Employee Postretirement Benefits

9 Months Ended

Sep. 30, 2024

Retirement Benefits [Abstract]

Employee Postretirement Benefits

5. Employee Postretirement Benefits

TEC is a participant in the comprehensive retirement plans of TECO Energy, LLC (formerly known as TECO Energy, Inc. prior to April 1, 2024). The following table presents detail related to TECO Energy’s periodic benefit cost for pension and other postretirement benefits. Amounts disclosed for TECO Energy’s pension benefits include the amounts related to its qualified pension plan and non-qualified, non-contributory SERP and Restoration Plan.

TECO Energy Benefit Cost
(millions)	Pension Benefits						Other Postretirement Benefits
Three months ended September 30,	2024			2023			2024			2023
Components of net periodic benefit cost
Service cost	$	4		$	3		$	1		$	0
Interest cost		9			8			2			2
Expected return on assets		(14	)		(13	)		0			0
Amortization of actuarial loss (gain)		2			2			(1	)		0
Settlement cost (1)		0			0			0			0
Net periodic benefit cost	$	1		$	0		$	2		$	2
Nine months ended September 30,
Components of net periodic benefit cost
Service cost	$	13		$	11		$	1		$	0
Interest cost		26			26			5			6
Expected return on assets		(41	)		(40	)		0			0
Amortization of actuarial loss (gain)		5			4			(2	)		(1	)
Settlement cost (1)		0			2			0			0
Net periodic benefit cost	$	3		$	3		$	4		$	5

(1) Represents TEC's SERP and Restoration Plan settlement charges as a result of the prior retirements of certain executives.

TEC’s portion of the net periodic benefit cost for the three months ended September 30, 2024 and 2023, respectively, was $1 million and $0 million for pension benefits, and $1 million and $1 million for other postretirement benefits. TEC’s portion of the net periodic benefit cost for the nine months ended September 30, 2024 and 2023, respectively, was $1 million and $1 million for pension benefits, and $3 million and $4 million for other postretirement benefits. TEC’s portion of net periodic benefit costs for pension and other benefits is included as an expense on the Condensed Statements of Income in “Operations & maintenance”.

TECO Energy assumed a long-term EROA of 7.05% and a discount rate of 5.27% for pension benefits under its qualified pension plan for 2024. For TECO Energy’s other postretirement benefits, TECO Energy used a discount rate of 5.28% for 2024.

TECO Energy and TECO Holdings made contributions of $16 million and $16 million to its qualified pension plan in the nine months ended September 30, 2024 and 2023, respectively. TEC’s portion of these contributions was $10 million and $10 million during the nine months ended September 30, 2024 and 2023, respectively. TECO Holdings does not expect to make contributions to the pension plan for the remainder of 2024. See Note 1 for further information regarding TECO Holdings.

Included in the benefit cost discussed above, for the three and nine months ended September 30, 2024, $0 million and $2 million, respectively, of unamortized prior service benefits and costs and actuarial gains and losses were reclassified by TEC from regulatory assets to the Condensed Statement of Income, compared with $0 million and $1 million for the three and nine months ended September 30, 2023, respectively.