<PAGE>   1
                                                                    Exhibit 4.26

CUSIP NO.: _______                              PRINCIPAL AMOUNT:  $206,200,000

REGISTERED NO. 1

                                TECO ENERGY, INC.

                    8.50% Junior Subordinated Notes Due 2041

<TABLE>
<S>                                      <C>                                    <C>
ORIGINAL ISSUE DATE:                     PRINCIPAL AMOUNT:                      SPECIFIED CURRENCY:  U.S. dollars
December 20, 2000                        $206,200,000
                                                                                SINKING FUND:  None
ISSUE PRICE:  100.00% (as a percentage   INTEREST RATE:  8.50%
of principal amount)                                                            REDEMPTION OPTIONS: See reverse of
                                         INTEREST PAYMENT DATES: January 31,    this Note.
STATED MATURITY:  January 31, 2041.      April 30, July 31 and October 31, of
                                         each year, commencing January 31,
                                         2001.
</TABLE>

         TECO ENERGY, INC., a corporation duly organized and existing under the
laws of the State of Florida (herein called the "Company," which term includes
any successor Corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to TECO FUNDING COMPANY I, LLC, a
Delaware limited liability company (the "LLC"), or registered assigns, the
principal sum set forth above on the Stated Maturity, upon the presentation and
surrender hereof at the principal office of the Company or such other office as
the Company has designated in writing, and to pay interest on the unpaid
principal balance hereof at a rate per annum (assuming a 360-day year consisting
of twelve 30-day months) equal to the Interest Rate set forth above.

         Interest will be payable on the Interest Payment Dates to the Person in
whose name this Note is registered at the close of business on the related
Record Date as provided below. In each case, payments shall be made in
accordance with the provisions hereof until the principal hereof is paid or duly
made available for payment.

         Payment of the principal of (and premium, if any) and any such interest
on this Note shall be made in immediately available funds at the office or
agency of the Company maintained for that purpose in the City of New York in the
State of New York, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts.

         Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.





                                   Annex A--1
<PAGE>   2
         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

         IN WITNESS WHEREOF, TECO ENERGY, INC. has caused this instrument to be
duly executed.



Dated:  December 20, 2000


TRUSTEE'S CERTIFICATE                              TECO ENERGY, INC.
OF AUTHENTICATION

This is one of the series
designated therein referred                  By: /s/ Gordon L. Gillette
to in the within-mentioned                      -------------------------------
Indenture.                                   Name: Gordon L. Gillette
                                             Title: Vice President - Finance and
                                             Chief Financial Officer

THE BANK OF NEW YORK,
as Authenticating Agent for the Trustee


By: /s/ authorized signatory
   ------------------------------
         Authorized signatory



                                   Annex A--2
<PAGE>   3
                                (REVERSE OF NOTE)

                                TECO ENERGY, INC.

                    8.50% Junior Subordinated Notes Due 2041

         This Note is one of a duly authorized issue of securities of the
Company (herein called the "Notes"), issued and to be issued under an Indenture
dated as of August 17, 1998, as supplemented by the Third Supplemental
Indenture, dated as of December 1, 2000 (as previously supplemented and amended,
and as further amended or supplemented, the "Indenture"), between the Company
and The Bank of New York, as trustee (the "Trustee", which term includes any
successor Trustee under the Indenture), to which Indenture reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Notes are, and are to be,
authenticated and delivered, including provisions relating to extensions of
interest payments in Article Two of the Third Supplemental Indenture and
subordination in Article Five of the Third Supplemental Indenture. This Note is
one of the securities of the series designated on the face hereof, limited in
aggregate principal amount to $206,200,000.

                              TRANSFER OR EXCHANGE

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company in any place where the principal of (and premium, if any) and
interest on this Note is payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes of this series and of like tenor,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

         The Notes are issuable only in registered form without coupons and,
except for such Notes issued in book-entry form, only in denominations of $25.00
and any integral multiple of $25.00. As provided in the Indenture and subject to
certain limitations therein set forth, this Note is exchangeable for a like
aggregate principal amount of Notes of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

         Prior to due presentment of this Note for registration of transfer, the
Company or the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.


                                   Annex A--3
<PAGE>   4
                           REDEMPTION AND ACCELERATION

         Optional Redemption. On or after December 20, 2005, the Company may
redeem all the Notes at any time or some of them from time to time at a
redemption price equal to 100% of the principal amount plus accrued and unpaid
interest to the redemption date.

         Additional Optional Redemption. In addition to redemptions pursuant to
the above under "Optional Redemption", if a Special Event (as defined below) has
occurred and is continuing then the Company shall have the right upon not less
than 30 days nor more than 60 days notice to the Holders of the Notes to redeem
the Notes, in whole but not in part, for cash within 90 days following the
occurrence of such Special Event (the "90 Day Period") at a redemption price
equal to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest thereon, if any, to the date of such redemption (the "Redemption
Price"); provided, however, that in the case of a Tax Event, if at the time
there is available to the Company the opportunity to eliminate, within the 90
Day Period, the Tax Event by taking some ministerial action ("Ministerial
Action"), such as filing a form or making an election, or pursuing some other
similar reasonable measure which has no adverse effect on the Company, the LLC,
the Trust or the Holders of the Trust Preferred Securities issued by the Trust,
the Company shall pursue such Ministerial Action instead of redemption, and
provided, further, that the Company shall have no right to redeem the Notes
while the Company is pursuing any Ministerial Action pursuant to its obligations
under the Limited Liability Company Agreement of the LLC. The Redemption Price
shall be paid on the date of such redemption, provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Redemption Price by
10:00 a.m., New York time, on the date such Redemption Price is to be paid.

         A "Special Event" shall mean either a Tax Event or an Investment
Company Event. "Tax Event" shall mean that the LLC or the Trust shall have
received an opinion of counsel (which may be regular counsel to the Company or
an Affiliate, but not an employee thereof) experienced in such matters to the
effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein affecting taxation, or (b) any official administrative written decision,
pronouncement or action or judicial decision interpreting or applying such laws
or regulations by any court, governmental agency or regulatory authority, in
each case which amendment or change is enacted, promulgated, issued or announced
or which interpretation or application is issued or announced on or after the
date of original issuance of Notes, there is more than an insubstantial risk
that (i) the LLC or the Trust is, or will be within 90 days of the date of the
opinion of counsel, subject to United States Federal income tax with respect to
interest received on the Notes or Company Preferred Securities, (ii) interest
payable by the Company to the LLC on the Notes is not, or will not be within 90
days of the date of the opinion of counsel, deductible for United States Federal
income tax purposes, or (iii) the LLC or the Trust is, or will be within 90 days
of the date of the opinion of counsel, subject to more than a de minimis amount
of other taxes, duties, assessments or other governmental charges. "Investment
Company Event" shall mean the LLC or the Trust shall have received an opinion of
counsel (which may be regular counsel to the Company or an Affiliate, but not an
employee thereof) experienced in such matters to the effect that, as a result of
the occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or

                                   Annex A--4
<PAGE>   5
regulatory authority (a "Change in 1940 Act Law") there is more than an
insubstantial risk that the LLC or the Trust is or will be considered an
"Investment Company" that is required to be registered under the Investment
Company Act of 1940, as amended, which Change in 1940 Act Law becomes effective
on or after the date of original issuance of the Notes.

         Notice of redemption shall be given by mail to the registered owner of
this Note, not less than 30 nor more than 60 days prior to the Redemption Date,
all as provided in the Indenture. The Company shall not be required to (a)
issue, register the transfer of or exchange Notes of this series during a period
beginning at the opening of business 15 days before the day of the mailing of
the relevant notice of redemption and ending at the close of business on the day
of such mailing or (b) register the transfer of or exchange any Notes selected
for redemption, in whole or in part, except the unredeemed portion of any Note
being redeemed in part.

         In the event of redemption of this Note in part only, a new Note or
Notes of this series, of like tenor, for the unredeemed portion hereof will be
issued in the name of the registered owner hereof upon the cancellation hereof.

         Acceleration. If any Event of Default with respect to the Notes shall
occur and be continuing, the principal of the Notes may be declared due and
payable in the manner and with the effect provided in the Indenture.

OTHER PROVISIONS

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected and of the Holders of 66 2/3%
in principal amount of the Securities at the time Outstanding of all series to
be affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. To the extent
permitted by law, any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Note.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.

         All terms used in this Note that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

         This Note shall be governed by and construed in accordance with the
laws of The State of New York.


                                   Annex A--5
<PAGE>   6
ABBREVIATIONS

         The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>                                       <C>
TEN COM  -- as tenants in common          UNIF GIFT MIN ACT--______ CUSTODIAN_____
TEN ENT  -- as tenants by the entireties                     (Cust)          (Minor)
JT TEN   -- as joint tenants with right   Under Uniform Gifts to Minors Act
            of survivorship and not as
            tenants in common             ___________________________
                                                    (State)
</TABLE>

         Additional abbreviations may also be used though not in the above list.

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

  Please Insert Social Security or
  Other Identifying Number of Assignee



________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE


________________________________________________________________________________


________________________________________________________________________________

the within Security of TECO ENERGY, INC. and does hereby irrevocably constitute
and appoint

__________________________________________________ attorney to transfer said
Security on the books of the Company, with full power of substitution in the
premises.


Dated:____________________              ________________________________________



  NOTICE: The signature to this assignment must correspond with the name as
  written upon the face of the within instrument in every particular, without
  alteration or enlargement or any change whatsoever.



                                   Annex A--6