POWER February 2022 - 22

UTILITY SPOTLIGHT
ties, FPL's growing population within its
service territory generates organic sales
and load growth, as well as new investment
opportunities that provide steady
rate base expansion with earnings and
cash flow growth potential. "
Moody's has also noted that while
4. As part of another ongoing modernization initiative, the Dania Beach site will host a new
combined cycle power plant that will feature two first-of-their-kind GE 7HA.03 gas turbines. The
gas turbines will be the " world's largest, most efficient, and flexible gas turbines " for the 60Hz
market when they begin commercial operation in mid-2022, GE has told POWER. This is a
conceptual rendering of the proposed facility and is subject to final engineering. Courtesy: FPL
Still,
the
strategy
is
not
without
hurdles. In a recent 10-year site plan
submitted to Florida regulators in April
2021, FPL described the fine balance
it must achieve to provide affordable
power while maintaining profitability.
Another challenge involves balancing its
load and generating capacity, particularly
in fast-growing metropolitan areas,
like Miami-Dade and Broward counties.
FPL suggests the impact on demand
from federal and state energy-efficiency
codes and standards could reduce summer
peak load in 2030 by about 1,500
MW and reduce annual energy usage
by 3,800 GWh. At the same time, current
load forecasts project " significant "
increases in electric vehicle adoption.
Many future-looking decisions are being
driven by the same dynamics that
have fueled the utility space worldwide
over the last two decades: forecasted
natural gas costs; projected costs for
new generating units; the efficiency
with which generating units convert
fuel into power; and costs related to environmental
impacts. The 10-year site
plan envisions additions of about 9,313
MW of additional PV generation in the
2021 through 2030 time period, much of
which will still be " fixed-tilt " as opposed
to " tracking " solar, considering higher
costs for " tracking " technology.
Modernizations will also be a priority.
Along with battery additions-including
a 409-MW battery installation at the
2.8-GW gas- and oil-fired Manatee plant
(which is to be imminently retired)-FPL
plans to build a pioneering combined
22
cycle (CC) unit at the Dania Beach Clean
Energy Center (Figures 3 and 4), a project
for which it gained state approval
in 2018. Plans also call for upgrades to
combustion turbine components, as well
as CC units, to ready them for hydrogen
combustion. A notable pilot project
planned for the existing Okeechobee
CC, for example, could fuel its turbines
with solar-produced hydrogen. Projected
to go into service in late 2023, the project
could guide the utility's " future use
of hydrogen in a larger way, " including as
a fuel in existing and new CC units, like
Dania Beach Unit 7.
Modernizations also extend to NextEra's
nuclear facilities. In December
2019, FPL's Turkey Point Units 3 and 4,
in Miami-Dade County won the Nuclear
Regulatory Commission's first set of
subsequent license renewals (SLRs), effectively
extending their lifetimes beyond
60 years and up to 80 years-through
2053. Turkey Point's two 800-MW units
entered commercial operation in 1972
and 1973, respectively, and their previous
licenses were set to expire in 2032
and 2033. In August 2021, FPL also filed
SLR applications for its two units at the
2-GW St. Lucie nuclear station in Jensen
Beach, Florida.
A Bright Outlook
The consensus among analysts is that
FPL faces a bright future. Moody's Investors
Service has called FPL, NextEra
Energy's principal subsidiary, a
" crown jewel. " The firm reports, " A rarity
amongst U.S. regulated electric utiliwww.powermag.com
FPL
earns the vast majority of its net income
through its base rates, the various
clauses " provide for adequate and timely
cost recovery and returns on certain other
investments. The company has experienced
very little in disallowances and regulatory
lag in cost recovery. For example,
its fuel and capacity clauses are adjusted
annually based on expected fuel and purchased
power prices and for prior period
differences between projected and actual
costs, " it said. FPL may also recover preconstruction
costs and carrying charges
for
construction work-in-progress
for
nuclear capital expenditures. In addition,
FPL has an environmental cost recovery
clause that is adjusted annually for capital
spending and operating expenses related
to emission controls, it said.
Outlooks for NEER, a company that
accounts for about 25% of NextEra Energy's
returns, are slightly more complex.
According to financial documents
released last October, NEER's pipeline
of projects for installation by 2024 includes
more than 12 wind projects with
a combined capacity of 5,823 MW, and
more than 50 solar projects, totaling a
combined 9,485 MW. But while 85%
of NEER's revenue over 2018, 2019, and
2020 was derived from wholesale electricity
markets, the company is seeing
significant growth for its regulated and
contracted assets. Growing demand for
renewable energy backed by federal,
state, and local incentives has allowed
the company to sell power under longterm
contracts to an array of customers,
including larger utilities that are looking
to meet their own sustainability goals,
Moody's said.
" The long term revenue visibility from
the contracted assets that are predominantly
renewables, which entail no fuel
risk or commodity price exposure, is in
contrast to the typically higher risk associated
with unregulated power companies
that are exposed to wholesale
merchant power sales and challenged
coal and nuclear plants, " it said. And
while NEER faces development and project
execution risks, the company " has a
strong track record of completing projects
on time and within budget, " it said. ■
-Sonal Patel is a POWER senior
associate editor.
POWER | February 2022

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POWER February 2022

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