The operator introduces the NextEra Energy and NextEra Energy Partners LP First Quarter 2024 Earnings Conference Call and explains the format of the call. The Director of Investor Relations, Kristin Rose, introduces the executives present and reminds listeners that the call is being recorded. The executives will make forward-looking statements and discuss the company's financial results, which are subject to risks and uncertainties. More information can be found on the company's websites and in their latest reports and filings.

NextEra Energy had a strong first quarter with an 8.3% increase in adjusted earnings per share. They also added a significant amount of new solar and renewable energy projects to their backlog. Reports show that there will be a significant increase in power demand in the future, driven by industries such as oil and gas, manufacturing, and technology. NextEra Energy believes that their renewable and storage projects will help meet this demand.

NextEra Energy believes that the U.S. renewables and storage market has the potential to grow three times larger in the next seven years, and they are well positioned to meet this demand. Their scale, experience, and technology investments give them a competitive advantage and allow them to provide value to customers and shareholders. Their operating fleet of 74 gigawatts could grow to over 100 gigawatts by 2026, further increasing their scale advantages. The solar supply chain has also improved, with inflationary pressures easing and manufacturing capacity expanding.

The U.S. manufacturing incentives are expected to increase domestic module manufacturing capacity to over 50 gigawatts by 2026. This will lead to greater supplier diversity and flexibility, as well as a competitive advantage due to decades of experience in navigating power demand challenges. NextEra Energy also has a head start in technology, with the ability to capture operational data and use artificial intelligence tools for decision making. This combination of scale, experience, and technology will drive long-term value for customers and shareholders.

The paragraph discusses the current state of electricity consumption in the U.S., with wind and solar energy making up a small portion of the overall mix. The company, NextEra Energy, is focused on providing affordable and clean energy through investments in renewables and storage. They also use data and technology to help customers balance supply and demand and identify the best locations for projects. The company's two businesses, FPL and Energy Resources, complement each other and leverage their expertise and experienced team to drive value for customers and shareholders. The company's CEO is confident in their position to lead the electrification of the U.S. economy and will discuss their plans at an upcoming Investor Day. The paragraph also mentions a $0.04 increase in earnings per share for FPL in the first quarter of 2024.

FPL's strong performance in the first quarter was driven by a growth in regulatory capital employed of 11.5%. They expect this growth to continue at an average of 10% annually through 2025. FPL's capital expenditures for 2024 are estimated to be between $7.8 billion and $8.8 billion. The reported ROE for regulatory purposes is expected to be 11.8%. FPL also received approval to reduce customer bills due to projected fuel savings, resulting in a lower bill for residential customers. The company plans to invest slightly above their previous range of $32 billion to $34 billion over the current four-year settlement agreement. They have also placed 1640 MW of new solar into service, bringing their owned and operated solar portfolio to over 6400 MW. The annual ten-year site plan shows that solar and storage are the most cost-effective solution for adding reliable grid capacity over the next decade, with plans to add 21 gigawatts of new solar generation capacity over the next ten years.

The 2024 plan for FPL includes doubling the expected deployment of battery storage to 4 gigawatts, with a goal to increase solar generation to 38% by 2033. Battery storage is seen as a valuable resource for customers, providing system balancing and energy supply. Florida's economy remains strong, with FPL experiencing its strongest quarter of customer growth in 15 years. Despite a decrease in retail sales, weather had a negative impact and underlying population growth and usage per customer drove a 4.1% increase on a weather normalized basis. Energy Resources saw a 13.1% increase in adjusted earnings, largely due to new investments in renewable energy.

The existing clean energy portfolio declined due to unfavorable wind resource, but the customer supply business contributed positively. Other factors, such as higher interest costs, reduced earnings. Energy Resources had a strong quarter in new renewables and storage origination, adding to their backlog. They recently completed two large solar and storage projects to support data centers in Arizona and New Mexico. The company is proud to support their customers' growing energy needs and create jobs in local communities. They are seeing a rise in power demand from their customers and are delivering cost-effective renewables and storage through state RFP processes and bilateral discussions.

NextEra Energy is seeing an increase in demand for their data and technology services from their oil and gas and manufacturing customers. They have a strong partnership with their power and commercial industrial customers and have a development pipeline and operating portfolio to deliver clean energy solutions. They expect 2024 to be another strong year for new renewables and storage projects. NextEra Energy Transmissions has been selected to develop a new transmission line in Southern California, which could unlock over 3 gigawatts of renewable generation capacity. This follows a record year for the company's transmission business in 2023. In the first quarter of 2024, adjusted earnings from corporate and other decreased slightly compared to the previous year.

NextEra Energy has entered into an agreement to transfer $1 billion in tax credits through 2024. They expect to deliver strong financial results in 2024, 2025, and 2026, with an average annual growth in operating cash flow at or above their adjusted EPS compound annual growth rate. The Board of Directors has approved a targeted growth rate in dividends per share of 10% per year through at least 2026. NextEra Energy Partners is focused on executing their transition plan and achieving a 6% LP distribution growth target through 2026. They have plans to address remaining convertible equity portfolio financing and do not expect to need an acquisition this year to achieve their growth rate.

NextEra Energy Partners' growth plan includes repowering wind projects and acquiring assets. They have announced plans to repower an additional 100 MW of wind facilities and have declared a quarterly distribution increase of 6%. In the first quarter, adjusted EBITDA was $462 million and cash available for distribution was $164 million. New projects contributed $32 million of adjusted EBITDA and $7 million of cash available for distribution. Existing projects saw a decline in adjusted EBITDA due to unfavorable wind resource and a planned outage. The suspension of the incentive distribution right fee provided a $39 million benefit. Adjusted EBITDA and cash available for distribution also declined due to the divestiture of the Texas pipeline portfolio.

The company expects to see 5% to 8% growth per year in LP distributions per unit through 2026, with a target of 6% growth per year. They also expect their payout ratio to be in the mid-90s through 2026. The annualized rate of the fourth quarter 2024 distribution is projected to be $3.73 per common unit. NextEra Energy Partners expects run rate contributions for adjusted EBITDA and cash available for distribution to be between $1.9 billion to $2.1 billion and $730 million to $820 million, respectively, by December 31, 2024. The company is prepared to deal with potential AD/CVD cases and changes to the bifacial panel tariff.

The speaker discusses the potential impact of trade actions on the solar panel market, stating that any actions are expected to be manageable due to several factors. They do not anticipate delivery stoppages, as the US is the most expensive market for solar panels and has a growing domestic industry. The company also has contractual protections and a diversified set of suppliers to mitigate any issues. The US market is expected to have a capacity of 50 gigawatts by 2026.

The speaker discusses potential anti-dumping and countervailing duty claims against solar panel manufacturers in the US. They argue that it is unlikely that panels are being dumped into the US market and that any potential duties would be manageable. Additionally, the speaker believes that the current inventory and contractual protections in place will allow the company to manage through any trade issues until more US production comes online.

John Ketchum discusses the impact of AD/CVD on NextEra and explains that the company has minimal exposure to the potential removal of the bifacial exemption. He also mentions that the company has contracted all of its panel needs and will continue to source from U.S. suppliers. Ketchum then addresses the data center segment and notes that the company has a significant opportunity in this market. He highlights the success NextEra has had with data center customers and mentions the 3.5 gigawatts in operation and another 3.5 gigawatts in the backlog. Ketchum emphasizes the company's understanding of the data center business and their ability to meet their needs.

The speaker explains that their company has a lot of experience in the data center industry and has developed tools to address the needs of data center developers. They predict a 15% CAGR in data center demand and identify three main priorities for developers: low cost energy, decarbonization, and location/speed to market. The speaker also expresses skepticism about nuclear energy as a solution for data centers, as most nuclear plants are already in the ground and cannot be moved. They suggest that nuclear energy may only be a viable option for satisfying east coast demand, particularly in regions like Silicon Valley where there are few nuclear plants.

The speaker believes that NextEra has a lot of advantages in the market, including flexibility and speed to market, and are better positioned to meet the demand for data centers. They are skeptical about the viability of SMRs and are focusing on renewable energy solutions. They have the technology and resources to identify and secure the best locations for data centers and are confident in the future opportunities in this market. The speaker also mentions that the demand for electricity is real and will be discussed further at the investor conference in June.

The speaker discusses the potential for private capital raise to address back-end CEPFs for NEP and mentions that discussions are ongoing, but there may not be any updates at the upcoming Analyst Day. They will address any developments at a later point.

The speaker asks about the backlog and notes the strength in solar and storage but weaker performance in wind. They inquire about the implications for financial guidance and the mix of projects. The speaker, Rebecca, responds by emphasizing the company's expectations to meet the top end of their outlined goals.

The company is confident in its development expectations, but acknowledges that it is difficult to predict future developments. The introduction of the IRA has had a significant impact on the market, particularly in driving demand for solar and storage solutions. The company is seeing strong demand across various industries, including data centers, manufacturing, and oil and gas. They remain optimistic about their portfolio approach, which includes wind, solar, and storage solutions in different regions.

Rebecca Kujawa, CEO of a renewable energy company, discusses the attractive returns for their technologies and the strong drivers for long-term demand growth in the US. She mentions a 15% CAGR for data center demand growth and expects strong dynamics for renewables penetration in electricity and energy consumption. In response to a question about ramping up generation, she hints at potential constraints such as equipment and site availability but overall sees a strong opportunity set for investing capital at attractive returns.

Rebecca Kujawa discusses the significant change in load growth and the time it takes to develop electrical infrastructure. She is confident in long-term trends and the team's preparedness in developing a pipeline. Their competitive advantages in scale, experience, and technology make them a strong partner for customers, such as data centers, who are looking for integrated solutions. Kujawa also mentions healthy returns and potentially higher margins with data center clients compared to other clients.

Rebecca Kujawa, in response to a question about storage originations, states that the company has very attractive returns across the board, with mid-teens for solar and above 20% for both wind and storage. She also emphasizes the company's disciplined approach and focus on delivering value to investors. She then hands it off to Armando Pimentel, who adds that the company has seen strong origination for storage due to its value proposition for firming up renewables. He also mentions the company's 10-year site plan filing.

The company's 10-year site plan includes a large amount of solar and a significant increase in storage capacity. The CEO expects to add even more storage in the future due to its cost effectiveness. The recent renewable development day highlighted the company's scale, experience, and technology as key differentiators and emphasized the potential for growth and unique solutions for customers. The company looks forward to sharing more at the upcoming investor conference.

The conference call for NextEra Energy and NextEra Energy Partners LP has ended and the operator thanks everyone for attending and invites them to disconnect.

This summary was generated with AI and may contain some inaccuracies.