business in Florida." Attorney Twomey has intervened on behalf of nine residential customers. Last month, Tampa Electric filed a motion with the FPSC asking Twomey to reveal who he is truly representing and alleging that his funding comes from coal suppliers and transportation companies. To date, he has refused to answer Tampa Electric. Ironically, Twomey was the FPSC Staff attorney in 1988 who drafted the benchmark against which he is now arguing. Wehle, Tampa Electric's lead witness, writes in her rebuttal testimony, "Through their theories, intervenors reach outrageous conclusions like: TECO Transport might be overcharging Tampa Electric for waterborne transportation services by as much as $40 million a year. Just to put into perspective how outrageous these allegations are: according to TECO Energy's 2003 Annual Report, TECO Transport's audited net income for 2003 was only $15.3 million and revenues from Tampa Electric accounted for about 38 percent of the business' total revenues!" Wehle also references a FPSC staffer's memorandum that cites annual savings of tens of millions of dollars to Tampa Electric's customers resulting from the contract arrangement with TECO Transport. Overall, since TECO Transport has served Tampa Electric, these savings total more than $500 million and counting. "Tampa Electric's customers have continued to enjoy similar savings for each and every year since the benchmark was established in 1988," said Wehle. Background: The testimony is part of a proceeding that was "spun out" of the annual fuel cost recovery proceeding last November. At issue are the rates Tampa Electric's affiliate, TECO Transport, charges the electric company and the continued applicability of the benchmark utilized by the FPSC that sets the ceiling for the rates that can be charged. In late 2003, Tampa Electric and TECO Transport signed a new five-year contract for coal transportation services. The contract includes rates that are lower than the prior five-year contract rates. DATASOURCE: TECO Energy, Inc. CONTACT: Laura Plumb, +1-813-228-1572, or Ross Bannister, +1-813-228-4945, both of TECO Energy Web site: http://www.tecoenergy.com/

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