Tampa Electric’s net income for the fourth quarter was $36.2 million, compared with $37.7 million for the same period in 2011. Results for the quarter reflected a 1.4% higher average number of customers, higher base revenues due to weather that was slightly better than in 2011, and lower interest expense, more than offset by higher depreciation and operations and maintenance expenses. Fourth quarter net income in 2012 included $1.0 million of Allowance for Funds Used During Construction (AFUDC) equity, which represents allowed equity cost capitalized to construction costs, compared with $0.2 million in the 2011 quarter.
Total degree days in Tampa Electric's service area in the fourth quarter of 2012 were 14% below normal, but 5% above the same period in 2011, resulting in pretax base revenue approximately $5.0 million higher than in 2011. Total net energy for load, which is a calendar measurement of retail energy sales rather than a billing-cycle measurement, increased 3.5% in the fourth quarter of 2012 compared with the same period in 2011. The quarterly energy sales shown on the statistical summary that accompanies this earnings release reflect the energy sales based on the timing of billing cycles, which can vary period to period. The increased number of residential customers drove higher sales to those customers in the quarter. Energy sales to industrial-phosphate customers increased due to the transfer of certain load from self-generation to Tampa Electric’s system.
Operations and maintenance expense, excluding all Florida Public Service Commission (FPSC)-approved cost-recovery clauses, increased $6.7 million in the 2012 quarter, reflecting higher generating system maintenance expenses, higher costs to operate and maintain the distribution system and higher pension and other employee benefit expenses, partially offset by lower bad-debt expense. Depreciation and amortization expense increased $2.9 million in 2012 due to additions to facilities to serve customers. Interest expense decreased $4.1 million due to lower long-term debt interest rates and balances and a lower interest rate on customer deposits.