POWER April 2015 - 56

GENERATION TRANSITIONS
NextEra Energy: A Tale of Two, and
Maybe Three, Companies
NextEra Energy consists of a traditional, vertically integrated electric utility with
a heavy reliance on nuclear and natural gas-Florida Power & Light-and
an aggressive foray into renewable energy outside of Florida-NextEra
Energy Resources. Given its recent bid for Hawaii's electric utility, which
has a legacy of oil-fired generation and a state commission pushing renewables,
NextEra is clearly a company facing a generation transition.
By Kennedy Maize
T
he story of NextEra Energy is a tale of
two companies, housed under the same
corporate roof in Juno Beach, Fla., and
about to add a third. One is a large, conventional,
vertically integrated electric utility
monopoly, Florida Power & Light (FPL),
existing in the comfort of state regulation
and reliant on nuclear and fossil generation.
The other is NextEra Energy Resources, a
nationwide competitive generation company
focused on wind, solar, and nuclear generation-for
many, an exemplar of the future
of generation. On the far opposite side of the
country lies Hawaii's investor-owned electric
system, which is poised to become the third
company under the NextEra umbrella.
Though the first two companies have a
solid track record, the third may prove to be
a risky deal.
A Foundation of Traditional
Generation
FPL's regulated fleet consists of two nuclear
units at St. Lucie, with 1,821 MW net capacity,
two nuclear units and two gas units
at Turkey Point with 3,186 MW net capacity,
and 20,513 MW of mostly gas generation
in operation elsewhere in the state. FPL
has 3,800 MW of gas-fired capacity under
construction. In 2014, according to the company's
earnings statement, FPL had $1.5 billion
in net income, on $11.4 billion in sales,
earning the company $3.45 per share.
FPL is the foundation and " cash cow " for
NextEra Energy Resources, the company's
play in wholesale, unregulated markets. Energy
Resources brought in $5.2 billion in revenue
in 2014, with net income of $985 million
($1.89 per share) flowing to the parent's bottom
line. The resources company has about
19 GW of nameplate capacity in natural gas,
wind, solar, and merchant nuclear in competitive
wholesale markets. During 2014, it added
1,364 MW of wind and 265 MW of solar.
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POWER | April 2015
Talking to investment analysts late last year,
NextEra Chief Financial Officer Moray Dewhurst
said the company continues to invest
in its regulated utility as Florida's economy
improves and the labor force grows, bringing
steady load growth. Similarly, at Energy Resources,
Dewhurst said, " Our development
and construction programs remains on track
and our backlog of contracted renewables
projects continues to develop, with a [power
purchase agreement] for another roughly 100
MW of U.S. wind signed since the last [earnings
report]. Earnings growth was driven by
new contracted renewables projects, as well
as strong results in our customer supply and
trading business. "
Energy Resources has inked about 980
MW in U.S. wind deals expected to enter
service this year: the 249-MW Golden West
and 150-MW Carousel projects in Colorado,
a 99-MW project in Oklahoma, and another
482 MW in projects the company says it
will announce later this year. The company
brought over 1 GW of U.S. wind into service
in 2014, and 340 MW in Canada.
Energy Resources is the largest U.S. generator
of wind and solar power and growing
rapidly.
Stretching to Embrace Hawaiian
Utility
Last December, NextEra Energy announced
a new direction, one that could turn out to
be chancy. Joining the growing utility mergers
and acquisitions trend (see " The Urge to
Merge, or Vice Versa? " in the January 2015
issue or online at powermag.com), NextEra
cut a $6 billion deal (including assumption
1. Old fossil. Kauai Electric Cooperative's Port Allen Station is still mostly dependent on
diesel. About 15% of the utility's power comes from hydro and solar today, but it has plans to
reach 50% renewables by 2023, mostly with additional hydro and solar generation. Courtesy:
Gail Reitenbach

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POWER April 2015

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