Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Measurements

17. Fair Value Measurements

Items Measured at Fair Value on a Recurring Basis

The following tables set forth by level within the fair value hierarchy the company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of Dec. 31, 2012 and 2011. As required by accounting standards for fair value measurements, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. For natural gas and diesel fuel swaps, the market approach was used in determining fair value.

Recurring Fair Value Measures
	At fair value as of Dec. 31, 2012
(millions)	Level 1		Level 2		Level 3		Total
Assets
Natural gas swaps		$0.0		$0.2		$0.0		$0.2
Diesel fuel swaps		0.0		0.0		0.0		0.0
Total		$0.0		$0.2		$0.0		$0.2
Liabilities
Natural gas swaps		$0.0		$14.3		$0.0		$14.3
Diesel fuel swaps		0.0		0.9		0.0		0.9
Total		$0.0		$15.2		$0.0		$15.2
	At fair value as of Dec. 31, 2011
(millions)	Level 1		Level 2		Level 3		Total
Assets
Natural gas swaps		$0.0		$0.0		$0.0		$0.0
Diesel fuel swaps		0.0		0.9		0.0		0.9
Total		$0.0		$0.9		$0.0		$0.9
Liabilities
Natural gas swaps		$0.0		$65.8		$0.0		$65.8
Diesel fuel swaps		0.0		1.2		0.0		1.2
Total		$0.0		$67.0		$0.0		$67.0

Natural gas and diesel fuel swaps are OTC swap instruments. The primary pricing inputs in determining the fair value of these swaps are the NYMEX quoted closing prices of exchange-traded instruments. These prices are applied to the notional amounts of active positions to determine the reported fair value (see Note 16).

The company considered the impact of nonperformance risk in determining the fair value of derivatives. The company considered the net position with each counterparty, past performance of both parties, the intent of the parties, indications of credit deterioration and whether the markets in which the company transacts have experienced dislocation. At Dec. 31, 2012, the fair value of derivatives was not materially affected by nonperformance risk. The company’s net positions with substantially all counterparties were liability positions. There were no Level 3 assets or liabilities during the 2012 or 2011 fiscal years.

TAMPA ELECTRIC CO [Member]

Fair Value Measurements

15. Fair Value Measurements

Items Measured at Fair Value on a Recurring Basis

The following table sets forth by level within the fair value hierarchy TEC’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of Dec. 31, 2012 and 2011. As required by accounting standards for fair value measurements, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. TEC’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. For all assets and liabilities presented below, the market approach was used in determining fair value.

Recurring Derivative Fair Value Measures
	At fair value as of Dec. 31, 2012
(millions)	Level 1		Level 2		Level 3		Total
Assets
Natural gas swaps	$	0.0		$0.2		$  0.0		$0.2
Total	$	0.0		$0.2		$  0.0		$0.2
Liabilities
Natural gas swaps	$	0.0		$14.3		$  0.0		$14.3
Total	$	0.0		$14.3		$  0.0		$14.3
	At fair value as of Dec. 31, 2011
(millions)	Level 1		Level 2		Level 3		Total
Assets
Natural gas swaps	$	0.0		$0.0		$  0.0		$0.0
Total	$	0.0		$0.0		$  0.0		$0.0
Liabilities
Natural gas swaps	$	0.0		$65.8		$  0.0		$65.8
Total	$	0.0		$65.8		$  0.0		$65.8

Natural gas swaps are OTC swap instruments. The primary pricing inputs in determining the fair value of natural gas swaps are the NYMEX quoted closing prices of exchange-traded instruments. These prices are applied to the notional amounts of active positions to determine the reported fair value (see Note 14).

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, the intent of the parties, indications of credit deterioration and whether the markets in which TEC transacts have experienced dislocation. At Dec. 31, 2012, the fair value of derivatives was not materially affected by nonperformance risk. TEC’s net positions with substantially all counterparties were liability positions. There were no Level 3 assets or liabilities during the 2012 or 2011 fiscal years.