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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, ~~2023~~2024

☐ 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
1-5007	TAMPA ELECTRIC COMPANY	59-0475140
	(a Florida corporation)
	TECO Plaza
	702 N. Franklin Street
	Tampa, Florida 33602
	(813) 228-1111

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
None

Securities registered pursuant to Section 12(g) of the Act:


None
(Title of class)

Indicate by check mark if Tampa Electric Company is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has 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) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

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

If an emerging growth company, indicate by check mark whether Tampa Electric Company has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether Tampa Electric Company is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No ☒

The aggregate market value of Tampa Electric Company’s common stock held by non-affiliates of the registrant as of June 30, ~~2023~~2024 was zero.

As of February 20, ~~2024~~2025, 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~~Holdings, Inc., an indirect wholly-owned subsidiary of Emera Inc.

Tampa Electric Company meets the conditions set forth in General Instruction (I)(1)(a) and (b) of Form 10-K and is therefore filing this form with the reduced disclosure format specified in General Instruction I(2) of Form 10-K.

DEFINITIONS

Acronyms and defined terms used in this and other filings with the U.S. Securities and Exchange Commission include the following:

Term		Meaning
AFUDC		allowance for funds used during construction
AFUDC-debt		debt component of allowance for funds used during construction
AFUDC-equity		equity component of allowance for funds used during construction
APBO		accumulated postretirement benefit obligation
ARO		asset retirement obligation
ASC		Accounting Standards Codification
ASU		Accounting Standards Update
BCF		billion cubic feet
CCRs		coal combustion residuals
CMO		collateralized mortgage obligation
CO2		carbon dioxide
CPI		consumer price index
CT		combustion turbine
D.C. Circuit Court		D.C. Circuit Court of Appeals
ECRC		environmental cost recovery clause
Emera		Emera Inc., a geographically diverse energy and services company headquartered in Nova Scotia, Canada and the indirect parent company of Tampa Electric Company
EPA		U.S. Environmental Protection Agency
ERISA		Employee Retirement Income Security Act
EROA		expected return on plan assets
EUSHI		Emera US Holdings Inc., a wholly owned subsidiary of Emera, which is the sole shareholder of TECO Holdings’ common stock as of April 1, 2024, and the sole shareholder of TECO Energy's common stock prior to April 1, 2024
EUSHI		Emera US Holdings Inc., a wholly owned subsidiary of Emera, which is the sole shareholder of TECO Energy’s common stock
FASB		Financial Accounting Standards Board
FDEP		Florida Department of Environmental Protection
FERC		Federal Energy Regulatory Commission
FPSC		Florida Public Service Commission
GHG		greenhouse gas
IRS		Internal Revenue Service
ITCs		investment tax credits
kWac		kilowatt on an alternating current basis
MBS		mortgage-backed securities
MD&A		the section of this report entitled Management’s Discussion and Analysis of Financial Condition and Results of Operations
MGP		manufactured gas plant
MMBTU		one million British Thermal Units
MRV		market-related value
MW		megawatt(s)
MWH		megawatt-hour(s)
NAV		net asset value
Note		Note to ~~consolidated~~ financial statements
NPDES		National Pollutant Discharge Elimination System
NPNS		normal purchase normal sale
O&M expenses		operations and maintenance expenses
OCI		other comprehensive income
OPC		Office of Public Counsel
OPEB		other postemployment benefits
Parent		~~TECO Energy, Inc.,~~ the direct parent company of Tampa Electric Company, which is TECO Holdings, Inc. as of April 1, 2024, and TECO Energy, Inc., prior to April 1, 2024
PBO		projected benefit obligation
PGS		Peoples Gas System, the former gas division of Tampa Electric Company
PGSI		Peoples Gas System, Inc.
PPA		power purchase agreement
PRP		potentially responsible party
R&D		research and development
PTCs		production tax credits
REIT		real estate investment trust
ROE		return on common equity
Regulatory ROE		return on common equity as determined for regulatory purposes
S&P		Standard and Poor’s
SEC		U.S. Securities and Exchange Commission
SERP		Supplemental Executive Retirement Plan
SPP		storm protection plan
TEC		Tampa Electric Company
TECO Energy		TECO Energy, Inc., the direct parent company of Tampa Electric Company prior to April 1, 2024
TECO Holdings		TECO Holdings, Inc., the direct parent company of Tampa Electric Company as of April 1, 2024
U.S. GAAP		generally accepted accounting principles in the United States

ROE return on common equity Regulatory ROE return on common equity as determined for regulatory purposes S&P Standard and Poor’s SEC U.S. Securities and Exchange Commission SERP Supplemental Executive Retirement Plan SoBRAs solar base rate adjustments SPP storm protection plan STIF short-term investment fund TEC Tampa Electric Company TECO Energy TECO Energy, Inc., the direct parent company of Tampa Electric Company U.S. GAAP generally accepted accounting principles in the United States

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

This Form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Forward-looking statements generally can be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "will be," "will continue," "may," "could," "will likely result," and similar expressions. The factors that could cause actual results to differ materially from the forward-looking statements made by TEC include those factors discussed herein, including those factors discussed with respect to TEC discussed in (a) Part I, Item 1A. Risk Factors, (b) Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part II, Item 8. Financial Statements: Note 8, Commitments and Contingencies; and (d) other factors discussed in filings with the SEC by TEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Report. TEC does not undertake any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this Form 10-K.

All references to “dollars” and “$” in this and other filings with the U.S. Securities and Exchange Commission are references to U.S. dollars, unless specifically indicated otherwise.

PART I

Item 1. BUSINESS

Tampa Electric Company, referred to as TEC, was incorporated in Florida in 1899 and was reincorporated in 1949. All of TEC’s common stock is owned by TECO ~~Energy, a holding company~~Holdings. TECO ~~Energy~~Holdings is an indirect, wholly owned subsidiary of Emera. Therefore, TEC is an indirect, wholly owned subsidiary of Emera.

TEC is a public utility operating within the State of Florida. TEC is comprised of the electric division, referred to as Tampa Electric, and prior to January 1, 2023, also included the natural gas division, referred to as PGS. Tampa Electric provides retail electric service to approximately ~~839~~855,~~960~~000 customers in West Central Florida with a net winter system generating capacity of 6,~~433~~620 MW at December 31, ~~2023~~2024.

TEC makes its SEC filings available free of charge on Tampa Electric’s website (www.tampaelectric.com/company/about/) as soon as reasonably practicable after they are filed with the SEC. TEC’s electronic SEC filings are also available on the SEC’s website (www.sec.gov).

TEC Revenues

TEC’s revenues consist of sales to residential, commercial, industrial and other customers. TEC’s residential load generally comprises individual homes, apartments and condominiums. Commercial customers include small retail operations, large office and commercial complexes, universities and hospitals. Industrial customers include manufacturing facilities, power generation customers and other large volume operations. Other sales volumes consist primarily of off-system sales to other utilities and revenues from street lighting.

For TEC’s revenue and other financial information by operating segments, see Note 11 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements.

TEC Human Capital

Tampa Electric had 2,~~546~~587 employees as of December 31, ~~2023~~2024, substantially all of whom are located in Florida. Of these employees, ~~706~~717 were represented by the International Brotherhood of Electrical Workers and ~~143~~141 were represented by the Office and Professional Employees International Union.

Maintaining a robust pipeline of talent is crucial to TEC’s ongoing success and is a key aspect of succession planning efforts across the organization. TEC is committed to investing in its employees through training and development programs as well as a tuition assistance program to promote continued professional growth. TEC provides a competitive compensation package that includes base pay, annual short-term incentives based on the achievement of corporate goals and performance, long-term incentives (applicable to eligible employee population), and health and retirement benefits.

TAMPA ELECTRIC – Electric Operations

Tampa Electric is engaged in the generation, purchase, transmission, distribution and sale of electric energy. The retail territory served comprises an area of about 2,000 square miles in West Central Florida, including Hillsborough County and parts of Polk, Pasco and Pinellas Counties. The principal communities served are Tampa, Temple Terrace, Winter Haven, Plant City and Dade City. Tampa Electric engages in wholesale sales to utilities and other resellers of electricity. At December 31, ~~2023~~2024, Tampa Electric had two generating stations in or near Tampa, one generating station in southwestern Polk County, ~~and~~27 25 photovoltaic power stations (~~thirteen~~fifteen in Hillsborough County, ten in Polk County, and two in Pasco County), and one energy storage site.

The sources of Tampa Electric’s operating revenue and MWH sales were as follows:

Tampa Electric Operating Revenue

(millions)

~~2023~~2024

~~2022~~2023

~~2021~~2022

By Customer Type

Residential

1,~~711~~507

1,~~381~~711

1,~~156~~381

Commercial

~~803~~686

~~666~~803

~~602~~666

Industrial

~~203~~162

~~176~~203

~~172~~176

Other sales of electricity

~~248~~215

~~215~~248

~~194~~215

Regulatory deferrals and unbilled revenue

(~~389~~111

)

(12389

)

(812

)

Total energy sales

2,~~576~~459

2,~~426~~576

2,~~116~~426

Off system sales

812

378

637

Other

5355

6053

5260

Total revenues

2,~~637~~526

2,~~523~~637

2,~~174~~523

By Sales Type

Base

1,~~458~~490

1,~~342~~458

1,~~179~~342

Clause

~~802~~751

~~901~~802

~~836~~901

Capital cost recovery for early retired assets

069

Storm surcharge

~~107~~29

0107

Gross receipts taxes and franchise fees

~~139~~120

~~114~~139

~~100~~114

Other

6267

9762

5997

Total revenues

2,~~637~~526

2,~~523~~637

2,~~174~~523

Megawatt-hour Sales

(thousands)

~~2023~~2024

~~2022~~2023

~~2021~~2022

Residential

10,~~307~~269

10,~~109~~307

910,~~941~~109

Commercial

6,~~462~~481

6,~~300~~462

6,~~144~~300

Industrial

2,~~082~~019

2,~~111~~082

2,~~122~~111

Other sales of electricity

1,~~940~~933

1,~~947~~940

1,~~886~~947

Total retail

20,~~791~~702

20,~~467~~791

20,~~093~~467

Off system sales

~~254~~343

~~405~~254

~~114~~405

Total energy sold

21,045

2021,~~872~~045

20,~~207~~872

No significant part of Tampa Electric’s business is dependent upon a single or limited number of customers where the loss of any one or several would have a significant adverse effect on Tampa Electric. Tampa Electric experiences summer peak loads due to the use of air conditioning and other cooling equipment and winter peak loads due to electric space heating and fewer daylight hours.

Regulation

Base Rates

Tampa Electric’s retail operations are regulated by the FPSC. The FPSC’s objective is to set rates at a level that provides an opportunity for the utility to collect revenues (revenue requirements) equal to its prudently incurred costs of providing service to customers, plus a reasonable return on invested capital.

The costs of owning, operating and maintaining the utility systems, excluding fuel, conservation costs, purchased power, storm protection plan projects and certain environmental costs, are recovered through base rates. These costs include O&M expenses, depreciation, taxes, and a return on investment in assets providing electric service (rate base). The rate of return on rate base, which is intended to approximate a company’s weighted cost of capital, primarily includes its costs for debt, deferred income taxes (at a zero cost rate) and an allowed ROE. Base rates are determined in FPSC rate setting hearings which occur at the initiative of Tampa Electric, the FPSC or other interested parties.

Tampa Electric’s 2024, 2023 and 2022 base rates reflect a settlement agreement approved by the FPSC on November 10, 2021. Tampa Electric’'s ~~2021~~2025 ~~results~~base rates reflect aan ~~settlement~~FPSC ~~agreement~~order ~~approved~~issued ~~by the FPSC~~ on ~~November~~February 63, ~~2017~~2025. See Note 3 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for information regarding Tampa Electric’s base rates, ROE and other regulatory matters.

Other Cost Recovery

Tampa Electric has five cost recovery clauses.

(1)

Tampa Electric has a fuel recovery clause allowing recovery of actual fuel costs from customers through annual fuel rate adjustments. Differences between actual prudently incurred fuel costs and amounts recovered from customers in a year are recovered from or returned to customers in a subsequent period.

(2)

Tampa Electric has a capacity recovery clause allowing recovery of firm demand payments associated with purchased power agreements.

(3)

Tampa Electric has an environmental cost recovery clause which allows it to earn a return on investments in new facilities to comply with new environmental regulations and to recover the costs to operate and maintain these facilities.

(4)

Through its conservation cost recovery clause, Tampa Electric offers its customers a comprehensive array of residential and commercial programs that have enabled it to meet its required demand side management goals, reduce weather-sensitive peak demand and conserve energy.

(5)

Tampa Electric has a Storm Protection Plan cost recovery clause allowing recovery of prudent transmission and distribution storm hardening costs for incremental activities not already included in base rates as outlined in the programs in its approved Storm Protection Plan.

During the fourth quarter of ~~2023~~2024, the FPSC approved cost-recovery rates for the above clauses effective January 1, ~~2024~~2025. See Note 3 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for further information. In addition, Tampa Electric’s 2021 rate case settlement agreement established a mechanism to recover the costs of retiring coal generation units and meter assets over a period of 15 years. The recovery started in January 2022 and will survive the term of the settlement agreement.

FERC and Other Regulations

Tampa Electric is subject to regulation by the FERC in various respects, including wholesale power sales, certain wholesale power purchases, transmission and ancillary services and accounting practices.

Tampa Electric is subject to federal, state and local environmental laws and regulations pertaining to air and water quality, land use, power plant, substation and transmission line siting, noise and aesthetics, solid waste and other environmental matters (see the Environmental Compliance section of the MD&A).

Competition

Tampa Electric’s retail electric business is substantially free from direct competition with other electric utilities, municipalities and public agencies. The principal form of competition at the retail level consists of self-generation available to ~~larger~~ users of electric energy. Such users may seek to expand their alternatives through various initiatives, including legislative and/or regulatory changes that would permit competition at the retail level. Tampa Electric intends to retain and expand its retail business by managing costs and providing quality service to retail customers.

Generation Sources

In ~~2023~~2024 and ~~2022~~2023, 8889% and 8688%, respectively, of Tampa Electric’s gross generation of electricity was natural gas-fired, with solar representing 811% and 78%, respectively, and coal representing 4less than 1% and 74%, respectively. In ~~2023~~2024 and ~~2022~~2023, Tampa Electric used its generating units to meet 9291% and 9092%, respectively, of the total system load requirements, with the remaining 89% and 108%, respectively coming from purchased power. Tampa Electric is required to maintain a generation capacity greater than firm peak demand. Tampa Electric meets the planning criteria for reserve capacity established by the FPSC, which is a 20% reserve margin over firm peak demand.

The table below presents information regarding Tampa Electric’s generation costs.

Average cost per MMBTU	~~2023~~2024		~~2022~~2023		~~2021~~2022
Natural Gas (1)	$	23.8165	$	82.3281	$	48.8332
Coal (2)		515.0047		35.5200		3.4952
Average generation cost per MWh (3)		3028.9747		3730.8597		3337.7385

(1)

Represents the cost of natural gas, transportation, storage, balancing, and fuel losses for delivery to the energy center.

(2)

Represents the cost of coal and transportation.

(3)

Represents the average generation cost per MWh including solar.

Tampa Electric’s fuel costs are affected by commodity prices and generation mix that is largely dependent on economic dispatch of the generating fleet, dispatching the lowest fuel cost options first (solar renewable energy being zero fuel costs), such that the incremental cost of generation increases as sales volumes increase. Generation mix may also be affected by plant outages, plant performance, availability of lower priced short-term purchased power, compliance with environmental standards and regulations, and availability of solar resources.

Natural Gas. Tampa Electric maintains gas commodity, pipeline transportation and storage contracts. As of December 31, ~~2023~~2024, 69% of Tampa Electric’s 2.0 million ~~BCF~~billion cubic feet of gas storage capacity was full. Tampa Electric has contracted for, on average, 5248% of its expected gas needs for the January through December ~~2024~~2025 period. Tampa Electric expects to issue requests for proposals (RFPs) to meet its remaining ~~2024~~2025 gas needs and begin contracting for its ~~2025~~2026 requirements. Additional volume requirements are purchased in the short-term spot market.

Coal. Tampa Electric burned less than 0.41 million tons of coal during ~~2023. Coal consumption is expected to decrease in~~ 2024, ~~compared to 2023. Consistent~~ with ~~2023,~~similar ~~Tampa~~usage ~~Electric~~anticipated ~~will be purchasing its coal~~ in ~~2024 under a contract with two different commodity suppliers~~2025. All ~~100%~~ of Tampa Electric's expected coal need in ~~2024~~2025 is under contract and stored on site. Tampa Electric takes coal deliveries primarily by water and uses transportation agreements with a rail provider if spot coal supplies are needed.

Franchises and Other Rights

Florida utilities must obtain franchises to operate in certain municipalities. Tampa Electric holds franchises and other rights that, together with its charter powers, govern the placement of Tampa Electric’s facilities on the public rights-of-way that it carries for its retail business in the localities it serves. The franchises specify the negotiated terms and conditions governing Tampa Electric’s use of public rights-of-way and other public property within the municipalities it serves during the term of the franchise agreement. Florida municipalities are prohibited from granting any franchise for a term exceeding 30 years.

Tampa Electric has franchise agreements with 13 incorporated municipalities within its retail service area. At December 31, ~~2023~~2024, these agreements have various expiration dates ranging through 2052 and are expected to be renewed under similar terms and conditions.

Franchise fees expense totaled $6759 million and $5667 million in ~~2023~~2024 and ~~2022~~2023, respectively. Franchise fees are calculated using a formula based primarily on electric revenues and are recovered on a dollar-for-dollar basis from customers.

Utility operations in Hillsborough, Pinellas and Polk Counties outside of incorporated municipalities are conducted in each case under one or more permits granted by the Florida Department of Transportation or the County Commissioners of such counties. There is no law limiting the time for which such permits may be granted. There are no fixed expiration dates for the Hillsborough County, Pinellas County and Polk County agreements.

Environmental Matters

Tampa Electric operates stationary sources with air emissions regulated by the Clean Air Act. Its operations are also impacted by provisions in the Clean Water Act and federal and state legislative initiatives on environmental matters. TEC, through its Tampa Electric division and former PGS division, is a PRP for certain superfund sites and, through its former PGS division, for certain former manufactured gas plant sites. See Environmental Compliance section of the MD&A for additional information. As a result of the separation of the PGS division, PGS is now the responsible party for those sites (in addition to third party PRPs for certain sites). See Note 1 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for information regarding the separation of PGS from TEC.

PEOPLES GAS SYSTEM – Gas Operations

On January 1, 2023, TEC transferred the assets and liabilities of its PGS division into a separate corporation called Peoples Gas System, Inc. This new corporation is a wholly owned subsidiary of a newly formed gas operations holding company, TECO Gas Operations, Inc., a wholly owned subsidiary of TECO Energy. From and after January 1, 2023, the PGS business is no longer operated by TEC. See Note 1 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for further information regarding the separation of PGS from TEC. For information regarding PGS's Business in 2022 ~~and 2021~~, see “Item 1. Business” of TEC’s Annual Report on Form 10-K for the year ended December 31, 2022.

Item 1A. RISK FACTORS

Risks Relating to TEC’s Business and Strategy

Regulatory, Legislative, and Legal Risks

Tampa Electric is regulated; changes in regulation or the regulatory environment could reduce revenues, increase costs or competition.

Tampa Electric operates in a regulated industry. Retail operations, including the rates charged and costs eligible for recovery under clauses, are regulated by the FPSC, and Tampa Electric’s wholesale power sales and transmission services are subject to regulation by the FERC. Changes in regulatory requirements or regulatory actions could have an adverse effect on TEC’s financial performance by, for example, reducing revenues, increasing competition or costs, threatening investment recovery or impacting rate structure. Additionally, if regulators deny or delay cost recovery approvals, Tampa Electric’s earnings could be negatively impacted.

If Tampa Electric earns returns on equity above its allowed range, indicating a trend, those earnings could be subject to review by the FPSC. Ultimately, prolonged returns above its allowed range could result in credits or refunds to customers, which could reduce future earnings and cash flow.

Changes in the environmental and land use laws and regulations affecting its business could increase TEC’s costs or curtail its activities.

TEC’s business is subject to regulation by various governmental authorities dealing with air, water and other environmental matters. Changes in compliance requirements or the interpretation by governmental authorities of existing requirements may impose additional costs on TEC, requiring cost-recovery proceedings and/or requiring it to modify its business model.

Federal or state regulation of GHG emissions, depending on how they are enacted, could increase Tampa Electric’s costs or the rates charged to its customers, which could curtail sales.

On June 19, 2019, the EPA released a final rule named the Affordable Clean Energy (ACE) rule. The ACE rule, which replaces the Clean Power Plan adopted in 2015, contained emission guidelines for states to address GHG emissions from existing coal-fired electric generating units. On January 19, 2021, the D.C. Circuit vacated the ACE rule and remanded it to the EPA. A replacement rule is under development.

The outcome of the pending rulemaking process and expected further litigation, and its impact on Tampa Electric’s business, is uncertain at ‎this time; however, it could result in increased operating costs and/or decreased operations at Tampa Electric’s coal-fired plants. Tampa Electric currently expects prudently incurred costs for compliance to be recovered through rates. However, timing of recovery could impact earnings and cash flows, and increases in rates charged to customers could result in reduced sales.

The computation of TEC’s provision for income taxes is impacted by changes in tax legislation.

Any changes in tax legislation could affect TEC’s future cash flows and financial position. The value of TEC’s existing deferred tax assets and liabilities are determined by existing tax laws and could be impacted by tax law changes, inincluding ~~laws~~any changes to the Inflation Reduction Act, as well as additional interpretations or technical corrections impacting the amount and timing of income tax payments or reduce or limit the ability to claim certain deductions and use carryforward tax benefits and/or credits. See Note 4 of the ~~2023~~2024 Annual TEC Consolidated Financial Statements for further information regarding TEC’s income taxes.

Tampa Electric may not be able to secure adequate rights-of-way to construct transmission lines and distribution-related facilities and could be required to find alternate ways to provide adequate sources of energy and maintain reliable service for their customers.

Tampa Electric relies on federal, state and local governmental agencies to secure rights-of-way and siting permits to construct transmission lines and distribution-related facilities. If adequate rights-of-way and siting permits to build new transportation and transmission lines cannot be secured, then Tampa Electric:

     
    •

    May need to remove or abandon its facilities on the property covered by rights-of-way or franchises and seek alternative 
locations for its transmission or distribution facilities;


	•		May need to rely on more costly alternatives to provide energy to its customers;


	•		May not be able to maintain reliability in its service area;


	•		May need to exercise the power of eminent domain, which can be costly and take time; and/or

	•		May experience a negative impact on its ability to provide electric service to new customers.

The franchise rights held by Tampa Electric could be lost in the event of a breach by such utilities or could expire and not be renewed.

Tampa Electric holds franchise agreements with counterparties throughout its service area. In some cases, these rights could be lost in the event of a breach of these agreements. These agreements are for set periods and could expire and not be renewed upon expiration of the then-current terms. From time to time municipalities seek to include provisions allowing them to purchase the portion of the utility’s system located within a given municipality’s boundaries under certain conditions.

expiration of the then-current terms. From time to time municipalities seek to include provisions allowing them to purchase the portion of the utility’s system located within a given municipality’s boundaries under certain conditions.

Operational and Construction Risks

TEC’s business is sensitive to variations in weather and the effects of extreme weather and has seasonal variations.

TEC’s utility business is affected by variations in general weather conditions including severe weather. Energy sales by its electric utility are particularly sensitive to seasonal variations in weather conditions, including unusually mild summer or winter weather that cause lower energy usage for cooling or heating purposes. Tampa Electric has both summer and winter peak periods that are dependent on weather conditions. Tampa Electric forecasts energy sales based on normal weather, which represents a long-term historical average. If there is unusually mild weather, or if climate change or other factors cause significant variations from normal weather, this could have a material impact on energy sales.

TEC is subject to several risks that arise or may arise from climate change.

TEC is subject to risks that may arise from the impacts of climate change. There is increasing public concern about climate change and growing support for reducing carbon dioxide emissions. Municipal, state, and federal governments have been setting policies and enacting laws and regulations to deal with climate change impacts in a variety of ways, including de-carbonization initiatives and promotion of cleaner energy and renewable energy generation of electricity. Refer to “changes in the environmental and land use laws and regulations” above. Insurance companies have begun to limit their exposure to coal-fired electricity generation and are evaluating the medium and long-term impacts of climate change which may result in fewer insurers, more restrictive coverage and increased premiums.

Climate change may lead to increased frequency and intensity of weather events and related impacts such as storms, hurricanes, cyclones, heavy rainfall, extreme winds, wildfires, flooding and storm surge. The potential impacts of climate change, such as rising sea levels and larger storm surges from more intense hurricanes, can combine to produce even greater damage to coastal generation and other facilities. Climate change is also characterized by rising global temperatures. Increased air temperatures may bring increased frequency and severity of wildfires, including within TEC’s service territory. Refer to “variations in weather” above.

High winds and lack of precipitation increase the risk of wildfires resulting from TEC’s infrastructure. The risk of wildfires is addressed primarily through asset management, storm hardening, and vegetation management programs for the electric utility. If it is found to be responsible for such a fire, TEC could suffer material costs, losses and damages, which could materially affect TEC’s business, access to capital, financial condition and results of operations including its reputation with customers, regulators, governments and financial markets. Resulting costs could include fire suppression costs, regeneration, timber value, increased insurance costs and costs arising from damages and losses incurred by third parties.

TEC is subject to physical risks that arise, or may arise, from global climate change, including damage to operating assets from more frequent and intense weather events and from wildfires due to warming air temperatures and increasing drought conditions. Some of Tampa Electric’s fossil fueled generation assets are located at or near coastal sites and as such are exposed to the separate and combined effects of rising sea levels and increasing storm intensity, including storm surges and flooding. Refer to “variations in weather” above.

Failure to address issues related to climate change could affect TEC’s reputation with stakeholders, its ability to operate and grow, and TEC’s access to, and cost of, capital. Refer to “Financial, Economic, and Market Risks” below.

Changing carbon-related costs, policy and regulatory changes and shifts in supply and demand factors could lead to more expensive or more scarce products and services that are required by TEC in its operations. This could lead to supply shortages, delivery delays and the need to source alternate products and services.

Depending on the regulatory response to government legislation and regulations, TEC may be exposed to the risk of reduced recovery through rates in respect of the affected assets. Valuation impairments could result from such regulatory outcomes.

TEC could face litigation or regulatory action related to environmental harms from carbon dioxide emissions or climate change public disclosure issues.

For thermal plants requiring cooling water, reduced availability of water resulting from climate change could adversely impact operations or the costs of operations.

The facilities and operations of TEC could be affected by natural disasters or other catastrophic events.

TEC’s facilities and operations are exposed to potential damage and partial or complete loss resulting from environmental disasters (e.g., hurricanes, floods, high winds, fires and earthquakes), equipment failures, terrorist or physical attacks, vandalism, a major accident or incident at one of the sites, and other events beyond the control of TEC. The operation of generation, transmission and distribution systems involves certain risks, including fires, explosions, pipeline ruptures, damage to solar panels and other generation assets, and other hazards and risks that may cause unforeseen interruptions, personal injury, death, or property damage. There have also been physical attacks on critical infrastructure around the world. In the event of a physical attack that disrupts service to customers, revenues would be reduced, and costs would be incurred to repair and restore systems. These types of events, either impacting TEC’s facilities or the industry in general, could cause TEC to incur additional security and insurance-related costs, and could have adverse effects on its business and financial results. Any costs relating to such events may not be recoverable through insurance or rates.

TEC is exposed to potential risks related to cyberattacks and unauthorized access, which could cause system failures, disrupt operations or adversely affect safety.

TEC increasingly relies on information technology systems and network infrastructure to manage its business and safely operate its assets, including controls for interconnected systems of generation, distribution and transmission and financial, billing and other business systems. TEC also relies on third party service providers to conduct business. As TEC operates critical infrastructure, it may be at greater risk of cyberattacks by third parties, which could include nation-state controlled parties.

Cyberattacks can reach TEC’s networks with access to critical assets and information via their interfaces with less critical internal networks or via the public internet. Cyberattacks can also occur via personnel with direct access to critical assets or trusted networks. An outbreak of infectious disease, a pandemic or a similar public health threat may cause disruption in normal working patterns including wide scale “work from home” policies, which could increase cybersecurity risk as the quantity of both cyberattacks and network interfaces increases. Refer to the risk factor below regarding public health risk. Methods used to attack critical assets could include general purpose or energy-sector-specific malware delivered via network transfer, removable media, viruses, attachments or links in e-mails. The methods used by attackers are continuously evolving and can be difficult to predict and detect.

TEC’s systems, assets and information could experience security breaches that could cause system failures, disrupt operations or adversely affect safety. Such breaches could compromise customer, employee-related or other information systems and could result in loss of service to customers or the unavailability, release, destruction or misuse of critical, sensitive or confidential information. These breaches could also delay delivery or result in contamination or degradation of hydrocarbon products TEC transports, stores or distributes.

Should such cyberattacks or unauthorized accesses materialize, TEC could suffer costs, losses and damages, all or some of which may not be recoverable through insurance, legal, regulatory cost recovery or other processes. If not recovered through these means, they could materially adversely affect TEC’s business and financial results including its reputation and standing with customers, regulators, governments and financial markets. Resulting costs could include, amongst others, response, recovery and remediation costs, increased protection or insurance costs and costs arising from damages and losses incurred by third parties. If any such security breaches occur, there is no assurance that they can be adequately addressed in a timely manner.

With respect to certain of its assets, TEC is required to comply with rules and standards relating to cybersecurity and information technology including, but not limited to, those mandated by bodies such as the North American Electric Reliability Corporation. TEC cannot be assured that its operations will not be negatively impacted by a cyberattack.

Effects of an outbreak of infectious disease, another pandemic or a similar public health threat could have a negative impact on TEC’s operations.

An outbreak of infectious disease, a pandemic or a similar public health threat or a fear of any of the foregoing, could adversely impact TEC, including by causing operating, supply chain and project development delays and disruptions, labor shortages and shutdowns (including as a result of government regulation and prevention measures), and delays in regulatory decisions and proceedings, which could have a negative impact on TEC’s operations.

Any adverse changes in general economic and market conditions arising as a result of a public health threat could negatively impact demand for electricity, revenue, operating costs, timing and extent of capital expenditures, results of financing efforts, or credit risk, counterparty risk and collection risk, which could result in a material adverse effect on TEC’s business.

Financial, Economic, and Market Risks

National and local economic conditions can have a significant impact on the results of operations, net income and cash flows at TEC.

The business of TEC is concentrated in Florida. If economic conditions decline, retail customer growth rates may stagnate or decline, and customers’ energy usage may decline, adversely affecting TEC’s results of operations, net income and cash flows. A factor in customer growth in Florida is net in-migration of new residents, both domestic and non-U.S. A slowdown in the U.S. economy could reduce the number of new residents and slow customer growth.

Potential competitive changes may adversely affect TEC.

There is competition in wholesale power sales across the United States. Some states have mandated or encouraged competition at the retail level and, in some situations, required divestiture of generating assets. While there is active wholesale competition in Florida, the retail electric business has remained substantially free from direct competition. Changes in the competitive environment occasioned by legislation, regulation, market conditions or initiatives of other electric power providers or voters, particularly with respect to retail competition, could adversely affect Tampa Electric’s business and its expected performance.

Florida electric utilities, including Tampa Electric, currently benefit from operating in a regulated environment with limited competition in their market for retail customers. However, the commercial and regulatory frameworks under which Tampa Electric operates can be impacted by changes in government and shifts in government policy. These include initiatives regarding deregulation or restructuring of the energy industry, which may result in increased competition and unrecovered costs that could adversely affect operations, net income and cash flows.

Disruption of fuel supply could have an adverse impact on the financial condition of TEC.

Tampa Electric depends on third parties to supply fuel, including natural gas and coal. As a result, there are risks of supply interruptions and fuel-price volatility. Disruption of fuel supplies or transportation services for fuel, whether because of weather-related problems, strikes, lock-outs, break-downs of transportation facilities, pipeline failures or other events, could impair the ability to deliver or generate electricity and could adversely affect operations. The loss of fuel suppliers or the inability to renew existing coal and natural gas contracts at favorable terms could significantly affect the ability to serve customers and have an adverse impact on the financial condition and results of operations of TEC.

Commodity price changes may affect the operating costs and competitive positions of TEC’s business.

TEC’s business is sensitive to changes in gas, coal and other commodity prices. Any changes in the availability of these commodities could affect the prices charged by suppliers as well as suppliers’ operating costs and the competitive positions of their products and services.

In the case of Tampa Electric, fuel costs used for generation are affected primarily by the cost of natural gas and coal. Tampa Electric is able to recover prudently incurred costs of fuel through retail customers’ bills, but increases in fuel costs affect electric prices and, therefore, the competitive position of electricity against other energy sources.

The ability to make sales of, and the margins earned on, wholesale power sales are affected by the cost of fuel to Tampa Electric, particularly as it compares to the costs of other power producers.

TEC may face risks associated with international and national trade laws and regulations which could affect operating costs.

Trade restrictions and imposition of new tariffs or trade restrictions could impact the availability and/or price of materials and equipment needed to support operations and capital investment and may affect operating costs and financial results.

Developments in technology could reduce demand for electricity.

Research and development activities are ongoing for new technologies that produce power or reduce power consumption. These technologies include renewable energy, customer-oriented generation, energy storage, energy efficiency and more energy-efficient appliances and equipment. Advances in these or other technologies could reduce the cost of producing electricity, or otherwise make Tampa Electric’s existing generating facilities uneconomic. Advances in such technologies could reduce demand for electricity, which could negatively impact the results of operations, net income and cash flows of TEC.

appliances and equipment. Advances in these or other technologies could reduce the cost of producing electricity, or otherwise make Tampa Electric’s existing generating facilities uneconomic. Advances in such technologies could reduce demand for electricity, which could negatively impact the results of operations, net income and cash flows of TEC.

Results at TEC may be affected by changes in customer energy-usage patterns.

For the past several years, at Tampa Electric and electric utilities across the United States, weather-normalized electricity consumption per residential customer has declined due to the combined effects of voluntary conservation efforts and improvements in equipment efficiency.

Forecasts by TEC are based on normal weather patterns and trends in customer energy-usage patterns. TEC could be negatively impacted if customers further reduce their energy usage in response to increased energy efficiency, economic conditions or other factors.

Increased customer use of distributed generation could adversely affect Tampa Electric.

In many areas of the United States, including in the markets where TEC operates, there is growing use of rooftop solar panels, small wind turbines and other small-scale methods of power generation, known as distributed generation. Distributed generation is encouraged and supported by various constituent groups, tax incentives, renewable portfolio standards and special rates designed to support such generation.

Increased usage of distributed generation can reduce utility electricity sales but does not reduce the need for ongoing investment in infrastructure to maintain or expand the transmission and distribution grid to reliably serve customers. Continued utility investment that is not supported by increased energy sales causes rates to increase for customers, which could further reduce energy sales and reduce future earnings and cash flows.

Failure to attract and retain an appropriately qualified workforce, or workforce disruptions, could adversely affect TEC’s financial results.

Events such as increased retirements due to an aging workforce or the departure of employees for other reasons without appropriate replacements, mismatch of skill sets to future needs, or unavailability of contract resources may lead to operating challenges such as lack of resources, loss of knowledge, and a lengthy time period associated with skill development. Failure to attract and hire employees, including the ability to transfer significant internal historical knowledge and expertise to the new employees, or workforce disruptions due to work stoppages or strikes, or the future availability and cost of contract labor may cause costs to operate TEC’s systems to rise. If TEC is unable to successfully attract and retain an appropriately qualified workforce, results of operations could be negatively impacted.

Liquidity and Capital Requirements Risks

TEC’s indebtedness could adversely affect its business, financial condition and results of operations, as well as its ability to meet its payment obligations on its debt.

TEC has indebtedness that it is obligated to pay. It must meet certain financial covenants as defined in the applicable agreements to borrow under its credit facilities. Also, TEC has certain restrictive covenants in specific agreements and debt instruments. The level of TEC’s indebtedness and potential inability to meet the requirements of the restrictive covenants contained in its debt obligations could have significant consequences to its business, could create risk for the holders of its debt, and could limit its ability to obtain additional financing (see Management’s Discussion & Analysis – Significant Financial Covenants section). Such risks include:

•

making it more difficult for TEC to satisfy its debt obligations and other ongoing business obligations, which may result in defaults;

•

events of default if it fails to comply with the financial and other covenants contained in the agreements governing such debt, which could result in all of its debt becoming immediately due and payable or require it to negotiate an amendment to financial or other covenants that could cause it to incur additional fees and expenses;

•

reducing the availability of cash flow to finance its business and limiting its ability to obtain additional financing for these purposes;

•

increasing its vulnerability to the impact of adverse economic and industry conditions;

•

limiting its flexibility in planning for, or reacting to, and increasing its vulnerability to, changes in its business and the overall economy;

•

and increasing its cost of borrowing.

TEC has obligations that do not appear on its balance sheet, such as letters of credit. To the extent material, these obligations are disclosed in the notes to the financial statements.

Financial market conditions could limit TEC’s access to capital and increase TEC’s costs of borrowing or refinancing, or have other adverse effects on its results.

TEC has debt maturing in subsequent years, which TEC anticipates will need to be refinanced. Future financial market conditions could limit TEC’s ability to raise the capital it needs and could increase its interest costs, which could reduce earnings and cash flows.

Declines in the financial markets or in interest rates or rates of return used to determine benefit assets or obligations could increase TEC’s pension expense or the required cash contributions to maintain required levels of funding for its plan.

TEC is a participant in the comprehensive retirement plans of TECO Energy. Under calculation requirements of the Pension Protection Act, as of the January 1, ~~2023~~2024 measurement date, TECO Energy’s pension plan was fully funded. Any future declines in the financial markets or interest rates could increase the amount of contributions required to fund its pension plan in the future and could cause pension expense to increase.

TEC’s financial condition and results could be adversely affected if its capital expenditures are greater than forecast or costs are not recoverable through rates.

TEC’s capital plan includes significant investments in generation, infrastructure modernization and customer-focused technologies. Any projects planned or currently in construction, particularly significant capital projects, may be subject to risks including, but not limited to, impact on costs from schedule delays, risk of cost overruns, ensuring compliance with operating and environmental requirements and other events within or beyond TEC’s control. Total costs may be higher than estimated, and there can be no assurance that TEC will be able to obtain the necessary project approvals, regulatory outcomes or applicable permits at the federal, state and /or local level to recover such expenditures through regulated rates. If TEC’s capital expenditures exceed the forecasted levels or are not recoverable, it may need to draw on credit facilities or access the capital markets on unfavorable terms.

TEC’s financial condition and ability to access capital may be materially adversely affected by multiple ratings downgrades to below investment grade.

The senior unsecured debt of TEC is rated by S&P at ‘BBB+’, by Moody’s at ‘A3’ and by Fitch at ‘A’. A downgrade to below investment grade by the rating agencies, which would require a four-notch downgrade by Moody’s and Fitch and a three-notch downgrade by S&P, may affect TEC’s ability to borrow, may change requirements for future collateral or margin postings, and may increase financing costs, which may decrease earnings. Downgrades could adversely affect TEC’s relationships with customers and counterparties. Some of the factors that can affect TEC’s credit ratings are cash flows, liquidity, the amount of debt as a component of total capitalization, political, legislative, and regulatory actions, and changes in Emera’s credit ratings.

In the event TEC’s ratings were downgraded to below investment grade, certain agreements could require immediate payment or full collateralization of net liability positions. Counterparties to its derivative instruments could request immediate payment or full collateralization of net liability positions. Credit provisions in long-term gas transportation agreements would give the transportation providers the right to demand collateral, which is estimated to be approximately $~~166~~84 million at December 31, ~~2023~~2024.

TEC may be subject to risks relating to its separation from PGS.

On January 1, 2023, TEC completed the separation from its former PGS division to PGSI. TEC’s business is less diversified as a result of the separation since its remaining Tampa Electric business serves only electric utility customers and operates in a more narrow geographic area than its former PGS division.

The separation is intended to be a tax-free transaction for U.S. federal income tax purposes. The IRS has issued a private letter ruling (IRS Ruling) to the effect that, subject to the limitations specified therein and the accuracy and compliance with certain representations, warranties and covenants, the distribution of the PGSI stock, together with certain related transactions, will qualify as a tax-free “reorganization” for U.S. federal income tax purposes. If any of these items are inaccurate, the separation may not qualify for tax-free treatment, which could result in material tax liabilities for TEC.

Item 1C. CYBERSECURITY

TEC assesses, identifies, and manages material risks from cybersecurity threats under the governance of its Cyber Security Framework and Information Security Policy, as well as several related policies and procedures addressing areas such as threat vulnerability management, cyber risk management, data protection and classification, network security, access control, incident response, security awareness, employee training and asset management. These policies and related standards require identification of all Information Technology (IT) and Operational Technology (OT) critical facilities and/or cyber assets, and sufficient controls for IT and OT asset inventory, including responsibilities for assets, information owners, and asset disposition processes. From a security perspective, TEC’s Information Security group is directed at protecting all aspects of data and how information is stored, transmitted, processed, and used in business processes. TEC’s Corporate Security group is responsible for protecting physical assets including critical facilities, protection of employees, and related physical security risks.

TEC’s Information Security group of the Information Technology department has the direct responsibility for developing, monitoring, and enforcing information security standards and procedures; reviewing and approving all network interconnections for compliance to security standards; and assisting, consulting, and training individuals throughout TEC in the use of appropriate information security practices. This group is responsible for ensuring that all IT and OT cyber systems, assets, and networks are aligned with Emera and affiliate cybersecurity framework. TEC engages independent third party consultants from time to time to assess the adequacy of its cybersecurity measures and assist in implementing any appropriate actions to address any vulnerabilities identified. In addition, TEC participates in an Electric Power Research Institute (EPRI) research project to develop cybersecurity performance metrics. EPRI offers a web-based platform, which supports automated cybersecurity data collection, security metrics calculation, visualization, and analysis. The Vice President of Information Technology and Chief Information Officer (CIO), who reports to the President and Chief Executive Officer, oversees this group and is responsible for managing the program, in collaboration with TEC’s businesses and functions. TEC’s CIO has advanced degrees in computer science and extensive experience in cybersecurity and information technology, including many years of experience at large organizations leading cybersecurity, IT processes and controls, strategy, architecture, delivery and support of IT applications, and overseeing large groups of employees and contractors responsible for carrying out these responsibilities. 14

~~TEC’s~~response, ~~Vendor~~security ~~Risk~~awareness, ~~Management~~employee ~~process~~training ~~includes~~and ~~conducting~~asset ~~risk~~management. ~~assessments~~These topolicies ~~identify~~ and ~~monitor~~related ~~cybersecurity~~standards ~~risks~~require ~~associated~~identification ~~with~~of ~~third-party~~all ~~service~~Information ~~providers,~~Technology ~~including~~(IT) ~~threat detection~~ and ~~security~~Operational ~~event~~Technology ~~notifications.~~(OT) ~~TEC~~critical ~~also~~facilities ~~has~~and/or ~~requirements~~cyber ~~for~~assets, ~~third-party~~and ~~service~~sufficient ~~providers~~controls ~~which~~for ~~include~~IT ~~regulatory~~and ~~compliance~~OT ~~and~~asset ~~meeting~~inventory, ~~the~~including ~~National~~responsibilities ~~Institute~~for ofassets, ~~Standards~~information owners, and ~~Technology~~asset ~~Cybersecurity~~disposition ~~Framework~~processes. ~~policy~~From ~~and~~a ~~standards.~~security perspective, TEC’s ~~processes~~Information ~~also~~Security ~~provide~~group ~~for~~is ~~mitigating~~directed ~~cybersecurity~~at ~~risk~~protecting ~~from~~all ~~third~~aspects ~~parties~~of ~~through~~data ~~seeking~~and tohow ~~include~~information is stored, transmitted, processed, and used in ~~its~~business ~~agreements~~processes. ~~with~~TEC’s ~~third-party~~Corporate ~~service~~Security ~~providers,~~group asis ~~applicable~~responsible for protecting physical assets including critical facilities, ~~cybersecurity~~protection ~~provisions~~of ~~designed~~employees, toand ~~appropriately~~related ~~address~~physical ~~such~~security risks.

TEC’s Information Security group of the Information Technology department has the direct responsibility for developing, monitoring, and enforcing information security standards and procedures; reviewing and approving all network interconnections for compliance to security standards; and assisting, consulting, and training individuals throughout TEC in the use of appropriate information security practices. This group is responsible for ensuring that all IT and OT cyber systems, assets, and networks are aligned with Emera and affiliate cybersecurity framework. TEC engages independent third-party consultants from time to time to assess the adequacy of its cybersecurity measures and assist in implementing any appropriate actions to address any vulnerabilities identified. In addition, TEC participates in an Electric Power Research Institute (EPRI) research project to develop cybersecurity performance metrics. EPRI offers a web-based platform, which supports automated cybersecurity data collection, security metrics calculation, visualization, and analysis. The Vice President of Information Technology and Chief Information Officer (CIO), who reports to the President and Chief Executive Officer, oversees this group and is responsible for managing the program, in collaboration with TEC’s businesses and functions. TEC’s CIO has advanced degrees in computer science and extensive experience in cybersecurity and information technology, including many years of experience at large organizations leading cybersecurity, IT processes and controls, strategy, architecture, delivery and support of IT applications, and overseeing large groups of employees and contractors responsible for carrying out these responsibilities.

TEC’s Vendor Risk Management process includes conducting risk assessments to identify and monitor cybersecurity risks associated with third-party service providers, including threat detection and security event notifications. TEC also has requirements for third-party service providers which include regulatory compliance and meeting policies and standards based on the National Institute of Standards and Technology Cybersecurity Frameworks. TEC’s processes also provide for mitigating cybersecurity risk from third parties through seeking to include in its agreements with third-party service providers, as applicable, cybersecurity provisions designed to appropriately address such risks.

TEC’s IT Business Continuity – Emergency Contingency Response Plan is updated periodically and reviewed at least annually. This plan includes guidelines for the escalation and communication of cybersecurity incidents, including a requirement to timely report to TEC’s executive leadership and Board of Directors based on an assessment of the risk and other specified criteria. TEC has established a cyber incident response team to prepare for, mitigate, and remediate cybersecurity incidents, which is integrated within Emera’s enterprise crisis management framework.

Cybersecurity risks are integrated into TEC’s overall risk management process through the collaboration of the cybersecurity professionals and TEC’s and Emera’s risk management functions to assess threat levels on an affiliate and corporate basis and identify steps and resources appropriate to manage such risks. The Board of Directors oversees the management of risks from cybersecurity threats through receiving regular reports from the CIO, which include updates on TEC’s performance with preparing, preventing, detecting, responding to, mitigating, and recovering from cybersecurity incidents. Should a cybersecurity threat or incident pose a significant risk to TEC, TEC's processes provide that the CIO, through the CEO, as appropriate, would promptly inform the Board regarding any such threat or incident. The CIO also provides regular updates on the key elements of its cybersecurity program to the Emera Board’s Risk and Sustainability Committee, which has oversight over Emera’s enterprise risk management framework, including oversight over cybersecurity risk.

While to date TEC has not detected a significant compromise of its cybersecurity systems, significant data loss or any material financial losses related to cybersecurity attacks, it is possible that TEC could experience a significant event in the future. Risks and exposures related to cybersecurity attacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats. See Item 1A. Risk Factors, “TEC is exposed to potential risks related to cyberattacks and unauthorized access, which could cause system failures, disrupt operations or adversely affect safety” for a further discussion of risks related to cybersecurity.

Item 2. PROPERTIES

TEC believes that ~~the~~its physical properties ~~of its operating companies~~ are adequate to carry on ~~their~~its ~~businesses~~business as currently conducted. The properties of Tampa Electric are subject to a first mortgage bond indenture under which no bonds are currently outstanding.

Tampa Electric has electric generating stations in service, with a December 2024 net winter generating capability of 6,620 MWs. Tampa Electric assets include the Big Bend Power Station (1,623 MWs capacity), the Bayside Power Station (2,212 MWs capacity) and the Polk Power Station (1,420 MWs capacity). Also included in Tampa Electric’s assets as of December 31, 2024 are twenty-seven solar arrays (1,350 MWs capacity) and one energy storage site (15 MWs capacity).

Tampa Electric ~~has~~owns ~~electric~~74 ~~generating~~transmission ~~stations~~substations inand ~~service,~~138 ~~with~~distribution asubstations ~~December~~with ~~2023~~an ~~net~~aggregate ~~winter~~transformer ~~generating~~capacity ~~capability~~ of 616,~~433~~872 ~~MWs~~mega volts amps. The Tampa Electric ~~assets~~system ~~include~~has ~~the~~a ~~Big~~8,005 ~~Bend~~mega ~~Power~~volts ~~Station~~amps ~~(1,623~~of ~~MWs~~generator step up unit capacity). The transmission system consists of 1,362 ~~the~~total ~~Bayside~~circuit ~~Power~~miles ~~Station~~of (2high voltage transmission lines,~~138~~ ~~capacity)~~including underground and ~~the~~double-circuit ~~Polk~~lines. ~~Power~~The ~~Station~~distribution (1system consists of 6,~~420~~053 ~~MWs~~circuit ~~capacity).~~miles ~~Also~~of ~~included~~overhead inlines ~~Tampa~~and ~~Electric’s~~6,805 ~~assets~~circuit asmiles of underground lines. As of December 31, ~~2023~~2024, ~~are~~there ~~twenty-five~~were ~~solar~~869,996 ~~arrays~~meters ~~(1,252~~in ~~MWs)~~service. All of this property is located in Florida.

Tampa Electric owns 72 transmission substations and 138 distribution substations with an aggregate transformer capacity of 16,823 mega volts amps. The Tampa Electric system has an 7,865 mega volts amps of generator step up unit capacity. The transmission system consists of 1,362 total circuit miles of high voltage transmission lines, including underground and double-circuit lines. The distribution system consists of 6,137 circuit miles of overhead lines and 6,476 circuit miles of underground lines. As of December 31, 2023, there were 853,555 meters in service. All of this property is located in Florida.

Tampa Electric’s property, plant and equipment are owned, except that titles to some of the properties are subject to easements, leases, contracts, covenants and similar encumbrances common to properties of the size and character of those of Tampa Electric.

Tampa Electric has easements or other property rights for rights-of-way adequate for the maintenance and operation of its electrical transmission and distribution lines that are not constructed upon public highways, roads and streets. Transmission and distribution lines located in public ways are maintained under franchises or permits.

Tampa Electric has a ~~long-term~~ lease for the office building in downtown Tampa, which serves as headquarters for TECO ~~Energy~~Holdings, Tampa Electric and PGS.

Item 3. LEGAL PROCEEDINGS

From time to time, TEC is involved in various legal, tax and regulatory proceedings before various courts, regulatory commissions and governmental agencies in the ordinary course of 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 loss. For a discussion of legal proceedings and environmental matters, see Note 8 of the ~~2023~~2024 Annual TEC Consolidated Financial Statements.

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

All of TEC’s common stock is owned by TECO ~~Energy~~Holdings, which in turn is owned by a subsidiary of Emera and, thus, is not listed on a stock exchange. Therefore, there is no market for such stock.

Item 6. [RESERVED]

Item 7. MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITIONS & RESULTS OF OPERATIONS

OVERVIEW

At December 31, ~~2023~~2024, Tampa Electric served approximately ~~840~~855,000 customers in a 2,000-square-mile service area in West Central Florida and had electric generating plants with a winter peak generating capacity of 6,~~433~~620 MW.

Prior to January 1, 2023, TEC had regulated electric and gas utility operations in Florida. From and after January 1, 2023, the gas utility operations are operated by PGSI, which is no longer a subsidiary of TEC. See Note 1 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for information regarding the separation of PGS from TEC. For information regarding PGS in 2022 ~~and 2021~~, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of TEC’s Annual Report on Form 10-K for the year ended December 31, 2022.

16TEC is a wholly owned subsidiary of TECO Holdings, and TECO Holdings is a wholly owned subsidiary of Emera. Therefore, TEC is an indirect, wholly owned subsidiary of Emera. See Note 10 to the 2024 Annual TEC Consolidated Financial Statements for information regarding related party transactions.

TEC is a wholly owned subsidiary of TECO Energy, and TECO Energy is a wholly owned subsidiary of Emera. Therefore, TEC is an indirect, wholly owned subsidiary of Emera. See Note 10 to the 2023 Annual TEC Consolidated Financial Statements for information regarding related party transactions.

2023 PERFORMANCE

All amounts included in this MD&A are pre-tax, except net income and income taxes.

In 2023, TEC’s net income was $466 million, compared with $540 million in 2022. 2023 net income decreased compared to 2022 primarily due to the separation of PGS from TEC on January 1, 2023 (see section below for further information on the separation). See Operating Company Results below for detail on the results of operations at Tampa Electric during 2023 compared to 2022. For information regarding 2022 results as compared to 2021, including PGS results, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of TEC’s Annual Report on Form 10-K for the year ended December 31, 2022.

OUTLOOK

TEC’s earnings are most directly impacted by the allowed rate of return on equity and the capital structures approved by the FPSC, the prudent management of operating costs, the approved recovery of regulatory deferrals, weather and its impact on energy sales, and the timing and amount of capital expenditures.

Tampa Electric anticipates earning towards the lower end of the ROE range in 2024. Normalizing 2023 for weather, Tampa Electric sales volumes in 2024 are projected to be higher than in 2023 due to customer growth. Tampa Electric expects customer growth rates in 2024 to be comparable to 2023, reflective of the expected economic growth in Florida.16

OnTampa ~~August~~Electric ~~16,~~anticipates ~~2023,~~earning ~~Tampa~~within ~~Electric~~its ~~filed~~ROE arange ~~petition~~in to2025. ~~implement~~New ~~the~~base ~~2024~~rates ~~Generation~~effective ~~Base~~January ~~Rate~~1, ~~Adjustment~~2025, ~~provisions~~are ~~pursuant~~projected to ~~the~~result ~~2021~~in ~~rate~~Tampa ~~case~~Electric's ~~settlement~~2025 ~~agreement~~earnings to be higher than in 2024. ~~Inclusive~~Normalizing of2024 for weather, Tampa Electric’s ~~ROE~~sales ~~adjustment,~~volumes ~~the~~in ~~increase~~2025 ofare ~~$22~~projected ~~million~~to ~~was~~be ~~approved~~higher bythan ~~the~~in ~~FPSC~~2024 ~~and~~due ~~the~~to ~~order~~customer ~~reflecting~~growth. ~~such~~Tampa ~~approval~~Electric ~~was~~expects ~~issued~~customer ongrowth ~~November~~rates ~~17,~~in ~~2023,~~2025 ~~effective~~to inbe ~~January~~comparable to 2024, reflective of the expected economic growth in Florida.

On ~~February~~April 12, 2024, Tampa Electric ~~notified~~requested ~~the FPSC of its intent to seek~~ a base rate increase, reflecting aan increased revenue requirement ~~increase~~ of ~~approximately~~ $~~290~~297 ~~to $320~~ million, effective in January 1, 2025, and additional adjustments of ~~approximately~~ $100 million and $7072 million for 2026 and 2027, respectively. Tampa Electric’s proposed rates include recovery of solar generation projects, energy storage capacity, a more resilient and modernized energy control center, and ~~numerous~~ other resiliency and reliability projects. ~~The~~Prior ~~filing~~to ~~range~~the ~~amounts~~rate ~~are~~case ~~estimates~~hearing, ~~until~~ Tampa Electric ~~completes~~submitted revisions to its ~~analysis~~requested ~~and~~base ~~files~~rate increase to reflect items that included production tax credits, energy storage life expectancy, and the company’s grid reliability and resilience project. The company’s August 22, 2024 requested revenue requirement reflects a base rate increase of $288 million, effective January 1, 2025, and adjustments of $92 million and $65 million for 2026 and 2027, respectively. From August 26 through 30, 2024, Tampa Electric’s rate case inhearing ~~April~~was heard by the FPSC. On December 3, 2024, the FPSC rendered a decision during a Special Agenda and the final order, reflecting such decision, was issued on February 3, 2025. The FPSC ~~will~~decision ~~hear~~includes ~~the~~an ~~case~~increase of $185 million in 2025 and adjustments of $87 million and $9 million in 2026 and 2027, respectively. The decision also allowed for equity in the ~~third~~capital ~~quarter~~structure to continue to be 54% from investor sources of ~~2024~~capital. The allowed regulatory ROE range is 9.50% to 11.50% with a 10.50% midpoint, effective January 1, 2025. On February 18, 2025, a motion for reconsideration on certain aspects of the rate case order was filed with the FPSC. Tampa Electric will respond to this motion in February 2025. Tampa Electric expects the FPSC to reach a final decision ~~expected~~on bythe motion in the ~~end~~second quarter of ~~2024~~2025.

On ~~January~~April 232, ~~2023~~2024, ~~TEC~~Tampa ~~petitioned~~Electric ~~the~~requested ~~FPSC~~a ~~for~~mid-course ~~recovery~~adjustment ofto ~~the~~its ~~storm~~fuel ~~reserve regulatory asset~~ and ~~the~~capacity ~~replenishment of the balance in the storm reserve to the previously approved storm reserve level of $56 million~~charges, ~~for~~reflecting a ~~total of~~ $~~131~~138 million. ~~The~~reduction ~~storm~~over ~~cost~~12 ~~recovery surcharge was approved by the FPSC on March 7~~months, 2023, and TEC began applying the surcharge on April 2023 bills. Subsequently, on November 9, 2023, the FPSC approved TEC’s petition, filed on August 16, 2023, to update the total storm cost collection to $134 million. It also changed the collection of the expected remaining balance of $29 million as of December 31, 2023, from ~~over~~June ~~the first three months of~~ 2024 tothrough ~~over~~May ~~the 12 months of 2024~~2025. The ~~storm~~requested ~~recovery~~reduction is ~~subject~~due to ~~review~~a ofsignificant ~~the~~decrease ~~underlying~~in ~~costs~~actual ~~for prudency~~ and ~~accuracy~~projected by2024 ~~the~~natural ~~FPSC~~gas ~~and~~prices ~~issuance~~since ofTampa anElectric ~~order~~submitted byits ~~the~~projected ~~FPSC~~2024 iscosts ~~expected~~in by the ~~third~~fall ~~quarter~~ of ~~2024~~2023. InOn ~~September~~May ~~2023~~7, ~~Tampa Electric was impacted by Hurricane Idalia. The related storm restoration costs were approximately $35 million~~2024, ~~which were charged to~~ the ~~storm~~FPSC ~~reserve~~approved ~~regulatory asset and not included in~~ the ~~petition~~mid-course ~~above~~adjustment. ~~Tampa Electric will determine the timing of the request for recovery of Hurricane Idalia costs at a future time.~~

OnTampa ~~January~~Electric ~~23,~~was ~~2023,~~impacted ~~TEC~~by ~~requested~~Hurricane anIdalia ~~adjustment~~in toSeptember ~~its~~2023. ~~fuel~~The ~~charges~~related tostorm ~~recover~~restoration ~~the~~costs ~~2022~~were ~~fuel~~approximately ~~under-recovery of~~ $~~518~~35 million, ~~over~~which awere ~~period~~charged ofto 21the ~~months~~storm reserve regulatory asset. ~~The~~Hurricane ~~request~~Helene ~~also~~made ~~included~~landfall anon ~~adjustment~~September to26, ~~2023~~2024. ~~projected~~Tampa ~~fuel~~Electric ~~costs~~was toimpacted ~~reflect~~by ~~the~~Hurricane ~~reduction~~Helene, resulting in ~~natural~~a ~~gas~~peak ~~prices~~number ~~since~~of ~~September~~customers ~~2022~~out ~~for~~of aapproximately ~~projected~~100,000. ~~reduction~~As of December 31, 2024, TEC deferred $~~170~~49 million ~~for~~to the ~~balance~~storm ofreserve ~~2023~~for future recovery, with a minimal impact to earnings. ~~The~~Hurricane ~~changes~~Milton, ~~were~~the ~~approved~~worst byweather event to impact the ~~FPSC~~area in over 100 years, made landfall on ~~March~~October 79, ~~2023~~2024. Tampa Electric was impacted by Hurricane Milton, ~~and~~resulting ~~were~~in ~~effective~~a ~~beginning~~peak onnumber ~~April~~of 1customers out of approximately 600,000. ~~2023~~As of December 31, 2024, TEC deferred $340 million to the storm reserve for future recovery, with a minimal impact to earnings.

Restoration costs for the storms described above are deferred and will be collected from customers in subsequent periods. On February 4, 2025, the FPSC approved Tampa Electric’s ~~has~~petition afiled ~~capital~~on ~~investment~~December ~~program~~27, ~~that~~2024 ~~supports~~for ~~achieving~~the ~~its~~recovery ~~goal~~of to$466 ~~reduce~~million ~~CO2~~for ~~emissions~~costs associated with Hurricane Idalia, Hurricane Debby, Hurricane Helene and Hurricane Milton and the associated interest to ~~60%~~replenish ofthe ~~2000~~storm ~~levels~~reserve byover an 18-month recovery period beginning in March 2025. ~~Since~~The ~~2000,~~amount ~~Tampa~~of ~~Electric~~cost-recovery ~~has~~is ~~reduced~~subject ~~its~~to ~~CO2~~a ~~emissions~~true-up bymechanism ~~more~~with ~~than~~the ~~50%~~FPSC.

In ~~2024~~2025, Tampa Electric expects to invest approximately $1.36 billion, excluding AFUDC, in capital projects. Capital projects include ~~solar~~ investments in solar, storm hardening ~~investments~~, grid modernization, ~~and~~ building resilience and energy storage. See Capital Investments below for further information.

These forecasts are based on our current assumptions described in the operating company discussion, which are subject to risks and uncertainties (see the Risk Factors section).

OPERATING RESULTS

All amounts included in this MD&A are pre-tax, except net income and income taxes.

TEC’s consolidated financial statements have been prepared in accordance with U.S. GAAP. TEC's reported operating results are affected by several critical accounting estimates (see the Critical Accounting Policies and Estimates section).

~~The following table shows the revenues and net income of the business segments on a U.S. GAAP basis (see Note 11 to the 2023 Annual TEC Consolidated Financial Statements).~~ 17

(millions)		2023		2022			2021
Revenues
	Tampa Electric	$	2,637	$	2,523		$	2,174
	PGS				656			528
	Eliminations				(10	)		(7	)
	TEC	$	2,637	$	3,169		$	2,695
Net income
	Tampa Electric	$	466	$	458		$	369
	PGS				82			77
	TEC	$	466	$	540		$	446

The following table shows the revenues and net income of the business segments on a U.S. GAAP basis (see Note 11 to the 2024 Annual TEC Consolidated Financial Statements).


(millions)		2024		2023		2022
Revenues
	Tampa Electric	$	2,526	$	2,637	$	2,523
	PGS						656
	Eliminations						(10	)
	TEC	$	2,526	$	2,637	$	3,169

Net income
	Tampa Electric	$	468	$	466	$	458
	PGS						82
	TEC	$	468	$	466	$	540

See Electric Operations Results below for detail on the results of operations at Tampa Electric during 2024 compared to 2023. For information regarding 2023 results as compared to 2022, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of TEC’s Annual Report on Form 10-K for the year ended December 31, 2023.

TAMPA ELECTRIC

Electric Operations Results

Tampa Electric’s net income in ~~2023~~2024 was $~~466~~468 million, compared with $~~458~~466 million in ~~2022~~2023. Results primarily reflected higher base revenues resulting from the 2021 rate case settlement agreement and customer growth, combined with additional storm protection plan return on investment, partially offset by higher ~~interest~~depreciation ~~expense~~ and ~~higher~~operations ~~depreciation~~& ~~expense~~maintenance expenses. Base revenues are energy sales excluding revenues from clauses, gross receipts taxes and franchise fees. Clauses, gross receipts taxes and franchise fees do not have a material effect on net income as these revenues substantially represent a dollar-for-dollar recovery of clause and other pass-through costs. See the Operating Revenues and Operating Expenses sections below for additional information.

The table below provides a summary of Tampa Electric’s revenue and expenses and energy sales by customer type.

Summary of Operating Results

(millions, except customers and total degree days)	~~2023~~2024		% Change			~~2022~~2023		% Change			~~2021~~2022
Revenues	$	2,~~637~~526		5(4	)	$	2,~~523~~637		165		$	2,~~174~~523
O&M expense		~~595~~545		30(8	)		~~459~~595		1030			~~416~~459
Depreciation and amortization expense		~~422~~454		8			~~389~~422		48			~~374~~389
Taxes, other than income		~~234~~224		16(4	)		~~201~~234		1116			~~181~~201
Non-fuel operating expenses		1,~~251~~223		19(2	)		1,~~049~~251		819			~~971~~1,049
Fuel expense		~~605~~517		(1115	)		~~681~~605		12(11	)		~~607~~681
Purchased power expense		78105		~~(48~~35	)		~~151~~78		42(48	)		~~106~~151
Total fuel & purchased power expense		~~683~~622		(189	)		~~832~~683		17(18	)		~~713~~832
Total operating expenses		1,~~934~~845		3(5	)		1,~~881~~934		123			1,~~684~~881
Operating income		~~703~~681		10(3	)		~~642~~703		3110			~~490~~642
Other income		8948		71(46	)		5289		1371			4652
Interest charges		~~239~~193		68(19	)		~~142~~239		2968			~~110~~142
Provision for income taxes		8768		(722	)		9487		65(7	)		5794
Net income	$	~~466~~468		20		$	~~458~~466		242		$	~~369~~458
Megawatt-Hour Sales (thousands)
Residential		10,~~307~~269		2(0	)		10,~~109~~307		2			910,~~941~~109
Commercial		6,~~462~~481		30			6,~~300~~462		3			6,~~144~~300
Industrial		2,~~082~~019		(13	)		2,~~111~~082		(1	)		2,~~122~~111
Other		1,~~940~~933		(0	)		1,~~947~~940		3(0	)		1,~~886~~947
Total retail		20,~~791~~702		2(0	)		20,~~467~~791		2			20,~~093~~467
Off system sales		~~254~~343		~~(37~~35	)		~~405~~254		~~255~~(37	)		~~114~~405
Total energy sold		21,045		10			2021,~~872~~045		31			20,~~207~~872
Retail customers—(thousands)
At December 31		~~840~~855		2			~~827~~840		2			~~811~~827
Retail net energy for load		21,~~767~~847		10			21,~~572~~767		31			21,~~033~~572
Total degree days		4,~~671~~573		(32	)		4,~~820~~671		6(3	)		4,~~565~~820

Operating Revenues

Revenues were $~~114~~111 million ~~higher~~lower in ~~2023~~2024 than in ~~2022~~2023 primarily driven by ~~higher~~decreased ~~base~~fuel ~~revenues~~clause ~~due~~and tostorm ~~new~~surcharge ~~base~~revenue, ~~rates~~less asfavorable aweather ~~result~~and of the ~~2021~~unfavorable ~~rate~~impact ~~case~~of ~~settlement~~Hurricane ~~agreement~~Milton ~~and~~(see ~~customer~~Note ~~growth~~3 ~~and~~to ~~storm~~the ~~surcharge~~TEC ~~revenue~~Consolidated Financial Statements), partially offset by ~~changes~~customer ingrowth ~~fuel~~and ~~recovery~~new ~~clause~~base ~~revenue~~rates ~~and~~as ~~less~~a ~~favorable~~result ~~weather~~of ~~compared to~~ the ~~same~~2021 ~~period~~rate incase ~~2022~~settlement agreement. Total degree days (a measure of heating and cooling demand) in Tampa Electric's service area in ~~2023~~2024 were 75% above normal (a 20-year statistical degree day average) and 32% below ~~2022~~2023, reflecting less favorable weather in ~~2023~~2024 compared to ~~2022~~2023. Total net energy for load, which is a calendar measurement of energy output, in ~~2023~~2024 was 1%consistent ~~higher~~with ~~compared to 2022~~2023.

Customer and Energy Sales Growth Outlook

The Tampa labor market (as measured by employment levels) continues to outperform the U.S. labor markets. The Tampa area unemployment rate was 2.8% in both 2023 and 2022. Florida’s unemployment rate decreased slightly to 2.8% in 2023 from 2.9% in 2022 and the U.S. rate also decreased slightly from 3.7% to 3.6%. Population growth in the area is forecasted to continue to be a major driver of customer growth. In ~~2024~~2025, ~~retail~~ energy sales volumes are expected to be similar to ~~2023~~2024 levels. In ~~2023~~2024, energy sales benefited from weather that was warmer than normal. Normalizing ~~2023~~2024 for weather, ~~2024~~2025 energy sales volumes are expected to be above ~~2023~~2024 levels due to customer growth. Tampa Electric expects ~~2024~~2025 customer growth to be approximately 1.76% and to continue at that level annually over the next few years.

Operating Expenses

In ~~2023~~2024, ~~operations~~O&M ~~and maintenance~~ expense was $~~136~~50 million ~~higher~~lower than in ~~2022~~2023 due to decreased storm ~~restoration~~ cost recognition of $~~107~~78 million related to storm surcharge revenue (offset in revenue), ~~increased~~partially ~~expenses~~offset ~~related~~by toincreased ~~clauses~~operations and ~~regulatory~~maintenance ~~deferrals~~expenses of $2012 million, and ~~increased~~regulatory ~~operational~~deferrals ~~expenses~~ of $916 million. The increase in operating expenses was primarily ~~due~~associated towith ~~higher~~increased ~~transmission~~solar ~~and distribution expense~~operations, ~~generation~~labor ~~maintenance, bad debt expense~~ and ~~customer~~software ~~support~~maintenance ~~costs~~expenses. Depreciation and amortization expense increased $3332 million in ~~2023~~2024 compared to ~~2022~~2023 as a result of additions to facilities and the in-service of generation projects.

O&M expense in ~~2024~~2025 is expected to increase compared to ~~2023~~2024 due to inflation. In ~~2024~~2025, depreciation expense is expected to increase compared to ~~2023~~2024 due to ~~solar~~capital projects and ~~other~~ plant additions.

Fuel Expense, Purchased Power and Fuel Cost Recovery

Total fuel expense decreased in ~~2023~~2024 from ~~2022~~2023 primarily due to lower natural gas prices. ~~Delivered natural gas prices increased approximately 70% in 2022 due to market forces affected by global events.~~ Total ~~2024~~2025 fuel and purchased power costs are expected to be ~~less~~higher than in ~~2023~~2024 due to ~~decreased~~higher gas demand driving the prices ~~for~~of natural gas.

In January 2022, Tampa Electric requested a mid-course adjustment to its fuel and capacity charges to recover an additional $169 million beginning April 1, 2022 through December 2022 due to an increase in fuel commodity and capacity costs. On March 1, 2022, the FPSC voted to approve the mid-course adjustment, and the order reflecting such approval was issued on March 18, 2022.

On January 23, 2023, Tampa Electric requested an adjustment to its fuel charges to recover the $518 million final 2022 fuel under-recovery over a period of 21 months. The request also included an adjustment to 2023 projected fuel costs to reflect the reduction in natural gas prices since September 2022 for a projected reduction of $170 million for the balance of 2023. The changes were approved by the FPSC on March 7, 2023, effective April 1, 2023.

InOn ~~November~~April ~~2023~~2, ~~the~~2024, ~~FPSC~~Tampa ~~approved~~Electric ~~cost~~requested a mid-~~recovery~~course ~~rates~~adjustment ~~for~~to its fuel and ~~purchased~~capacity ~~power~~charges, ~~capacity,~~reflecting ~~environmental,~~a ~~conservation~~$138 ~~and~~million ~~storm~~reduction ~~protection~~over ~~plan~~12 ~~costs~~months, ~~for~~from June 2024 through May 2025. The ~~rates~~requested ~~include~~reduction ~~the~~is ~~expected~~due ~~cost~~to ~~for~~a ~~natural~~significant ~~gas~~decrease ~~and~~in ~~coal~~actual inand projected 2024. ~~These~~natural ~~rates~~gas ~~are~~prices ~~typically~~since ~~set~~Tampa ~~annually,~~Electric ~~based~~submitted onits ~~information~~projected ~~provided~~2024 costs in ~~September~~the fall of ~~the~~2023. ~~year~~On ~~prior~~May to7, 2024, the ~~year~~FPSC approved the ~~rates~~mid-course ~~take effect~~adjustment.

In December 2024, the FPSC approved cost-recovery rates for fuel and purchased power, capacity, environmental, conservation and storm protection plan costs for 2025. The rates include the expected cost for natural gas and coal in 2025. These rates are typically set annually, based on information provided in September of the year prior to the year the rates take effect.

OTHER ITEMS IMPACTING NET INCOME

Other Income

For the years ~~2023~~2024 and ~~2022~~2023, TEC’s other income was $8948 million and $5589 million, respectively, which included AFUDC-equity of $1930 million and $3519 million, respectively, interest income from affiliate of $380 million and $038, respectively, and other income of $3218 million and $2032 million, respectively. The ~~decrease~~increase in AFUDC-equity was primarily due to the ~~in-service~~ timing of ~~Tampa~~resiliency ~~Electric’s modernization of its Big Bend Power Station~~projects. The decrease in interest income from affiliate is ~~related~~due to the repayment of the note receivable from PGS for PGS's allocation of short-term and long-term debt resulting from the separation of PGS from TEC as of January 1, 2023. See Notes 1 and 10 to the TEC Consolidated Financial Statements for details of the separation of PGS from TEC and the resulting related party transactions. The ~~increase~~decrease in Other Income is primarily due to lower interest income on the deferred fuel balance.

AFUDC-equity is expected to ~~decrease~~increase in ~~2024~~2025 due to the timing of construction of capital projects, including solar generation ~~and grid modernization~~. ~~Interest income from affiliate is expected to decrease in 2024, primarily due to the repayment of the receivable from PGS on December 20, 2023.~~

Interest Expense

For the years ~~2023~~2024 and ~~2022~~2023, TEC’s interest expense, including interest expense to affiliates and excluding AFUDC-debt, was $~~245~~203 million and $~~178~~245 million, respectively. The ~~increase~~decrease in ~~2023~~2024 was due to ~~higher~~lower ~~interest~~borrowings ~~rates~~resulting ~~and~~from ~~higher~~proceeds ~~borrowings~~received from affiliate loan repayments related to ~~support~~the ~~TEC’s~~separation ~~ongoing~~of ~~capital~~PGS ~~investment~~from ~~program~~TEC in 2023 and ~~ongoing~~lower ~~operations~~fuel under-recoveries. ~~The~~In addition, the weighted-average interest rate on borrowings outstanding under the credit facilities and commercial paper at December 31, ~~2023~~2024 and ~~2022~~2023 was 54.78% and 5.07%, respectively. See Other Income above for information regarding the interest income from affiliate associated with PGS's allocation of short-term and long-term debt resulting from the separation of PGS from TEC as of January 1, 2023. The interest income from affiliate partially offsets the impact of TEC's interest expense within Net Income on the Consolidated Statement of Income.

Interest expense is expected to ~~decrease~~increase in ~~2024~~2025, reflecting ~~lower~~higher balances ~~due to Tampa Electric’s repayment of certain short-term borrowings in December 2023~~ (see Note 6 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for further detail).

Income Taxes

The provision for income taxes decreased in ~~2023~~2024 compared to ~~2022~~2023 primarily as a result of lower pre-tax income ~~due to PGS’s separation from TEC on January 1, 2023~~ and production tax credits related to solar facilities.  Income tax expense as a percentage of income before taxes was 1512.7% in ~~2023~~2024 and 1815.37% in ~~2022~~2023. TEC expects the ~~2024~~2025 annual effective tax rate to be approximately 1114% ~~due to increased production tax credit benefits~~.

TEC is included in a consolidated U.S. federal income tax return with EUSHI and its subsidiaries. TEC’s income tax expense is based upon a ~~separate~~standalone return method, modified for the benefits-for-loss allocation in accordance with ~~TECO Energy’s and~~ EUSHI’s ~~respective~~ tax sharing ~~agreements~~agreement. The cash (refunds) payments for federal income taxes and state income taxes made under those tax sharing agreements totaled $~~102~~(3) million and $2102 million in ~~2023~~2024 and ~~2022~~2023, respectively.

For more information on TEC's income taxes, including a reconciliation between the statutory federal income tax rate, the effective tax rate and impacts of tax reform, see Note 4 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements.

LIQUIDITY, CAPITAL RESOURCES

Balances as of December 31, ~~2023~~2024

(millions)
Credit facilities/ commercial paper / intercompany advances (1)	$	1,200
Credit facilities/ commercial paper (1)	$	800
Drawn amounts/LCs		707
Drawn amounts/ letters of credit		637
Available credit facilities		~~493~~163
Cash		54
Total liquidity	$	~~498~~167

(1)

See Note 6 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for information regarding the credit facilities.

Cash from Operating Activities

Cash flows from operating activities in ~~2023~~2024 were $1,~~241~~164 million, ana ~~increase~~decrease of $~~730~~77 million compared to ~~2022~~2023. ~~Increases~~The decrease to cash from operations ~~were~~was primarily due to the ~~result~~timing of ~~higher~~fuel cost collection, partially offset by decreases to accounts receivable balances resulting from decreased fuel ~~revenues~~and ~~coupled~~2022 ~~with~~storm ~~lower~~cost ~~natural~~recoveries ~~gas~~reflected ~~prices,~~in ~~partially~~customer ~~offset~~bills byand increases to accounts payable due to the timing of invoice payments.

Cash from Investing Activities

Cash flows from investing activities in ~~2023~~2024 resulted in a net use of cash of $1.34 billion, which primarily reflects TEC’s investment in capital. See the Capital Investments section for additional information.

Cash from Financing Activities

Cash flows from financing activities in ~~2023~~2024 resulted in net cash inflows of $48254 million. TEC received $~~956~~600 million ~~from the repayment~~ of ~~a note receivable from PGS, $300 million of~~ equity contributions from Parent, and $~~400~~495 million proceeds from ~~short-term~~the ~~credit~~issuance ~~agreements~~of ~~greater than 90 days, and $87 million increase in short~~long-term debt ~~with maturities of less than 90 days~~. These increases in cash flows were partially offset by ~~the~~dividend ~~repayment~~payments ofto ~~short-term~~Parent ~~credit agreements greater than 90 days~~ of $~~800~~469 million, ~~dividend~~the ~~payments~~repayment ~~to Parent~~ of $~~472~~300 million, ~~advances~~of tolong-term ~~affiliate~~debt ofand a $~~227~~70 million, ~~and~~decrease ~~the~~in ~~repayment~~short-term ofdebt awith ~~note~~maturities ~~payable~~of toless ~~Parent~~than of90 ~~$195 million~~days.

Cash and Liquidity Outlook

TEC’s tariff-based gross margins are the principal source of cash from operating activities. A diversified retail customer mix, primarily consisting of rate-regulated residential, commercial, and industrial customers, provides TEC with a reasonably predictable source of cash. In addition to using cash generated from operating activities, TEC uses available cash, equity contributions from Parent, credit facility and commercial paper borrowings, ~~intercompany~~transactions ~~activity~~with affiliates, and debt issuances to support normal operations and capital expenditure requirements. TEC may reduce short-term borrowings with cash from operations, long-term borrowings, or capital contributions from Parent. TEC expects to make significant capital expenditures in ~~2024~~2025 (see Capital Investments section below for further detail on TEC’s projected capital expenditures). Debt raised is subject to applicable regulatory approvals and Tampa Electric is required to maintain a capital structure as allowed by the regulator.

As noted earlier, cash from operating activities and short-term borrowings are used to fund normal operations and capital expenditures, which may result in periodic working capital deficits. The working capital deficit as of December 31, ~~2023~~2024 was primarily caused by short-term borrowings and periodic fluctuations in assets and liabilities related to FPSC clauses and riders. At December 31, ~~2023~~2024, TEC’s unused capacity under its credit facilities was $~~493~~163 million.

TEC has a credit ~~facilities~~facility ~~and~~utilized with commercial paper that ~~provide~~provides $~~1,200~~800 million of credit, ~~including $400 million~~ maturing in ~~2024 and $800 million maturing in 2026~~2028. See Note 6 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for additional information regarding the credit facilities and commercial paper. TEC expects that its liquidity will be adequate for both the near and long term, given its expected operating cash flows, capital expenditures and related financing plans.

TEC expects cash from operations in ~~2024~~2025 to be lower than in2024 ~~2023~~ primarily due to ~~lower~~higher cash ~~inflows~~outflow ~~from~~in ~~fuel~~2025 ~~recovery~~for ~~and~~storm ~~lower~~costs ~~storm~~incurred ~~surcharge~~in ~~revenue~~2024, ~~partially~~a ~~offset~~decrease byin anexpected ~~increase~~fuel inrecoveries, ~~base~~and ~~rates~~higher ~~effective~~anticipated intax ~~January~~payments, ~~2024~~offset ~~(as~~by ~~stipulated~~an increase in ~~the~~base ~~2021~~rates

~~settlement~~effective ~~agreement)~~in January 2025, ~~lower~~inflow ~~interest~~of ~~expense~~storm ~~payments,~~surcharge revenue and customer growth (see Note 3 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements). TEC plans to use cash in ~~2024~~2025 to fund capital spending and to pay dividends to its shareholder. Dividends are paid at the discretion of TEC’s Board of Directors.

TEC’s credit facilities contain certain financial covenants (see Covenants in Financing Agreements section). TEC estimates that it could fully utilize the total available capacity under its facilities in ~~2024~~2025 and remain within the covenant restrictions.

Short-Term Borrowings

TEC had the following credit facilities and related borrowings as of December 31, 2023 and 2022.


	December 31, 2024								December 31, 2023
			Borrowings		Borrowings		Letters of				Borrowings		Borrowings		Letters of
	Credit		Outstanding -		Outstanding -		Credit		Credit		Outstanding -		Outstanding -		Credit
(millions)	Facilities		Credit Facilities (1)		Commercial Paper (1)		Outstanding		Facilities		Credit Facilities (1)		Commercial Paper (1)		Outstanding
5-year facility (2)	$	800	$	0	$	636	$	1	$	800	$	0	$	706	$	1
1-year term facility (3)	0		0		0		0			200	0		0		0
1-year term facility (4)	0		0		0		0			200	0		0		0
Total	$	800	$	0	$	636	$	1	$	1,200	$	0	$	706	$	1

(1)

	December 31, 2023								December 31, 2022
			Borrowings		Borrowings		Letters of				Borrowings		Borrowings		Letters of
	Credit		Outstanding -		Outstanding -		Credit		Credit		Outstanding -		Outstanding -		Credit
(millions)	Facilities		Credit Facilities (1)		Commercial Paper (1)		Outstanding		Facilities		Credit Facilities (1)		Commercial Paper (1)		Outstanding
5-year facility (2)	$	800	$	0	$	706	$	1	$	800	$	0	$	619	$	1
1-year term facility (3)	0		0			0	0			400		400		0	0
1-year term facility (4)		200	0		0		0		0		0		0		0
1-year term facility (5)		200	0		0		0		0		0		0		0
Total	$	1,200	$	0	$	706	$	1	$	1,200	$	400	$	619	$	1

Borrowings outstanding are reported as notes payable in the Consolidated Balance Sheets.

(2)

~~This~~On ~~5-year~~April 1, 2024, TEC amended the credit facility ~~matures~~agreement to extend the maturity date to December 171, ~~2026~~2028. TEC also has an active commercial paper program for up to $800 million, of which the full amount outstanding is backed by TEC’s credit facility. The amount of commercial paper issued results in an equal amount of its credit facility being considered drawn and unavailable. On January 30, 2024, TEC completed a sale of $500 million aggregate principal amount of 4.90% Notes due March 1, 2029. TEC used the net proceeds from this offering for the repayment of a portion of the borrowings outstanding under the ~~TEC 5-year~~ credit facility. Therefore, $497 million of borrowings outstanding under the ~~TEC 5-year~~ credit facility were reclassified as long-term debt on the Consolidated Balance Sheet as of December 31, 2023.

(3)

~~This 1-year term facility was set to mature on December 16, 2022.~~ On ~~December~~March 131, ~~2022~~2023, TEC ~~extended~~entered ~~the~~into ~~maturity~~a ~~date~~1-year toterm ~~December~~facility ~~13,~~that ~~2023,~~matured aton ~~which~~February ~~time~~28, ~~the facility terminated~~2024.

(4)

On ~~March~~April 13, 2023, TEC entered into a 1-year term facility that ~~matures~~matured on ~~February~~April 281, 2024.

OnAt ~~April~~December 331, ~~2023~~2024, ~~TEC~~the ~~entered~~credit ~~into~~facility required a ~~1-year~~commitment ~~term~~fee ~~facility~~of ~~that~~12.5 ~~matures~~basis points. The weighted average interest rate on ~~April~~outstanding 1amounts payable under the credit facilities and commercial paper program at December 31, 2024 and 2023 was 4.8% and 5.7%, respectively. For a complete description of the credit facilities see Note 6 to the 2024 Annual TEC Consolidated Financial Statements.

At December 31, 2023, these credit facilities required a commitment fee of 12.5 basis points. The weighted average interest rate on outstanding amounts payable under the credit facilities and commercial paper program at December 31, 2023 and 2022 was 5.7% and 5.0%, respectively. For a complete description of the credit facilities see Note 6 to the 2023 Annual TEC Consolidated Financial Statements.

     
    Maximum

    Minimum

    Average

    Average

     
    drawn

    drawn

    drawn

    interest

    (millions)

    amount

    amount

    amount

    rate

2024 credit facility utilization

739

0

266

5.30

Maximum

Minimum

Average

drawn

interest

(millions)

amount

rate

2023 credit facility utilization

1,457

608

1,133

5.62

Significant Financial Covenants

In order to utilize its bank credit facilities, TEC must meet certain financial tests as defined in the applicable agreements. In addition, TEC has certain restrictive covenants in specific agreements and debt instruments. At December 31, ~~2023~~2024, TEC was in compliance with all applicable financial covenants. The table that follows lists the significant financial covenants and the performance relative to them at December 31, ~~2023~~2024. Reference is made to the specific agreements and instruments for more details.

			Calculation
Instrument	Financial Covenant (1)	Requirement/Restriction	at December 31, ~~2023~~2024
Credit facility- $800 million (2)	Debt/capital	Cannot exceed 65%	4846.52%
Term facility - $200 million (2)	Debt/capital	Cannot exceed 65%	48.5%
Term facility - $200 million (2)	Debt/capital	Cannot exceed 65%	48.5%

(1)

As defined in the applicable instrument.

(2)

See Note 6 to the 2024 Annual TEC Consolidated Financial Statements for a description of the credit facilities.

Credit Ratings at December 31, 2024

As defined in each applicable instrument.

See Note 6 to the 2023 Annual TEC Consolidated Financial Statements for a description of the credit facilities.

Credit Ratings


	Standard & Poor’s (S&P)	Moody’s	Fitch
Credit ratings of senior unsecured debt	BBB+	A3	A
Credit ratings outlook	Negative	Negative	Negative

S&P, Moody’s and Fitch describe credit ratings in the A3 or A category as having a strong capacity to meet its financial commitments. Ratings in the BBB or Baa category are described as representing adequate capacity for payment of financial obligations. The lowest investment grade credit rating for S&P is BBB-, for Moody’s is Baa3 and for Fitch is BBB-; thus, the three credit rating agencies assign TEC’s senior unsecured debt investment-grade credit ratings.

In January 2025, S&P changed TEC's credit ratings outlook to Stable from Negative.

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. TEC’s access to capital markets and cost of financing, including the applicability of restrictive financial covenants, are influenced by the ratings of its securities. In addition, certain of TEC’s derivative instruments contain provisions that require TEC’s debt to maintain investment grade credit ratings.

Summary of Contractual Obligations

The following table lists the contractual obligations of TEC, including cash payments to repay long-term debt, interest payments, lease payments and unconditional commitments related to capital expenditures.

Contractual Cash Obligations at December 31, ~~2023~~2024

	Payments Due by Period
(millions)	Total		~~2024~~2025		~~2025~~2026		~~2026~~2027		~~2027~~2028		~~2028~~2029		After ~~2028~~2029
Long-term debt (1)	$	43,~~275~~975	$	~~300~~0	$	0	$	0	$	0	$	0500	$	3,~~975~~475
Interest payment obligations(2)		3,~~239~~063		173		173		~~174~~173		~~174~~173		~~174~~161		2,~~371~~210
Transportation(3)		1,~~443~~925		~~135~~146		~~128~~145		~~125~~176		~~125~~138		97120		~~833~~1,200
Pension plan(4)		22167		011		011		726		1328		227		064
Capital projects(5)		~~668~~457		~~533~~279		81161		5317		10		0		0
Fuel and gas supply		~~276~~188		~~194~~156		6027		174		41		10		0
Purchased power		4		4		0		0		0		0		0
Long-term service agreements		177		21		22		40		30		31		33
Long-term service agreements(6)		151		34		22		23		22		17		33
Leases		119		4		2		2		2		2		107
Operating leases		84		3		3		1		1		1		75
Other(6)		17		15		1		1		0		0		0
Demand side management		12		5		5		1		1		0		0
Total contractual obligations	$	10,088	$	805	$	542	$	439	$	372	$	841	$	7,089
Total contractual obligations	$	10,174	$	1,381	$	472	$	401	$	341	$	292	$	7,287

(1)

See the Consolidated Statements of Capitalization and Note 7 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for a list of long-term debt and the respective due dates.

(2)

Future interest payments are calculated based on the assumption that all debt is outstanding until maturity. For debt instruments with variable rates, interest is calculated for all future periods using the rates in effect at December 31, ~~2023~~2024.

(3)

These payment obligations under contractual agreements are recovered from customers under regulatory clauses approved by the FPSC (see the Business section).

(4)

The estimated contractual obligation is calculated as required contributions to the funded pension plan and estimated benefit payments related to the other unfunded benefit plans. Under calculation requirements of the Pension Protection Act, as of the January 1, ~~2023~~2024 measurement date, the pension plan was fully funded. Under ERISA guidelines, TEC is not required to make additional cash contributions until ~~2026~~2027; however, TEC may elect to make discretionary cash contributions prior to that time. Future contributions are subject to annual valuation reviews, which may vary significantly due to changes in interest rates, discount rate assumptions, plan asset performance, which is affected by investment portfolio performance, and other factors (see Liquidity, Capital Resources section and Note 5 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements).

(5)

Represents outstanding commitments for major capital projects (see the Capital Investments section).

(6)

~~Represents~~Includes ~~outstanding~~contractual ~~commitments~~obligations ~~for~~under ~~service,~~demand ~~including~~side ~~long-term~~management ~~capitalized~~and ~~maintenance~~purchased ~~agreements~~power ~~for Tampa Electric’s CTs~~agreements.

See Notes 3, 4, 5 and 12 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for information regarding additional obligations related to regulatory liabilities, taxes, employee postretirement benefits and asset retirement obligations.

Off-Balance Sheet Arrangements and Contingent Obligations

TEC does not have any material off-balance sheet arrangements or contingent obligations not otherwise included in our Consolidated Financial Statements as of December 31, ~~2023~~2024.

Capital Investments

(millions)	Actual ~~2023~~2024			Forecasted ~~2024~~2025
Tampa Electric (1)
Renewable generation	$	~~246~~250		$	~~200~~400
Transmission		9899			90120
Distribution		~~416~~433			~~375~~450
Generation		~~248~~237			~~195~~260
Facilities, equipment, vehicles and other		~~300~~402			~~410~~390
Tampa Electric total		1,~~308~~421			1,~~270~~620
Net cash effect of accruals, retentions and AFUDC		~~(14~~1	)
Total	$	1,~~294~~422		$	1,~~270~~620

(1)

Individual line items exclude AFUDC-debt and equity.

Tampa Electric invested approximately $850 million in solar projects during 2017 to 2021 (solar wave I). On February 18, 2020, Tampa Electric announced its intention to invest approximately $800 million in an additional 600 MW of new utility-scale solar photovoltaic projects, which were completed at the end of 2023 (solar wave II). In addition, Tampa Electric intends to invest approximately $~~590~~599 million in ~~an additional~~ 375 MW of new utility-scale solar photovoltaic projects in 2024 through 2026 (solar wave III) and approximately $812 million in ~~470~~466MW MW of new utility-scale solar photovoltaic projects in 2026 through 2028 (solar wave IV). In 2024 through 2026, Tampa Electric expects to spend approximately $600 million in capital for the storm protection plan, $535 million in grid modernization, $350 million in its new corporate headquarters and operations center for building resilience, $94 million for 74 MW of generation capacity expansion and $~~154~~156 million for 115 MW of energy storage. AFUDC will be earned on eligible capital projects during the construction periods and return on investment will be earned on capital projects running through certain recovery mechanisms.

Tampa Electric’s ~~2023~~2024 capital expenditures included solar generation projects, storm hardening for the transmission and distribution systems, new technology for distribution system grid modernization, energy storage, maintenance and refurbishment of existing generating facilities, a generation capacity expansion project and the construction of a new headquarters and operations center to improve building resilience. In ~~2024~~2025, Tampa Electric expects capital expenditures to include solar generation and energy storage projects, completion of a generation capacity expansion project to improve system resilience, a new headquarters and operations center to improve building resilience, storm hardening for the transmission and distribution systems, new technology for distribution system grid modernization, and the maintenance and refurbishment of existing generating facilities.

The forecasted capital expenditures shown above are based on current estimates and assumptions. Actual capital expenditures could vary materially from these estimates due to changes in and timing of projects and changes in costs for materials or labor (see the Risk Factors section).

Capital Structure

At December 31, ~~2023~~2024, TEC’s year-end capital structure was 4846% debt and 5254% common equity. At December 31, ~~2022~~2023, TEC’s year-end capital structure was 4748% debt and 5352% common equity.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of consolidated financial statements requires management to make various estimates and assumptions that affect revenues, expenses, assets, liabilities and disclosures. The policies and estimates identified below are, in the view of management, the more significant accounting policies and estimates used in the preparation of our consolidated financial statements. These estimates and assumptions are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and judgments under different assumptions or conditions. See Note 1 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for a description of TEC’s significant accounting policies and the estimates and assumptions used in the preparation of the consolidated financial statements.

Regulatory Accounting

Tampa Electric’s ~~and PGS’s~~ retail ~~businesses~~business and the prices charged to customers are regulated by the FPSC. Tampa Electric’s wholesale business is regulated by the FERC. As a result, Tampa Electric ~~and~~qualifies ~~PGS qualify~~ for the application of accounting guidance for certain types of regulation. This guidance recognizes that the actions of a regulator can provide reasonable assurance of the existence of an asset or liability. Regulatory assets and liabilities arise as a result of a difference between U.S. GAAP and the accounting principles imposed by the regulatory authorities. Regulatory assets generally represent incurred costs that have been deferred, as their future recovery in customer rates is probable. Regulatory liabilities generally represent obligations to make refunds to customers from previous collections for costs that are not likely to be incurred.

TEC regularly assesses the probability of recovery of the regulatory assets by considering factors such as regulatory environment changes, recent rate orders to other regulated entities in the same jurisdiction, the current political climate in the state, and the status of any pending or potential deregulation legislation. The assumptions and judgments used by regulatory authorities will continue to have an impact on the recovery of costs, the rate earned on invested capital and the timing and amount of assets to be recovered.

TEC’s most significant regulatory liability relates to non-ARO costs of removal and regulatory tax liability. The non-ARO costs of removal represent estimated funds received from customers through depreciation rates to cover future non-legally required cost of removal of property, plant and equipment upon retirement. TEC accrues for removal costs over the life of the related assets based on depreciation studies approved by the FPSC. The costs are estimated based on historical experience and future expectations, including expected timing and estimated future cash outlays. The regulatory tax liability is the offset to the adjustment to the deferred tax liability remeasured as a result of tax reform. See Note 4 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for further information.

The application of regulatory accounting guidance is a critical accounting policy and estimate since a difference in these assumptions and actual results may result in a material impact on reported assets and the results of operations (see Note 3 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements).

Income Taxes

TEC uses the asset and liability method in the measurement of deferred income taxes. Under the asset and liability method, TEC estimates the current tax exposure and assesses the temporary differences resulting from differing treatment of items, such as depreciation, for financial statement and tax purposes. These differences are reported as deferred taxes measured at enacted rates in the consolidated financial statements. Management reviews all reasonably available current and historical information, including forward-looking information, to determine if it is more likely than not that some or the entire deferred tax asset will not be realized. If TEC determines that it is likely that some or all of a deferred tax asset will not be realized, then a valuation allowance is recorded to report the balance at the amount expected to be realized. At December 31, ~~2023~~2024, TEC does not have a valuation allowance. At December 31, ~~2023~~2024, TEC had a net deferred income tax liability of $~~880~~976 million, attributable primarily to property-related items.

See further discussion of uncertainty in income taxes, impacts of tax reform and other tax items in Note 4 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements.

Employee Postretirement Benefits

TEC is a participant in the retirement plans of TECO Energy. TECO Energy sponsors a defined benefit pension plan (pension plan), a fully-funded non-qualified, non-contributory supplemental executive retirement benefit plan available to certain members of senior management and an unfunded non-qualified, non-contributory Restoration Plan that allows certain members of senior management to receive an additional benefit to restore what is limited by the IRS under the pension plan. TEC recognizes in its statement of financial position the over-funded or under-funded status of its allocated portion of TECO Energy’s postretirement benefit plans. The accounting related to employee postretirement benefits is a critical accounting estimate for TEC for the following reasons: 1) a change in the estimated benefit obligation could have a material impact on reported assets, liabilities and results of

~~reasons: 1) a change in the estimated benefit obligation could have a material impact on reported assets, liabilities and results of~~ operations; and 2) changes in assumptions could change the annual pension funding requirements, which could have a significant impact on TEC’s annual cash requirements.

Several statistical and other factors which attempt to anticipate future events are used in calculating the expenses and liabilities related to these plans. Key factors include assumptions about the expected rates of return on plan assets, discount rates and mortality rates. TECO Energy determines these factors within certain guidelines and with the help of external consultants. TECO Energy considers market conditions, including but not limited to, changes in investment returns and interest rates, in making these assumptions.

Pension plan assets (plan assets) are invested in a mix of equity and fixed-income securities. The expected return on asset assumption was based on expectations of long-term inflation, real growth in the economy, fixed income spreads and equity premiums consistent with the company’s portfolio, with provision for active management and expenses paid from the trust that holds the plan assets. The expected return on assets was 7.05%, 67.5005% and 6.7050% as of January 1, ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022, respectively. Given recent capital market returns and market expectations for long-term interest rates, TECO Energy expects the expected return on assets to be 7.05% for ~~2024~~2025 (based on ~~actuarial~~ 20-year expected market returns). Actual returns in ~~2023~~2024 were 145.71%.

The discount rate assumption used to measure benefit expense was an above-mean yield curve. The above-mean yield curve technique matches the yields from 100 high-quality (AA-rated, non-callable) corporate bonds to the company’s projected cash flows for the plans to develop a present value that is converted to a discount rate assumption, which is subject to change each year.

Holding all other assumptions constant, a 1% decrease in the assumed rate of return on pension plan assets or the discount rate assumption would have had in ~~2023~~2024 and is anticipated to have in ~~2024~~2025 the following impact on TEC’s after-tax pension cost:

Year	1% Decrease in Assumed Expected Return on Assets	1% Decrease in Assumed Discount Rate
2023	$5 million increase	$1 million increase
2024	$6 million increase	$1 million increase
2025	$6 million increase	$1 million increase

Unrecognized actuarial gains and losses for the pension plan are being recognized over a period of approximately 1112 years, which represents the expected remaining service life of the employee group. Unrecognized actuarial gains and losses arise from several factors including experience and assumption changes in the obligations and from the difference between expected return and actual returns on plan assets. These unrecognized gains and losses will be systematically recognized in future net periodic pension expense in accordance with applicable accounting guidance for pensions.

The key assumptions used in determining the amount of obligation and expense recorded for postretirement benefits other than pension (OPEB), under the applicable accounting guidance, include the assumed discount rate and the assumed rate of increases in future health care costs. TECO Energy determines the discount rate for the OPEB’s projected benefit cash flows. In estimating the health care cost trend rate, TECO Energy considers its actual health care cost experience, future benefit structures, industry trends, and advice from our outside actuaries.

See the discussion of employee postretirement benefits in Note 5 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements.

RECENTLY ISSUED ACCOUNTING STANDARDS

Change in Accounting Policy

TEC considers the applicability and impact of all ASUs issued by the FASB. TEC was not required to and did not adopt any new ASUs in 2023. The following update has been issued by FASB, but have not yet been adopted by TEC. Any ASUs not included below were assessed and determined to be either not applicable to TEC or have insignificant impact on the consolidated financial statements.

Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The change in the standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The changes improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The guidance ~~will~~was be effective for annual reporting periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. Early adoption is permitted. The standard will be applied retrospectively. TEC is currently evaluating the impact of adoption of the standard on its consolidated financial statements.

beginning after December 15, 2024. TEC adopted the standard for the year ended December 31, 2024. The standard was applied retrospectively. See Note 11 to the 2024 Annual TEC Consolidated Financial Statements for further detail.

Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard enhances the transparency, decision usefulness and effectiveness of income tax disclosures by requiring consistent categories and greater disaggregation of information in the reconciliation of income taxes computed using the enacted statutory income tax rate to the actual income tax provision and effective income tax rate, as well as the disaggregation of income taxes paid (refunded) by jurisdiction. The standard also requires disclosure of income (loss) before provision for income taxes and income tax expense (benefit) in accordance with U.S. Securities and Exchange Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application – General Notes to Financial Statements: Income Tax Expense, and the removal of disclosures no longer considered cost beneficial or relevant. The guidance will be effective for annual reporting periods beginning after December 15, 2024, and interim periods within annual reporting periods beginning after December 15, 2025. Early adoption is permitted. The standard will be applied on a prospective basis, with retrospective application permitted. TEC is currently evaluating the impact of adoption of the standard on its ~~consolidated~~ financial ~~statements~~statement disclosures.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting–Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The standard will be applied on a prospective basis, with retrospective application permitted. TEC is currently evaluating the impact of adoption of the standard on its financial statement disclosures.

ENVIRONMENTAL COMPLIANCE

Environmental Matters

TEC has significant environmental considerations. Tampa Electric operates stationary sources with air emissions regulated by the Clean Air Act. Its operations are also impacted by provisions in the Clean Water Act and federal and state legislative initiatives on environmental matters.

Hazardous Air Pollutants (HAPS) Maximum Achievable Control Technology (MACT) Mercury Air Toxics Standards (MATS)

On June 29, 2015, the U.S. Supreme Court remanded the EPA’s Mercury Air Toxics Standards (MATS) to the D.C. Circuit Court of Appeals for failing to properly consider the cost of compliance. The litigation is currently in abeyance while the EPA reconsiders its action. MATS remain in effect until the D.C. Circuit Court of Appeals acts.

All of Tampa Electric’s conventional coal-fired units are already equipped with electrostatic precipitators, scrubbers and selective catalytic reductions, and the Polk Unit 1 integrated gasification combined-cycle unit emissions are minimized in the gasification process. Therefore, Tampa Electric has minimized the impact of this rule and has demonstrated compliance on all applicable units with the most stringent “Low Emitting Electric Generating Unit” classification for MATS with nominal additional capital investment.

Carbon Reductions and GHG

Tampa Electric has historically supported voluntary efforts to reduce carbon emissions and has taken significant steps to reduce overall emissions at Tampa Electric’s facilities. Since 2000, Tampa Electric has reduced its system-wide emissions of CO2 by more than 50%, bringing emissions to below 1990 levels. Tampa Electric CO2 emissions continue to remain below 1990 levels. In addition to the emission decreases in 2005 as the result of the repowering of two Gannon Station coal units to natural gas and the shut-down of the remaining Gannon Station coal-fired units, Tampa Electric has optimized its existing coal units to operate on natural gas. During this same time frame, the number of retail customers and retail energy sales have risen. Tampa Electric also substantially reduced CO2 emissions by significantly expanding the use of solar power, repowering Big Bend Unit 1 steam turbine, and retiring Big Bend Unit 2 and Unit 3. The Big Bend Unit 1 modernization project is capable of producing 1,090 megawatts of power and will continue to lead to lower system-wide emissions. See Capital Investments above for information regarding Tampa Electric’s solar projects. ~~Tampa Electric has a long-term goal to reduce CO2 emissions to 80% of 2000 levels by 2040 and aspires to reach a net zero future by 2050.~~

On ~~June~~April 1924, ~~2019~~2024, the EPA ~~released~~issued aits final ~~rule~~power plant rules for electric generating units, ~~named~~including ~~the~~(i) ~~Affordable~~new GHG ~~Clean~~standards ~~Energy~~and (~~ACE~~ii) ~~rule,~~Mercury toand ~~establish~~Air ~~emission~~Toxics ~~guidelines~~Standards ~~for~~(MATS). ~~states~~The tonew ~~address~~MATS will not have a material impact on TEC. The new GHG ~~emissions~~standard ~~from~~applies only to existing coal-fired and new natural gas electric generating units. Onand ~~January~~will ~~19,~~therefore ~~2021,~~have ~~the~~limited ~~D.C.~~impact ~~Circuit~~on ~~Court~~Tampa ofElectric ~~Appeals~~generating ~~vacated~~units. ~~the~~Big ~~ACE~~Bend ~~rule~~Unit ~~and~~4 ~~remanded~~is itthe toonly ~~the~~unit ~~EPA~~affected. OnAs ~~May 8~~written, ~~2023,~~ the ~~EPA~~rule ~~released~~would arequire ~~proposed~~Big ~~rule~~Bend ~~establishing~~Unit ~~CO2~~4 ~~emission~~to ~~standards~~retire ~~for~~in ~~new~~2039 ~~and~~without ~~existing~~major ~~fossil~~enhancements ~~fuel-fired~~to ~~power~~the ~~plants.~~unit, Asinstead ~~proposed~~of ~~under~~the ~~Section~~current ~~111~~planned ofretirement ~~the~~date ~~Clean~~of 2040.

Coal Combustion Residuals Recycling and Regulation

~~Air~~Dewatering ~~Act,~~Pond ~~the~~was ~~New~~completed ~~Source~~in ~~Performance~~2020 ~~Standards~~ and ~~Best~~closure ~~System~~by removal of ~~Emission~~all ~~Reduction~~CCRs ~~guidelines~~from ~~would~~the ~~require~~Economizer ~~affected~~Ash ~~electric~~and ~~generating~~Pyrite ~~units~~Ponds towas ~~achieve~~completed ~~CO2~~in ~~emission~~October ~~limits~~2021. ~~thorough~~The final project required for compliance with the ~~implementation~~CCR ofRule ~~carbon~~at ~~capture~~Big ~~and~~Bend ~~sequestration~~is the North Gypsum Stackout Area Drainage Improvements Project, orwhich ~~low-GHG~~is ~~hydrogen~~scheduled ~~co-firing. The~~for ~~proposed~~completion ~~rule~~in ~~also~~2025. ~~repeals~~FDEP has revised the ~~ACE~~existing ~~rule~~state ~~promulgated~~solid ~~under~~waste regulation to incorporate Florida CCR permit requirements for regulated units and these new requirements will operate in lieu of the ~~Trump~~Federal ~~Administration~~permitting program. However, TEC ~~expects~~is ~~one~~largely orexempt ~~more~~from ~~units~~the tostate bepermitting ~~subject~~requirements because it completed its mandatory closure projects prior to the state rule’s passage. On May 18, if2023, ~~finalized~~the inEPA ~~its~~proposed ~~current~~new ~~form~~rules requiring identification and regulation of Legacy CCR Management Units. TEC is a member of the Utility Solid Waste Activities Group, who filed comments on behalf of its members in July 2023 contesting many of the proposed rule’s provisions.

~~Tampa~~The ~~Electric~~new ~~expects~~CCR ~~that~~rule ~~the~~finalized ~~costs~~in toApril ~~comply~~2024 ~~with~~covers ~~new~~any ~~environmental~~landfill ~~regulations~~or ~~would~~impoundment bein ~~eligible~~existence ~~for~~at ~~recovery~~an ~~through~~inactive ~~the~~power ~~ECRC.~~facility Ifbut ~~approved~~not receiving CCRs as ~~prudent~~of 2015, ~~the~~any ~~costs~~CCR ~~required~~placed tointo ~~comply~~the ~~with~~environment ~~CO2~~for ~~emissions~~beneficial ~~reductions~~uses, ~~would~~or beCCR ~~reflected~~units in(landfills ~~customers’~~and ~~bills.~~impoundments) Ifpreviously ~~the~~closed ~~regulation~~under ~~allowing~~state ~~cost~~programs. ~~recovery~~TEC is ~~changed~~currently ~~and~~evaluating the ~~cost~~impact of ~~compliance~~the isnew ~~not~~CCR ~~recovered~~rule ~~through~~at the ~~ECRC,~~Big ~~Tampa~~Bend ~~Electric~~Power ~~could~~Station ~~seek~~and towill ~~recover~~likely ~~those~~require ~~costs~~site ~~through~~evaluations abeginning ~~base-rate~~in ~~proceeding.~~2025 ~~TEC~~to ~~has~~determine ~~been~~the ~~awarded~~presence ~~funding~~or ~~from~~absence ~~the~~of UCCR management units.S. ~~Department~~If offound, ~~Energy~~additional toevaluations ~~evaluate~~would ~~technologies~~be required toin ~~comply~~2026 ~~during~~and ~~2023~~based ~~through~~on ~~2025.~~those ~~In addition~~findings, ~~TEC~~modifications ~~expects~~to ~~tax~~the ~~credits~~site ~~under~~groundwater ~~the~~monitoring ~~Inflation~~could ~~Reduction~~be ~~Act~~required ~~related~~beginning toin ~~these~~2027 ~~technologies~~ to bedetermine anthe ~~important~~need ~~offset~~for toadditional ~~the~~corrective ~~cost of compliance~~action.

~~Ozone~~TEC expects that the costs to comply with the new environmental regulations would be eligible for recovery. If approved as prudent, the costs would be reflected in customers’ bills, recovered through either the environmental cost recovery clause or base rates.   

On December 31, 2020, the EPA published a final rule to retain the national ambient air quality standards (NAAQS) for photochemical oxidants including ozone, originally adopted in 2012. Under the Clean Air Act, the EPA is required to review the NAAQS every five years and, if appropriate, revise it. The EPA has announced that the NAAQS is currently under review, which could result in revisions to the standard affecting compliance in Tampa Electric’s service territory. The impact of this potential new standard on the operations of Tampa Electric will depend on the standard that is ultimately adopted and on the outcome of any related litigation or other developments.

Water Supply and Quality

The EPA’s final rule under 316(b) of the Clean Water Act (effective October 2014) addresses perceived impacts to aquatic life by cooling water intakes and is applicable to Tampa Electric's Bayside and Big Bend Power Stations. Polk Power Station is not covered by this rule since it does not operate an intake on "waters of the United States". Tampa Electric has two ongoing projects (one for Bayside and one for Big Bend) that require compliance with the rule. Compliance includes the completion of the biological, technical, and financial study elements required by the rule. These study elements have been completed and submitted for Bayside and were used by FDEP to determine the necessity of cooling water system retrofits. FDEP agreed with Tampa Electric’s proposed plan for Bayside and Tampa Electric began a multi-year construction project to install new fish-friendly modified traveling screens and a fish return in 2022. Tampa Electric is negotiating an alternative schedule for Big Bend (as allowed by the rule) but completed a portion of the compliance requirements with the Big Bend modernization project with the installation of fish-friendly modified traveling screens and a fish return on modernized Unit 1. The remainder of the compliance requirements are to be determined and completed at a later date. The full impact of the new regulations on Tampa Electric will depend on the ~~outcome of subsequent legal proceedings challenging the rule, the results of the~~ study elements performed as part of the rules’ implementation, and the actual requirements established by FDEP.

The final EPA rule for existing steam electric effluent limit guidelines (ELGs) became effective January 4, 2016 and establishes limits for wastewater discharges from flue gas desulfurization (FGD) processes, fly ash and bottom ash transport water, leachate from ponds and landfills containing coal combustion residuals, gasification processes, and flue gas mercury controls. The new ~~guidelines~~ELGs ~~are~~will ~~expected~~not tohave bea ~~incorporated~~material ~~into~~impact ~~National~~on ~~Pollutant~~TEC. ~~Discharge Elimination System permit renewals for~~ Big Bend ~~Station~~completed ~~(FGD~~construction ~~wastewater~~of ~~and~~a ~~bottom~~deep ~~ash~~injection ~~transport~~well ~~water)~~system ~~and~~in ~~Polk Power Station (gasification wastewater) to achieve compliance as soon as possible after November 1, 2018, but no later than~~ December ~~31,~~ 2023. ~~The~~for ~~EPA~~disposal ~~decided~~of ~~to extend the near-term deadlines for~~ FGD wastewater, ~~and~~ bottom ash transport water toand asother ~~soon~~process aswastewaters ~~possible~~rather ~~after~~than ~~November~~discharge 1,to ~~2020~~surface waters. This Onchange ~~November~~will ~~22,~~be ~~2019,~~made ~~the~~to ~~EPA published in~~ the ~~Federal~~final ~~Register~~National ~~its~~Pollutant ~~proposed~~Discharge ~~updates~~Elimination toSystem ~~the~~(NPDES) ~~ELGs~~permit, anticipated in ~~which the EPA revised limits for both bottom ash transport water and FGD wastewater and extended the final compliance deadline by two years for FGD wastewater~~2025. ~~The~~Since ~~final~~Polk ~~rule~~Power ~~with~~Station ~~revised~~also ~~limits~~uses ~~was~~a ~~published~~deep oninjection ~~October~~well ~~13,~~rather ~~2020~~than ~~and~~discharging ~~became~~it ~~effective~~to ~~December~~surface 14water, ~~2020. Although a legal challenge to this rule is pending in~~ the ~~D.C.~~effluent ~~Circuit~~limitations ~~Court~~will ofno ~~Appeals,~~longer noapply ~~stays~~to ~~are~~either inpower ~~effect~~station. The ~~EPA~~referenced ~~proposed~~wastewaters aat ~~new~~each ~~rule~~power instation ~~March~~will ~~2023~~be toregulated ~~strengthen~~under ~~discharge~~the ~~limits~~Underground ~~that~~Injection isControl ~~expected~~program torather bethan ~~finalized~~the inNPDES ~~2024~~program.

The preliminary draft of the NPDES Permit for Big Bend stated that effluent limitations for total recoverable arsenic, mercury, and selenium and total nitrate/nitrite for FGD wastewater are applicable no later than December 31, 2023. Big Bend completed construction of a deep injection well system in December 2023 for disposal of FGD wastewater, bottom ash transport water and other process wastewaters. Since Polk Power Station disposes of any gasification wastewater created down the deep injection well rather than discharging it to surface water, the effluent limitations do not apply to that power station.

EPA Waters of the US

In ~~January 2020~~2023, the EPA and ~~the~~Department ~~U.S Army Corps~~ of ~~Engineers~~the ~~(Corps)~~Army ~~finalized~~issued a final rule, ~~called~~amending the ~~Navigable~~definition ~~Waters~~of ~~Protection Rule (NWPR), to define~~ “waters of the United States” ~~and thereby establish federal regulatory authority under the Clean Water Act~~. ~~This~~The final rule ~~became~~is ~~effective~~expected ~~in June 2020. In November 2021, the EPA and the Corps announced a proposed rule which would re-establish the pre-2015 definition of “waters of the United States” updated “~~to ~~reflect~~have ~~consideration~~environmental ofpermitting ~~Supreme~~implications ~~Court~~for ~~decisions".~~new OnTampa ~~January~~Electric ~~18,~~solar ~~2023,~~sites ~~the revised definition rule was published in the Federal Register~~ and ~~the~~permitting ~~rule~~renewals ~~took~~for ~~effect~~existing onfacilities ~~March~~requiring ~~20,~~approved ~~2023.~~jurisdictional determinations.

Ozone

On August 29, 2023, the EPA and Department of the Army (the agencies) announced a final rule amending the 2023 definition of “waters of the United States”. The amendments conform with the U.S. Supreme Court’s May 25, 2023 decision in the case of Sackett v. Environmental Protection Agency. The conforming rule became effective on September 8, 2023. The final rule is expected to have environmental permitting implications for new Tampa Electric solar sites and permitting renewals for existing facilities requiring approved jurisdictional determinations.

Superfund and Former Manufactured Gas Plant Sites

As of December 31, 2022, TEC, through its Tampa Electric division and former PGS division, was a PRP for certain superfund sites and, through its former PGS division, for certain former MGP sites. As a result of the separation of the PGS division, PGS is now the responsible party for those sites (in addition to third party PRPs for certain sites). See Note 1 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for information regarding the separation of PGS from TEC.

Coal Combustion Residuals Recycling and Regulation

Tampa Electric produces ash and other by-products, collectively known as CCRs at its Big Bend Power Station. Greater than 90% of all CCRs produced at this facility are marketed to customers for beneficial use in commercial and industrial products. The EPA’s final CCR rule became effective on October 19, 2015 and regulates CCRs as non-hazardous solid waste. In 2016 and 2017, the FPSC approved Environmental Cost Recovery for capital and O&M expenses associated with various projects proposed as part of Tampa Electric’s CCR compliance program. Subsequently, a closure by removal and liner retrofit project for the West Slag Dewatering Pond was completed in 2020 and closure by removal of all CCRs from the Economizer Ash and Pyrite Ponds was completed in October 2021. The final project required for compliance with the CCR Rule at Big Bend is the North Gypsum Stackout Area Drainage Improvements Project, which is scheduled for completion in 2024. FDEP has revised the existing state solid waste regulation to incorporate Florida CCR permit requirements for regulated units and these new requirements will operate in lieu of the Federal permitting program. However, TEC is largely exempt from the state permitting requirements because it completed its mandatory closure projects prior to the state rule’s passage. On May 18, 2023, the EPA proposed new rules requiring identification and regulation of Legacy CCR Management Units. This proposal appears to cover any landfill or impoundment in existence but not receiving CCRs as of the effective date of the 2015 rule and any CCR placed into the environment prior to the rule for beneficial use. TEC is a member of the Utility Solid Waste Activities Group, who filed comments on behalf of its members in July 2023 contesting many of the proposed rule’s provisions.

Conservation

In 2023, Tampa Electric continued to offer its customers a comprehensive array of residential and commercial Demand Side Management (DSM) programs that enabled the company to meet all of its required annual DSM goals. Tampa Electric completed the second full year of operational testing the integrated renewable energy system that utilizes a large solar array integrated with battery storage and electric vehicle and large commercial vehicle battery charging systems. In 2023, Tampa Electric completed the program to convert its remaining high-pressure sodium and metal halide streetlights to LED technology. This conversion program converted 209,821 luminaires over the five-year program. Additionally, Tampa Electric has continued working on the development of the proposed DSM goals and supporting programs for the 2025-2034 period that will be filed with the FPSC in 2024.

In 2023, Tampa Electric achieved all of the residential and commercial annual energy and demand goals. To achieve these DSM goals, Tampa Electric offered 36 cost-effective DSM Programs. These programs and their costs are approved annually by the FPSC with the costs recovered through a clause rate on the customer’s electric bill. Since their inception to January 1, 2023, Tampa Electric’s conservation programs have contributed to reducing the summer peak demand by 814 MWs and the winter peak demand by 1,332 MWs.

REGULATION

See Business - Tampa Electric – Electric Operations and Note 3 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for a description of base rates, cost-recovery clauses and competition.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Risk Management Infrastructure

TEC is subject to various types of market risk in the course of daily operations, as discussed below. TEC has adopted an enterprise-wide approach to the management and control of market and credit risk. Middle Office risk management functions, including credit risk management and risk control, are independent of each transacting entity (Front Office).

29TECO Holding’s Risk Management Policy (Policy) governs all energy transacting activity. The Policy is administered by a Risk Authorizing Committee (RAC) that is comprised of senior management. Within the bounds of the Policy, the RAC approves specific hedging strategies, new transaction types or products, limits, and transacting authorities. Transaction activity is reported daily and measured against limits. For all commodity risk management activities, derivative transaction volumes are limited to the anticipated volume for customer sales or supplier procurement activities.

TECO Energy’s Risk Management Policy (Policy) governs all energy transacting activity. The Policy is administered by a Risk Authorizing Committee (RAC) that is comprised of senior management. Within the bounds of the Policy, the RAC approves specific hedging strategies, new transaction types or products, limits, and transacting authorities. Transaction activity is reported daily and measured against limits. For all commodity risk management activities, derivative transaction volumes are limited to the anticipated volume for customer sales or supplier procurement activities.

TEC operates and oversees transaction activity related to interest rate risk exposures. Interest rate derivative transaction activity is directly correlated to borrowing activities.

Risk Management Objectives

The Front Office is responsible for reducing and mitigating the market risk exposures that arise from the ownership of physical assets and contractual obligations. The primary objectives of the risk management organization, the Middle Office, are to quantify, measure, and monitor the market risk exposures arising from the activities of the Front Office and the ownership of physical assets. In addition, the Middle Office is responsible for enforcing the limits and procedures established under the approved risk management policies. Based on the policies approved by TEC’s board of directors and the procedures established by the RAC, from time to time, TEC enters into futures, forwards, swaps and option contracts to limit the exposure to items, such as fuel supply risk and the risk of price fluctuations for physical purchases and sales of natural gas in the course of normal operations.

TEC uses derivatives only to reduce normal operating and market risks, not for speculative purposes. The primary objective in using derivative instruments for regulated operations is to reduce the impact of market price volatility on customers.

On November 6, 2017, the FPSC approved an amended and restated settlement agreement filed by Tampa Electric, which includes a provision for a moratorium on hedging of natural gas purchases ending on December 31, 2022. On October 21, 2021, the FPSC approved a settlement agreement filed by Tampa Electric related to its 2021 rate case that extended the moratorium to December 31, 2024 (see Note 3 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements for further information on the settlement agreements). As of December 31, ~~2023~~2024 and ~~2022~~2023, TEC had no hedges in place.

Credit Risk

TEC has a rigorous process for the establishment of new trading counterparties and evaluation of current counterparties. This process includes an evaluation of each counterparty’s credit ratings, as applicable, and/or its financial statements, with attention paid to liquidity and capital resources; establishment of counterparty specific credit limits; optimization of credit terms; and execution of standardized enabling agreements. TEC manages credit risk with policies and procedures for counterparty analysis, exposure measurement, and exposure monitoring and mitigation. Credit assessments are conducted on all counterparties, and deposits or collateral are requested for counterparties that do not meet the creditworthiness requirements as set out in TEC's internal policies.

Certain of TEC’s derivative instruments, including NPNS agreements, contain provisions that require our debt to maintain an investment-grade credit rating from any or all of the major credit rating agencies. If TEC’s debt ratings were to fall below investment grade or not be rated, it could trigger these provisions, and the counterparties to the derivative instruments could demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. 29

Certain of TEC’s derivative instruments, including NPNS agreements, contain provisions that require TEC's debt to maintain an investment-grade credit rating from any or all of the major credit rating agencies. If TEC’s debt ratings were to fall below investment grade or not be rated, it could trigger these provisions, and the counterparties to the derivative instruments could demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions.

Interest Rate Risk

TEC is exposed to changes in interest rates primarily from borrowing under the company's credit facilities and commercial paper program. A hypothetical 10% increase in TEC's weighted-average interest rate on its borrowings under the credit facilities and commercial paper outstanding at December 31, ~~2023~~2024 and ~~2022~~2023 would have resulted in a $61 million and $56 million impact on pre-tax earnings, respectively. This is driven by ~~rising~~lower ~~interest~~outstanding ~~rates~~balances and ~~higher~~interest ~~outstanding balances~~rates. A hypothetical 10% increase in interest rates would have decreased the fair market value of TEC's long-term debt by 6.0% at December 31, ~~2023~~2024 and December 31, ~~2022~~2023. See the Financing Activity section and Notes 6 and 7 to the ~~2023~~2024 Annual TEC Consolidated Financial Statements. These amounts were determined based on the variable rate obligations existing on the indicated dates at TEC. The above sensitivities assume no changes to TEC’s current financial structure and could be affected by changes in TEC’s credit ratings, changes in general economic conditions or other external factors (see the Risk Factors section).

Commodity Risk

TEC faces varying degrees of exposure to commodity risks including natural gas, coal and other energy commodity prices. Any changes in prices could affect the prices ~~these~~TEC ~~businesses charge~~charges, ~~their~~its operating costs and the competitive position of ~~their~~its products and services. Management uses different risk measurement and monitoring tools based on the degree of exposure to commodity risks.

and services. Management uses different risk measurement and monitoring tools based on the degree of exposure of each operating company to commodity risks.

Regulated Utilities

Tampa Electric’s fuel costs used for generation are affected primarily by the price of natural gas and, to a lesser degree, the cost of coal (see the Business - Generation Sources section). ~~Tampa~~Currently, ~~Electric~~TEC’s ~~use~~commodity price risks are largely mitigated by the fact that increases in the price of ~~natural~~prudently ~~gas~~incurred fuel and purchased power are recovered through FPSC-approved cost-recovery clauses, with ~~its~~no ~~more~~anticipated ~~volatile~~effect ~~pricing~~on earnings. However, ~~for~~increasing ~~generation~~fuel cost-recovery has the potential to affect the relative attractiveness of ~~electricity~~alternative ~~was~~energy ~~88%~~solutions into ~~2023~~consumers. TEC manages fuel supply risk and ~~86%~~commodity price risk by entering into long-term fuel supply agreements and prudently operating plant facilities to optimize cost. At December 31, 2024 and 2023, a change in ~~2022~~commodity ~~(see~~prices would not have had a material impact on TEC's earnings but could have and has had an impact on the ~~Business~~timing ~~section)~~of the cash recovery of the cost of fuel.

Currently, TEC’s commodity price risks are largely mitigated by the fact that increases in the price of prudently incurred fuel and purchased power are recovered through FPSC-approved cost-recovery clauses, with no anticipated effect on earnings. However, increasing fuel cost-recovery has the potential to affect total energy usage and the relative attractiveness of electricity to consumers. TEC manages fuel supply risk and commodity price risk by entering into long-term fuel supply agreements and prudently operating plant facilities to optimize cost. At December 31, 2023 and 2022, a change in commodity prices would not have had a material impact on TEC's earnings but could have and has had an impact on the timing of the cash recovery of the cost of fuel. 30

TAMPA ELECTRIC COMPANY

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

To the Shareholder and the Board of Directors of Tampa Electric Company

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Tampa Electric Company (the Company) as of December 31, ~~2023~~2024 and ~~2022~~2023, the related consolidated statements of income and comprehensive income, capitalization and cash flows for each of the three years in the period ended December 31, ~~2023~~2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “"consolidated financial statements”"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, ~~2023~~2024 and ~~2022~~2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2023~~2024, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’'s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’'s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the ~~Board~~audit ofcommittee ~~Directors~~ and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for the effects of regulatory matters Description of the Matter As ~~disclosed in Note 3~~ of ~~the~~December ~~consolidated~~31, ~~financial statements~~2024, the Company ~~has~~had $~~988~~1,441 million in regulatory assets and $~~795~~904 million in regulatory liabilities. As disclosed in Note 3 of the consolidated financial statements, Tampa Electric’s retail business is regulated by the Florida Public Service Commission (FPSC), and Tampa Electric is also subject to regulation by the Federal Energy Regulatory Commission (FERC) (collectively, the regulators). The regulatory rates are designed to recover the prudently incurred costs of providing ~~the~~service ~~regulated~~or products, orplus ~~services and provide~~ a reasonable return on ~~the~~ equity invested or assets~~, as applicable~~. In addition to regulatory assets and liabilities, rate regulation impacts ~~multiple~~other financial statement line items, including, but not limited to, property, plant and equipment, revenues, and expenses.Auditing the impact of rate regulation on the Company’s financial statements is complex and highly judgmental due to the significant judgments made by the Company to support its accounting and disclosure for regulatory matters when final regulatory decisions or orders have not yet been obtained or when regulatory formulas are complex. There is also subjectivity involved in assessing the potential impact of future regulatory decisions on

3231

statement balances and activity, including, but not limited to, property, plant, and equipment, revenues, and expenses.Auditing the impact of rate regulation on the Company’s consolidated financial statements is complex due to the significant judgments made by the Company to support its accounting and disclosure for regulatory matters when final regulatory decisions or orders have not yet been made or when regulatory formulas are vague or complex. There is also subjectivity involved in assessing the potential impact of future regulatory decisions on the financial statements. Although the Company expects to recover costs from customers through rates, there is a risk that the ~~regulator~~regulators may not approve full recovery of costs incurred. The Company’s judgments include making an assessment of the probable recovery of, and return on, costs incurred, of the potential disallowance of part of the cost incurred, or of the probable refund to customers through future rates. How We Addressed the Matter in Our Audit We ~~performed~~tested ~~audit procedures that included, among others, assessing~~ the Company’s evaluation of the probability of future recovery for regulatory assets and refund of regulatory liabilities byfor ~~obtaining~~regulatory ~~and~~matters ~~reviewing~~when ~~relevant~~final regulatory decisions or orders, ~~filings,~~have ~~testimony,~~not ~~hearings~~yet ~~and~~been ~~correspondence,~~made ~~and~~or ~~other~~when ~~publicly~~regulatory ~~available~~formulas ~~information.~~are ~~For~~vague ~~regulatory~~or ~~matters~~complex. ~~for~~Our ~~which~~audit ~~regulatory~~procedures ~~decisions~~included, oramong ~~orders~~others, ~~have~~obtaining ~~not~~and ~~yet~~reviewing ~~been~~relevant ~~obtained~~regulatory orders, wefilings, ~~inspected~~and ~~the~~other ~~regulatory~~correspondence. ~~filings~~We inspected these communications for any evidence that might contradict the Company’s assertions,. ~~and~~We reviewed ~~other~~ regulatory orders, filings, and other correspondence for other entities within the same jurisdiction or for the Company’s previously approved regulatory assets and liabilities to assess the likelihood of recovery in future rates based on the ~~regulator~~regulators’s treatment of similar costs under similar circumstances. We ~~obtained and evaluated an analysis from the Company and corroborated that analysis with letters from legal counsel, when appropriate, regarding cost recoveries or future changes in rates. We~~ also assessed the methodology, accuracy and completeness of the Company’s calculations of regulatory asset and liability balances based on provisions and formulas outlined in ~~rate~~regulatory orders, filings, and other correspondence with the regulators. We also evaluated the Company's disclosures related to the impacts of rate regulation including the balances recorded and the regulatory developments.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2018.

Tampa, Florida

February 2621, ~~2024~~2025

3332

TAMPA ELECTRIC COMPANY

Consolidated Balance Sheets

Assets	December 31,			December 31,
(millions)	~~2023~~2024			~~2022~~2023
Property, plant and equipment
Utility plant
Utility plant, at original costs	$	14,433		$	13,655
Electric	$	13,655		$	12,536
Accumulated depreciation		(3,348	)		(3,443	)
Gas		0			2,938
Utility plant, net		11,085			10,212
Utility plant, at original costs		13,655			15,474
Other property		18			16
Accumulated depreciation		(3,443	)		(3,845	)
Total property, plant and equipment, net		11,103			10,228
Utility plant, net		10,212			11,629
Other property		16			15
Total property, plant and equipment, net		10,228			11,644
Current assets
Cash and cash equivalents		54			145
Receivables, less allowance for credit losses of $2 and $4 at December 31, 2023 and 2022, respectively		286			295
Receivables, less allowance for credit losses of $1 and $2 at December 31, 2024 and 2023, respectively		220			286
Due from affiliates		1913			2219
Inventories, at average cost
Fuel		3645			2336
Materials and supplies		~~181~~191			~~159~~181
Regulatory assets		~~161~~343			~~361~~161
Prepayments and other current assets		32			3532
Total current assets		~~720~~848			~~909~~720
Other assets
Regulatory assets		~~827~~1,098			~~1,191~~827
Deferred charges and other assets		5658			5956
Total other assets		~~883~~1,156			~~1,250~~883
Total assets	$	1113,~~831~~107		$	1311,~~803~~831

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

3433

TAMPA ELECTRIC COMPANY

Consolidated Balance Sheets—continued

Liabilities and Capital	December 31,			December 31,
(millions)	~~2023~~2024			~~2022~~2023
Capitalization
Common stock	$	45,~~505~~105		$	54,~~075~~505
Accumulated other comprehensive loss		(1	)		(1	)
Retained earnings		~~219~~218			~~346~~219
Total capital		45,~~723~~322			54,~~420~~723
Long-term debt		3,~~933~~935			3,~~734~~933
Total capital		89,~~656~~257			98,~~154~~656
Current liabilities
Long-term debt due within one year		~~300~~0			0300
Notes payable		~~209~~636			~~1,019~~209
Accounts payable		~~354~~666			~~472~~354
Due to affiliates		1018			~~226~~10
Customer deposits		~~121~~126			~~145~~121
Regulatory liabilities		94146			8594
Accrued interest		2831			3028
Accrued taxes		1412			1514
Other		4358			4543
Total current liabilities		1,~~173~~693			21,~~037~~173
Other liabilities
Deferred income taxes		~~880~~976			~~1,045~~880
Regulatory liabilities		~~701~~758			~~1,055~~701
Investment tax credits		~~237~~224			~~243~~237
Deferred credits and other liabilities		~~184~~199			~~269~~184
Total other liabilities		2,~~002~~157			2,~~612~~002
Commitments and Contingencies (see Note 8)
Total liabilities and capital	$	1113,~~831~~107		$	1311,~~803~~831

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

3534

TAMPA ELECTRIC COMPANY

Consolidated Statements of Income and Comprehensive Income

(millions)

For the years ended December 31,

~~2023~~2024

~~2022~~2023

~~2021~~2022

Revenues

Electric

2,~~637~~526

2,~~519~~637

2,~~170~~519

Gas

~~650~~0

~~525~~650

Total revenues

2,~~637~~526

32,~~169~~637

23,~~695~~169

Expenses

Fuel

~~605~~517

~~676~~605

~~604~~676

Purchased power

78105

~~151~~78

~~106~~151

Cost of natural gas sold

~~257~~0

~~155~~257

Operations & maintenance

~~595~~545

~~619~~595

~~566~~619

Depreciation and amortization

~~422~~454

~~436~~422

~~430~~436

Taxes, other than income

~~234~~224

~~257~~234

~~228~~257

Total expenses

1,~~934~~845

21,~~396~~934

2,~~089~~396

Income from operations

~~703~~681

~~773~~703

~~606~~773

Other income

Allowance for other funds used during construction

1930

3519

4535

Interest income from affiliates

380

038

Other income, net

3218

2032

520

Total other income

8948

5589

5055

Interest charges

Interest expense

~~234~~203

~~178~~234

~~151~~178

Interest expense to affiliates

110

011

Allowance for borrowed funds used during construction

(610

)

(116

)

(2111

)

Total interest charges

~~239~~193

~~167~~239

~~130~~167

Income before provision for income taxes

~~553~~536

~~661~~553

~~526~~661

Provision for income taxes

8768

~~121~~87

80121

Net income

~~466~~468

~~540~~466

~~446~~540

Comprehensive income

~~466~~468

~~540~~466

~~446~~540

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

3635

TAMPA ELECTRIC COMPANY

Consolidated Statements of Cash Flows

(millions)
For the years ended December 31,	~~2023~~2024			~~2022~~2023			~~2021~~2022
Cash flows from or used in operating activities
Net income	$	~~466~~468		$	~~540~~466		$	~~446~~540
Adjustments to reconcile net income to cash from operating activities:
Depreciation and amortization		~~422~~454			~~436~~422			~~430~~436
Deferred income taxes and investment tax credits		~~(22~~66	)		~~137~~(22	)		28137
Allowance for equity funds used during construction		(1930	)		(3519	)		(4535	)
Deferred recovery clauses		~~415~~134			~~(422~~415	)		(58422	)
Regulatory assets and liabilities		~~116~~(305	)		~~(100~~116	)		(10100	)
Pension and post-retirement asset and liabilities		(2311	)		(1823	)		(1018	)
Other		1415			(114	)		23(1	)
Changes in working capital:
Receivables, less allowance for credit losses		~~(44~~72	)		(4544	)		(3245	)
Inventories		(3919	)		(4139	)		(841	)
Taxes accrued		12(3	)		~~(23~~12	)		(1323	)
Accounts payable		~~(56~~315	)		75(56	)		5375
Other		(18	)		8(1	)		(78	)
Cash flows from operating activities		1,~~241~~164			~~511~~1,241			~~797~~511
Cash flows from or used in investing activities
Capital expenditures		(1,~~294~~422	)		(1,~~427~~294	)		(1,~~397~~427	)
Net proceeds from sale of assets		03			100			010
Cash flows used in investing activities		(1,~~294~~419	)		(1,~~417~~294	)		(1,~~397~~417	)
Cash flows from or used in financing activities
Equity contributions from Parent		~~300~~600			~~605~~300			~~580~~605
Dividends to Parent		(~~472~~469	)		(~~517~~472	)		(~~450~~517	)
Proceeds from long-term debt issuance		0495			~~595~~0			~~790~~595
Repayment of long-term debt		0(300	)		~~(250~~0	)		(~~279~~250	)
Advances to affiliate		~~(227~~0	)		0(227	)		0
Repayment of advances to affiliate		~~956~~0			0956			0
Advances from Parent		0			~~195~~0			0195
Repayment of advances from Parent		~~(195~~0	)		0(195	)		0
Net change in short-term debt (maturities of 90 days or less)		87(70	)		~~374~~87			~~(230~~374	)
Proceeds from other short-term debt (maturities over 90 days)		~~400~~0			400			~~500~~400
Repayment of other short-term debt (maturities over 90 days)		~~(800~~0	)		(~~500~~800	)		(~~300~~500	)
Other financing activities		(12	)		0(1	)		(30	)
Cash flows from financing activities		48254			~~902~~48			~~608~~902
Net increase (decrease) in cash and cash equivalents		(51	)		(45	)		8(4	)
Cash and cash equivalents at beginning of the year		105			1810			1018
Cash and cash equivalents at end of the year	$	54		$	145		$	1814
Supplemental disclosure of cash paid (received):
Interest	$	~~233~~182		$	~~152~~233		$	~~120~~152
Income taxes	$	~~102~~(3	)	$	2102		$	622
Supplemental disclosure of non-cash activities:
Change in accrued capital expenditures	$	2010		$	(620	)	$	25(6	)
Reclassification of short-term debt to long-term debt	$	~~497~~0		$	0497		$	0
Change in note receivable from PGS	$	~~(736~~0	)	$	0(736	)	$	0

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

3736

TAMPA ELECTRIC COMPANY

Consolidated Statements of Capitalization

									Accumulated
									Other
			Common			Retained			Comprehensive			Total
(millions, except share amounts)	Shares (1)		Stock			Earnings			Loss			Capital
Balance, December 31, 2020		10	$	3,890		$	327		$	(1	)	$	4,216
Net income							446						446
Equity contributions from Parent				580									580
Dividends to Parent (2)							(450	)					(450	)
Balance, December 31, 2021		10	$	4,470		$	323		$	(1	)	$	4,792
Net income							540						540
Equity contributions from Parent				605									605
Dividends to Parent (2)							(517	)					(517	)
Balance, December 31, 2022		10	$	5,075		$	346		$	(1	)	$	5,420
Net income							466						466
Separation of PGS equity from TEC				(871	)		(121	)					(992	)
Equity contributions from Parent				300									300
Dividends to Parent (2)							(472	)					(472	)
Other				1									1
Balance, December 31, 2023		10	$	4,505		$	219		$	(1	)	$	4,723
Net income							468						468
Equity contributions from Parent				600									600
Dividends to Parent (2)							(469	)					(469	)
Balance, December 31, 2024		10	$	5,105		$	218		$	(1	)	$	5,322

Preferred stock – $100 par value

1.5 million shares authorized, none outstanding.

Preferred stock – no par

2.5 million shares authorized, none outstanding.

Preference stock – no par, subordinate to the preferred stock

2.5 million shares authorized, none outstanding.

(1)

Common stock without par value, 25 million shares authorized

(2)

Dividends are declared and paid at the discretion of TEC’s Board of Directors.

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

3837

TAMPA ELECTRIC COMPANY

Consolidated Statements of Capitalization – continued

At December 31, ~~2023~~2024 and ~~2022~~2023, TEC had the following long-term debt outstanding:

Long-Term Debt
(millions)	Due	~~Due~~2024		~~2023~~		2023		~~2022~~
Tampa Electric	Notes (1)(2)(3) : 3.88%	2024		$	300			$	263
Notes (1)(2): 3.88%	2024	$	0			$	300
	2.40%	2031			400				285
4.90%	2029		500			0
	6.55%	2036			250				250
2.40%	2031		400				400
	6.15%	2037			250				190
6.55%	2036		250				250
	4.10%	2042			300				250
6.15%	2037		250				250
	4.35%	2044			300				290
4.10%	2042		300				300
	4.20%	2045			250				230
4.35%	2044		300				300
	4.30%	2048			350				275
4.20%	2045		250				250
	4.45%	2049			375				350
4.30%	2048		350				350
	3.63%	2050			300				275
4.45%	2049		375				375
	3.45%	2051			400				285
3.63%	2050		300				300
	5.00%	2052			300				262
3.45%	2051		400				400
	Total long-term debt of Tampa Electric				3,775				3,205
5.00%	2052		300				300
PGS	Notes (1)(2)(3) : 3.88%	2024		0					38
Total long-term debt of Tampa Electric			3,975				3,775
	2.40%	2031		0					115
Long-term debt reclassification(3)			0				500
	6.15%	2037		0					60
Total long-term debt			3,975				4,275
	4.10%	2042		0					50
Unamortized debt discount, net			(10	)			(14	)
	4.35%	2044		0					10
Debt issuance costs			(30	)			(28	)
	4.20%	2045		0					20
Total carrying amount of long-term debt			3,935				4,233
	4.30%	2048		0					75
Less amount due within one year			0				300
	4.45%	2049		0					25
Total long-term debt		$	3,935			$	3,933
	3.63%	2050		0					25
	3.45%	2051		0					115
	5.00%	2052		0					37
	Total allocated long-term debt of PGS				0				570
Long-term debt reclassification(4)					500			0
Total long-term debt					4,275				3,775
Unamortized debt discount, net					(14	)			(11	)
Debt issuance costs					(28	)			(30	)
Total carrying amount of long-term debt					4,233				3,734
Less amount due within one year					300			0
Total long-term debt				$	3,933			$	3,734

(1)

These senior unsecured debt securities are subject to redemption in whole or in part, at any time, at the option of the issuer.

(2)

These long-term debt agreements contain various restrictive covenants.

(3)

In 2022, the amounts shown are allocations to Tampa Electric and PGS of TEC Notes. See Note 1 for information regarding the separation of PGS from TEC on January 1, 2023.

See Note 7 for information regarding the long-term debt reclassification of $500 million, net of debt issuance costs.

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

3938

TAMPA ELECTRIC COMPANY

Consolidated Statements of Capitalization—continued

At December 31, ~~2023~~2024, long-term debt had a carrying amount of $43,~~233~~935 million and an estimated fair market value of $3,~~831~~431 million. At December 31, ~~2022~~2023, total long-term debt had a carrying amount of $34,~~734~~233 million and an estimated fair market value of $3,~~234~~831 million. The fair value of the debt securities is determined using Level 2 measurements (see Note 14 for information regarding the fair value hierarchy).

A substantial part of Tampa Electric’s tangible assets is pledged as collateral to secure its first mortgage bonds. There are currently no bonds outstanding under Tampa Electric’s first mortgage bond indenture, and Tampa Electric could cause the lien associated with this indenture to be released at any time. Gross maturities and annual sinking fund requirements of long-term debt are as follows:

Long-Term Debt Maturities

													Total
As of December 31, 2023													Long-Term
As of December 31, 2024													Long-Term
(millions)	~~2024~~2025		~~2025~~2026		~~2026~~2027		~~2027~~2028		~~2028~~2029		Thereafter		Debt
Tampa Electric	$	300	$	0	$	0	$	0	$	0	$	3,975	$	4,275
Long-term debt maturities	$	0	$	0	$	0	$	0	$	500	$	3,475	$	3,975
Total long-term debt maturities	$	300	$	0	$	0	$	0	$	0	$	3,975	$	4,275

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

4039

TAMPA ELECTRIC COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Significant Accounting Policies

Description of the Business

TEC is comprised of the electric division, referred to as Tampa Electric, and prior to January 1, 2023, also included the natural gas division, referred to as PGS. Tampa Electric provides retail electric services in West Central Florida, and PGS is engaged in the purchase, distribution and sale of natural gas for residential, commercial, industrial and electric power generation customers in Florida. Prior to January 1, 2023, intercompany balances and transactions within the electric and natural gas divisions have been eliminated in consolidation. See "Separation of PGS from TEC" below for information regarding the separation that occurred on January 1, 2023. TEC’s significant accounting policies are as follows:

Principles of Consolidation and Basis of Presentation

TEC maintains its accounts in accordance with recognized policies prescribed or permitted by the FPSC and the FERC. These policies conform with U.S. GAAP in all material respects. The use of estimates is inherent in the preparation of financial statements in accordance with U.S. GAAP. Actual results could differ from these estimates.

Prior to April 1, 2024, TEC iswas a wholly owned subsidiary of TECO Energy, ~~Inc.~~which ~~TEC~~is ~~contains~~an ~~the~~indirect, ~~electric~~wholly ~~division,~~owned ~~and~~subsidiary ~~prior~~of toEmera. ~~January~~On April 1, ~~2023~~2024, ~~also~~TECO ~~included~~Energy ~~the~~distributed ~~natural~~its ~~gas~~investment ~~division.~~in ~~Prior~~TEC to ~~January~~TECO 1Holdings, ~~2023,~~Inc. ~~intercompany~~in ~~balances~~a ~~and~~transaction ~~transactions~~intended ~~within~~to ~~the~~qualify ~~divisions~~as ~~have~~a ~~been~~tax-free ~~eliminated in consolidation~~reorganization. ~~TECO~~This ~~Energy~~new corporation is aalso an indirect, wholly owned ~~indirect~~ subsidiary of Emera. Therefore, TEC is an indirect, wholly owned subsidiary of Emera.

Cash Equivalents

Cash equivalents are highly liquid, high-quality investments purchased with an original maturity of three months or less. The carrying amount of cash equivalents approximated fair market value because of the short maturity of these instruments.

Property, Plant and Equipment

Property, plant and equipment is stated at original cost, which includes labor, material, applicable taxes, overhead and AFUDC. Concurrent with a planned major maintenance outage or with new construction, the cost of adding or replacing retirement units-of-property is capitalized in conformity with the regulations of FERC and FPSC. The cost of maintenance, repairs and replacement of minor items of property is expensed as incurred.

As a regulated utility, TEC must file depreciation and dismantlement studies periodically and receive approval from the FPSC before implementing new depreciation rates. Included in approved depreciation rates is either an implicit net salvage factor or a cost of removal factor, expressed as a percentage. The net salvage factor is principally comprised of two components—a salvage factor and a cost of removal or dismantlement factor. TEC uses current cost of removal or dismantlement factors as part of the estimation method to approximate the amount of cost of removal in accumulated depreciation. The original cost of utility plant retired or otherwise disposed of and the cost of removal or dismantlement, less salvage value, is charged to accumulated depreciation and the accumulated cost of removal reserve reported as a regulatory liability, respectively.

For other property dispositions, the cost and accumulated depreciation are removed from the balance sheet and a gain or loss is recognized.

4140

Property, plant and equipment consisted of the following assets:

(millions)	Estimated Useful Lives	December 31, ~~2023~~2024			December 31, ~~2022~~2023
Electric generation	10-60 years	$	6,~~732~~574		$	6,~~300~~732
Electric transmission	10-75 years		1,~~182~~245			1,~~109~~182
Electric distribution	10-60 years		3,~~609~~920			3,~~296~~609
Gas transmission and distribution	15-75 years	0				2,567
General plant and other	4-60 years		1,081			997
General plant and other	4-60 years		997			1,020
Total cost			12,820			12,520
Total cost			12,520			14,292
Less accumulated depreciation			(3,348	)		(3,443	)
Less Tampa Electric accumulated depreciation			(3,443	)		(3,158	)
Construction work in progress			1,631			1,151
Less PGS accumulated depreciation		0				(687	)
Total property, plant and equipment, net		$	11,103		$	10,228
Tampa Electric construction work in progress			1,151			949
PGS construction work in progress		0				248
Total property, plant and equipment, net		$	10,228		$	11,644

Depreciation

The provision for total regulated utility plant in service, expressed as a percentage of the original cost of depreciable property, was 3.56%, 3.25% and 3.52% for ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022, respectively. Construction work in progress is not depreciated until the asset is placed in service. TEC's total depreciation expense for the years ended December 31, ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022 was $~~390~~417 million, $~~402~~390 million and $~~408~~402 million, respectively. For the year ended December 31, ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022, Tampa Electric's depreciation expense was $~~390~~417 million, $~~359~~390 million and $~~357~~359 million, respectively.

TEC computes depreciation and amortization using the following methods:

•

the group remaining life method, approved by the FPSC, is applied to the average investment, adjusted for anticipated costs of removal less salvage, in functional classes of depreciable property;

•

the amortizable life method, approved by the FPSC, is applied to the net book value to date over the remaining life of those assets not classified as depreciable property above.

Allowance for Funds Used During Construction

AFUDC is a non-cash credit to income with a corresponding charge to utility plant which represents the cost of borrowed funds and a reasonable return on other funds used for construction. The rates used to calculate AFUDC are revised periodically to reflect significant changes in cost of capital. In ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022, Tampa Electric’s rate was 6.07%, 6.0007% and 6.4600%, respectively. PGS’s rate used to calculate its AFUDC in 2022 ~~and 2021~~ was 6.00%. Total AFUDC for the years ended December 31, ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022 was $2540 million, $4625 million and $6646 million, respectively.

Inventory

TEC values materials, supplies and fossil fuel inventory (natural gas and coal) using a weighted-average cost method. These materials, supplies and fuel inventories are carried at the lower of weighted-average cost or net realizable value.

Regulatory Assets and Liabilities

~~Tampa~~TEC ~~Electric~~is ~~and PGS are~~ subject to accounting guidance for the effects of certain types of regulation (see Note 3).

~~Deferred~~Government ~~Income Taxes~~ Assistance

~~TEC~~Government ~~uses~~assistance ~~the~~is ~~asset~~recognized ~~and~~when ~~liability~~there ~~method~~is inreasonable ~~the~~assurance ~~measurement~~that ofTEC ~~deferred~~will ~~income~~comply ~~taxes.~~with ~~Under~~ the ~~asset~~conditions and ~~liability method,~~ the ~~temporary~~funding ~~differences~~will ~~between~~be ~~the~~received. ~~financial~~Government ~~statement~~assistance ~~and~~related ~~tax~~to ~~bases~~PP&E ofis ~~assets~~deducted ~~and~~from ~~liabilities~~the ~~are~~asset's ~~reported~~carrying asamount ~~deferred~~and ~~taxes~~the ~~measured~~net atamount ~~enacted~~is ~~tax rates~~depreciated. ~~Tampa~~Government ~~Electric~~assistance ~~and~~related ~~PGS are regulated, and their books and records reflect approved regulatory treatment, including certain adjustments~~ to ~~accumulated deferred~~ income ~~taxes~~is ~~and~~deducted ~~the~~from ~~establishment of a corresponding regulatory tax liability reflecting~~ the ~~amount~~related ~~payable~~expense to ~~customers~~which ~~through~~it ~~future~~is ~~rates.~~intended ~~See~~to ~~Note 4 for additional details~~compensate.

42 In 2024 and 2023, TEC received $5 million and zero, respectively, of government assistance from the U.S. Department of Energy towards the front end engineering design studies for carbon capture and storage. The capital projects receiving government assistance are related to TEC’s environmental compliance initiatives. Further details on significant government assistance programs are noted below.

~~Investment and Production Tax Credits (PTCs)~~41

~~ITCs~~Carbon ~~have~~Storage been recorded as deferred credits and are being amortized as reductions to income tax expense as required by regulatory practices. TEC recognizes a reduction of income tax expense for PTCs earned by its eligible solar assets. The PTCs are based on per kwH rate prescribed by applicable federal statutes. Project

~~Stranded~~In ~~Tax~~January ~~Effects~~2025, TEC was approved for government assistance from the Department of Energy to fund an evaluation related to subsurface storage of CO2 in ~~Accumulated~~Florida. ~~Other~~TEC ~~Comprehensive~~can ~~Income~~make claims for 80% of eligible project costs to a maximum $98 million. The term of the agreement ends on April 2028.

~~TEC~~Deferred ~~utilizes~~Income ~~a portfolio approach to determine the timing and extent to which stranded income tax effects from items that were previously recorded in accumulated other comprehensive income are released.~~Taxes

TEC uses the asset and liability method in the measurement of deferred income taxes. Under the asset and liability method, the temporary differences between the financial statement and tax bases of assets and liabilities are reported as deferred taxes measured at enacted tax rates. TEC is regulated, and the books and records reflect approved regulatory treatment, including certain adjustments to accumulated deferred income taxes and the establishment of a corresponding regulatory tax liability reflecting the amount payable to customers through future rates. See Note 4 for additional details.

Investment and Production Tax Credits (PTCs)

ITCs have been recorded as deferred credits and are being amortized as reductions to income tax expense as required by regulatory practices. TEC recognizes a reduction of income tax expense for PTCs earned by its eligible solar assets. The PTCs are based on per kwH rate prescribed by applicable federal statutes.

Stranded Tax Effects in Accumulated Other Comprehensive Income

TEC utilizes a portfolio approach to determine the timing and extent to which stranded income tax effects from items that were previously recorded in accumulated other comprehensive income are released.

Revenue Recognition

Regulated electric revenue

Electric revenues, including energy charges, demand charges, basic facilities charges and applicable clauses and riders, are recognized when obligations under the terms of a contract are satisfied. This occurs primarily when electricity is delivered to customers over time as the customer simultaneously receives and consumes the benefits of the electricity. Electric revenues are recognized on an accrual basis and include billed and unbilled revenues. Revenues related to the sale of electricity are recognized at rates approved by the respective regulator and recorded based on metered usage, which occur on a periodic, systematic basis, generally monthly. At the end of each reporting period, the electricity delivered to customers, but not billed, is estimated and the corresponding unbilled revenue is recognized. Tampa Electric’s estimate of unbilled revenue at the end of the reporting period is calculated by estimating the number of MWH delivered to customers at the established rate expected to prevail in the upcoming billing cycle. This estimate includes assumptions as to the pattern of energy demand, timing of meter reads and line losses.

Regulated gas revenue

Prior to January 1, 2023, gas revenues, including energy charges, demand charges, basic facilities charges and applicable clauses and riders, were recognized when obligations under the terms of a contract were satisfied. This occurred primarily when gas was delivered to customers over time as the customer simultaneously received and consumed the benefits of the gas. Gas revenues were recognized on an accrual basis and included billed and unbilled revenues. Revenues related to the distribution and sale of gas were recognized at rates approved by the regulator and recorded based on metered usage, which occurred on a periodic, systematic basis, generally monthly. At the end of each reporting period, the gas delivered to customers, but not billed, was estimated and the corresponding unbilled revenue was recognized. PGS’s estimate of unbilled revenue at the end of the reporting period was calculated by estimating the number of therms delivered to customers at the established rate expected to prevail in the upcoming billing cycle. This estimate included assumptions as to the pattern of usage, weather, and inter-period changes to customer classes.

Other

See Accounting for Franchise Fees and Gross Receipts below for the accounting for gross receipts taxes. Sales and other taxes TEC collects concurrent with revenue-producing activities are excluded from revenue.

Revenues and Cost Recovery

Revenues include amounts resulting from cost-recovery clauses which provide for monthly billing charges to reflect increases or decreases in fuel, purchased power, conservation, environmental and storm protection plan costs for Tampa Electric and, prior to January 1, 2023, purchased gas, interstate pipeline capacity, replacement of cast iron/bare steel pipe and conservation costs for PGS. These adjustment factors are based on costs incurred and projected for a specific recovery period. Any over- or under-recovery of costs plus an interest factor are taken into account in the process of setting adjustment factors for subsequent recovery periods. Over-recoveries of costs are recorded as regulatory liabilities, and under-recoveries of costs are recorded as regulatory assets.

costs plus an interest factor are taken into account in the process of setting adjustment factors for subsequent recovery periods. Over-recoveries of costs are recorded as regulatory liabilities, and under-recoveries of costs are recorded as regulatory assets.

Certain other costs incurred by the regulated utilities are allowed to be recovered from customers through prices approved in the regulatory process. These costs are recognized as the associated revenues are recognized.

Receivables and Allowance for Credit Losses

Receivables on the Consolidated Balance Sheets include receivables from contracts with customers, which consist of services to residential, commercial, industrial and other customers, totaling $~~284~~219 million and $~~295~~284 million as of December 31, ~~2023~~2024 and ~~2022~~2023, respectively. An allowance for credit losses is established based on TEC’s collection experience and reasonable and supportable forecasts that affect the collectibility of the reported amount. Circumstances that impact estimates of credit losses include, but are not limited to, customer credit issues, fuel prices, customer deposits and general economic conditions. Accounts are reserved in the allowance or written off once they are deemed to be uncollectible.

43TEC accrues base revenues for services rendered but unbilled to provide for matching of revenues and expenses (see Note 3). As of December 31, 2024 and 2023, unbilled revenues of $68 million and $63 million, respectively, are included in the “Receivables” line item on TEC’s Consolidated Balance Sheets.

TEC accrues base revenues for services rendered but unbilled to provide for matching of revenues and expenses (see Note 3). As of December 31, 2023 and 2022, unbilled revenues of $63 million and $82 million, respectively, are included in the “Receivables” line item on TEC’s Consolidated Balance Sheets.

Accounting for Franchise Fees and Gross Receipts Taxes

TEC is allowed to recover certain costs incurred on a dollar-for-dollar basis from customers through rates approved by the FPSC. The amounts included in customers’ bills for franchise fees and gross receipt taxes are included as revenues on the Consolidated Statements of Income. Franchise fees and gross receipt taxes payable are included as an expense on the Consolidated Statements of Income in “Taxes, other than income”. These amounts totaled $~~139~~120 million, $~~145~~139 million and $~~129~~145 million for the years ended December 31, ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022, respectively.

Deferred Charges and Other Assets

Deferred charges and other assets consist primarily of pension assets net of accrued pension liabilities (see Note 5) and right-of-use assets related to operating leases (see Note 13).

Deferred Credits and Other Liabilities

Other deferred credits primarily include accrued other postretirement benefits (see Note 5), ~~MGP environmental remediation liability prior to January 1, 2023 (see Note 8),~~ asset retirement obligations (see Note 12), lease liabilities (see Note 13) and a reserve for auto, general and workers’ compensation liability claims.

TECO ~~Energy~~Holdings and its subsidiaries, including TEC, have a self-insurance program supplemented by excess insurance coverage for the cost of claims whose ultimate value exceeds the company’s retention amounts. TEC estimates its liabilities for auto, general and workers’ compensation using discount rates mandated by statute or otherwise deemed appropriate for the circumstances. Discount rates used in estimating these other self-insurance liabilities at December 31, ~~2023~~2024 and ~~2022~~2023 ranged from 4.00% to 5.9911% and 4.00% to 5.7899%, respectively.

Derivatives and Hedging Activities

TEC had $1 million and $51 million derivative assets as of December 31, ~~2023~~2024 and ~~2022~~2023, respectively, and $0zero ~~and $1 million~~ derivative liabilities as of December 31, ~~2023~~2024 and December 31, ~~2022~~2023, respectively.

TEC’s physical contracts qualify for the NPNS exception to derivative accounting rules, provided they meet certain criteria. Generally, NPNS applies if TEC deems the counterparty creditworthy, if the counterparty owns or controls resources within the proximity to allow for physical delivery of the commodity, if TEC intends to receive physical delivery and if the transaction is reasonable in relation to TEC’s business needs. As of December 31, ~~2023~~2024 and ~~2022~~2023, all of TEC’s physical contracts qualified for the NPNS exception, which was elected.

TEC 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, the cash inflows and outflows are included in the operating section of the Consolidated Statements of Cash Flows. 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 Statements of Cash Flows.

Separation of PGS from TEC

PGS became an operating division of TEC in 1997 when TECO Energy purchased PGS and merged that corporation into TEC. Since then, PGS has operated as a stand-alone regulated utility, including having its own tariff and its own books and records.

On January 1, 2023, TEC transferred the assets and liabilities of its PGS division into a separate corporation called Peoples Gas System, Inc. (PGSI) pursuant to a Contribution Agreement. This new corporation is a wholly owned subsidiary of a newly formed gas operations holding company, TECO Gas Operations, Inc., a wholly owned subsidiary of TECO Energy. On January 1, 2023, the assets, liabilities, and equity that had been recorded in the books of PGS were transferred from TEC to the newly formed PGSI at book value in a tax-free transaction. PGSI issued 100 shares of common stock to TEC related to the transfer of PGS, which were subsequently distributed to TECO Energy, Inc. and then contributed to TECO Gas Operations, Inc. This is a transaction between entities under common control; therefore, TEC did not recognize a gain or loss on the transaction. TEC is not required to recast its prior period financial statements and disclosures to exclude PGS prior to January 1, 2023. The TEC Consolidated Statement of Cash Flows for the year ended December 31, 2023 does not include the non-cash impact of separating the PGS assets, liabilities and equity from TEC on January 1, 2023 and excludes PGS’s opening cash balance.

The impact of the separation of PGS from TEC on the Consolidated Statements of Capital for the year ended December 31, 2023 was $992 million, which represents the net assets of PGS transferred as of January 1, 2023. TEC recorded $121 million to retained earnings, which was the retained earnings of PGS as of January 1, 2023, and the remainder of $871 million was recorded to additional paid in capital, which is presented with common stock.

retained earnings, which was the retained earnings of PGS as of January 1, 2023, and the remainder of $871 million was recorded to additional paid in capital, which is presented with common stock.

Prior to the separation, as a division of TEC, PGS had received an allocation of outstanding unsecured notes and outstanding short-term borrowings issued by TEC. The obligations related to these combined borrowings were reflected in an affiliate loan agreement between TEC and PGS. The initial obligation of PGS under the loan agreement at January 1, 2023 was a term loan in the principal amount of $670 million and a revolving loan in the principal amount of $66 million. The maturity date for both was December 29, 2023. On December 20, 2023, PGS repaid Tampa Electric the outstanding principal amount of the term loan and revolving loan of $670 million and $286 million, respectively, plus outstanding interest. The repayment terminates the affiliate loan agreement and Tampa Electric will no longer provide capital for the operations of PGS. See Note 6 for further information.

See Note 11 for certain financial information related to PGS. In addition, the following table presents the assets and liabilities of PGS in TEC’s Consolidated Balance Sheet as of December 31, 2022:

	December 31,
(millions)	2022
Property, plant and equipment
Utility plant	$	2,938
Accumulated depreciation		(687	)
Total property, plant and equipment, net		2,251
Current assets
Cash and cash equivalents		4
Receivables, less allowance for credit losses of $1 at December 31, 2022		62
Due from affiliates		4
Inventories, at average cost
Materials and supplies		5
Regulatory assets		9
Prepayments and other current assets		4
Total current assets		88
Other assets
Regulatory assets		53
Deferred charges and other assets		79
Total other assets		132
Total assets	$	2,471
Capitalization
Common stock	$	871
Retained earnings		121
Total capital		992
Long-term debt		564
Total capital		1,556
Current liabilities
Notes payable		166
Accounts payable		78
Due to affiliates		27
Customer deposits		30
Regulatory liabilities		11
Accrued interest		4
Accrued taxes		5
Other		4
Total current liabilities		325
Other liabilities
Deferred income taxes		238
Regulatory liabilities		277
Deferred credits and other liabilities		75
Total other liabilities		590

4544

Total liabilities and capital $ 2,471


Customer deposits		30
Regulatory liabilities		11
Accrued interest		4
Accrued taxes		5
Other		4
Total current liabilities		325

Other liabilities
Deferred income taxes		238
Regulatory liabilities		277
Deferred credits and other liabilities		75
Total other liabilities		590

Total liabilities and capital	$	2,471

2. New Accounting Pronouncements

Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The change in the standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The changes improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The guidance ~~will~~was be effective for annual reporting periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. ~~Early~~TEC ~~adoption~~adopted isthe ~~permitted. The~~ standard ~~will~~for bethe ~~applied~~year ~~retrospectively.~~ended ~~TEC~~December is31, ~~currently~~2024. ~~evaluating~~The ~~the~~standard ~~impact~~was ofapplied ~~adoption~~retrospectively. ofSee ~~the~~Note ~~standard~~11 onfor ~~its~~further ~~consolidated financial statements~~detail.

Income Tax Disclosures

Disaggregation of Income Statement Expenses

3. Regulatory

Tampa Electric’s retail business and PGS are regulated by the FPSC. Tampa Electric is also subject to regulation by the FERC in various respects, including wholesale power sales, certain wholesale power purchases, transmission and ancillary services and accounting practices. The FPSC sets rates based on a cost of service methodology which allows utilities to collect total revenues (revenue requirements) equal to their prudently incurred cost of providing service or products, plus a reasonable return on equity invested or assets. As a result, Tampa Electric and PGS qualify for the application of accounting guidance for certain types of regulation. This guidance recognizes that the actions of a regulator can provide reasonable assurance of the existence of an asset or liability. Regulatory assets and liabilities arise as a result of a difference between U.S. GAAP and the accounting principles imposed by the regulatory authorities. Regulatory assets generally represent incurred costs that have been deferred, as their future recovery in customer rates is probable. Regulatory liabilities generally represent obligations to make refunds to customers from previous collections for costs that are not likely to be incurred. In addition to regulatory assets and regulatory liabilities, rate regulation impacts other financial statement balances and activity, including, but not limited to, property, plant, and equipment, revenues, and expenses.

liability. Regulatory assets and liabilities arise as a result of a difference between U.S. GAAP and the accounting principles imposed by the regulatory authorities. Regulatory assets generally represent incurred costs that have been deferred, as their future recovery in customer rates is probable. Regulatory liabilities generally represent obligations to make refunds to customers from previous collections for costs that are not likely to be incurred. In addition to regulatory assets and regulatory liabilities, rate regulation impacts other financial statement balances and activity, including, but not limited to, property, plant, and equipment, revenues, and expenses.

Tampa Electric Base Rates

Tampa Electric’s ~~results~~2024, ~~for~~2023 ~~2021~~and ~~reflected~~2022 anbase ~~amended~~rates ~~and~~reflect ~~restated~~a settlement agreement dated as of August 6, ~~approved~~2021 (the Settlement Agreement) by and among Tampa Electric and the intervenors in Tampa Electric’s 2021 rate case, which was approved by an FPSC order on November 610, ~~2017,~~2021. ~~that~~The ~~replaced~~Settlement ~~the~~Agreement ~~previous~~agreed ~~2013~~to an increase in base ~~rate~~rates ~~settlement~~annually ~~agreement~~effective ~~and~~with ~~extended~~January it2022 ~~another~~bills, ~~four~~to ~~years~~generate ~~through~~a ~~2021.~~$191 ~~The~~million ~~agreement~~increase ~~provided~~in ~~for~~revenue ~~Tampa~~consisting ~~Electric’s~~of ~~allowed~~$123 ~~regulatory~~million ~~ROE~~of totraditional bebase rate charges and $68 million in a ~~mid-point~~new charge to recover the costs of 10retiring assets.~~25%~~ ~~with~~The aSettlement ~~range~~Agreement further included two subsequent year adjustments of ~~plus~~$90 ormillion ~~minus~~and 1%$21 million, effective January 2023 and January 2024, respectively. Under the agreement, the allowed equity in the capital structure ~~was~~continued to be 54% from investor sources of capital. The ~~amended~~Settlement Agreement included an allowed regulatory ROE range of 9.0% to 11.0% with a 9.95% midpoint. Under the agreement, ~~provided~~base ~~for~~rates ~~SoBRAs~~will ~~for~~not change from January 1, 2022 through December 31, 2024, unless Tampa Electric’s ~~substantial~~earned ~~investments~~ROE inwere ~~solar~~to ~~generation~~fall below the bottom of the range during that time. The Settlement Agreement contained a provision whereby Tampa Electric ~~invested~~agrees ~~approximately~~to ~~$850~~quantify ~~million~~the future impact of a decrease or increase in ~~these~~corporate ~~solar~~income ~~projects~~tax ~~during~~rates ~~2017~~on tonet ~~2021~~operating ~~and~~income ~~accrued~~through ~~AFUDC~~a ~~during~~reduction ~~construction~~or increase in base revenues within 180 days of when such tax change becomes law or its effective date. The ~~agreement~~Settlement ~~included~~Agreement further created a ~~sharing~~mechanism ~~provision~~to ~~that~~recover ~~allowed~~the ~~customers~~costs toof ~~benefit~~retiring ~~from~~coal ~~75%~~generation units and meter assets over a period of ~~any~~15 ~~cost~~years ~~savings~~which ~~for~~survives ~~projects~~the ~~below~~term ~~$1,500/kWac~~of that agreement. The ~~2017~~Settlement ~~settlement~~Agreement ~~agreement~~set ~~further~~new depreciation and dismantlement rates effective January 1, 2022 and contained athe ~~provision~~provisions ~~related~~that Tampa Electric will not have to ~~tax~~file ~~reform.~~another Andepreciation ~~asset~~study ~~optimization~~during ~~provision~~the ~~that~~term ~~allows~~of the agreement but will file a new depreciation study no more than one year, nor less than 90 days, before the filing of its next general base rate proceeding. Additionally, Tampa Electric agreed to ~~share~~a infinancial hedging moratorium for natural gas ending on December 31, 2024.

The Settlement Agreement allows a 25 basis point increase in the allowed ROE range and mid-point, and $10 million of additional revenue, if the average 30-year United States Treasury Bond yield rate for any period of six consecutive months is at least 50 basis points greater than the yield rate on the date the FPSC votes to approve the agreement. On July 1, 2022, Tampa Electric requested to adjust its base rates to collect an additional $10 million annually (prorated in the first year) effective September 1, 2022 and increase its mid-point ROE and upper and lower allowed ranges. On August 16, 2022, the FPSC approved the change. The new mid-point ROE is 10.20%, and the range is 9.25% to 11.25% effective July 1, 2022.

On April 2, 2024, Tampa Electric requested a base rate increase, reflecting an increased revenue requirement of $297 million, effective January 1, 2025, and additional adjustments of $100 million and $72 million for 2026 and 2027, respectively. Tampa Electric’s proposed rates include recovery of solar generation projects, energy storage capacity, a more resilient and modernized energy control center, and other resiliency and reliability projects. Prior to the rate case hearing, Tampa Electric submitted revisions to its requested base rate increase to reflect items that included production tax credits, energy storage life expectancy, and the company’s grid reliability and resilience project. The company’s August 22, 2024 requested revenue requirement reflects a base rate increase of $288 million, effective January 1, 2025, and adjustments of $92 million and $65 million for 2026 and 2027, respectively. From August 26 through 30, 2024, Tampa Electric’s rate case hearing was heard by the FPSC. On December 3, 2024, the FPSC rendered a decision during a Special Agenda and the final order, reflecting such decision, was issued on February 3, 2025. The FPSC decision includes an increase of $185 million in 2025 and adjustments of $87 million and $9 million in 2026 and 2027, respectively. The decision also allowed for equity in the capital structure to continue to be 54% from investor sources of capital. The allowed regulatory ROE range is 9.50% to 11.50% with a 10.50% midpoint, effective January 1, 2025. On February 18, 2025, a motion for reconsideration on certain aspects of the rate case order was filed with the FPSC. Tampa Electric will respond to this motion in February 2025. Tampa Electric expects the FPSC to reach a final decision on the motion in the second quarter of 2025.

Tampa Electric Storm Restoration Cost Recovery

In accordance with Tampa Electric’s 2021 rate case settlement agreement and continued with Tampa Electric's 2024 rate case order, in the event of a named storm that results in damage to its system, Tampa Electric can petition the FPSC to seek recovery of those costs over a 12-month period or longer as determined by the FPSC, as well as replenish its storm reserve regulatory liability of $56 million. Based on an FPSC order, if the charges to the storm reserve exceed the reserve liability account balance, the excess is to be carried as a regulatory asset. At December 31, 2024, the balance in the regulatory asset for storm restoration costs was $377 million.

since 2018, and the ~~savings~~replenishment of the balance in the reserve to the $56 million level that existed as of October 31, 2013 for ~~optimization~~a total of ~~its~~approximately ~~system~~$131 ~~once~~million. ~~certain~~The ~~thresholds~~storm ~~are~~cost ~~achieved~~recovery issurcharge ~~also~~was ~~included~~approved by the FPSC on March 7, 2023, and Tampa Electric began applying the surcharge on April 2023 bills. ~~Additionally~~Subsequently, on November 9, 2023, the FPSC approved Tampa Electric’s ~~agreed~~petition filed on August 16, 2023 to aupdate ~~financial~~the ~~hedging~~total ~~moratorium~~storm ~~for~~cost ~~natural~~collection ~~gas~~from ~~ending~~$129 onmillion to approximately $134 million and change the collection of the expected remaining balance of approximately $29 million as of December 31, ~~2022~~2023, ~~and~~from ~~that~~over itthe ~~will~~first ~~make~~three nomonths ~~investments~~of in2024 ~~gas~~to ~~reserves~~over the 12 months of 2024. On June 13, 2024, the FPSC issued an Order approving a total storm cost collection of $135 million.

OnIn ~~August~~September 62023, ~~2021,~~ Tampa Electric ~~filed~~was ~~with~~impacted ~~the FPSC a joint motion for approval of a settlement agreement dated as of August 6, 2021 (the Settlement Agreement)~~ by ~~and~~Hurricane ~~among Tampa Electric and the intervenors in Tampa Electric’s rate case filed with the FPSC in April 2021~~Idalia. The ~~Settlement~~related ~~Agreement~~storm ~~agreed~~restoration to an increase in base rates annually effective with January 2022 bills, to generate a $191 million increase in revenue consisting of $123 million of traditional base rate charges and $68 million in a new charge to recover the costs ofwere ~~retiring~~approximately ~~assets. The Settlement Agreement further included two subsequent year adjustments of~~ $9035 million ~~and $21 million~~, ~~effective~~which ~~January~~were ~~2023~~charged ~~and~~to ~~January 2024, respectively. Under~~ the ~~agreement,~~storm ~~the~~reserve ~~allowed equity in the capital structure continued to be 54% from investor sources of capital. The Settlement Agreement included an allowed~~ regulatory ~~ROE~~asset ~~range of 9.0% to 11.0% with a 9.95% midpoint. The Settlement Agreement allows a 25 basis point increase in the allowed ROE range~~ and mid-point, and $10 million of additional revenue, if the average 30-year United States Treasury Bond yield rate for any period of six consecutive months is at least 50 basis points greater than the yield rate on the date the FPSC votes to approve the agreement. Under the agreement, base rates will not ~~change~~included from January 1, 2022 through December 31, 2024, unless Tampa Electric’s earned ROE were to fall below the bottom of the range during that time. The Settlement Agreement contained a provision whereby Tampa Electric agrees to quantify the future impact of a decrease or increase in corporate income tax rates on net operating income through a reduction or increase in base revenues within 180 days of when such tax change becomes law or its effective date. The Settlement Agreement further created a mechanism to recover the ~~costs~~petition ~~of retiring coal generation units and meter assets over a period of 15 years which survives the term of that agreement~~above. The Settlement Agreement set new depreciation and dismantlement rates effective January 1, 2022 and contained the provisions that Tampa Electric will not have to file another depreciation study during the term of the agreement but will file a new depreciation study no more than one year, nor less than 90 days, before the filing of its next general base rate proceeding. Additionally, Tampa Electric agreed to a financial hedging moratorium for natural gas ending on December 31, 2024. On October 21, 2021, the FPSC approved the Settlement Agreement and the final order, reflecting such approval, was issued on November 10, 2021.

~~Tampa~~Hurricane ~~Electric's~~Helene ~~2021~~made ~~settlement~~landfall ~~agreement~~on ~~provision~~September ~~allowed~~26, 2024. Tampa Electric towas ~~request~~impacted aby ~~revenue~~Hurricane ~~and~~Helene, ~~ROE~~resulting ~~increase~~in ~~due~~a topeak ~~increases~~number inof ~~the~~customers ~~30-year~~out ~~U.S.~~of ~~Treasury~~approximately ~~bond yield rate~~100,000. OnAs ~~July~~of 1December 31, ~~2022~~2024, ~~Tampa~~TEC ~~Electric~~deferred ~~requested to adjust its base rates to collect an additional~~ $1049 million ~~annually~~to ~~(prorated in~~ the ~~first~~storm ~~year)~~reserve ~~effective~~for ~~September~~future 1recovery, ~~2022~~with ~~and~~a ~~increase~~minimal ~~its~~impact ~~mid-point ROE and upper and lower allowed ranges. On August 16, 2022, the FPSC approved the change. The new mid-point ROE is 10.20%, and the range is 9.25%~~ to 11earnings.~~25% effective July 1, 2022.~~

On ~~August~~Hurricane 16Milton, ~~2023,~~the ~~Tampa~~worst ~~Electric~~weather ~~filed~~event ~~a petition~~ to ~~implement~~impact the ~~2024~~area ~~Generation~~in ~~Base~~over ~~Rate~~100 ~~Adjustment~~years, ~~provisions~~made ~~pursuant~~landfall toon ~~the~~October ~~2021~~9, ~~Settlement Agreement~~2024. ~~Inclusive of~~ Tampa Electric’s ~~ROE~~was ~~adjustment~~impacted by Hurricane Milton, ~~the~~resulting ~~increase~~in a peak number of ~~$22~~customers ~~million~~out ~~was~~of ~~approved~~approximately by600,000. ~~the~~As ~~FPSC~~of ~~and~~December ~~the~~31, ~~order~~2024, ~~reflecting~~TEC ~~such~~deferred ~~approval~~$340 ~~was~~million ~~issued~~to onthe ~~November~~storm ~~17,~~reserve ~~2023~~for future recovery, ~~effective~~with ina ~~January~~minimal ~~2024~~impact to earnings.

OnRestoration ~~February~~costs 1,for ~~2024, Tampa Electric notified~~ the ~~FPSC~~storms ofdescribed ~~its~~above ~~intent~~are todeferred ~~seek~~and awill ~~base~~be ~~rate~~collected ~~increase,~~from ~~reflecting~~customers ain ~~revenue~~subsequent ~~requirement~~periods. ~~increase~~On ofFebruary ~~approximately $290 to $320 million~~4, ~~effective in January~~ 2025, ~~and~~the ~~additional~~FPSC ~~adjustments~~approved ~~of approximately $100 million and $70 million for 2026 and 2027, respectively.~~ Tampa Electric’s ~~proposed~~petition ~~rates~~filed ~~include~~on ~~recovery~~December of27, ~~solar~~2024 ~~generation~~for ~~projects,~~the ~~energy~~recovery ~~storage~~of ~~capacity,~~$466 amillion ~~more~~for ~~resilient~~costs ~~and~~associated ~~modernized~~with ~~energy~~Hurricane ~~control center~~Idalia, ~~and~~Hurricane ~~numerous~~Debby, ~~other~~Hurricane ~~resiliency~~Helene and ~~reliability~~Hurricane ~~projects.~~Milton ~~The~~and ~~filing~~the ~~range~~associated ~~amounts~~interest ~~are~~to ~~estimates~~replenish ~~until~~the ~~Tampa~~storm ~~Electric~~reserve ~~completes~~over ~~its~~an ~~analysis~~18-month ~~and~~recovery ~~files~~period ~~the~~beginning ~~case~~ in ~~April~~March ~~2024~~2025. The ~~FPSC~~amount ~~will~~of ~~hear~~cost-recovery ~~the~~is ~~case~~subject into ~~the~~a ~~third~~true-up ~~quarter~~mechanism ~~of 2024~~ with ~~a decision expected by~~ the ~~end of 2024~~FPSC.

Tampa Electric Big Bend Modernization Project

Tampa Electric invested $876 million, including $91 million of AFUDC, during 2018 through 2022 to modernize the Big Bend Power Station. The Big Bend modernization project repowered Big Bend Unit 1 with natural gas combined-cycle technology and eliminated coal as this unit’s fuel. As part of the Big Bend modernization project, Tampa Electric retired the Unit 1 components that will not be used in the modernized plant, ~~in 2020 and~~ Big Bend Unit 2 inand ~~2021. Tampa Electric retired~~ Big Bend Unit 3 in ~~2023 as it is in the best interest of customers from economic~~2020, ~~environmental~~2021 ~~risk~~ and ~~operational~~2023, ~~perspectives~~respectively.

~~At December 31, 2020,~~ Tampa Electric’s ~~balance~~Settlement ~~sheet~~Agreement ~~included~~provided ~~$636~~recovery ~~million~~for inthe ~~electric~~Big ~~utility~~Bend ~~plant~~modernization ~~and~~project ~~$267~~in ~~million~~two inphases. ~~accumulated~~The ~~depreciation~~first ~~related~~phase towas ~~Unit~~a 1revenue ~~components~~increase ~~and~~to ~~Unit~~cover 2the ~~and~~costs ~~Unit~~of 3the assets. Inin ~~accordance~~service ~~with~~during ~~Tampa~~2022, ~~Electric’s~~among ~~2017~~other ~~settlement~~items. ~~agreement~~The ~~approved~~remainder byof the ~~FPSC,~~project ~~Tampa~~costs ~~Electric~~was ~~continued~~recovered toas ~~account~~part ~~for~~of ~~its~~the ~~investment~~2023 insubsequent ~~Units~~year 1,adjustment. 2The ~~and~~Settlement 3Agreement inalso ~~electric~~included ~~utility~~a ~~plant~~new ~~and~~charge ~~depreciated~~to recover the ~~assets~~remaining ~~using~~costs of the ~~current~~retiring ~~depreciation~~Big ~~rates~~Bend ~~until~~coal ~~December~~generation 31assets, ~~2021,~~Units at1 through 3, which ~~point~~will ~~they~~be ~~were~~spread ~~reclassified~~over to15 ayears ~~regulatory~~and ~~asset~~will onsurvive the ~~balance~~term ~~sheet~~of the Settlement Agreement. The special capital recovery schedule for all three units was applied beginning January 1, 2022.

Tampa Electric’s Settlement Agreement provided recovery for the Big Bend modernization project in two phases. The first phase was a revenue increase to cover the costs of the assets in service during 2022, among other items. The remainder of the project costs was recovered as part of the 2023 subsequent year adjustment. The Settlement Agreement also included a new charge to recover the remaining costs of the retiring Big Bend coal generation assets, Units 1 through 3, which will be spread over 15 years and will

survive the term of the Settlement Agreement. The special capital recovery schedule for all three units was applied beginning January 1, 2022.

Tampa Electric Mid-Course Adjustment to Fuel Recovery

In ~~July~~January ~~2021~~2022, Tampa Electric requested a mid-course adjustment to its fuel and capacity charges, ~~effective~~to ~~with~~recover ~~September~~$169 ~~2021~~million ~~customer~~beginning ~~bills~~April 1, 2022 through December 2022 due to an increase in fuel commodity and capacity costs ~~in 2021~~. On ~~August~~March 31, ~~2021~~2022, the FPSC ~~approved~~voted ~~the~~to ~~request~~approve tothe ~~recover~~mid-course ~~$83~~adjustment, ~~million~~and ofthe ~~additional~~order ~~costs~~reflecting ~~during~~such ~~the~~approval ~~months~~was ofissued ~~September~~on ~~through~~March ~~December~~18, ~~2021~~2022.

On April 2, 2024, Tampa Electric requested a mid-course adjustment to its fuel and capacity charges, reflecting a $138 million reduction over 12 months, from June 2024 through May 2025. The requested reduction is due to a significant decrease in actual and projected 2024 natural gas prices since Tampa Electric submitted its projected 2024 costs in the fall of 2023. On May 7, 2024, the FPSC approved the mid-course adjustment.

Tampa Electric Storm Protection Cost Recovery Clause and Settlement Agreement

On October 3, 2019, the FPSC issued a rule to implement a Storm Protection Plan (SPP) Cost Recovery Clause. This clause provides a process for Florida investor-owned utilities, including Tampa Electric, to recover transmission and distribution storm hardening costs for incremental activities not already included in base rates. A settlement agreement was approved on August 10, 2020 and Tampa Electric’s cost recovery began in January 2021. The current approved plan addresses the years 2023, 2024 and 2025 and was approved by the FPSC on October 4, 2022.

~~Tampa Electric Storm Restoration Cost Recovery~~47

As a result of Tampa Electric’s 2013 rate case settlement, in the event of a named storm that results in damage to its system, Tampa Electric can petition the FPSC to seek recovery of those costs over a 12-month period or longer as determined by the FPSC, as well as replenish its reserve to $56 million, the level of the reserve as of October 31, 2013. Once the storm reserve regulatory liability is exhausted, TEC may petition the FPSC for recovery. This provision was also included in Tampa Electric’s subsequent 2017 amended and restated settlement agreement and in Tampa Electric’s 2021 rate case settlement agreement. In 2021, 2020 and 2019, Tampa Electric incurred total storm restoration costs for multiple hurricanes of approximately $10 million, which was charged to the storm reserve regulatory liability.

In September 2022, Tampa Electric was impacted by Hurricane Ian. Total storm restoration costs were $129 million, with $121 million charged to the storm reserve. Restoration costs charged to the storm reserve exceeded the storm reserve balance and this amount was deferred to be collected from customers in subsequent periods. In November 2022, Tampa Electric incurred costs of approximately $2 million related to Hurricane Nicole. In January 2023, Tampa Electric petitioned the FPSC for recovery of costs associated with Hurricanes Ian and Nicole that exceeded the reserve, $10 million of storm restoration costs charged to the reserve since 2018, and the replenishment of the balance in the reserve to the $56 million level that existed as of October 31, 2013 for a total of approximately $131 million. The storm cost recovery surcharge was approved by the FPSC on March 7, 2023, and Tampa Electric began applying the surcharge on April 2023 bills. Subsequently, on November 9, 2023, the FPSC approved Tampa Electric’s petition filed on August 16, 2023 to update the total storm cost collection from $129 million to approximately $134 million and change the collection of the expected remaining balance of approximately $29 million as of December 31, 2023, from over the first three months of 2024 to over the 12 months of 2024. The storm recovery is subject to review of the underlying costs for prudency and accuracy by the FPSC and issuance of an order by the FPSC is expected to occur by the third quarter of 2024.

In September 2023, Tampa Electric was impacted by Hurricane Idalia. The related storm restoration costs were approximately $35 million, which were charged to the storm reserve regulatory asset and not included in the petition above. Tampa Electric will determine the timing of the request for recovery of Hurricane Idalia costs at a future time.

PGS Base Rates

PGS’s results for 2022 ~~and 2021~~ reflected a rate case settlement agreement filed by PGS and ~~OPC~~the Office of Public Counsel and approved by the FPSC on November 19, 2020. The settlement agreement provides for an increase in base rates by $58 million annually effective January 2021, which is a $34 million increase in revenue and $24 million increase of revenues previously recovered through the cast iron and bare steel replacement rider. This settlement agreement includes an allowed regulatory ROE range of 8.90% to 11.00% with a 9.90% midpoint, including the ability to reverse a total of $34 million of accumulated depreciation through 2023. During 2023 and 2022, PGS reversed $1420 million ofand ~~the~~ $3414 million, respectively, of accumulated depreciation. ~~No amounts were reversed prior to 2022.~~

Regulatory Assets and Liabilities

Details of the regulatory assets and liabilities are presented in the following table:

Regulatory Assets and Liabilities

	December 31,		December 31,
(millions)	~~2023~~2024		~~2022~~2023
Regulatory assets:
Regulatory tax asset (1)	$	~~112~~117	$	~~124~~112
Cost-recovery clauses (2)		9420		~~525~~94
Capital cost recovery for early retired assets (3)		~~507~~513		~~497~~507
Environmental remediation (4)		0		20
Capital cost recovery for retired Polk Unit 1 components (4)		142		0
Postretirement benefits (5)		~~236~~243		~~272~~236
Storm reserve (6)		7377		767
Other		3229		3832
Total regulatory assets		~~988~~1,441		~~1,552~~988
Less: Current portion		~~161~~343		~~361~~161
Long-term regulatory assets	$	~~827~~1,098	$	~~1,191~~827
Regulatory liabilities:
Regulatory tax liability (7)	$	~~477~~456	$	~~601~~477
Cost-recovery clauses - deferred balances (2)		2080		3020
Accumulated reserve—cost of removal (8)		~~271~~304		~~498~~271
Other		27		11
Deferred production tax credits (9)		57		23
Total regulatory liabilities		795		1,140
Other		7		4
Less: Current portion		94		85
Total regulatory liabilities		904		795
Long-term regulatory liabilities	$	701	$	1,055
Less: Current portion		146		94
Long-term regulatory liabilities	$	758	$	701

(1)

The regulatory tax asset is primarily associated with the depreciation and recovery of AFUDC-equity. This asset does not earn a return but rather is included in the capital structure, which is used in the calculation of the weighted cost of capital used to determine revenue requirements. It will be recovered over the expected life of the related assets.

(2)

These assets and liabilities are related to FPSC clauses and riders~~, primarily related to the fuel clause and the increase in natural gas prices experienced in 2022~~. They are recovered or refunded through cost-recovery mechanisms approved by the FPSC on a dollar-for-dollar basis in a subsequent period.

(3)

This regulatory asset is related to the remaining net book value of Big Bend Units 1 through 3 and smart meter assets that were retired. The balance earns a rate of return as permitted by the FPSC and will be recovered as a separate line item on customer bills for a period of 15 years, beginning in 2022 through 2036. See “Tampa Electric Big Bend Modernization Project” above for further information.

(4)

This regulatory asset ~~was~~is related to ~~PGS~~the ~~costs~~remaining ~~associated~~net ~~with~~book ~~environmental~~value ~~remediation~~of ~~primarily~~certain atcomponents ~~MGP~~of ~~sites~~Polk Unit 1 that were early retired on December 31, 2024. ~~See~~The ~~Note~~balance 1earns ~~for~~a ~~information~~rate ~~regarding~~of return as permitted by the ~~separation~~FPSC ofand ~~PGS~~will ~~from~~be ~~TEC.~~recovered through base rates over an 11-year recovery period beginning on January 1, 2025.

(5)

This asset is related to the deferred costs of postretirement benefits and it is amortized over the remaining service life of plan participants. Deferred costs of postretirement benefits that are included in expense are recognized as cost of service for rate-making purposes as permitted by the FPSC.

(6)

See "Tampa Electric Storm Restoration Cost Recovery" above for information regarding this reserve. The regulatory asset is included in rate base and earns a rate of return as permitted by the FPSC.

(7)

The regulatory tax liability is primarily related to the revaluation of TEC’s deferred income tax balances recorded on December 31, 2017 at the lower corporate income tax rate due to U.S. tax reform. The liability related to the revaluation of the deferred income tax balances is amortized and returned to customers through rate reductions or other revenue offsets based on IRS regulations and the settlement agreement for tax reform benefits approved by the FPSC.

income tax balances is amortized and returned to customers through rate reductions or other revenue offsets based on IRS regulations and the settlement agreement for tax reform benefits approved by the FPSC.

(8)

This item represents the non-ARO cost of removal in the accumulated reserve for depreciation. AROs are costs for legally required removal of property, plant and equipment. Non-ARO cost of removal represents estimated funds received from customers through depreciation rates to cover future non-legally required cost of removal of property, plant and equipment, net of salvage value upon retirement, which reduces rate base for ratemaking purposes. This liability is reduced as costs of removal are incurred.

49(9) This regulatory liability represents the deferred benefit for production tax credits (PTC) available for qualifying solar facilities

placed in service on or after January 1, 2022, which reduced income tax expense. Following the recommendation of the FPSC, these PTC deferrals will be amortized over a three-year period.

4. Income Taxes

Change in Florida Corporate Income Tax Rate

On September 14, 2021, the state of Florida issued a corporate tax rate reduction from 4.46% to 3.53% effective January 1, 2021 through December 31, 2021. In 2021, TEC recorded a $4 million regulatory liability in recognition of its obligation to pass the tax rate reduction expense benefit to customers per the 2017 settlement agreement. Effective January 1, 2022, the Florida corporate income tax rate is 5.5%.

Inflation Reduction Act

On August 16, 2022, the Inflation Reduction Act was signed into legislation and includes numerous tax incentives for clean energy, such as the extension and modification of existing investment and production tax credits for projects placed in service through 2024, ~~the expansion of ITC for energy storage technology beginning 2023~~ and ~~introduces~~ new technology-neutral clean energy provisions related credits beginning in 2025. ~~TEC~~The ~~has~~Inflation ~~determined~~Reduction ~~that~~Act ~~electing~~also ~~production~~expanded ~~tax~~the ~~credits~~ITC for ~~its~~energy ~~solar~~storage ~~plants~~technology, ~~placed~~including inan ~~service~~election inthat ~~2022~~permits ~~and~~these ~~2023~~ITCs ~~will~~to be ~~more~~amortized ~~beneficial~~over ~~for~~a ~~customers~~period ~~compared~~that tois ~~ITCs~~shorter ~~and~~than ~~has~~the ~~recorded~~life aof ~~regulatory~~the ~~liability~~asset. inDuring ~~recognition~~2024, ofTEC ~~its~~placed ~~obligation~~in toservice ~~pass~~its ~~the~~first ~~tax~~standalone ~~benefits~~energy tostorage ~~customers~~project ofeligible ~~$23~~for ~~million~~the ITC and $7in ~~million~~accordance aswith ofthe FPSC decision rendered on December 313, ~~2023~~2024, ~~and~~is ~~2022,~~amortizing ~~respectively~~this project over a five-year period.

TEC has determined that electing production tax credits for its solar plants placed in service through 2024 will be more beneficial for customers compared to ITCs and has recorded a regulatory liability in recognition of its obligation to pass the tax benefits to customers of $57 million and $23 million as of December 31, 2024 and 2023, respectively. In accordance with the FPSC decision rendered on December 3, 2024, the regulatory liability will be refunded to customers over a three-year period. See Note 3.

Income Tax Expense

TEC is included in a consolidated U.S. federal income tax return with EUSHI and its subsidiaries. TEC’s income tax expense is based upon a ~~separate~~standalone return method, modified for the benefits-for-loss allocation in accordance with ~~respective~~EUSHI's tax sharing ~~agreements of TECO Energy and EUSHI~~agreement. To the extent that TEC’s cash tax positions are settled differently than the amount reported as realized under the tax sharing agreement, the difference is accounted for as either a capital contribution or a distribution.

In 2023, 2022 and 2021, TEC recorded net tax provisions of $87 million, $121 million and $80 million, respectively.

Income tax expense consists of the following components:

Income Tax Expense (Benefit)

(millions)
For the year ended December 31,	~~2023~~2024			~~2022~~2023			~~2021~~2022
Current income taxes
Federal	$	842		$	~~(13~~84	)	$	48(13	)
State		250			(325	)		4(3	)
Deferred income taxes
Federal		~~(19~~36	)		~~105~~(19	)		24105
State		534			385			1338
Investment tax credits amortization		(84	)		(68	)		(96	)
Total income tax expense	$	8768		$	~~121~~87		$	80121

5049

During 2024 and 2022, TEC increased its net operating loss carryforward. Total current income tax expense for the ~~year~~years ~~ended~~ending December 31, ~~2022~~2024 and December 31, ~~was~~2022 were reduced by $13 million and $59 million, respectively, to reflect the benefits of operating loss carryforwards.

For the three years presented, the overall effective tax rate differs from the U.S. federal statutory rate as presented below:

Effective Income Tax Rate

(millions)
For the year ended December 31,	~~2023~~2024			~~2022~~2023			~~2021~~2022
Income before provision for income taxes	$	~~553~~536		$	~~661~~553		$	~~526~~661
Federal statutory income tax rates		21	%		21	%		21	%
Income taxes, at statutory income tax rate		~~116~~113			~~139~~116			~~110~~139
Increase (decrease) due to
State income tax, net of federal income tax		23			2723			1327
Excess deferred tax amortization		(25	)		(25	)		(2625	)
ITC amortization		(84	)		(68	)		(96	)
AFUDC-equity		(43	)		(74	)		(97	)
Production Tax Credits		(15	)		(6	)		0
Production tax credits		(30	)		(15	)		(6	)
Other Tax credits		(4	)		(3	)		(3	)
Other tax credits		(7	)		(4	)		(3	)
Other		41			24			42
Total income tax expense on consolidated statements of income	$	8768		$	~~121~~87		$	80121
Income tax expense as a percent of income before income taxes		1512.7	%		1815.37	%		1518.23	%

Deferred Income Taxes

Deferred taxes result from temporary differences in the recognition of certain liabilities or assets for tax and financial reporting purposes. The principal components of TEC’s deferred tax assets and liabilities recognized in the balance sheet are as follows:

(millions)
As of December 31,	~~2023~~2024		~~2022~~2023
Deferred tax liabilities (1)
Property related	$	1,~~227~~314	$	1,~~318~~227
Deferred fuel		235		~~133~~23
Pension and postretirement benefits		~~100~~123		~~111~~100
Insurance reserves		0		15
Storm reserve		95		2
Total deferred tax liabilities		1,~~350~~537		1,~~577~~352
Deferred tax assets (1)
Loss and credit carryforwards (2)		~~383~~438		~~408~~383
Medical benefits		1922		2419
Insurance reserves		12		03
Pension and postretirement benefits		4962		5749
Capitalized energy conservation assistance costs		0		23
Other		37		18
Other		18		20
Total deferred tax assets		561		472
Total deferred tax assets		470		532
Total deferred tax liability, net	$	976	$	880
Total deferred tax liability, net	$	880	$	1,045

(1)

Certain property related assets and liabilities have been netted. At December 31, 2022, PGS total deferred tax liabilities and deferred tax assets were $213 million and $37 million, respectively, with the majority of the balances related to property and capitalized energy conservation assistance costs.

(2)

Deferred tax assets for net operating loss and tax credit carryforwards have been reduced by unrecognized tax benefits of $10 million and $910 million at December 31, ~~2023~~2024 and ~~2022~~2023, respectively.

The expiration of TEC's tax credits and net operating loss (NOL) carryforwards are as follows:

5150

(millions)	December 31, ~~2023~~2024		Expiration Year
General business credits	$	~~324~~361	2027-~~2043~~2044
Federal NOL carryforwards		135	2037
Federal NOL carryforwards (1)		~~199~~248	indefinite
State NOL carryforwards (1)		~~305~~359	indefinite
Total tax credits and NOL carryforwards	$	~~963~~1,103

(1)

Indefinite carryforward for Federal NOLs and NOLs for states that have adopted the U.S. Tax Cuts and Jobs Act of 2017 provisions, generated in tax years beginning after December 31, 2017.

TEC has unused general business credits of $~~324~~361 million expiring between 2027 and ~~2043~~2044, of which $~~266~~270 million relate to ITCs expiring between 2034 and ~~2043~~2044. As a result of TECO Energy's merger with Emera in 2016, TECs NOLs and credits will be utilized by EUSHI, in accordance with the benefits-for-loss allocation which provide that tax attributes are utilized by the consolidated tax return group of EUSHI.

Unrecognized Tax Benefits

TEC accounts for uncertain tax positions as required by U.S. GAAP. ~~This~~The ~~guidance~~following ~~addresses~~table ~~the~~provides ~~determination~~details of ~~whether tax benefits claimed or expected to be claimed on a tax return should be recorded in~~ the ~~financial~~change ~~statements. Authoritative guidance related to accounting for uncertainty~~ in ~~income~~unrecognized ~~taxes requires an enterprise to recognize in its financial statements the best estimate of the impact of a~~ tax ~~position~~benefits byas determining if the weight of the available evidence indicates that it is more likely than not, based solely on the technical merits, that the position will be sustained upon examination, including resolution of any related appeals and litigation processes. follows:

The following table provides details of the change in unrecognized tax benefits as follows:


(millions)	2024		2023		2022
Balance at January 1,	$	10	$	9	$	6
Increases due to tax positions related to prior year	0		0		2
Increases due to tax positions related to current year	0		1		1
Balance at December 31,	$	10	$	10	$	9

(millions)	2023		2022		2021
Balance at January 1,	$	9	$	6	$	9
Increases due to tax positions related to prior year	0		2		1
Increases due to tax positions related to current year	1		1		1
Decreases due to settlements with tax authorities	0		0			(5	)
Balance at December 31,	$	10	$	9	$	6

As of December 31, 2024 and 2023, TEC’s uncertain tax positions for federal research and development tax credits were $10 million and $10 million, respectively, all of which was recorded as a reduction of deferred income tax assets for tax credit carryforwards. The unrecognized tax benefits, if recognized, would reduce TEC’s effective tax rate.

AsTEC ofrecognizes ~~December~~interest ~~31,~~accruals ~~2023~~related ~~and~~to ~~2022, TEC’s~~ uncertain tax positions ~~for~~in ~~federal~~“Other ~~R&D~~income” ~~tax~~or ~~credits~~“Interest ~~were $10 million and $9 million~~expense”, ~~respectively, all of which was recorded~~ as aapplicable, ~~reduction~~and ofpenalties ~~deferred~~in ~~income~~“Operation ~~tax~~and ~~assets~~maintenance ~~for~~expense” ~~tax credit carryforwards. TEC’s unrecognized federal tax benefits decreased~~ in ~~2021 by approximately $5 million due to~~ the ~~resolution~~Consolidated Statements of ~~its 2016 federal tax credits issue with IRS Appeals~~Income. ~~The~~In ~~settlement~~2024, of2023 ~~the~~and ~~federal~~2022, ~~R&D~~TEC ~~credits audit~~ did not ~~impact~~recognize ~~the~~any ~~effective~~ pre-tax ~~rate~~charges ~~during~~for ~~2021.~~interest ~~The~~or ~~unrecognized tax benefits, if recognized, would reduce TEC’s effective tax rate~~penalties.

~~TEC~~ The ~~recognizes~~U.S. ~~interest~~federal ~~accruals~~statute ~~related~~of tolimitations ~~uncertain~~remains ~~tax~~open ~~positions~~for inthe ~~“Other~~year ~~income”~~2017 orand ~~“Interest~~forward. ~~expense”,~~Florida’s asstatute ~~applicable,~~of ~~and~~limitations ~~penalties~~is inthree ~~“Operation~~years ~~and~~from ~~maintenance~~the ~~expense”~~filing inof ~~the~~an ~~Consolidated~~income ~~Statements~~tax ~~of Income~~return. InThe ~~2023,~~state ~~2022~~impact ~~and~~of ~~2021,~~any ~~TEC~~federal ~~did~~changes ~~not~~remains ~~recognize~~subject ~~any~~to ~~pre-tax~~examination ~~charges~~by ~~(benefits)~~various states for ~~interest.~~a ~~Additionally,~~period ~~TEC~~of ~~did~~up ~~not~~to ~~have~~one ~~any~~year ~~accrued~~after ~~interest~~formal ornotification ~~amounts~~to ~~recorded~~the ~~for~~states. ~~penalties~~Years atstill ~~December~~open ~~31,~~to ~~2023,~~examination ~~2022~~by Florida’s tax authorities include 2013 and ~~2021~~forward as a result of EUSHI’s consolidated Florida net operating loss still being utilized.

The U.S. federal statute of limitations remains open for the year 2017 and forward. 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 2005 and forward as a result of TECO Energy’s consolidated Florida net operating loss still being utilized.

5. Employee Postretirement Benefits

Pension Benefits

TEC is a participant in the comprehensive retirement plans of TECO Energy, LLC (formerly known as TECO Energy, Inc. prior to April 1, 2024), including a qualified, non-contributory defined benefit retirement plan that covers substantially all employees. Subsequent to April 1, 2024, TECO Energy, LLC became a wholly owned subsidiary of the newly created TECO Holdings (see Note 1 for further detail.) Effective January 1, 2025, the comprehensive retirement plans were transferred to TECO Holdings. Benefits are based on the employees’ age, years of service and final average earnings. Where appropriate and reasonably determinable, the portion of expenses, income, gains or losses allocable to TEC are presented. Otherwise, such amounts presented reflect the amount allocable to all participants of the TECO Energy retirement plans.

Amounts disclosed for pension benefits in the following tables and discussion also include the fully-funded obligations for the SERP and the unfunded obligations of the Restoration Plan. The SERP is a non-qualified, non-contributory defined benefit retirement plan available to certain members of senior management. The Restoration Plan is a non-qualified, non-contributory defined benefit retirement plan that allows certain members of senior management to receive contributions as if no IRS limits were in place.

5251

TECO Energy	Pension Benefits						Other Benefits (2)
Obligations and Funded Status
(millions)	~~2023~~2024			~~2022~~2023			~~2023~~2024			~~2022~~2023
Change in benefit obligation
Benefit obligation at beginning of year	$	~~666~~678		$	~~850~~666		$	~~142~~132		$	~~200~~142
Service cost		1517			1815			1			21
Interest cost		35			2335			7			57
Plan participants’ contributions		0			0			4			4
Benefits paid		(5957	)		(7959	)		(1910	)		(19	)
Actuarial loss (gain)		271			~~(142~~27	)		7(4	)		~~(50~~7	)
Plan amendments		0			0			~~(10~~0	)		0(10	)
Plan settlements (3)		(60	)		(46	)		0			0
Benefit obligation at end of year	$	~~678~~674		$	~~666~~678		$	~~132~~130		$	~~142~~132

Change in plan assets
Fair value of plan assets at beginning of year	$	~~650~~686		$	~~924~~650		$	0		$	0
Actual gain (loss) return on plan assets		7841			~~(214~~78	)		0			0
Employer contributions		16			1816			0			0
Employer direct benefit payments		70			57			156			15
Plan participants’ contributions		0			0			4			4
Benefits paid		(5857	)		(7858	)		0			0
Direct benefit payments		(10	)		(1	)		(1910	)		(19	)
Plan settlements (3)		(60	)		(46	)		0			0
Fair value of plan assets at end of year (1)	$	686		$	~~650~~686		$	0		$	0

TECO Energy	Pension Benefits					Other Benefits (1)
Funded Status
(millions)	~~2023~~2024		~~2022~~2023			~~2023~~2024			~~2022~~2023
Benefit obligation (PBO/APBO)	$	~~678~~674	$	~~666~~678		$	~~132~~130		$	~~142~~132
Less: Fair value of plan assets		686		~~650~~686			0			0
Funded status at end of year	$	812	$	~~(16~~8	)	$	(~~132~~130	)	$	(~~142~~132	)

TEC	Pension Benefits						Other Benefits
Amounts recognized in balance sheet
(millions)	~~2023~~2024			~~2022~~2023			~~2023~~2024			~~2022~~2023
Noncurrent assets	$	1014		$	010		$	0		$	0
Accrued benefit costs and other current liabilities		0			(70	)		(10	)		(1210	)
Deferred credits and other liabilities		(12	)		(91	)		(9997	)		(~~121~~99	)
	$	912		$	~~(16~~9	)	$	(~~109~~107	)	$	(~~133~~109	)

TEC	Pension Benefits				Other Benefits
Amounts recognized in regulatory assets
(millions)	~~2023~~2024		~~2022~~2023		~~2023~~2024		~~2022~~2023
Net actuarial loss	$	~~207~~213	$	~~242~~207	$	29	$	3029
Amount recognized	$	~~207~~213	$	~~242~~207	$	29	$	3029

Net loss (gain) arising during the year (includes curtailment gain)	$	215		$	~~123~~2		$	~~(56~~123	)	$	7(4	)	$	~~(50~~7	)	$	(550	)
Prior service cost	$	0		$	0		$	0		$	~~(11~~0	)	$	0(11	)	$	0
Amounts recognized as component of net periodic benefit cost:
Amortization or curtailment recognition of prior service credit		0			0			0			3			23			2
Amortization or settlement of actuarial loss		(7	)		(197	)		(2319	)		0			(30	)		(43	)
Total recognized in OCI and regulatory assets	$	(58	)	$	~~104~~(5	)	$	~~(79~~104	)	$	(1	)	$	(511	)	$	(751	)
Total recognized in net periodic benefit cost, OCI and regulatory assets	$	(212	)	$	~~113~~(2	)	$	~~(67~~113	)	$	54		$	~~(43~~5	)	$	2(43	)

TECO Energy	~~2023Target~~2024Target Allocation			~~2022Target~~2023Target Allocation			Actual Allocation, End of Year
Asset Category							~~2023~~2024			~~2022~~2023
Cash and cash equivalents	0%-10%			~~n/a~~0%-10%				32	%	~~n/a~~	3	%
Equity securities	48%-68%			5048%-7068%				5758	%		5857	%
Fixed income securities	29%-49%			3029%-5049%				40	%		4240	%
Total		100	%		100	%		100	%		100	%


TECO Energy	At Fair Value as of December 31, 2024
(millions)
	Level 1			Level 2		Level 3		Using NAV (1)		Total
Cash	$	1		$	0	$	0	$	0	$	1
Accounts receivable		19			0		0		0		19
Accounts payable		(38	)		0		0		0		(38	)
Short-term investment funds (STIFs)		17			0		0		0		17
Real estate investment trusts (REITs)		2			0		0		0		2
Mutual funds		9			0		0		0		9
US Equity		99			0		0		0		99
Municipal bonds		0			2		0		0		2
Government bonds		0			71		0		0		71
Corporate bonds		0			53		0		0		53
Mortgage Backed Securities (MBS)		0			11		0		0		11
Investments not utilizing the practical expedient		109			137		0		0		246
Limited Partnership Pooled Fund		0			0		0		79		79
Common and collective trusts (1)		0			0		0		361		361
Total investments	$	109		$	137	$	0	$	440	$	686


TECO Energy	At Fair Value as of December 31, 2023
(millions)
	Level 1			Level 2			Level 3		Using NAV (1)		Total
Cash	$	(1	)	$	0		$	0	$	0	$	(1	)
Accounts receivable		3			0			0		0		3
Accounts payable		(10	)		0			0		0		(10	)
Short-term investment funds (STIFs)		24			0			0		0		24
Common stock		1			0			0		0		1
Real estate investment trusts (REITs)		3			0			0		0		3
Mutual funds		38			0			0		0		38
Municipal bonds		0			2			0		0		2
Government bonds		0			108			0		0		108
Corporate bonds		0			57			0		0		57
Long futures		5			0			0		0		5
Short Sales		0			(1	)		0		0		(1	)
Investments not utilizing the practical expedient		63			166			0		0		229
Common and collective trusts (1)		0			0			0		443		443
Mutual fund (1)		0			0			0		14		14
Total investments	$	63		$	166		$	0	$	457	$	686

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Non-accelerated filer

Smaller reporting company

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