TECO ENERGY, INC - Annual Report Page 28

The terms of these coal sales contracts result from bidding and negotiations with customers. Consequently, these contracts

typically vary significantly in price, quantity, quality and length and may contain terms and conditions that allow for periodic price
reviews, price adjustment mechanisms, recovery of governmental impositions as well as provisions for force majeure, suspension,
termination, treatment of environmental legislation and assignment.

Current sales are made to both domestic and European markets, and the metallurgical coal from the Burke Branch

Development is expected to be marketed to new markets and customers in Europe, South America and Asia.

Distribution

TECO Coal transports coal from its mining complexes to customers by rail, barge, vessel and trucks. The company employs

transportation specialists who coordinate the development of acceptable shipping schedules with customers, transportation
providers and mining facilities.

Competition

Primary competitors of TECO Coal's subsidiaries are other coal suppliers, many of which are located in Central Appalachia.

Even though consolidation and bankruptcy have decreased the number of coal suppliers, the industry is still intensely competitive.
To date, TECO Coal has been able to compete for coal sales by mining specialty coals, including coals used for making coke and
furnace injection, high-quality steam coal and by effectively managing production and processing costs.

Employees

As of Dec. 31, 2011, TECO Coal and its subsidiaries employed a total of 1,162 employees.

Regulations

Mine Safety and Health

The operations of underground mines, including all related surface facilities, are subject to the Federal Coal Mine Safety and

Health Act of 1969, the 1977 Amendment and the new Miner Act of 2006. TECO Coal's subsidiaries are also subject to various
Kentucky, Tennessee and Virginia mining laws which require approval of roof control, ventilation, dust control and other facets of
the coal mining business. Federal and state inspectors inspect the mines to ensure compliance with these laws. TECO Coal believes
it is in substantial compliance with the standards of the various enforcement agencies. It is unaware of any mining laws or
regulations that would materially affect the market price of coal sold by its subsidiaries, although recent mining accidents within
the industry could lead to new legislation that could impose additional costs on TECO Coal. (see Exhibit 95 - Mine Safety
Disclosures to this annual report.)

Black Lung Legislation

Under the Black Lung Benefits Revenue Act of 1977 and the Black Lung Benefits Reform Act of 1977, as amended in 1981,

each coal mine operator must make payment of federal black lung benefits to claimants who are current and former employees,
certain survivors of a miner who dies from black lung disease, and to a trust fund for the payment of benefits and medical expenses
to claimants who last worked in the coal industry prior to Jul. 1, 1973. Historically, a small percentage of the miners currently
seeking federal black lung benefits are awarded these benefits by the federal government. The trust fund is funded by an excise tax
on coal production of up to $1.10 per ton for deep-mined coal and up to $0.55 per ton for surface-mined coal, neither amount to
exceed 4.4% of the gross sales price.

In December 2000, the Department of Labor issued new amendments to the regulations implementing the federal black lung

laws that, among other things, establish a presumption in favor of a claimant's treating physician, limit a coal operator's ability to
introduce medical evidence, and redefine Coal Workers Pneumoconiosis to include chronic obstructive pulmonary disease. TECO
Coal expects these changes in the regulations, and regulations introduced by the 2010 healthcare reform act, will increase the
percentage of claims approved and the overall cost of black lung to coal operators. TECO Coal, with the help of its consulting
actuaries, intends to continue monitoring claims very closely.

Workers' Compensation

TECO Coal is liable for workers' compensation benefits for traumatic injury and occupational exposure claims under state

workers' compensation laws. Workers' compensation laws are administered by state agencies with each state having its own set of
rules and regulations regarding compensation that is owed to an employee that is injured in the course of employment.