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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, 2025

☐ 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)
	Midtown East Tower
	3600 Midtown Drive
	Tampa, Florida 33607
	(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, 2025 was zero.

As of February 21, 2026, 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 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
CCRs		coal combustion residuals
CO2		carbon dioxide
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
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
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
IT		information technology
ITCs		investment tax credits
MD&A		the section of this report entitled Management’s Discussion and Analysis of Financial Condition and Results of Operations
MMBTU		one million British Thermal Units
MW		megawatt(s)
MWH		megawatt-hour(s)
NAV		net asset value
Note		Note to financial statements
NPNS		normal purchase normal sale
O&M expenses		operations and maintenance expenses
OBBBA		One Big Beautiful Bill Act
OCI		other comprehensive income
OPEB		other postemployment benefits
Parent		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
PP&E		property, plant and equipment
PTCs		production tax credits
ROE		return on common equity
Regulatory ROE		return on common equity as determined for regulatory purposes
ROU		right-of-use
S&P		Standard and Poor’s
SEC		U.S. Securities and Exchange Commission
SERP		Supplemental Executive Retirement 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

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 or Tampa Electric, was incorporated in Florida in 1899 and was reincorporated in 1949. All of TEC’s common stock is owned by TECO Holdings. TECO Holdings is an indirect, wholly owned subsidiary of Emera. Therefore, TEC is an indirect, wholly owned subsidiary of Emera.

TEC 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. TEC engages in wholesale sales to utilities and other resellers of electricity. At December 31, 2025, TEC had three generating stations in or near Tampa, one generating station in southwestern Polk County, twenty-eight photovoltaic power stations (sixteen in Hillsborough County, ten in Polk County, and two in Pasco County), and three energy storage sites.

TEC makes its SEC filings available free of charge on TEC’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).

Revenues

TEC provides retail electric service to approximately 866,000 customers in West Central Florida with a net winter system generating capacity of 6,771 MW at December 31, 2025. 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.

No significant part of TEC’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 TEC. TEC 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.

For further information regarding the sources of TEC's operating revenues and kilowatt-hours billed, see the Operating Results section of the MD&A. For TEC’s revenue and other financial information by operating segments, see Note 11 to the 2025 Annual TEC Financial Statements.

Human Capital

TEC had 2,601 employees as of December 31, 2025, substantially all of whom are located in Florida. Of these employees, 753 were represented by the International Brotherhood of Electrical Workers and 130 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.

Regulation

Base Rates

TEC’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 TEC, the FPSC or other interested parties.

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

Other Cost Recovery

TEC has five cost recovery clauses.

(1)

TEC 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)

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

(3)

TEC 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, TEC 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)

TEC 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 2025, the FPSC approved cost-recovery rates for the above clauses effective January 1, 2026. See Note 3 to the 2025 Annual TEC Financial Statements for further information. In addition, TEC’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

TEC 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.

TEC 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

TEC’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 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. TEC intends to retain and expand its retail business by managing costs and providing quality service to retail customers.

Generation Sources

In 2025 and 2024, 88% and 89%, respectively, of TEC’s net generation of electricity was natural gas-fired, with solar representing 12% and 11%, respectively, and coal representing less than 1% and 1%, respectively. In 2025 and 2024, TEC used its generating units to meet 89% and 91%, respectively, of the total system load requirements, with the remaining 11% and 9%, respectively coming from purchased power. TEC is required to maintain a generation capacity greater than firm peak demand. TEC 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 TEC’s generation costs.


Average cost per MMBTU	2025		2024		2023
Natural Gas (1)	$	4.73	$	3.65	$	2.81
Coal (2)		8.72		15.47		5.00

Average generation cost per MWh (3)		31.51		28.47		30.97

(1)

Represents the cost of natural gas, transportation, storage, 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.

TEC’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 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. TEC maintains gas commodity, pipeline transportation and storage contracts. As of December 31, 2025, 66% of TEC’s 2.0 billion cubic feet of gas storage capacity was full. TEC has contracted for, on average, 63% of its expected gas needs for the January through December 2026 period at market price. TEC expects to issue requests for proposals to meet its remaining 2026 gas needs and to continue contracting for its 2027 requirements. Additional volume requirements are purchased in the short-term spot market.

Franchises and Other Rights

Florida utilities must obtain franchises to operate in certain municipalities. TEC holds franchises and other rights that, together with its charter powers, govern the placement of TEC’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 TEC’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.

TEC has franchise agreements with 13 incorporated municipalities within its retail service area. At December 31, 2025, these agreements have various expiration dates ranging through 2052 and are expected to be renewed under similar terms and conditions.

Franchise fees expense totaled $70 million and $59 million in 2025 and 2024, 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

See Environmental Compliance section of the MD&A for information regarding environmental matters.

Item 1A. RISK FACTORS

Risks Relating to TEC’s Business and Strategy

Regulatory, Legislative, and Legal Risks

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

TEC operates in a regulated industry. Retail operations, including the rates charged and costs eligible for recovery under clauses, are regulated by the FPSC, and TEC’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, TEC’s earnings could be negatively impacted. Emerging laws and policies addressing data center development may impact load growth and the need for additional utility infrastructure.

If TEC earns returns on equity above its allowed range, 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.

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, including any changes to the Inflation Reduction Act or OBBBA, 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 2025 Annual TEC Financial Statements for further information regarding TEC’s income taxes.

TEC 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.

TEC 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 TEC:

      
     •

     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 TEC could be lost in the event of a breach by such utility or could expire and not be renewed.

TEC 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.

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 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. TEC has both summer and winter peak periods that are dependent on weather conditions. TEC 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, as well as risks arising from the evolving political and regulatory environment related to climate change.

TEC is subject to risks that may arise from the impacts of climate change. In addition, shifts in U.S. federal policy have resulted in the rollback or suspension of several climate and environmental regulations. In prior years, municipal, state, and federal governments had 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. Some states are continuing to advance their own climate disclosure and decarbonization mandates. This creates uncertainty regarding future requirements for greenhouse gas emissions, climate risk disclosures, and the transition to cleaner energy sources. Refer to “changes in the environmental and land use laws and regulations” above.

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.

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 reliance on technology, the cost of technology, technological vulnerabilities, and the rapid evolution of artificial intelligence, which could cause system failures, disrupt operations or adversely affect safety.

TEC relies on various IT systems to manage operations, including increasing reliance on IT solutions operated by third parties, such as software as a service and third-party cloud hosting. This subjects TEC to inherent costs and risks associated with maintaining, upgrading, replacing and changing these systems. This includes impairment of its IT operations, potential disruption of internal control systems, substantial capital expenditures, demands on management time and other risks of delays, difficulties in upgrading existing systems, transitioning to new systems or integrating new systems into its current systems. Technological reliance may increase vulnerability to cyberattacks and data breaches and increase operational reliance on technology systems and third parties. The rapid evolution of artificial intelligence (AI) has the potential to disrupt existing business models and markets and could result in a material adverse effect on TEC’s business. If the company does not successfully integrate AI in a timely and cost-effective manner, it may not fully realize anticipated efficiencies, cost savings, or service improvements. If AI systems or tools do not operate as expected, it could result in adverse operational, safety, reputational, financial, legal, privacy, data security, or other outcomes. TEC’s digital transformation strategy, including investment in infrastructure modernization, emerging technologies such as Generative AI, and customer focused technologies, is driving increased investment in IT technology solutions, resulting in increased project risks associated with the implementation of these solutions.

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 IT 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 IT 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 TEC’s business and its expected performance.

Florida electric utilities, including TEC, 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 TEC 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.

TEC depends on third parties to supply fuel, including natural gas. 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 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 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.

Fuel costs used for generation are affected primarily by the cost of natural gas. TEC 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 TEC, 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 solar 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 TEC’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 TEC 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 TEC.

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 Holdings. Under calculation requirements of the Pension Protection Act, as of the January 1, 2025 measurement date, TECO Holdings’ 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 $93 million at December 31, 2025.

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 concentrated geographic area than its former PGS division.

The separation was structured as 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.

The insolvency or default of key third parties could have an adverse impact on the financial condition of TEC.

TEC is exposed to risk related to its reliance on certain key partners, suppliers, and customers, any of which may endure financial challenges resulting from commodity price and market volatility, economic instability or adversity, adverse political or regulatory changes and other causes which may cause or contribute to such parties’ insolvency, bankruptcy, restructuring or default on their contractual obligations to TEC. This could adversely affect TEC’s financial condition.

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 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 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 the cybersecurity framework that governs the company. 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 Chief Technology Officer (CTO), 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 CTO has extensive experience at TEC in many areas, including in technology-related matters, operational technology, utility operations generally, energy supply, electric delivery, and engineering, including many years of experience leading a large business unit in technology implementation and related processes , and overseeing large groups of employees and contractors responsible for carrying out these responsibilities. The CTO has degrees and certifications in engineering, business, and cyber security.

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 CTO, 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 CTO, through the CEO, as appropriate, would promptly inform the Board regarding any such threat or incident. The CTO also provides regular updates on the key elements of its cybersecurity program to the Emera Board’s Safety and Risk 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 its physical properties are adequate to carry on its business as currently conducted. The properties of TEC are subject to a first mortgage bond indenture under which no bonds are currently outstanding.

TEC has electric generating stations in service, with a December 2025 net winter generating capability of 6,771 MWs. Tampa Electric assets include the Big Bend Power Station (1,561 MWs capacity), the Bayside Power Station (2,212 MWs capacity), the Polk Power Station (1,406 MWs capacity), and MacDill Power Station (73 MWs capacity). Also included in Tampa Electric’s assets as of December 31, 2025, are twenty-eight solar arrays (1,424 MWs capacity) and three energy storage sites (95 MWs capacity).

TEC owns 77 transmission substations and 139 distribution substations with an aggregate transformer capacity of 17,126 mega volts amps. The Tampa Electric system has a 8,285 mega volts amps of generator step up unit capacity. The transmission system consists of 1,379 total circuit miles of high voltage transmission lines, including underground and double-circuit lines. The distribution system consists of 5,979 circuit miles of overhead lines and 7,104 circuit miles of underground lines. As of December 31, 2025, there were 880,841 meters in service. All of this property is located in Florida.

TEC’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 TEC.

TEC 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.

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, see Note 8 of the 2025 Annual TEC 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 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, 2025, TEC served approximately 866,000 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 6,771 MW.

TEC 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 2025 Annual TEC Financial Statements for information regarding related party transactions.

TEC’s 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).

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.

TEC anticipates earning within its allowed ROE range in 2026. Earnings are expected to be higher in 2026 than 2025 as a result of new base rates effective January 1, 2026, and continued customer growth.

On September 4, 2025, TEC petitioned the FPSC to increase base revenue by $88 million to reflect the 2026 adjustment in accordance with its 2024 rate case decision. On November 4, 2025, the FPSC approved the adjustment, with new rates becoming effective January 1, 2026.

On February 3, 2025, the FPSC issued the final order approving the rate case decision, effective January 1, 2025. For additional details on the rate case decision, see Note 3 to the 2025 Annual TEC Financial Statements. In February 2025, a motion for reconsideration on certain aspects of the final order was filed by an intervening party with the FPSC. On May 6, 2025, the FPSC denied the motion for reconsideration, except with respect to immaterial calculation corrections, and the final order was issued on June 11, 2025. In March 2025, two intervening parties each filed a notice of appeal to the Florida Supreme Court regarding the outcome of TEC’s 2024 base rate proceeding. On January 12, 2026, the intervening parties filed their briefs related to the appeal. To date, the FPSC has not responded to the briefs.

On February 4, 2025, the FPSC approved TEC’s petition for the recovery of $466 million of costs associated with Hurricane Idalia, Hurricane Debby, Hurricane Helene and Hurricane Milton, and the associated interest to replenish the storm reserve over an 18-month recovery period, which began in March 2025. The amount of cost-recovery is subject to a true-up mechanism with the FPSC. For additional details on the storm reserve, see Note 3 to the 2025 Annual TEC Financial Statements.

In 2026, TEC expects to invest approximately $1.8 billion, including AFUDC, in capital projects. Capital projects include generation investments, grid modernization, storm hardening investments, and transmission expansion. 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.

See below for detail on the results of operations at TEC during 2025 compared to 2024. For information regarding 2024 results as compared to 2023, 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, 2024.

TEC’s net income in 2025 was $607 million, compared with $468 million in 2024. Results primarily reflected higher base revenues resulting from the 2024 rate case and customer growth, combined with the benefit from production tax credits, and additional storm protection plan return on investment. These increases were partially offset by higher operations & maintenance, depreciation and interest 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.

TEC's regulated operating statistics for the years ended December 31, 2025, 2024 and 2023 were as follows.


(millions, except customers and total degree days)	2025			% Change		2024			% Change			2023
By Customer Type
Operating Revenues
Residential (1)	$	1,786			19	$	1,507			(12	)	$	1,711
Commercial (1)		822			20		686			(15	)		803
Industrial (1)		195			20		162			(20	)		203
Other (1)		253			18		215			(13	)		248
Regulatory deferrals and unbilled revenue (2)		(25	)		77		(111	)		71			(389	)
Total retail sales of electricity		3,031			23		2,459			(5	)		2,576
Off system sales of electricity		18			50		12			50			8
Other operating revenue		66			20		55			4			53
Total revenues	$	3,115			23	$	2,526			(4	)	$	2,637
Megawatt-hour Sales
Residential		10,309			0		10,269			(0	)		10,307
Commercial		6,536			1		6,481			0			6,462
Industrial		2,105			4		2,019			(3	)		2,082
Other		1,993			3		1,933			(0	)		1,940
Total retail		20,943			1		20,702			(0	)		20,791
Off system sales		384			12		343			35			254
Total energy sold		21,327			1		21,045			0			21,045

By Sales Type
Base	$	1,691			13	$	1,490			2		$	1,458
Clause		862			15		751			(6	)		802
Capital cost recovery for early retired assets		69			0		69			0			69
Storm surcharge		263			807		29			(73	)		107
Gross receipts taxes and franchise fees		144			20		120			(14	)		139
Other		86			28		67			8			62
Total revenues	$	3,115			23	$	2,526			(4	)	$	2,637

Customers at December 31, (thousands)		866			1		855			2			840
Retail net energy for load		21,797			0		21,847			0			21,767
Total degree days		4,658			2		4,573			(2	)		4,671

(1)

Reflects a billing cycle measurement.

(2)

Primarily reflects unbilled revenue, which incorporates a calendar measurement, and postings for clause recovery deferrals.

Operating Revenues

Revenues were $589 million higher in 2025 than in 2024 primarily driven by higher storm surcharge revenue (offset in O&M expense), higher base revenues due to new base rates as a result of the 2024 rate case, customer growth and favorable weather, and increased regulatory deferral revenue, partially offset by lower average customer usage. Total degree days (a measure of heating and cooling demand) in Tampa Electric's service area in 2025 were 6% above normal (a 20-year statistical degree day average) and 2% above 2024 reflecting favorable weather in 2025 compared to 2024. Total net energy for load, which is a calendar measurement of energy output, in 2025 was consistent with 2024.

Customer and Energy Sales Growth Outlook

Population growth in the area is forecasted to continue to be a major driver of customer growth. In 2026, energy sales volumes are expected to be similar to 2025 levels. In 2025, energy sales benefited from weather that was warmer than normal. Normalizing 2025 for weather, 2026 energy sales volumes are expected to be above 2025 levels due to customer growth. TEC expects 2026 customer growth to be approximately 1.6% and to continue at approximately that level annually over the next few years.

Operating Expenses

In 2025, O&M expense was $246 million higher than in 2024 due to increased storm cost recognition of $234 million related to storm surcharge revenue (offset in revenue) and increased operations and maintenance expenses of $56 million, partially offset by decreased regulatory deferrals of $44 million. The decrease in regulatory deferrals is primarily driven by the $53 million benefit from production tax credits, partially offset by amortization related to the Polk Power Station Unit 1 retirement as a result of the 2024 rate case. The increase in operating expenses was primarily associated with higher costs for employee benefits, operations related to solar investments, and software maintenance. During 2022 through 2024, TEC recorded a regulatory liability of $57 million to defer the benefit of PTCs. Starting in 2025, the deferred PTC benefit is being amortized over a three-year period (see Note 3 to the 2025 Annual TEC Financial Statements for further information). O&M related to PTC regulatory deferrals decreased by $53 million in 2025 due to the absence of the $34 million deferral of benefits from PTCs in 2024 and the $19 million amortization of the regulatory liability in 2025. Depreciation and amortization expense increased $50 million in 2025 compared to 2024 as a result of additions to facilities and the in-service of capital projects.

O&M expense in 2026 is expected to increase compared to 2025 due to inflation. In 2026, depreciation expense is expected to increase compared to 2025 due to several major projects and plant additions.

Fuel Expense, Purchased Power and Fuel Cost Recovery

Total fuel expense increased in 2025 from 2024 primarily due to higher purchased power costs due to unfavorable hot weather that impacted the eastern U.S. and an increase in days with outages in 2025 compared to 2024. Total 2026 fuel and purchased power costs are expected to be higher than in 2025 due to higher natural gas prices.

On January 23, 2023, TEC 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.

On April 2, 2024, TEC 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 TEC submitted its projected 2024 costs in the fall of 2023. On May 7, 2024, the FPSC approved the mid-course adjustment.

In December 2025 and 2024, the FPSC approved cost-recovery rates for fuel and purchased power, capacity, environmental, conservation and storm protection plan costs for 2026 and 2025, respectively. The rates include the expected cost for natural gas and coal in the following year. 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 2025 and 2024, TEC’s other income was $60 million and $48 million, respectively, which included AFUDC-equity of $35 million and $30 million, respectively, and other income of $25 million and $18 million, respectively. The increase in AFUDC-equity in 2025 compared to 2024 is primarily due to the timing of solar, resiliency and other projects and an increase in the applicable AFUDC rate. On April 24, 2025, the FPSC approved to change the rate used to account for AFUDC from 6.07% to 6.65% effective January 1, 2025.

AFUDC-equity is expected to increase in 2026 due to the timing of construction of capital projects, including solar generation.

Interest Expense

For the years 2025 and 2024, TEC’s interest expense, including interest expense to affiliates and excluding AFUDC-debt, was $232 million and $203 million, respectively. The increase is due to higher borrowings, primarily resulting from storm costs incurred in 2024 and support of TEC's capital program.

Interest expense is expected to increase in 2026, reflecting higher outstanding debt balances (see Note 6 to the 2025 Annual TEC Financial Statements for further detail).

Income Taxes

The provision for income taxes increased in 2025 compared to 2024 primarily as a result of higher pre-tax income, partially offset by higher production tax credits and amortization of deferred investment tax credits related to solar facilities. Income tax expense as a percentage of income before taxes was 14.1% in 2025 and 12.7% in 2024. TEC expects the 2026 annual effective tax rate to be approximately 12%.

 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 standalone return method, modified for the benefits-for-loss allocation in accordance with EUSHI’s tax sharing agreement. The cash (refunds) payments for federal income taxes and state income taxes made under those tax sharing agreements totaled $117 million and $(3) million in 2025 and 2024, 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 2025 Annual TEC Financial Statements. 

LIQUIDITY, CAPITAL RESOURCES

Balances as of December 31, 2025



(millions)
Credit facilities/ commercial paper (1)	$	1,200
Drawn amounts/ letters of credit		774
Available credit facilities		426
Cash		3
Total liquidity	$	429

(1)

See Note 6 to the 2025 Annual TEC Financial Statements for information regarding the credit facilities.

Cash from Operating Activities

Cash flows from operating activities in 2025 were $886 million, a decrease of $278 million compared to 2024. The decrease to cash from operations was primarily due to higher fuel costs driving under-recoveries and changes in accounts receivable balances resulting from increased revenue reflected on customer bills.

Cash from Investing Activities

Cash flows from investing activities in 2025 resulted in a net use of cash of $1.5 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 2025 resulted in net cash inflows of $651 million. TEC received $530 million of equity contributions from Parent, $593 million proceeds from the issuance of long-term debt and a $137 million increase in short-term debt with maturities of less than 90 days. These increases in cash flows were partially offset by dividend payments to Parent of $606 million.

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, transactions 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 2026 (see Capital Investments section below for further detail on TEC’s projected capital expenditures). Debt raised is subject to applicable regulatory approvals and TEC 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, 2025 was primarily caused by short-term borrowings and periodic fluctuations in assets and liabilities related to FPSC clauses and riders. At December 31, 2025, TEC’s unused capacity under its credit facilities was $426 million. 

TEC has a credit facility utilized with commercial paper that provides $1.2 billion of credit, maturing in 2030. See Note 6 to the 2025 Annual TEC 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 2026 to be higher than 2025 primarily due to lower cash outflows for 2024 storm costs that were paid in 2025 and higher base revenues due to the 2026 subsequent year adjustment effective in January 2026 (see Note 3 to the 2025 Annual TEC Financial Statements). TEC plans to use cash in 2026 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 Significant Financial Covenants section). TEC estimates that it could fully utilize the total available capacity under its facilities in 2026 and remain within the covenant restrictions.

Short-Term Borrowings

      
     December 31, 2025

     December 31, 2024

      
     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)

1,200

0

773

1

800

0

636

1

(1)

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

(2) On November 20, 2025, TEC amended the credit facility agreement to increase the capacity amount from $800 million to $1.2 billion and extend the maturity date to November 20, 2030. At December 31, 2025, TEC also had 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 22, 2026, TEC amended the commercial paper program to increase the amount to $1.2 billion from $800 million.

At December 31, 2025, the credit facility 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, 2025 and 2024 was 4.0% and 4.8%, respectively. For a complete description of the credit facilities see Note 6 to the 2025 Annual TEC Financial Statements.

      
     Maximum

     Minimum

     Average

     Average

      
     drawn

     drawn

     drawn

     interest

     (millions)

     amount

     amount

     amount

     rate

2025 credit facility utilization

773

95

453

4.49

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, 2025, 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, 2025. Reference is made to the specific agreements and instruments for more details.

(1)

As defined in the applicable instrument.

(2)

See Note 6 to the 2025 Annual TEC Financial Statements for a description of the credit facilities.

Credit Ratings at December 31, 2025


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

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.

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, 2025


	Payments Due by Period
(millions)	Total		2026		2027		2028		2029		2030		After 2030
Long-term debt (1)	$	4,575	$	0	$	0	$	0	$	500	$	0	$	4,075
Interest payment obligations(2)		3,184		204		204		204		192		179		2,201
Transportation(3)		1,799		151		179		140		121		114		1,094
Pension plan(4)		114		9		9		9		10		9		68
Capital projects(5)		167		115		32		18		2		0		0
Fuel and gas supply		553		248		133		86		86		0		0
Long-term service agreements		116		19		27		19		19		19		13
Leases		180		4		4		4		4		4		160
Purchased power agreements		122		17		12		13		13		13		54
Total contractual obligations	$	10,810	$	767	$	600	$	493	$	947	$	338	$	7,665

(1)

See the Statements of Capitalization and Note 7 to the 2025 Annual TEC 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, 2025.

(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, 2025 measurement date, the pension plan was fully funded. Under ERISA guidelines, TEC is not required to make additional cash contributions until 2030; 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 2025 Annual TEC Financial Statements).

(5)

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

See Notes 3, 4, 5 and 12 to the 2025 Annual TEC 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 the Financial Statements as of December 31, 2025.

Capital Investments


(millions)	Actual 2025			Forecasted 2026
Tampa Electric (1)
Transmission	$	128		$	220
Distribution		568			555
Generation		583			775
Facilities, equipment, vehicles and other		297			200
Tampa Electric total		1,576			1,750
Net cash effect of accruals, retentions and AFUDC		(19	)
Total	$	1,557		$	1,750

(1)

Individual line items include AFUDC.

TEC intends to invest approximately $571 million in 372 MW of new utility-scale solar photovoltaic projects in 2024 through 2026 (solar wave III) with spend to date of $457 million as of December 31, 2025, approximately $801 million in 455 MW of new utility-scale solar photovoltaic projects in 2026 through 2028 (solar wave IV), and approximately $531 million in 298 MW of new utility-scale solar photovoltaic projects in 2029 through 2030 (solar wave V). In 2025 through 2027, TEC expects to spend approximately $615 million in capital for the storm protection plan, $437 million in grid modernization, $704 million towards 1,096 MW of generation capacity expansion, including $385 million for 670 MW related to two new combustion turbines, and $200 million for 195 MW of energy storage. Additionally, transmission expansions are also expected to require $217 million in capital during 2025 through 2027. 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.

TEC’s 2025 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 2026, TEC expects capital expenditures to include generation investments, grid modernization, storm hardening investments, and transmission expansion.

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, 2025, TEC’s year-end capital structure was 48% debt and 52% common equity. At December 31, 2024, TEC’s year-end capital structure was 46% debt and 54% common equity.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of 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 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 2025 Annual TEC Financial Statements for a description of TEC’s significant accounting policies and the estimates and assumptions used in the preparation of the financial statements.

Regulatory Accounting

TEC’s retail business and the prices charged to customers are regulated by the FPSC. TEC’s wholesale business is regulated by the FERC. As a result, TEC qualifies 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 2025 Annual TEC 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 2025 Annual TEC 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 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, 2025, TEC does not have a valuation allowance. At December 31, 2025, TEC had a net deferred income tax liability of $969 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 2025 Annual TEC Financial Statements.

Employee Postretirement Benefits

In 2024, TEC was a participant in the comprehensive retirement plans of TECO Energy, LLC (formerly known as TECO Energy, Inc. prior to April 1, 2024). Effective January 1, 2025, the comprehensive retirement plans were transferred to TECO Holdings. TECO Holdings 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 Holdings’ 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 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 Holdings determines these factors within certain guidelines and with the help of external consultants. TECO Holdings 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%, 7.05% and 7.05% as of January 1, 2025, 2024 and 2023, respectively. Given recent capital market returns and market expectations for long-term interest rates, TECO Holdings expects the expected return on assets to be 7.30% for 2026 (based on 20-year expected market returns). Actual returns in 2025 were 16.17%.

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 qualified pension plan assets or the discount rate assumption would have had in 2025 and is anticipated to have in 2026 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
2025	$4 million increase	$1 million increase
2026	$4 million increase	$1 million increase

Unrecognized actuarial gains and losses for the pension plan are being recognized over a period of approximately 11 to 12 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 Holdings determines the discount rate for the OPEB’s projected benefit cash flows. In estimating the health care cost trend rate, TECO Holdings 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 2025 Annual TEC Financial Statements.

RECENTLY ISSUED ACCOUNTING STANDARDS

Income Tax Disclosures

TEC adopted ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, effective December 31, 2025. 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. Adoption of the standard resulted in additional disclosures provided in Note 4.

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 updates are to be applied prospectively with the option for retrospective application. TEC is currently evaluating the impact of adoption of the standard update on its financial statement disclosures.

Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The standard update modernizes accounting for internal-use software by eliminating references to project stages and clarifying the threshold to begin capitalizing costs. The standard update also specifies that the disclosure requirements under ASC 360, Property, Plant and Equipment, apply to capitalized software costs accounted for under ASC 350-40. The guidance will be effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The standard updates are to be applied using either a prospective, retrospective, or modified transition approach. TEC is currently evaluating the impact of adoption of the standard update on its financial statements.

Accounting for Government Grants Received by Business Entities

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832) – Accounting for Government Grants Received by Business Entities. The ASU adds guidance to Accounting Standards Codification 832 on the recognition, measurement, and presentation of government grants. The guidance will be effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The standard updates are to be applied using either a modified prospective, modified retrospective, or full retrospective approach, as detailed in the ASU. TEC is currently evaluating the impact of adoption of the standard update on its financial statements.

ENVIRONMENTAL COMPLIANCE

Environmental Matters

TEC has significant environmental considerations. TEC 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.

Carbon Reductions and GHG

TEC has historically supported voluntary efforts to reduce carbon emissions and has taken significant steps to reduce overall emissions at TEC’s facilities. Since 2000, TEC has reduced its system-wide emissions of CO2 by more than 50%, bringing emissions to below 1990 levels. TEC CO2 emissions continue to remain below 1990 levels. TEC 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 MWs of power and will continue to lead to lower system-wide emissions. See Capital Investments above for information regarding TEC’s solar projects.

On April 24, 2024, the EPA issued its final power plant rules for electric generating units, including (i) new GHG standards and (ii) Mercury and Air Toxics Standards (MATS). The new MATS will not have a material impact on TEC. The new GHG standard applies only to existing coal-fired and new natural gas electric generating units and will therefore have limited impact on TEC generating units. Big Bend Unit 4 is the only unit affected. As written, the rule would require Big Bend Unit 4 to retire in 2039 without major enhancements to the unit, instead of the current planned retirement date of 2040. On March 12, 2025, the EPA announced that this rule was under reconsideration. On June 11, 2025, the EPA announced a proposal to repeal all “greenhouse gas” emissions standards for the power sector under Section 111 of the Clean Air Act (CAA) and to repeal amendments to the 2024 MATS that directly result in coal-fired power plants having to shut down.

On August 1, 2025, the EPA released a proposal for the Reconsideration of 2009 Endangerment Finding and Greenhouse Gas Vehicle Standards. This finding has been the basis for the regulation of greenhouse gas emissions from motor vehicles and has been a critical component of the federal government's climate regulation efforts. If the Endangerment Finding is repealed, it could have significant implications for the power industry, as it would remove the legal authority for the EPA to regulate greenhouse gas emissions from power plants and other sources. 

Coal Combustion Residuals Recycling and Regulation

TEC 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  TEC’s CCR compliance program. The final project required for compliance with the CCR Rule at Big Bend is the North Gypsum Stackout Area Drainage Improvements Project, which was completed in 2025. 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.

The legacy rule finalized in May 2024 covers any landfill or impoundment in existence at an inactive power facility but not receiving CCRs as of 2015 (not applicable to Big Bend), or any CCR placed into the environment for beneficial use. TEC is currently evaluating the impact of the rule at the Big Bend Power Station and will be required to perform site evaluations in 2026 to determine the presence of any regulated CCR management units. The report for this first phase of the evaluations will be submitted by February 9, 2027. If determined to be present, additional groundwater monitoring for these units would begin to determine the need for additional corrective actions, possibly including CCR management unit remediation and closure. It is possible that the new EPA Administration may make revisions to the CCR Rules in general and the above rule deadlines. However, it is prudent for TEC to proceed with required compliance activities until such revisions occur.

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.   

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 TEC'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". TEC 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 TEC’s proposed plan for Bayside and TEC completed a multi-year construction project to install new fish-friendly modified traveling screens and a fish return. TEC 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 TEC will depend on 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 ELGs will not have a material impact on TEC. 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 rather than discharge to surface waters. Since Polk Power Station also uses a deep injection well rather than discharging it to surface water, the effluent limitations will no longer apply to either power station. The referenced wastewaters at each power station will be regulated under the Underground Injection Control program rather than the NPDES program. On March 12, 2025, the EPA announced that this rule was under reconsideration but this is not anticipated to have a material impact on TEC operations.

EPA Waters of the US

In 2023, the EPA and Department of the Army issued a final rule amending the definition of “waters of the United States”. On November 20, 2025, the EPA and the U.S. Army Corps of Engineers released a proposed rule revising the definition of “waters of the United States” applicable to all Clean Water Act programs. The final rule is expected to have environmental permitting implications for new TEC solar sites, transmission and distribution infrastructure, and permitting renewals for existing facilities requiring approved jurisdictional determinations.

Ozone

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 TEC’s service territory. The impact of this potential new standard on the operations of TEC will depend on the standard that is ultimately adopted and on the outcome of any related litigation or other developments.

REGULATION

See Business-Regulation and Note 3 to the 2025 Annual TEC Financial Statements for a description of base rates, cost-recovery clauses and competition.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market 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).

TECO Holding’s Risk Management Policy (Policy) governs all energy transacting activity. The Policy is administered by the 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 monitored by the Middle Office 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.

Market 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. As of December 31, 2025 and 2024, 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 TEC's debt to maintain an investment-grade credit rating from any or all of the major credit rating agencies. If TEC’s credit 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, 2025 and 2024 would have resulted in a $2 million and $1 million impact on pre-tax earnings, respectively. A hypothetical 10% increase in interest rates would have decreased the fair market value of TEC's long-term debt by 5% and 6% at December 31, 2025 and December 31, 2024. See the Financing Activity section and Notes 6 and 7 to the 2025 Annual TEC 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 and other energy commodity prices. Any changes in prices could affect the prices TEC charges, its operating costs and the competitive position of its products and services. Management uses different risk measurement and monitoring tools based on the degree of exposure to commodity risks.

Regulated Utilities

TEC’s fuel costs used for generation and purchased power costs are affected primarily by the price of natural gas (see the Business - Generation Sources section). 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 the relative attractiveness of alternative energy solutions 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, 2025 and 2024, 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.

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 balance sheets of Tampa Electric Company (the Company) as of December 31, 2025 and 2024, the related statements of income and comprehensive income, capitalization and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, 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 audit committee 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 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 of December 31, 2025, the Company had $1,182 million in regulatory assets and $841 million in regulatory liabilities. As disclosed in Note 3 of the 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 service or products, plus a reasonable return on equity invested or assets. In addition to regulatory assets and liabilities, rate regulation impacts other financial

        
       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 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 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 tested the Company’s evaluation of the probability of future recovery for regulatory assets and refund of regulatory liabilities for regulatory matters when final regulatory decisions or orders have not yet been made or when regulatory formulas are vague or complex. Our audit procedures included, among others, obtaining and reviewing relevant regulatory orders, filings, and other publicly available correspondence. We inspected these communications for any evidence that might contradict the Company’s assertions. We reviewed regulatory orders, filings and other publicly available 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 regulators’ treatment of similar costs under similar circumstances. We assessed the methodology, accuracy and completeness of the Company’s calculations of regulatory asset and liability balances based on provisions and formulas outlined in 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 regulatory developments.

/s/ Ernst & Young LLP

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

Tampa, Florida

February 23, 2026

TAMPA ELECTRIC COMPANY

Balance Sheets


Assets	December 31,			December 31,
(millions)	2025			2024
Property, plant and equipment
Utility plant, at original costs	$	15,787		$	14,433
Accumulated depreciation		(3,626	)		(3,348	)
Utility plant, net		12,161			11,085
Other property		20			18
Total property, plant and equipment, net		12,181			11,103

Current assets
Cash and cash equivalents		3			4
Receivables, less allowance for credit losses of $1 and $1 at December 31, 2025 and 2024, respectively		258			220
Due from affiliates		17			13
Inventories, at average cost
Fuel		38			45
Materials and supplies		216			191
Regulatory assets		226			343
Prepayments and other current assets		38			32
Total current assets		796			848

Other assets
Regulatory assets		956			1,098
Deferred charges and other assets		138			58
Total other assets		1,094			1,156
Total assets	$	14,071		$	13,107

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

TAMPA ELECTRIC COMPANY

Balance Sheets—continued


Liabilities and Capital	December 31,			December 31,
(millions)	2025			2024
Capitalization
Common stock	$	5,635		$	5,105
Accumulated other comprehensive loss		(1	)		(1	)
Retained earnings		219			218
Total capital		5,853			5,322
Long-term debt		4,531			3,935
Total capital		10,384			9,257

Current liabilities
Notes payable		773			636
Accounts payable		366			666
Due to affiliates		15			18
Customer deposits		129			126
Regulatory liabilities		114			146
Accrued interest		42			31
Accrued taxes		14			12
Other		60			58
Total current liabilities		1,513			1,693

Other liabilities
Deferred income taxes		969			976
Regulatory liabilities		727			758
Investment tax credits		234			224
Finance lease liabilities - long-term		48			15
Deferred credits and other liabilities		196			184
Total other liabilities		2,174			2,157

Commitments and Contingencies (see Note 8)

Total liabilities and capital	$	14,071		$	13,107

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

TAMPA ELECTRIC COMPANY

Statements of Income and Comprehensive Income


(millions)
For the years ended December 31,	2025			2024			2023
Revenues
Electric	$	3,115		$	2,526		$	2,637
Expenses
Fuel		525			517			605
Purchased power		178			105			78
Operations & maintenance		791			545			595
Depreciation and amortization		504			454			422
Taxes, other than income		251			224			234
Total expenses		2,249			1,845			1,934
Income from operations		866			681			703
Other income
Allowance for equity funds used during construction		35			30			19
Interest income from affiliates		0			0			38
Other income, net		25			18			32
Total other income		60			48			89
Interest charges
Interest expense		232			203			234
Interest expense to affiliates		0			0			11
Allowance for borrowed funds used during construction		(13	)		(10	)		(6	)
Total interest charges		219			193			239
Income before provision for income taxes		707			536			553
Provision for income taxes		100			68			87
Net income	$	607		$	468		$	466
Comprehensive income	$	607		$	468		$	466

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

TAMPA ELECTRIC COMPANY

Statements of Cash Flows


(millions)
For the years ended December 31,	2025			2024			2023
Cash flows from or used in operating activities
Net income	$	607		$	468		$	466
Adjustments to reconcile net income to cash from operating activities:
Depreciation and amortization		504			454			422
Deferred income taxes and investment tax credits		(30	)		66			(22	)
Allowance for equity funds used during construction		(35	)		(30	)		(19	)
Deferred recovery clauses		(58	)		134			415
Regulatory assets and liabilities		267			(305	)		116
Pension and postretirement asset and liabilities		(11	)		(11	)		(23	)
Other		(16	)		15			14
Changes in working capital:
Receivables, less allowance for credit losses		(42	)		72			(44	)
Inventories		(18	)		(19	)		(39	)
Taxes accrued		2			(3	)		12
Accounts payable		(296	)		315			(56	)
Other		12			8			(1	)
Cash flows from operating activities		886			1,164			1,241
Cash flows from or used in investing activities
Capital expenditures		(1,557	)		(1,422	)		(1,294	)
Net proceeds from sale of assets		19			3			0
Cash flows used in investing activities		(1,538	)		(1,419	)		(1,294	)
Cash flows from or used in financing activities
Equity contributions from Parent		530			600			300
Dividends to Parent		(606	)		(469	)		(472	)
Proceeds from long-term debt issuance		593			495			0
Repayment of long-term debt		0			(300	)		0
Advances to affiliate		0			0			(227	)
Repayment of advances to affiliate		0			0			956
Repayment of advances from Parent		0			0			(195	)
Net change in short-term debt (maturities of 90 days or less)		137			(70	)		87
Proceeds from other short-term debt (maturities over 90 days)		0			0			400
Repayment of other short-term debt (maturities over 90 days)		0			0			(800	)
Other financing activities		(3	)		(2	)		(1	)
Cash flows from financing activities		651			254			48
Net increase (decrease) in cash and cash equivalents		(1	)		(1	)		(5	)
Cash and cash equivalents at beginning of the year		4			5			10
Cash and cash equivalents at end of the year	$	3		$	4		$	5

Supplemental disclosure of cash paid (received):
Interest	$	198		$	182		$	233
Federal income taxes	$	88		$	(2	)	$	79
State income taxes	$	29		$	(1	)	$	23
Supplemental disclosure of non-cash investing and financing activities:
Change in accrued capital expenditures	$	(14	)	$	10		$	20
ROU asset in exchange for finance lease liability

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

TAMPA ELECTRIC CO 10-K