Last week, TECO energy confirmed the rumor that the company is exploring its opportunities to sell. TECO has had a long-time policy to not confirm such statements as this rumor has been whispered a few times before. That policy was ignored last week as the company announced it hired the services of the well-known Wall Street firm, Morgan Stanley to help. There’s many different components to the company that will make the sale very interesting. TECO energy has a number of subsidiaries under their umbrella and whether the company seeks to sell as a bundle or split its divisions will determine the complexity.
TECO selling but why
There is a lot of debate that is circulating around “why” the TECO energy empire is deciding to sell, especially as a company with larger operations in Florida, where the state operates as a regulated state where electricity consumers have no competitive energy choice. The question “why” garners more curiosity given the number of times the rumor of the company selling has been cried several times before without validation and this time confirms the sale, publicly. There is speculation that due to the new and continuing carbon mandates, the energy industry is being forced to consolidate and could potentially be a factor here.
Energy companies off the hook
It is no secret that energy generators are required to follow mandates and continue operating in compliance of those changes. That said, the Supreme Court recently dealt a blow to the Obama administration’s landmark air quality rule, ruling that the Environmental Protection Agency did not properly consider the costs of the regulation. This is a huge break for the energy companies that would have had to implement compliance procedures, at least for now.
Disrupted energy market
The energy industry as a whole has endured quite of a bit of disruption with many new companies, products and awareness that are changing the landscape of all aspects of energy. Florida has found itself under the microscope which will create some disruption and awareness in the state where the industry has enjoyed fixed costs and profits for some time. Ultimately, making giving the Florida energy market a timeline to change and adapt or fight like crazy trying to keep the stagnant market the way it is. Another potential factor for TECO’s consideration of selling.
Florida has two other large energy suppliers, Duke Energy and Florida Power and Light that may place an offer on this opportunity. However, with the interesting position Florida finds itself in, this may open TECO to other offers from natural gas and electricity energy suppliers looking to make an entry into Florida prior to any regulatory changes that may come down the line (bad pun not intended).
Radiant Energy is a national energy solutions company providing energy management services to consumers everywhere. We will continue to monitor the potential sale and report as things develop.
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