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 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 Tampa Electric Company is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

As of ~~August 8, 2022,~~May 9, 2023, there were 10 shares of Tampa Electric Company’s common stock issued and outstanding, all of which were held, beneficially and of record, by TECO Energy, Inc.

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

Acronyms used in this and other filings with the U.S. Securities and Exchange Commission in ~~2022~~2023 and ~~2021~~2022 include the following:

This Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. 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 in (1) TEC’s ~~2021~~2022 Annual Report on Form 10-K 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; (2) this Quarterly Report on Form 10-Q in (a) Part 1, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (b) Part 1, Item 1. Financial Statements: Note 8, Commitments and Contingencies, and (3) 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-Q.

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.

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

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

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


								Accumulated														Accumulated
								Other														Other
			Common		Retained			Comprehensive			Total					Common			Retained			Comprehensive			Total
(millions, except share amounts)	Shares		Stock		Earnings			Loss			Capital			Shares		Stock			Earnings			Loss			Capital
Three months ended June 30, 2022
Balance, March 31, 2022		10		4,645	$	356		$	(1	)	$	5,000
Three months ended March 31, 2023
Balance, December 31, 2022															10	$	5,075		$	346		$	(1	)	$	5,420
Net income						145						145								79						79
Separation of PGS equity from TEC																	(871	)		(121	)					(992	)
Equity contributions from Parent				105								105					100									100
Dividends to Parent						(117	)					(117	)							(91	)					(91	)
Balance, June 30, 2022		10	$	4,750	$	384		$	(1	)	$	5,133
Other																	1									1
Balance, March 31, 2023															10	$	4,305		$	213		$	(1	)	$	4,517

Three months ended June 30, 2021
Balance, March 31, 2021		10		4,045	$	331		$	(1	)	$	4,375
Net income						121						121
Equity contributions from Parent				135								135
Dividends to Parent						(93	)					(93	)
Balance, June 30, 2021		10	$	4,180	$	359		$	(1	)	$	4,538

Six months ended June 30, 2022
Three months ended March 31, 2022
Balance, December 31, 2021		10		4,470	$	323		$	(1	)	$	4,792			10		4,470		$	323		$	(1	)	$	4,792
Net income						263						263								118						118
Equity contributions from Parent				280								280					175									175
Dividends to Parent						(202	)					(202	)							(85	)					(85	)
Balance, June 30, 2022		10	$	4,750	$	384		$	(1	)	$	5,133

Six months ended June 30, 2021
Balance, December 31, 2020		10		3,890	$	327		$	(1	)	$	4,216
Net income						213						213
Equity contributions from Parent				290								290
Dividends to Parent						(181	)					(181	)
Balance, June 30, 2021		10	$	4,180	$	359		$	(1	)	$	4,538
Balance, March 31, 2022															10	$	4,645		$	356		$	(1	)	$	5,000

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

3. Regulatory

Tampa Electric Base Rates

On August 6, 2021, Tampa Electric filed with the FPSC a joint motion for approval of a settlement agreement dated as of August 6, 2021 (the Settlement Agreement) by and among Tampa Electric and the intervenors in Tampa Electric’s rate case filed with the FPSC in April 2021. The Settlement Agreement ~~agrees~~agreed to an increase in base rates annually effective with January 2022 bills, to generate a $191 million increase in revenue consisting of $123 million of traditional base rate charges and $68 million in a new charge to recover the costs of retiring assets. The Settlement Agreement further ~~includes~~included twosubsequent year adjustments of $90 million and $21 million, effective January 2023 and January 2024, respectively. Under the agreement, the allowed equity in the capital structure

~~will continue~~ continued to be 54% from investor sources of capital. The Settlement Agreement ~~includes~~included an allowed regulatory ROE range of 9.0% to 11.0% with a 9.95% midpoint. The Settlement Agreement allows a 25 basis point increase in the allowed ROE range and mid-point, and $10 million of additional revenue, if the average 3030-year~~-year~~ United States Treasury Bond yield rate for any period of six consecutive months is at least 50 basis points greater than the yield rate on the date the FPSC votes to approve the agreement. Under the agreement, base rates will 0not change from January 1, 2022 through December 31, 2024, unless Tampa Electric’s earned ROE were to fall below the bottom of the range during that time. The Settlement Agreement ~~contains~~contained a provision whereby Tampa Electric agrees to quantify the future impact of a decrease or increase in corporate income tax rates on net operating income through a reduction or increase in base revenues within 180 ~~days~~ days of when such tax change becomes law or its effective date. The Settlement Agreement further ~~creates~~created a mechanism to recover the costs of retiring coal generation units and meter assets over a period of 15 ~~years~~ years which survives the term of that agreement. The Settlement Agreement ~~sets~~set new depreciation and dismantlement rates effective January 1, 2022 and ~~contains~~contained the provisions that Tampa Electric will not have to file another depreciation study during the term of the agreement but will file a new depreciation study no more than one year, nor less than 90 days, before the filing of its next general base rate proceeding. Additionally, Tampa Electric agreed to a financial hedging moratorium for natural gas ending on December 31, 2024. On October 21, 2021, the FPSC approved the Settlement Agreement and the final order, reflecting such approval, was issued on November 10, 2021.

Tampa Electric’s Settlement Agreement provides recovery for the Big Bend modernization project in two phases. The first phase is a revenue increase to cover the costs of the assets in service during 2022, among other items. The remainder of the project costs will be recovered as part of the 2023 subsequent year adjustment. ~~The Settlement Agreement also includes a new charge to recover the remaining costs of the retiring Big Bend coal generation assets, Units 1 through 3, which will be spread over~~ 15 ~~years and will survive the term of the Settlement Agreement. The special capital recovery schedule for all three units was applied beginning January 1, 2022.~~

Tampa Electric ROE Adjustment

~~Tampa Electric's 2021 settlement agreement provision allows Tampa Electric~~Pursuant to ~~request a revenue and ROE increase due to increases in~~ the ~~30-year U.S. Treasury bond yield rate. On~~Settlement Agreement, on July 1, 2022, Tampa Electric requested to adjust its base rates to collect an additional $10 million annually (prorated in the first year) effective September 1, 2022 and increase its mid-point ROE and upper and lower allowed ranges. IfOn August 16, 2022, the FPSC approved the change. The new mid-point ROE ~~will be~~is 10.20%, and the range ~~will be~~is 9.25% to 11.25% effective July 1, 2022. ~~The FPSC is expected to issue a decision in August 2022.~~

Tampa Electric Mid-Course Adjustment to Fuel Recovery

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

On January 23, 2023, Tampa Electric requested an adjustment to its fuel charges to recover the $518 million final 2022 fuel under-recovery over a period of 21 months. The request also included an adjustment to 2023 projected fuel costs to reflect the

reduction in natural gas prices since September 2022 for a projected reduction of $170 million for the balance of 2023. The changes were approved by the FPSC on March 7, 2023, effective April 1, 2023.

Tampa Electric Storm Restoration Cost Recovery

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

In September 2022, Tampa Electric was impacted by Hurricane Ian. The majority of Hurricane Ian restoration costs were charged against Tampa Electric’s FPSC approved storm reserve, resulting in minimal impact on earnings and capital expenditures. Total restoration costs were $126 million, with $119 million charged to the storm reserve. Restoration costs charged to the storm reserve exceed the reserve balance and this amount will be deferred and collected from customers in subsequent periods. In November 2022, Tampa Electric incurred costs of approximately $2 million related to Hurricane Nicole. In January 2023, Tampa Electric petitioned the FPSC for recovery of storm costs. Recovery will include costs associated with Hurricanes Ian and Nicole that exceeded the reserve, $10 million of storm restoration costs charged to the reserve since 2018, and the replenishment of the balance in the reserve to the $56 million level that existed as of October 31, 2013 for a total of approximately $131 million. The storm cost recovery surcharge was approved by the FPSC on March 7, 2023, and TEC began applying the surcharge on April 2023 bills. The storm recovery is subject to review of the underlying costs for prudency by the FPSC. The review and issuance of an order by the FPSC is likely to occur by the end of 2023.

Tampa Electric Storm Protection Cost Recovery Clause and Settlement Agreement

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

~~PGS Base Rates~~

~~On June 8, 2020, PGS filed a petition for an increase in rates~~2025 and ~~service charges effective January 2021. On November 19, 2020,~~was approved by the FPSC ~~approved a settlement agreement filed by PGS and OPC. The settlement agreement provides for an increase in base rates by $~~58 ~~million annually effective January 2021, which is a $~~34 ~~million increase in revenue and $~~24 ~~million increase of revenues previously recovered through the cast iron and bare steel replacement rider. This settlement agreement includes an allowed regulatory ROE range of~~ ~~8.90% to~~ ~~11.00% with a~~ ~~9.90% midpoint, including the ability to reverse a total of $~~34 ~~million of accumulated depreciation through 2023. During the three and six months ended June 30, 2022, PGS reversed $~~5 ~~million and $~~10 ~~million, respectively, of the $~~34 ~~million accumulated depreciation.~~ ~~NaN~~ ~~amounts were reversed prior to~~on October 4, 2022. In addition, the agreement set new depreciation rates effective January 1, 2021 that are consistent with PGS’s current overall average depreciation rate. Under the agreement, base rates are frozen from ~~January 1, 2021~~ to ~~December 31, 2023, unless its earned ROE were to fall below~~ ~~8.90% before that time with an allowed equity in the capital structure of~~ ~~54.7% from investor sources of capital.~~

~~PGS Mid-Course Adjustment to Fuel Recovery~~

In May 2022, PGS filed a request with the FPSC for a mid-course correction to its 2022 purchased gas adjustment (PGA) factor cap. The request was initiated due to an increase in the price of natural gas. The PGA factor serves as a cap on the rate charged to customers and may be adjusted monthly. On July 7, 2022, the FPSC voted to approve the mid-course adjustment. Effective August 1, 2022, the PGA cap will change from $~~1.19163~~ ~~per therm to $1.70492~~ ~~per therm. Since the PGA is an approved range, the impact will depend on fluctuations in natural gas pricing and customer usage. At June 30, 2022, PGS was not in an under recovery position.~~

Regulatory Assets and Liabilities

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


Regulatory Assets and Liabilities
(millions)	June 30, 2022		December 31, 2021		March 31, 2023		December 31, 2022
Regulatory assets:
Regulatory tax asset (1)	$	129	$	117	$	110	$	124
Cost-recovery clauses (2)		243		89		461		525
Capital cost recovery for early retired assets (3)		508		518		493		497
Environmental remediation (4)		22		22		0		20
Postretirement benefits (5)		219		230		241		272
Asset retirement obligation (6)		12		11		10		13
Storm reserve (7)						76		76
Other		15		15		23		25
Total regulatory assets		1,148		1,002		1,414		1,552
Less: Current portion		305		136		384		361
Long-term regulatory assets	$	843	$	866	$	1,030	$	1,191
Regulatory liabilities:
Regulatory tax liability (7)	$	638	$	638
Regulatory tax liability (8)					$	507	$	601
Cost-recovery clauses - deferred balances (2)		26		16		22		30
Accumulated reserve - cost of removal (8)		472		468
Storm reserve (9)		46		46
Accumulated reserve - cost of removal (9)						302		498
Other		2		2		13		11
Total regulatory liabilities		1,184		1,170		844		1,140
Less: Current portion		63		78		83		85
Long-term regulatory liabilities	$	1,121	$	1,092	$	761	$	1,055

(1)

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

(2)

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

(3)

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

(4)

This asset is related to PGS costs associated with environmental remediation primarily at MGP sites. The balance is included in rate base, partially offsetting the related liability, and earns a rate of return as permitted by the FPSC. The timing of recovery is based on a settlement agreement approved by the FPSC.

(5)

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

(6)

This asset is related to costs associated with an asset retirement obligation, which is a legal obligation for the future retirement of certain tangible, long-lived assets. This regulatory asset does not earn a return because it is offset with related assets and

liabilities within rate base. It is recovered and removed as the obligation is settled and removed as the activities for the retirement of the related assets have been completed.

(7)

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

(8)

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

~~(8)~~(9)

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

~~(9)~~

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

8. Commitments and Contingencies

Legal Contingencies

From time to time, TEC and its subsidiaries are involved in various legal, tax and regulatory proceedings before various courts, regulatory commissions and governmental agencies in the ordinary course of 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.

Superfund and Former Manufactured Gas Plant Sites

As of December 31, 2022, TEC, through its Tampa Electric division and former PGS ~~divisions, is~~division, was a PRP for certain superfund sites and, through its former PGS division, for certain former MGP sites. While the joint and several liability associated with these sites presents the potential for significant response costs, as of June 30, 2022 and December 31, 2021, TEC has estimated its ultimate financial liability to be $14 million, primarily at PGS. This amount has been accrued and is primarily reflected in the long-term liability section under “Deferred credits and other liabilities” on the Consolidated Condensed Balance Sheets. The environmental remediation costs associated with these sites are expected to be paid over many years.

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

~~In instances where other PRPs are involved, most of those PRPs are creditworthy and are likely to continue to be creditworthy for the duration~~separation of the ~~remediation work. However, in~~PGS division, PGS is now the responsible party for those ~~instances that they are not, TEC could be liable~~sites (in addition to third party PRPs for ~~more than TEC’s currently assessed percentage of the remediation costs.~~

Factors that could impact these estimates include the ability of other PRPs to pay their pro-rata portion of the cleanup costs, additional testing and investigation which could expand the scope of the cleanup activities, additional liability that might arise from the cleanup activities themselves or changes in laws or regulations that could require additional remediation. Under current regulations, these costs are recoverable through customer rates established in subsequent base rate proceedings. See ~~Note 3~~ ~~for information regarding the related regulatory asset.~~certain sites).

Long-Term Commitments

TEC has commitments for various purchases as disclosed below, including payment obligations under contractual agreements for fuel, fuel transportation and power purchases that are recovered from customers under regulatory clauses. The following is a schedule of future payments under PPAs, minimum lease payments with non-cancelable lease terms in excess of one year, and other net purchase obligations/commitments at ~~June 30, 2022:~~March 31, 2023:


							Fuel		Long-term				Demand										Fuel		Long-term				Demand
	Purchased				Capital		and		Service		Operating		Side				Purchased				Capital		and		Service		Operating		Side
(millions)	Power		Transportation		Projects		Gas Supply		Agreements		Leases		Management		Total		Power		Transportation		Projects		Gas Supply (1)		Agreements		Leases		Management		Total

2022	$	33	$	119	$	241	$	287	$	24	$	1	$	3	$	708
2023		0		235		153		44		30		3		1		466	$	7	$	103	$	368	$	223	$	20	$	2	$	4	$	727
2024		0		231		63		0		28		3		1		326		0		130		111		36		36		3		5		321
2025		0		218		1		0		20		2		1		242		0		126		5		4		22		2		4		163
2026		0		214		0		0		21		1		0		236		0		124		4		4		23		1		1		157
2027																		0		124		0		4		22		1		1		152
Thereafter		0		1,876		0		0		52		48		0		1,976		0		924		0		1		50		46		0		1,021
Total future minimum payments	$	33	$	2,893	$	458	$	331	$	175	$	58	$	6	$	3,954	$	7	$	1,531	$	488	$	272	$	173	$	55	$	15	$	2,541

(1) As of March 31, 2023, $20 million of fuel and gas supply contractual obligations were held between Tampa Electric and Emera Energy Services, a related party.

Debt Covenants

TEC must meet certain financial tests, including a debt to capital ratio, as defined in the applicable debt agreements and has certain restrictive covenants in specific agreements and debt instruments. At ~~June 30, 2022,~~March 31, 2023, TEC was in compliance with all required covenants.

9. Segment Information

Due to the separation of PGS from TEC, TEC operates under a single operating and reportable segment effective January 1, 2023 because the operations of TEC only include the operations of the Electric division. See "Separation of PGS from TEC" in Note 1 for further information regarding the separation of PGS from TEC.


(millions)	Tampa								Tampa Electric		Tampa					Eliminations/				Tampa Electric
Three months ended June 30,	Electric		PGS		Eliminations				Company
Three months ended March 31,											Electric		PGS			Reclassifications				Company
2023
Revenues - external											$	552								$	552
Intracompany sales												0									0
Total revenues												552									552
Total interest charges												58									58
Net income											$	79								$	79
2022
Revenues - external	$	662	$	159	$	0			$	821	$	509	$	182		$	0			$	691
Intracompany sales		1		1		(2	)			0		1		1			(2	)			0
Total revenues		663		160		(2	)			821		510		183			(2	)			691
Total interest charges		32		6		0				38		30		5			0				35
Net income	$	126	$	19	$	0			$	145	$	88	$	30		$	0			$	118
2021
Revenues - external	$	531	$	123	$	0			$	654
Intracompany sales		1		0		(1	)			0
Total revenues		532		123		(1	)			654
Total interest charges		29		5		0				34
Net income	$	102	$	19	$	0			$	121

Six months ended June 30,
2022
Revenues - external	$	1,171	$	341	$	0			$	1,512
Intracompany sales		2		2		(4	)			0
Total revenues		1,173		343		(4	)			1,512
Total interest charges		62		11		0				73
Net income	$	214	$	49	$	0			$	263
2021
Revenues - external	$	977	$	276	$	0			$	1,253
Intracompany sales		2		2		(4	)			0
Total revenues		979		278		(4	)			1,253
Total interest charges		57		10		0				67
Net income	$	167	$	46	$	0			$	213
Total assets at June 30, 2022	$	11,234	$	2,336	$	(706	)	(1)	$	12,864
Total assets at December 31, 2021	$	10,650	$	2,209	$	(663	)	(1)	$	12,196
Total assets at March 31, 2023											$	12,920				$	(647	)	(1)	$	12,273
Total assets at December 31, 2022											$	12,064	$	2,471	(2)	$	(732	)	(1)	$	13,803

(1)

Amounts primarily relate to consolidated deferred tax reclassifications. Deferred tax assets are reclassified and netted with deferred tax liabilities upon consolidation.

10. Revenue

The following disaggregates TEC’s revenue by major source:

(millions)
Tampa

Tampa Electric

Three months ended June 30, 2022
Electric

PGS

Eliminations

Company

Electric revenue

Residential
$
348

$
0

$
0

$
348

Commercial

170

0

0

170

Industrial

47

0

0

47

Regulatory deferrals and unbilled revenue

16

0

0

16

Other (1)

82

0

(1
)

81

Total electric revenue

663

0

(1
)

662

Gas revenue

Residential

0

50

0

50

Commercial

0

49

0

49

Industrial (2)

0

8

0

8

Other (3)

0

53

(1
)

52

Total gas revenue

0

160

(1
)

159

Total revenue
$
663

$
160

$
(2
)

$
821

Three months ended June 30, 2021

Electric revenue

Residential
$
276

$
0

$
0

$
276

Commercial

144

0

0

144

Industrial

41

0

0

41

Regulatory deferrals and unbilled revenue

11

0

0

11

Other (1)

60

`

0

(1
)

59

Total electric revenue

532

0

(1
)

531

Gas revenue

Residential

0

49

0

49

Commercial

0

46

0

46

Industrial (2)

0

6

0

6

Other (3)

0

22

0

22

Total gas revenue

0

123

0

123

Total revenue
$
532

$
123

$
(1
)

$
654


(millions)	Tampa			Tampa Electric
Three months ended March 31, 2023	Electric	PGS	Eliminations	Company


Electric revenue
Residential	$	325							$	325
Commercial		170								170
Industrial		46								46
Regulatory deferrals and unbilled revenue		(60	)							(60	)
Other (1)		71								71
Total electric revenue		552								552
Total revenue	$	552							$	552

Three months ended March 31, 2022
Electric revenue
Residential	$	270		$	0	$	0		$	270
Commercial		137			0		0			137
Industrial		37			0		0			37
Regulatory deferrals and unbilled revenue		3			0		0			3
Other (1)		63			0		(1	)		62
Total electric revenue		510			0		(1	)		509
Gas revenue
Residential		0			75		0			75
Commercial		0			56		0			56
Industrial (2)		0			7		0			7
Other (3)		0			45		(1	)		44
Total gas revenue		0			183		(1	)		182
Total revenue	$	510		$	183	$	(2	)	$	691

(millions)
Tampa

Tampa Electric

Six months ended June 30, 2022
Electric

PGS

Eliminations

Company

Electric revenue

Residential
$
618

$
0

$
0

$
618

Commercial

307

0

0

307

Industrial

84

0

0

84

Regulatory deferrals and unbilled revenue

19

0

0

19

Other (1)

145

0

(2
)

143

Total electric revenue

1,173

0

(2
)

1,171

Gas revenue

Residential

0

125

0

125

Commercial

0

105

0

105

Industrial (2)

0

15

0

15

Other (3)

0

98

(2
)

96

Total gas revenue

0

343

(2
)

341

Total revenue
$
1,173

$
343

$
(4
)

$
1,512

Six months ended June 30, 2021

Electric revenue

Residential
$
508

$
0

$
0

$
508

Commercial

270

0

0

270

Industrial

78

0

0

78

Regulatory deferrals and unbilled revenue

9

0

0

9

Other (1)

114

0

(2
)

112

Total electric revenue

979

0

(2
)

977

Gas revenue

Residential

0

116

0

116

Commercial

0

99

0

99

Industrial (2)

0

12

0

12

Other (3)

0

51

(2
)

49

Total gas revenue

0

278

(2
)

276

Total revenue
$
979

$
278

$
(4
)

$
1,253

(1)

Other electric revenue includes sales to public authorities, off-system sales to other utilities and various other items.

(2)

Industrial gas revenue includes sales to power generation customers.

(3)

Other gas revenue includes off-system sales to other utilities and various other items.

Remaining Performance Obligations

Remaining performance obligations primarily represent lighting contracts and gas transportation contracts with fixed contract terms. As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $~~130~~62 million and $~~135~~140 million, respectively. The decrease is due to TEC's January 1, 2023 separationfrom its former PGS division. See Note 1 for further information regarding the separation of PGS from TEC. As allowed under ASC 606, these amounts exclude contracts with an original expected length of one year or less and variable amounts for which TEC recognizes revenue at the amount to which it has the right to invoice for services performed. TEC expects to recognize revenue for the remaining performance obligations through ~~2041~~2043.

11.11. Fair Value Measurements

Items Measured at Fair Value on a Recurring Basis

Accounting guidance governing fair value measurements and disclosures provides that fair value represents the amount that would be received in selling an asset or the amount that would be paid in transferring a liability in an orderly transaction between market participants. As a basis for considering assumptions that market participants would use in pricing an asset or liability,

1917

accounting guidance also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:


Level 1:	Observable inputs, such as quoted prices in active markets;
Level 2:	Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
Level 3:	Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

There were no Level 3 assets or liabilities for the periods presented.

As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the carrying value of TEC’s short-term debt was not materially different from the fair value due to the short-term nature of the instruments and because the stated rates approximate market rates. The fair value of TEC’s short-term debt is determined using Level 2 measurements. See Note 7 for information regarding the fair value of long-term debt.

12. ~~Subsequent Events~~Related Party Transactions

A summary of activities between TEC and its affiliates follows:

On ~~July 12, 2022, TEC completed a sale of (i) $300~~Net transactions with affiliates ~~million aggregate~~


(millions)
Three months ended March 31,	2023		2022
Natural gas sales to/(from) affiliates	$	33	$	83
Services to/(from) affiliates		12		(2	)
Interest income from PGS		8		0
Interest expense to TECO Energy		3		0
Dividends to TECO Energy		91		85
Equity contributions from TECO Energy		100		175

Amounts due from or to affiliates


(millions)	March 31, 2023		December 31, 2022
Note receivable from PGS (1)	$	805	$	0
Interest receivable (1)		12		0
Accounts receivable related to asset management agreements to Emera Energy Services Inc. (2)		5		7
Accounts receivable excluding asset management agreements (2)		7		5
Taxes receivable (3)		9		10
Accounts payable (2)		18		31
Note payable to TECO Energy (4)		195		195
Interest payable to TECO Energy (4)		1		0

(1)

On January 1, 2023, TEC entered into a loan agreement with PGS for PGS’s allocation of outstanding unsecured notes issued by TEC and outstanding short-term borrowings associated with the separation of PGS from TEC on that date. As of March 31, 2023, the note receivable from PGS was a term loan in the principal amount of ~~3.875% Notes due~~ ~~July 12,~~ ~~2024(the 2024 Notes) and (ii)~~ $~~300~~670 million ~~aggregate~~and a revolving loan in the principal amount of $~~5.00~~142~~% Notes due~~ million, net of discounts and issuance costs of $7 million. The maturity date for both loans is ~~July 15,~~ ~~2052~~December 29, 2023. The note receivable for the term loan bears interest at primarily the stated rate and the revolving loan rate approximates the market rate of TEC's commercial paper. See "Separation of PGS from TEC" in Note 1( for further information.

(2)

Accounts receivable and accounts payable were incurred in the ~~2052 Notes,~~ordinary course of business and ~~collectively, the Notes).~~do not bear interest.

(3)

Taxes receivable were due from EUSHI. See Note 74 for additional information.

(4)

The note payable with TECO Energy bears interest at a rate approximating the market rate of TEC's commercial paper.

2018

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

Earnings Summary - Unaudited


			Three months ended June 30,						Six months ended June 30,								Three months ended March 31,
(millions)			2022			2021			2022			2021					2023		2022
Revenues	Revenues														Revenues
		Tampa Electric	$	663		$	532		$	1,173		$	979			Tampa Electric	$	552	$	510
		PGS		160			123			343			278			PGS				183
		Eliminations		(2	)		(1	)		(4	)		(4	)		Eliminations				(2	)
		TEC	$	821		$	654		$	1,512		$	1,253			TEC	$	552	$	691

Net income	Net income														Net income
		Tampa Electric	$	126		$	102		$	214		$	167			Tampa Electric	$	79	$	88
		PGS		19			19			49			46			PGS				30
		TEC	$	145		$	121		$	263		$	213			TEC	$	79	$	118

Operating Results

~~Second~~First quarter ~~2022~~2023 net income was ~~$145~~$79 million, compared to ~~$121~~$118 million in the ~~second~~first quarter of ~~2021. Second~~2022. First quarter ~~2022~~2023 results ~~were impacted by higher revenues at Tampa Electric and~~decreased primarily due to the separation of PGS partially offset by higher depreciation and amortization expenses and lower AFUDC at Tampa Electric and higher O&M expense at PGS. Year-to-date 2022 net income was $263 million, compared to $213 million infrom TEC on January 1, 2023 (see section below for further information on the 2021 year-to-date period. Year-to-date 2022 results were impacted by higher revenues at Tampa Electric and PGS, partially offset by higher depreciation and amortization and O&M expenses and lower AFUDC at Tampa Electric and higher O&M expense at PGS.separation). See Operating Company Results below for ~~further detail.~~detail on the results of operations at Tampa Electric during the first quarter of 2023 compared to the first quarter of 2022.

Separation of PGS From TEC

On January 1, 2023, TEC transferred the assets and liabilities of its PGS division into a separate corporation called Peoples Gas System, Inc. pursuant to a Contribution Agreement. This new corporation is a wholly owned subsidiary of a newly formed gas operations holding company, TECO Gas Operations, Inc., a wholly owned subsidiary of TECO Energy. On January 1, 2023, the assets, liabilities, and equity that had been recorded in the books of PGS were transferred from TEC to the newly formed company at book value in a tax-free transaction. PGS issued 100 shares of common stock to TEC related to the transfer, which were subsequently distributed to TECO Energy, Inc. and then contributed to TECO Gas Operations, Inc. As a result, from and after January 1, 2023, the PGS division is no longer operated by TEC. This is a transaction between entities under common control; therefore, TEC did not recognize a gain or loss on the transaction. TEC is not required to recast its prior period financial statements and disclosures to exclude PGS prior to January 1, 2023.

Included in the liabilities transferred was PGS’s allocation of outstanding unsecured notes and outstanding short-term borrowings issued by TEC. The obligations related to these combined borrowings are reflected in a loan agreement between TEC and PGS. The initial obligation of PGS under the loan agreement at January 1, 2023 was a term loan in the principal amount of $670 million and a revolving loan in the principal amount of $66 million. The maturity date for both is December 29, 2023. PGS intends to access the third-party lending market during 2023 but cannot predict when during the year that it will do so. To assist its affiliate and to facilitate an orderly transfer of its gas assets, Tampa Electric will continue to be responsible for providing capital as needed to PGS under a loan agreement guaranteed by TECO Energy and TECO Gas Operations, Inc. See Note 12 to the TEC Consolidated Condensed Financial Statements for details of the related party transactions as of March 31, 2023.

Operating Company Results

Amounts included in the operating company discussions below are pre-tax, except net income and income taxes.

Electric Division

Tampa Electric’s net income for the ~~second~~first quarter of ~~2022~~2023 was ~~$126~~$79 million, compared with ~~$102~~$88 million for the same period in ~~2021.~~2022. Results primarily reflected higher interest expense, depreciation expense and O&M expense, partially offset by higher base revenues resulting from the 2021 rate case settlement agreement, ~~favorable weather~~customer growth and ~~revenues related to capital cost recovery for early retired assets, partially offset by higher depreciation expense and lower AFUDC.~~

Revenues were $131 million higher than in the same quarter in 2021 primarily driven by higher fuel recovery clause revenue of $52 million as a result of higher fuel costs, revenues related to capital cost recovery for early retired assets of $17 million and increased base revenues of $43 million.interest income from affiliate. Base revenues ~~which~~ are energy sales excluding revenues from clauses, ~~capital cost recovery for early retired assets,~~gross receipts taxes and franchise fees. Clauses, gross receipts taxes and franchise fees ~~increased~~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.

Revenues were $42 million higher than in the same period in 2022, primarily driven by higher base revenue due to new base rates as a result of the 2021 rate case settlement agreement ~~favorable weather~~ and customer ~~growth.~~growth, partially offset by mild weather compared to the same period in 2022, and higher fuel recovery clause revenue as a result of increased fuel costs in 2022. Total degree days (a measure

of heating and cooling demand) in Tampa Electric's service area in the ~~second~~first quarter of ~~2022~~2023 were ~~17%~~6% above normal (a 20-year statistical degree day average) and ~~10% above~~8% below the ~~2021~~2022 period, reflecting ~~favorable~~mild weather in the ~~second~~first quarter of ~~2022~~2023 compared to ~~2021.~~2022. Total net energy for load, which is a calendar measurement of energy output, in the ~~second~~first quarter of ~~2022 was 4% higher than the same period in 2021.~~

~~O&M expense, excluding all FPSC-approved cost-recovery clauses,~~2023 was consistent with the same ~~quarter~~period in ~~2021.~~2022.

In 2023, operations and maintenance expense was $11 million higher than in 2022 due to increased operating expenses of $6 million and increased costs related to FPSC-approved cost-recovery clauses of $5 million. The increase in operating expenses was due to higher transmission and distribution, generation maintenance, customer support and information technology costs. Depreciation and amortization expense ~~excluding all FPSC-approved cost-recovery clauses,~~ increased $7$9 million in ~~the second quarter of 2022~~2023 compared to 2022 as a result of the ~~same period in 2021, primarily due to~~depreciation of additions to facilities and the in-service of generation ~~projects.~~

~~Tampa Electric’s net income year-to-date 2022 was $214~~projects of $10 million, compared with $167 million for the same period in 2021. Results primarily reflected higher revenues resulting from the 2021 rate case settlement agreement, favorable weather and revenues related to capital cost recovery for early retired assets, partiallyslightly offset by ~~higher~~decreased depreciation ~~expense, lower AFUDC and higher O&M expense.~~

~~Revenues were $194 million higher than year-to-date 2021 primarily driven by higher base revenues of $86 million, higher fuel recovery clause revenue of $50 million as a result of increased fuel~~ costs ~~and revenues~~ related to capital cost recovery for early retired assets of $32 million. Base revenue increased due to new base rates as a result of the 2021 rate case settlement agreement, favorable weather and customer growth. Total degree days (a measure of heating and cooling demand) in Tampa Electric's service area year-to-date 2022 were 16% above normal (a 20-year statistical degree day average) and 11% above the 2021 period, reflecting favorable weather year-to-date in 2022 compared to 2021. Total net energy for load, which is a calendar measurement of energy output, year-to-date 2022 was 4% higher than year-to-date 2021.

~~O&M expense, excluding all~~ FPSC-approved cost-recovery clauses was $6 million higher than year-to-date 2021 primarily due to higher transmission and distribution, insurance and benefit costs. Depreciation and amortization expense, excluding all FPSC-approved cost-recovery clauses, increased $14 million year-to-date 2022 primarily due to additions to facilities and the in-service of ~~generation projects.~~$1 million.

Tampa Electric’s regulated operating statistics for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ were as follows:


(millions, except customers and total degree days)	Operating Revenues						Kilowatt-Hours Billed						Operating Revenues								Kilowatt-Hours Billed
Three months ended June 30,	2022		2021		% Change		2022		2021		% Change
Three months ended March 31,													2023			2022		% Change			2023		2022		% Change
By Customer Type
Residential (1)	$	348	$	276		26		2,513		2,472		2	$	325		$	270		20			2,073		2,082		(0	)
Commercial (1)		170		144		18		1,575		1,525		3		170			137		24			1,403		1,375		2
Industrial (1)		47		41		15		550		541		2		46			37		24			493		484		2
Other (1)		55		47		17		482		478		1		57			47		21			452		448		1
Regulatory deferrals and unbilled revenue (2)		16		11		45								(60	)		3		(2,100	)
Total retail sales of electricity		636		519		23		5,120		5,016		2		538			494		9			4,421		4,389		1
Off system sales of electricity		15		1		1,400		150		16		838		2			4		(50	)		53		84		(37	)
Other operating revenue		12		12		0								12			12		0
Total revenues	$	663	$	532		25		5,270		5,032		5	$	552		$	510		8			4,474		4,473		0
Retail net energy for load (kilowatt hours)		5,751		5,516		4
By Sales Type
Base													$	321		$	299		7
Clause														174			157		11
Capital cost recovery for early retired assets														15			15		0
Other														42			39		8
Total revenues													$	552		$	510		8

Customers at March 31, (thousands)														832			814		2
Retail net energy for load (kilowatt-hours)														4,583			4,575		0
Total degree days		1,474		1,345		10								635			688		(8	)

(millions, except customers and total degree days)	Operating Revenues						Kilowatt-Hours Billed
Six months ended June 30,	2022		2021		% Change		2022		2021		% Change
By Customer Type
Residential (1)	$	618	$	508		22		4,595		4,525		2
Commercial (1)		307		270		14		2,950		2,850		4
Industrial (1)		84		78		8		1,034		1,015		2
Other (1)		102		90		13		930		912		2
Regulatory deferrals and unbilled revenue (2)		19		9		111
Total retail sales of electricity		1,130		955		18		9,509		9,302		2
Off system sales of electricity		19		1		1,800		234		27		767
Other operating revenue		24		23		4
Total revenues	$	1,173	$	979		20		9,743		9,329		4
Customers at June 30, (thousands)		820		802		2
Retail net energy for load (kilowatt-hours)		10,326		9,952		4
Total degree days		2,162		1,953		11

(1)

Reflects a billing cycle measurement.

(2)

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

~~Natural Gas Division~~

PGS had net income of $19 million for both the second quarter of 2022 and the second quarter of 2021. Revenues were $37 million higher than in the second quarter of 2021 primarily due to higher off-system sales and higher PGA clause-related revenues. The base revenue increase of $2 million was primarily due to customer growth (4.6% higher number of customers in the second quarter of 2022 compared to the second quarter of 2021). Operations and maintenance expense, excluding all FPSC-approved cost-recovery clauses, was $4 million higher than the 2021 quarter primarily due to higher labor, benefits and contractor costs to operate, maintain and expand the distribution system. Depreciation and amortization decreased $3 million in the second quarter of 2022 due to the $5 million reversal of accumulated depreciation, partially offset by increases due to asset growth. The PGS rate case settlement,

~~which was approved in November 2020, provides the ability to reverse a total of $34 million of accumulated depreciation through 2023 (see~~ ~~Note 3~~ ~~to the~~ ~~TEC Consolidated Financial Statements~~ ~~for further information).~~

PGS had net income of $49 million for the 2022 year-to-date period, compared with $46 million in the 2021 period. Revenues were $65 million higher than in the prior period primarily due to higher off-system sales and higher PGA clause-related revenues. The base revenue increase of $4 million was primarily due to customer growth. Operations and maintenance expense, excluding all FPSC-approved cost-recovery clauses, was $5 million higher than in 2021 primarily due to the same quarterly drivers mentioned above. Depreciation and amortization decreased $6 million in the 2022 period due to the $10 million reversal of accumulated depreciation as provided for in PGS’s 2020 settlement agreement, partially offset by increases due to asset growth. Return on investment in the cast iron and bare steel replacement rider was $2 million higher in the 2022 period.

~~PGS’s regulated operating statistics for the three and six months ended June 30, 2022 and 2021 were as follows:~~

(millions, except customers)

Operating Revenues

Therms

Three months ended June 30,

2022

2021

% Change

2022

2021

% Change

By Customer Type

Residential

$
50

$
49

2

20

21

(5
)
Commercial

49

46

7

130

126

3

Industrial

5

5

0

107

117

(9
)
Power generation

3

1

200

216

200

8

Off system sales

31

4

675

34

10

240

Other operating revenues

20

15

33

Total

$
158

$
120

32

507

474

7

By Sales Type

System supply

$
98

$
66

48

64

39

64

Transportation

40

39

3

443

435

2

Other operating revenues

20

15

33

Total

$
158

$
120

32

507

474

7

(millions, except customers)

Operating Revenues

Therms

Six months ended June 30,

2022

2021

% Change

2022

2021

% Change

By Customer Type

Residential

$
125

$
116

8

59

59

0

Commercial

105

99

6

277

266

4

Industrial

10

9

11

227

229

(1
)
Power generation

5

3

67

405

418

(3
)
Off system sales

46

10

360

59

25

136

Other operating revenues

46

34

35

Total

$
337

$
271

24

1,027

997

3

By Sales Type

System supply

$
206

$
154

34

137

101

36

Transportation

85

83

2

890

896

(1
)
Other operating revenues

46

34

35

Total

$
337

$
271

24

1,027

997

3

Customers at June 30, (thousands)

456

436

5

Other Income

For the ~~second~~first quarter of ~~2022~~2023 and ~~2021,~~2022, TEC’s other income was ~~$12~~$21 million and ~~$12~~$11 million, respectively, ~~and~~which included AFUDC-equity of $9$3 million and $8 million, respectively, interest income from affiliate of $8 million and $0, respectively, and other income of $10 million ~~respectively. For the year-to-date periods in 2022~~ and ~~2021, TEC’s other income was $23 million and $23 million, respectively, and included AFUDC-equity of $17 million and $20~~$3 million, respectively. The decrease in

AFUDC-equity was primarily due to the in-service timing of Tampa Electric’s modernization of its Big Bend Power ~~Station~~Station. The interest income from affiliate is related to the note receivable from PGS for PGS's allocation of short-term and long-term debt resulting from the separation of PGS from TEC as of January 1, 2023. See Notes 1 and 12 to the TEC Consolidated Condensed Financial Statements for details of the separation of PGS from TEC and the ~~construction~~resulting related party transactions. The increase in Other Income is primarily due to interest income on the deferred fuel balance.

Interest Expense

For the first quarter of ~~solar projects.~~2023 and 2022, TEC’s interest expense, excluding AFUDC-debt, was $59 million and $38 million, respectively. The increase was due to higher interest rates and higher borrowings to support TEC’s ongoing capital investment program and ongoing operations, including fuel under recoveries and costs for hurricane restoration. The weighted-average interest rate on borrowings outstanding under the credit facilities and commercial paper at March 31, 2023 and 2022 was 5.55% and 1.04%,

respectively. See Other Income above for information regarding the interest income from affiliate associated with PGS's allocation of short-term and long-term debt resulting from the separation of PGS from TEC as of January 1, 2023. The interest income from affiliate partially offsets the impact of TEC's interest expense on the Consolidated Condensed Statement of Income.

Income Taxes

The provisions for income taxes were ~~$39~~$15 million and ~~$21~~$29 million for the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $68 million and $41 million for the six months ended June 30, 2022 and 2021,~~ respectively. Compared to the ~~2021 periods,~~2022 period, the ~~increase~~decrease in the provision for income taxes for the ~~six months and~~ three months ended ~~June 30, 2022~~March 31, 2023 was primarily the result of ~~higher~~lower pre-tax ~~income.~~income due to PGS's separation from TEC on January 1, 2023 and production tax credits related to solar facilities.

Liquidity and Capital Resources

The table below sets forth the ~~June 30, 2022~~March 31, 2023 liquidity, cash balances and amounts available under the TEC credit facilities.

(millions)

Credit facilities

$
1,300

Drawn amounts/letters of credit

(971
)
(1)
Available credit facilities

329

Cash and short-term investments

11

Total liquidity

$
340

(1) On July 12, 2022, TEC issued long-term debt and a portion of the proceeds were used to repay TEC's $470 million commercial paper balance. Therefore, the $470 million commercial paper balance was classified as a long-term debt on TEC's consolidated balance sheet as of June 30, 2022. See ~~Note 7~~ ~~to the~~ ~~TEC Consolidated Financial Statements~~ ~~for further information.~~



(millions)
Credit facilities/ commercial paper / advances from affiliates	$	1,595
Drawn amounts/letters of credit		(1,379	)
Available credit facilities		216
Cash and short-term investments		4
Total liquidity	$	220

Cash Impacts Related to Operating Activities

Cash flows from operating activities for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 were ~~$294~~$151 million, ~~a decrease~~an increase of ~~$52~~$9 million compared to the same period in ~~2021. Decreases~~2022. Increases to cash from operations were primarily the result of ~~higher fuel under-recoveries due to rising~~lower natural gas prices, ~~and higher materials and supplies inventory,~~ partially offset by ~~higher base revenues resulting from new base rates as a result of the 2021 rate case agreement and favorable weather and~~ the timing of ~~non-clause~~ invoice payments.

Cash Impacts Related to Financing Activities

Cash flows from financing activities for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 resulted in net cash inflows of ~~$303~~$97 million. TEC received ~~$280~~$100 million of equity contributions from Parent and ~~$225~~$88 million of net proceeds from short-term debt with maturities with 90 days or less. These increases in cash flows were partially offset by dividend payments to Parent of ~~$202~~$91 million. ~~See~~ ~~Note 7~~ ~~to the~~ ~~TEC Consolidated Financial Statements~~ ~~for information regarding TEC's long-term debt issuance in July 2022.~~

Covenants in Financing Agreements

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 ~~June 30, 2022,~~March 31, 2023, TEC was in compliance with all applicable financial covenants. The following table contains the significant financial covenant and the performance relative to it at ~~June 30, 2022.~~March 31, 2023.

Significant Financial Covenants


			Calculation at
Instrument (1)	Financial Covenant (2)	Requirement/Restriction	~~June 30, 2022~~March 31, 2023
Credit facility - $800 million	Debt/capital	Cannot exceed 65%	~~45.9%~~52.1%
Term facility- ~~$500~~$400 million	Debt/capital	Cannot exceed 65%	~~45.9%~~52.1%
Term facility - $200 million	Debt/capital	Cannot exceed 65%	52.1%

(1)

See Note 6 to the TEC Consolidated Condensed Financial Statements for details of the credit facility.

(2)

As defined in the instrument.

Credit Ratings of Senior Unsecured Debt at ~~June 30, 2022~~March 31, 2023


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

Certain of TEC’s derivative instruments contain provisions that require TEC’s debt to maintain investment grade credit ratings.

Commitments and Contingencies

See Note 8 to the TEC Consolidated Condensed Financial Statements for information regarding TEC’s commitments and contingencies as of ~~June 30, 2022.~~March 31, 2023.

Regulatory Matters

See Note 3 to the TEC Consolidated Condensed Financial Statements for information regarding TEC’s regulatory matters as of ~~June 30, 2022.~~March 31, 2023.

Fair Value Measurements

TEC's fair value measurements are described in Notes 7 and 11 to the TEC Consolidated Condensed Financial Statements. In addition, TEC considered the impact of nonperformance risk in determining the fair value of derivatives. TEC considered the net position with each counterparty, past performance of both parties and the intent of the parties, indications of credit deterioration and whether the markets in which TEC transacts have experienced dislocation. At ~~June 30, 2022,~~March 31, 2023, the fair value of derivatives was not materially affected by nonperformance risk.

Critical Accounting Policies and Estimates

Critical accounting policies and estimates have not materially changed in ~~2022.~~2023. For further discussion of critical accounting policies and estimates, see TEC’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information required by Item 3 is omitted pursuant to General Instruction H(2) of Form 10-Q.

Item 4. CONTROLS AND PROCEDURES

(a)

Evaluation of Disclosure Controls and Procedures. TEC’s management, with the participation of its principal executive officer and principal financial officer, has evaluated the effectiveness of TEC’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~June 30, 2022.~~March 31, 2023. Based on such evaluation, TEC’s principal financial officer and principal executive officer have concluded that, as of ~~June 30, 2022,~~March 31, 2023, TEC’s disclosure controls and procedures are effective.

(b)

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

2522

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

From time to time, TEC is involved in various legal, tax and regulatory proceedings before various courts, regulatory commissions and governmental agencies in the ordinary course of business. Where appropriate, accruals are made in accordance with accounting standards for contingencies to provide for matters that are probable of resulting in an estimable loss. For a discussion of legal proceedings and environmental matters, see Note 8 of the TEC Consolidated Condensed Financial Statements.

Item 6. EXHIBITS


Exhibit
No.	Description
3.1	Restated Articles of Incorporation of Tampa Electric Company, as amended on November 30, 1982 (Exhibit 3 to Registration Statement No. 2-70653 of Tampa Electric Company). (P)	*

3.2	Bylaws of Tampa Electric Company, as amended effective February 2, 2011 (Exhibit 3.4, Form 10-K for 2010 of Tampa Electric Company).	*

~~4.1~~10.1	~~Seventeenth Supplemental Indenture~~Credit Agreement dated as of March ~~18, 2021, between~~1, 2023, among Tampa Electric Company, as ~~issuer, and~~Borrower, The Bank of ~~New York Mellon,~~Nova Scotia, as ~~trustee, supplementing~~Administrative Agent, and the ~~Indenture dated as of July 1, 1998, as amended~~Lenders party thereto (Exhibit ~~4.12,~~10.1, Form 8-K dated ~~July 12, 2022~~March 1, 2023 of Tampa Electric Company).	*

31.1	Certification of the Chief Executive Officer of Tampa Electric Company pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of the Chief Financial Officer of Tampa Electric Company pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32	Certification of the Chief Executive Officer and Chief Financial Officer of Tampa Electric Company pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)

101.INS**	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document.

101.SCH**	Inline XBRL Taxonomy Extension Schema Document.

101.CAL**	Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF**	Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB**	Inline XBRL Taxonomy Label Linkbase Document.

101.PRE**	Inline XBRL Taxonomy Presentation Linkbase Document.

104	The cover page from TEC’s Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2022~~March 31, 2023 has been formatted in Inline XBRL.

(1)

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

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

** The XBRL related information in Exhibit 101 to this quarterly report on Form 10-Q shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

2623

SIGNATURES

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


	TAMPA ELECTRIC COMPANY
	(Registrant)

Date: ~~August 10, 2022~~May 11, 2023	By:	/s/ Gregory W. Blunden
		Gregory W. Blunden
		Treasurer and Chief Financial Officer
		(Principal Financial and Accounting Officer)

2724


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


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


Term		Meaning

AFUDC		allowance for funds used during construction
AFUDC-debt		debt component of allowance for funds used during construction
AFUDC-equity		equity component of allowance for funds used during construction
APBO		accumulated postretirement benefit obligation
ARO		asset retirement obligation
ASC		Accounting Standards Codification
ASU		Accounting Standards Update
BCF		billion cubic feet
CCRs		coal combustion residuals
CMO		collateralized mortgage obligation
CNG		compressed natural gas
CO2		carbon dioxide
COVID-19		coronavirus disease 2019
CPI		consumer price index
CT		combustion turbine
D.C. Circuit Court		D.C. Circuit Court of Appeals
ECRC		environmental cost recovery clause
Emera		Emera Inc., a geographically diverse energy and services company headquartered in Nova Scotia, Canada and the indirect parent company of Tampa Electric Company
EPA		U.S. Environmental Protection Agency
ERISA		Employee Retirement Income Security Act
EROA		expected return on plan assets
EUSHI		Emera US Holdings Inc., a wholly owned subsidiary of Emera, which is the sole shareholder of TECO Energy’s common stock
FASB		Financial Accounting Standards Board
FDEP		Florida Department of Environmental Protection
FERC		Federal Energy Regulatory Commission
FPSC		Florida Public Service Commission
GHG		greenhouse gas
IGCC		integrated gasification combined-cycle
IRS		Internal Revenue Service
ITCs		investment tax credits
kWac		kilowatt on an alternating current basis
LNG		liquefied natural gas
MBS		mortgage-backed securities
MD&A		the section of this report entitled Management’s Discussion and Analysis of Financial Condition and Results of Operations
MGP		manufactured gas plant
MMBTU		one million British Thermal Units
MRV		market-related value
MW		megawatt(s)
MWH		megawatt-hour(s)
NAV		net asset value
Note		Note to consolidated financial statements
NPNS		normal purchase normal sale
O&M expenses		operations and maintenance expenses
OCI		other comprehensive income
OPC		Office of Public Counsel
OPEB		other postemployment benefits
Parent		TECO Energy, Inc., the direct parent company of Tampa Electric Company
PBGC		Pension Benefit Guarantee Corporation
PBO		projected benefit obligation
PGA		purchased gas adjustment
PGS		Peoples Gas System, ~~the gas division of Tampa Electric Company~~Inc., formerly Peoples Gas System


PPA		power purchase agreement
PRP		potentially responsible party
R&D		research and development
REIT		real estate investment trust
RFP		request for proposal
ROE		return on common equity
Regulatory ROE		return on common equity as determined for regulatory purposes
S&P		Standard and Poor’s
SCR		selective catalytic reduction
SEC		U.S. Securities and Exchange Commission
SERP		Supplemental Executive Retirement Plan
SoBRAs		solar base rate adjustments
SPP		storm protection plan
STIF		short-term investment fund
Tampa Electric		Tampa Electric, the electric division of Tampa Electric Company
TEC		Tampa Electric Company
TECO Energy		TECO Energy, Inc., the direct parent company of Tampa Electric Company
TSI		TECO Services, Inc.
U.S. GAAP		generally accepted accounting principles in the United States


TECO Energy Benefit Cost
(millions)	Pension Benefits						Other Postretirement Benefits						Pension Benefits						Other Postretirement Benefits
Three months ended June 30,	2022			2021			2022			2021
Three months ended March 31,													2023			2022			2023		2022
Components of net periodic benefit cost
Service cost	$	5		$	6		$	1		$	1		$	4		$	4		$	0	$	0
Interest cost		6			6			2			2			9			6			2		1
Expected return on assets		(13	)		(13	)		0			0			(14	)		(13	)		0		0
Amortization of:
Actuarial loss (gain)		5			5			(1	)		(1	)		1			4			0		1
Settlement cost		1			0			0			0
Net periodic benefit cost	$	4		$	4		$	2		$	2		$	0		$	1		$	2	$	2
Six months ended June 30,
Components of net periodic benefit cost
Service cost	$	9		$	11		$	1		$	1
Interest cost		12			11			3			3
Expected return on assets		(26	)		(26	)		0			0
Amortization of:
Actuarial loss (gain)		9			11			0			0
Settlement cost		1			0			0			0
Net periodic benefit cost	$	5		$	7		$	4		$	4


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


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


Large accelerated filer	☐	Accelerated filer		☐

Non-accelerated filer	☒	Smaller reporting company		☐

			Emerging growth company		☐


Assets	June 30,			December 31,			March 31,			December 31,
(millions)	2022			2021			2023			2022
Property, plant and equipment
Utility plant
Electric	$	11,940		$	11,563		$	12,720		$	12,536
Gas		2,779			2,626			0			2,938
Utility plant, at original costs		14,719			14,189			12,720			15,474
Accumulated depreciation		(3,741	)		(3,601	)		(3,202	)		(3,845	)
Utility plant, net		10,978			10,588			9,518			11,629
Other property		14			14			15			15
Total property, plant and equipment, net		10,992			10,602			9,533			11,644

Current assets
Cash and cash equivalents		11			18			4			14
Receivables, less allowance for credit losses of $5 and $7 at June 30, 2022 and December 31, 2021, respectively		334			254
Receivables, less allowance for credit losses of $2 and $4 at March 31, 2023 and December 31, 2022, respectively								231			295
Due from affiliates		36			8			838			22
Inventories, at average cost
Fuel		16			20			31			23
Materials and supplies		144			121			157			159
Regulatory assets		305			136			384			361
Prepayments and other current assets		25			22			22			35
Total current assets		871			579			1,667			909

Deferred debits
Other assets
Regulatory assets		843			866			1,030			1,191
Other		158			149			43			59
Total deferred debits		1,001			1,015
Total other assets								1,073			1,250
Total assets	$	12,864		$	12,196		$	12,273		$	13,803


Liabilities and Capitalization	June 30,			December 31,			March 31,			December 31,
(millions)	2022			2021			2023			2022
Capitalization
Common stock	$	4,750		$	4,470		$	4,305		$	5,075
Accumulated other comprehensive loss		(1	)		(1	)		(1	)		(1	)
Retained earnings		384			323			213			346
Total capital		5,133			4,792			4,517			5,420
Long-term debt		3,607			3,136			3,734			3,734
Total capitalization		8,740			7,928			8,251			9,154

Current liabilities
Long-term debt due within one year		250			250
Notes payable		500			745			1,183			1,019
Accounts payable		356			390			247			472
Due to affiliates		37			44			214			226
Customer deposits		136			132			119			145
Regulatory liabilities		63			78			83			85
Accrued interest		20			18			45			30
Accrued taxes		67			19			27			15
Other		54			51			35			45
Total current liabilities		1,483			1,727			1,953			2,037

Long-term liabilities
Deferred income taxes		885			858			878			1,045
Regulatory liabilities		1,121			1,092			761			1,055
Investment tax credits		298			249			243			243
Deferred credits and other liabilities		337			342			187			269
Total long-term liabilities		2,641			2,541			2,069			2,612

Commitments and Contingencies (see Note 8)

Total liabilities and capitalization	$	12,864		$	12,196		$	12,273		$	13,803


	Three months ended June 30,						Three months March 31,
(millions)	2022			2021			2023			2022
Revenues
Electric	$	662		$	531		$	552		$	509
Gas		159			123			0			182
Total revenues		821			654			552			691
Expenses
Fuel		190			129			137			128
Purchased power		34			26			10			7
Cost of natural gas sold		65			33			0			72
Operations and maintenance		149			139			118			147
Depreciation and amortization		107			107			104			105
Taxes, other than income		66			56			52			61
Total expenses		611			490			421			520
Income from operations		210			164			131			171
Other income
Allowance for equity funds used during construction		9			10			3			8
Interest income from affiliates								8			0
Other income, net		3			2			10			3
Total other income		12			12			21			11
Interest charges
Interest expense		40			39			56			38
Interest expense to affiliates								3			0
Allowance for borrowed funds used during construction		(2	)		(5	)		(1	)		(3	)
Total interest charges		38			34			58			35
Income before provision for income taxes		184			142			94			147
Provision for income taxes		39			21			15			29
Net income	$	145		$	121		$	79		$	118
Comprehensive income	$	145		$	121		$	79		$	118


(millions, except customers)	Operating Revenues						Therms
Three months ended June 30,	2022		2021		% Change		2022		2021		% Change
By Customer Type
Residential	$	50	$	49		2		20		21		(5	)
Commercial		49		46		7		130		126		3
Industrial		5		5		0		107		117		(9	)
Power generation		3		1		200		216		200		8
Off system sales		31		4		675		34		10		240
Other operating revenues		20		15		33
Total	$	158	$	120		32		507		474		7
By Sales Type
System supply	$	98	$	66		48		64		39		64
Transportation		40		39		3		443		435		2
Other operating revenues		20		15		33
Total	$	158	$	120		32		507		474		7

(millions, except customers)	Operating Revenues						Therms
Six months ended June 30,	2022		2021		% Change		2022		2021		% Change
By Customer Type
Residential	$	125	$	116		8		59		59		0
Commercial		105		99		6		277		266		4
Industrial		10		9		11		227		229		(1	)
Power generation		5		3		67		405		418		(3	)
Off system sales		46		10		360		59		25		136
Other operating revenues		46		34		35
Total	$	337	$	271		24		1,027		997		3
By Sales Type
System supply	$	206	$	154		34		137		101		36
Transportation		85		83		2		890		896		(1	)
Other operating revenues		46		34		35
Total	$	337	$	271		24		1,027		997		3
Customers at June 30, (thousands)		456		436		5



(millions)
Credit facilities	$	1,300
Drawn amounts/letters of credit		(971	)	(1)
Available credit facilities		329
Cash and short-term investments		11
Total liquidity	$	340



	June 30, 2022									December 31, 2021								March 31, 2023								December 31, 2022
			Borrowings			Borrowings		Letters				Borrowings		Borrowings		Letters				Borrowings		Borrowings		Letters				Borrowings		Borrowings		Letters
	Credit		Outstanding -			Outstanding -		of Credit		Credit		Outstanding -		Outstanding -		of Credit		Credit		Outstanding -		Outstanding -		of Credit		Credit		Outstanding -		Outstanding -		of Credit
(millions)	Facilities		Credit Facilities (1)			Commercial Paper		Outstanding		Facilities		Credit Facilities (1)		Commercial Paper (1)		Outstanding		Facilities		Credit Facilities (1)		Commercial Paper (1)		Outstanding		Facilities		Credit Facilities (1)		Commercial Paper (1)		Outstanding
5-year facility (2)	$	800	$	0	(3)	$	470	$	1	$	800	$	0	$	245	$	1	$	800	$	0	$	783	$	1	$	800	$	0	$	619	$	1
1-year term facility ~~(4)~~(3)		500		500			0		0		500		500		0		0		400		400		0		0		400		400		0		0
1-year term facility (4)																			200		0		0		0		0		0		0		0
Total	$	1,300	$	500		$	470	$	1	$	1,300	$	500	$	245	$	1	$	1,400	$	400	$	783	$	1	$	1,200	$	400	$	619	$	1