TECO Energy shareholders throw sparks at leadership

The company's annual meeting pits about 130 people, mostly still fuming over past missteps, against executives defending their recovery.

TAMPA - The turnout at TECO Energy Inc.'s annual shareholders meeting Wednesday was smaller than last year. But anger over the Tampa utility's financial woes - and its ill-fated decision to invest heavily in wholesale power - was as palpable as ever.

"We shareholders lost value in our stock, our dividends were cut, and I've never seen . . . any of the managers get their salaries cut," said Claus Brinnitzer, a 77-year-old TECO investor from Inverness.

"I'm not really sure (TECO executives and directors) are really feeling the same kind of pain from these decisions as a whole lot of the retirees and widows who have shares in this company," said 34-year-old shareholder James Chittenden of Tampa.

The passage of a year and a rebound in the company's share price appeared to have done little to comfort the roughly 130 TECO shareholders who attended Wednesday's meeting at the Hilton Tampa Airport Westshore Hotel on N Lois Avenue.

Nearly all shareholder comment involved pointed criticism of the company and its senior management, including chairman and chief executive Robert Fagan.

Philip Ritchie, a retired river barge pilot from St. Petersburg who called for Fagan's resignation during last year's meeting, made an encore appearance Wednesday.

"A shipmaster is responsible for his vessel and all the souls aboard," the 77-year-old Ritchie said, dressed again in his old Merchant Marine uniform. "A CEO is responsible to the shareholders and if either the shipmaster or the CEO puts his vessel in peril by misadventure, negligence or any other personal fault of the individual, he needs to be replaced."

Ritchie urged Fagan to resign and asked for support among shareholders. About 20 stood amid scattered applause. Fagan responded by thanking Ritchie for his remarks, adding "hope to see you here again next year." Ritchie then tried to continue speaking but found that his mike was turned off.

Earlier in the meeting, Fagan and other senior TECO executives appeared to anticipate the criticism, focusing their remarks on the company's plans to cut debt, maintain the company's dividend and increase earnings.

"Suffice it to say, we are not pleased with the 2003 results," Fagan said, referring to the massive $909.4-million loss the company reported, caused mostly by a write-off of its investment in its two largest wholesale power plants.

Fagan said one significant factor in TECO's favor is the attractiveness of the Florida market. Florida's diverse economy is more impervious to economic downturns than those of other more industrialized states, Fagan said, adding that the state is the country's third-largest electricity market after California and Texas.

But Chittenden, the shareholder, later threw such assurances back at Fagan.

"All the advantages you have - a growing, vibrant Florida economy plus you have a regulated monopoly and the state allows you to charge whatever you need to get a certain fair rate of return," he said. "All you ever had to do was . . . sell electricity and natural gas to the public and sit back and watch the profits tumble in at an ever-increasing rate."

In an unusual exchange that ended the meeting, TECO executive vice president and chief operating officer John Ramil defended the company's Tampa Electric Co. subsidiary from a lineman who works for the utility.

Richard Williams, a 50-year-old Tampa Electric lineman and 30-year veteran of the company, criticized his employer for what he claimed was its failure to update service equipment.

"We have trucks that are 20 years old that keep breaking down on us," Williams said. "We used to go on road trips to help other companies and we . . . had the best equipment, the best trained men. Now we're almost a laughingstock because our equipment doesn't make it up there."

Ramil, who had been president of Tampa Electric, defended the company's record, as well as Williams' right to criticize it.

"In the 27 years I've been with the company, I don't think all employees have ever been satisfied with all that's been spent on the system," he said. "They want to do more for employees, they want to do more for customers, and that's okay. I like employees feeling that way because they want to serve customers really well and they don't want to disappoint them."

Ramil said Tampa Electric has spent more during the last five years on capital improvements and operating and maintenance costs than it has during any previous comparable period. He also said Tampa Electric's reliability compares favorably with other utilities.

"I feel comfortable that we have taken the right resources and used them in the right way," Ramil said.

Also on Wednesday, TECO reported a 7 percent slide in first-quarter net income from a year earlier. During the quarter ended March 31, the utility reported earnings of $2.5-million, down from $2.7-million during the same period last year. Earnings per share for the quarter were a penny a share, down from 2 cents a year earlier. Revenue fell slightly to $642.3-million, from $651.8-million a year earlier.

The results included a $10.6-million gain from the sale of the company's propane business, a $3.4-million after-tax charge due to a valuation adjustment at TECO Solutions and an $800,000 after-tax valuation adjustment at TECO Transport.

TECO's shares closed Wednesday at $12.75, down 66 cents, on more than three times average trading volume.

- Louis Hau can be reached at hau@sptimes.com or 813 226-3404.