Natural Growth

Sporting a USF button down shirt without a tie, TECO Energy Inc. President and CEO John Ramil is about to enjoy two things he's been excited about in 2011: pleasant weather and a tour of the University of South Florida Polytechnic Institute's Center for Academic Medical Learning and Simulation.

The consistent weather has kept costs steady at the Tampa-based utility holding company, and the 90,000-square-foot research facility located in downtown Tampa embodies his goal to strengthen research in the area, particularly in the field of health science.

TECO recorded net income growth in the second and third quarters of 2011 compared with the same periods of the previous year. Of course the 2010 sale of a power distributor in Guatemala that was used to pay down parent debt and a $3 million customer refund were major factors in this disparity. But Ramil also credits the growing popularity of natural gas fueled vehicles — an area in which he says TECO builds the market.

One of TECO's regulated subsidiaries, Peoples Gas, supplies roughly 200 garbage trucks with compressed natural gas, Ramil explains. “In terms of sales, that is like adding 200 restaurants to our customer base.”

TECO takes an active and innovative approach in this sector with its marketing subsidiary TECO Partners, which is also based out of Tampa. Ramil says the firm consults with commercial clients interested in natural gas use, and will even make an investment in filling stations for the fuel. “We see ourselves as an anchor in this way,” Ramil says.

For example, a waste collection firm may be the first tenant using a TECO filling station, but other firms will follow once the investment has been made. Ramil says the price differential between natural gas and petroleum products is expected to remain distant, which means the economic choice to choose natural gas will remain strong. The social benefit of having cleaner burning fuel can strengthen a firm's marketing technique, as well.

With the positive financial showing in the first three quarters of 2011, Ramil continues to swat investment bankers looking to broker an acquisition deal. A pending merger of Progress Energy and Duke Energy has certainly fueled the hype. But Ramil says TECO's return on equity and return to shareholders remains healthy, and the firm will remain independent.

One challenge for TECO in 2012 will come from a familiar foe for utilities companies: the global economy. A November company statement announced the discovery of metallurgical coal, which is used by steel companies, on land it owns. The global reach of the steel market leaves the industry vulnerable to financial turmoil in Europe, something Ramil is concerned about in the short run. But he remains focused on moving deeper into that industry as a long-term growth strategy for TECO Coal, a subsidiary of TECO based out of Kentucky.

Balancing the positions he holds on the boards of Blue Cross Blue Shield of Florida and the Florida Chamber — among various other organizations — has gotten easier for Ramil. He has narrowed his focus and views his position as chair of the USF board of directors as his first priority outside of TECO. “I'm getting better at deciding which events I have to go to and which ones it would be nice to go to,” he says.

On TECO, Ramil expects a 1% increase in customer growth 2012, which is still a point less than what he believes will be the new industry benchmark. However, the firm remains committed to independence. “We're the little guy,” Ramil says in comparison with competing utilities holding companies. “But we hold our own pretty well.”