The paragraph outlines the introduction to the NextEra Energy Inc. and NextEra Energy Partners LP third quarter 2024 earnings call. The operator greets participants and notes the listen-only mode with instructions for asking questions later. Mark Edelman, Director of Investor Relations, introduces the call and mentions key executives present, including John Ketchum, Brian Bolster, Rebecca Kujawa, Mark Hickson, and Armando Pimentel. John Ketchum will provide opening remarks, followed by a financial overview from Brian Bolster, with the executive team available for questions afterward. The call will include forward-looking statements subject to risks and uncertainties, with additional information available in the earnings release and on their websites.

In the paragraph, NextEra Energy reports strong third-quarter results, with a 10% year-over-year increase in adjusted earnings per share, driven by solid performance at FPL and Energy Resources. The company highlights the addition of approximately 3 gigawatts to its backlog for the second consecutive quarter, totaling around 11 gigawatts over four quarters. NextEra also announces new framework agreements with two Fortune 50 companies for potential renewables and storage projects totaling 10.5 gigawatts by 2030, which, combined with a previous joint development agreement, amounts to a potential 15 gigawatts. This emphasizes their market position and customer trust. The paragraph concludes with a mention of FPL and the impact of Hurricanes Helene and Milton, as well as a brief reference to discussing the industry's transformative period.

The paragraph expresses condolences to those impacted by Hurricanes Helene and Milton, which caused significant destruction in Florida. Hurricane Helene, a Category 4 storm, and Hurricane Milton, a Category 3 storm, led to extensive power outages, affecting 680,000 and 2 million FPL customers, respectively. FPL prepared by mobilizing over 30,000 workers for restoration efforts, which enabled swift recovery of power to affected customers. The paragraph thanks FPL employees, contractors, vendors, and first responders for their dedication and effective response in restoring services.

The paragraph expresses gratitude to Governor DeSantis and industry partners for their support during hurricanes Helene and Milton. It highlights the mutual aid provided to help rebuild the southeastern power grid. Florida Power & Light (FPL) has invested in creating a robust and intelligent power grid, resulting in fewer outages during the storms. Underground power lines outperformed overhead lines, and the solar sites sustained minimal damage. These investments have enhanced FPL's reliability and resilience, delivering significant benefits to their customers.

The paragraph highlights the urgent need for a resilient power grid due to a projected sixfold increase in power demand over the next 20 years, driven by 24/7 operations of data centers, reshoring of manufacturing, and industrial electrification. U.S. data centers alone are anticipated to contribute significantly to this demand, potentially leading to 150 gigawatts of new renewables and storage capacity required by 2030. Meeting this demand efficiently is crucial to avoid power price hikes, inflation, and reduced global competitiveness for U.S. industries. Florida Power & Light (FPL) is prepared for this growth, emphasizing their strategy of maintaining low customer bills and high reliability, with energy costs nearly 40% below the national average.

The paragraph discusses Energy Resources' strategic investments in low-cost solar generation and battery storage, which have significantly lowered fuel costs and saved customers billions. The company's operational efficiency is exemplified by its best-in-class non-fuel operating and maintenance expenses, saving customers $3 billion annually. Energy Resources, particularly through its Florida Power & Light (FPL) experience, is well-positioned to address the industry's challenges of cost, capacity, and speed in power demand. The company highlights the economic advantages of renewables, stating that new wind and solar projects are significantly cheaper than new gas power generation. Incentives for renewables directly benefit customers through lower bills. FPL's success with solar and storage as the lowest cost energy option has led to it having the largest utility-owned solar portfolio in the U.S., a trend seen across various types of utility providers nationwide.

The paragraph discusses the rapid deployment capabilities of renewable energy sources like wind, solar, and storage compared to nuclear and gas. It highlights the addition of 3 gigawatts of renewable energy in the quarter and outlines limitations with nuclear energy, such as the minimal potential of recommissioning plants and the limited number of existing merchant plants which are unevenly distributed in the U.S. Although nuclear could contribute, it can't meet the expected 900 gigawatt new demand by 2040. It also notes that new, large-scale nuclear technologies are unproven and costly. The paragraph concludes by mentioning NextEra Energy's significant history in gas power generation development over the past two decades.

The paragraph discusses the future energy landscape, emphasizing the need for increased gas power generation and battery storage to meet growing demand. It highlights the advantages of battery storage when paired with renewables, which are becoming increasingly cost-effective and quick to deploy. The paragraph forecasts a significant growth in renewables, projecting a tripling over the next seven years. NextEra Energy is positioned to capitalize on this growth, having originated over 33 gigawatts of renewables and storage since 2021 and aiming to expand its portfolio from 38 to potentially 81 gigawatts by 2027, underscoring their strategic advantage in the sector.

The paragraph discusses the potential growth in NextEra Energy's portfolio, aiming for over 50 gigawatts of co-located storage by the end of 2027, driven by new framework agreements with major companies and a joint development agreement with Entergy. This growth highlights the value of renewables and storage, contributing significantly to the U.S. economy by creating jobs, increasing tax revenues, and providing clean and reliable electricity. The company emphasizes the readiness and cost-effectiveness of renewables like wind, solar, and storage in meeting the nation's energy needs while revitalizing rural communities. NextEra Energy is well-positioned to lead in this sector given its experience and infrastructure. Additionally, FPL, a part of NextEra, reported an increase in earnings per share for the third quarter of 2024.

The paragraph outlines FPL's financial performance and expectations. FPL's regulatory capital growth was around 9.5% year-over-year, with anticipated annual growth of 10% over the agreement period ending in 2025. Capital expenditures for the quarter reached $2 billion, with projections of $8-$8.8 billion for 2024 and over $34 billion for the agreement term. Retail sales rose by 1% or 1.6% when normalized for weather. FPL reversed $231 million in reserve amortization, ending with an $817 million balance. After hurricanes, storm reserve funds were depleted, leading to planned cost recovery via customer surcharges in 2025, amounting to $1.2 billion, with $150 million allocated to replenish the storm reserve. The exact restoration costs await final approval by the Florida Public Service Commission. FPL's regulatory ROE for the year ending September 2024 is expected to be around 11.8%.

The paragraph discusses NextEra Energy's financial performance and future expectations. The regulatory return on equity for 2024 and 2025 is projected to be 11.4%. Energy Resources reported approximately 11% year-over-year adjusted earnings growth, with an increase of $0.04 in earnings per share driven by new investments, primarily in renewables. However, earnings from customer supply and trading decreased by $0.10 per share due to normalization. Contributions from NextEra Energy's transmission and gas infrastructure businesses increased slightly, while other factors reduced earnings by $0.03 per share. The company added about 3 gigawatts to its renewables and storage backlog, which now totals over 24 gigawatts, providing strong development visibility. Overall, third-quarter 2024 adjusted EPS was $1.03 per share, with flat earnings from corporate and other compared to last year. NextEra Energy maintains its long-term financial goals, aiming to achieve top-end adjusted EPS results from 2024 to 2027 and expects continued strong growth in operating cash flow.

The paragraph discusses the financial and operational updates of NextEra Energy Partners. The company expects to increase its dividends per share by 10% annually through at least 2026, starting from a 2024 base. The board declared a quarterly distribution of $0.9175 per common unit, reflecting a nearly 6% increase from the previous year. NextEra Energy Partners has announced plans to repower approximately 225 megawatts of wind facilities, expanding its wind repowering target to 1.9 gigawatts by 2026, up from 1.3 gigawatts. Despite a decline in third-quarter adjusted EBITDA and cash available for distribution due to the divestiture of its Texas Pipeline portfolio, the company is focusing on its portfolio of clean energy assets and future wind repowering opportunities to enhance performance and generation. Third-quarter adjusted EBITDA was $453 million, and cash available for distribution was $155 million.

The paragraph discusses NextEra Energy Partners' financial performance and strategic plans. The company's cash available for distribution in the third quarter of 2024 was negatively affected by interest payments on debt issued in December 2023 and increased project-level debt servicing due to a 2023 acquisition. NextEra projects adjusted EBITDA from its portfolio by the end of 2024 to be between $1.9 billion and $2.1 billion, reflecting anticipated contributions in 2025. The partnership is exploring options to optimize capital structure and possibly redirect more cash flow toward organic growth. Growth strategies could include acquisitions, wind repowerings, and other opportunities. They plan to complete their capital review by the fourth quarter of 2024 and offer distribution expectations then. The paragraph ends with the company opening the floor to questions from analysts, with the first question being about framework agreements and the company’s previous stance on these agreements.

John Ketchum and Rebecca Kujawa discuss the strategic benefits of framework agreements their company has established with Entergy and two major Fortune 50 companies, totaling over 10.5 gigawatts. These agreements offer the company flexibility in asset allocation and foster strong partnerships, which are advantageous for securing additional business. Ketchum notes their approach with Entergy involves a balance between build-operate-transfer (BOT) agreements and power purchase agreements (PPAs), whereas the Fortune 50 customers are more focused on PPAs. Kujawa highlights the rapid change in energy demand and the critical energy needs of their clients. She emphasizes the importance of alignment between the company and these clients to ensure they have access to a vast pipeline of energy projects, underscoring the company's unmatched project development and interconnection capabilities.

The paragraph discusses a company's approach to collaborating with customers to integrate projects into their backlog, highlighting their unique visibility into increasing demand, especially for renewables. Steve Fleishman asks when they can disclose customer identities, and John Ketchum suggests names may be revealed alongside deal announcements. Rebecca Kujawa clarifies that the customers are Fortune 50 companies outside the tech industry, emphasizing that while demand from hyperscalers is significant, these agreements are with non-tech firms needing power for new facilities.

The paragraph discusses the increasing demand for low-cost, low-carbon energy, driven by data centers and other industries that anticipate higher future power prices. John Ketchum highlights that while data centers are leading this demand, other sectors are also striving to secure renewable energy to manage costs, marking a broader trend of industrial electrification and manufacturing independence from China. He also mentions the company's interest in recommissioning the Duane Arnold plant, noting ongoing assessments and collaborations with the NRC and local stakeholders.

The paragraph is part of a discussion during an investor call where Shahriar Pourreza from Guggenheim Partners asks John Ketchum about the potential restart of the Duane Arnold plant. Ketchum explains that they're still evaluating the cost, but they're optimistic due to the plant's simpler boiling water reactor (BWR) design. He mentions the intention to own the plant long-term, benefiting from an attractive power purchase agreement (PPA), rather than looking to monetize it. Additionally, regarding NEP, Ketchum addresses a change in language about timing and their confidence in concluding a financial review by their year-end call.

The paragraph discusses a conversation between John Ketchum and Shahriar Pourreza about NextEra's strategic review of its capital allocation and distribution policies concerning its entities, SEPF and NEP. Ketchum mentions that the company is evaluating whether to focus more on growing business cash flow rather than distributions, all in the context of reassessing the YieldCo model. While NextEra's preference is to remain the owner of NextEra Energy Partners (NEP), Ketchum notes they are considering all options. An update on the distribution policy is expected in the company's fourth-quarter call.

The paragraph discusses NextEra Energy's strategic positioning and preparedness for future growth opportunities, particularly in relation to data centers. In a conversation with Julien Dumoulin-Smith from Jefferies, John Ketchum of NextEra Energy highlights that the company has taken proactive measures to "safe harbor" their assets through 2029. This involves securing their development program and mitigating risks related to supply chain issues by stockpiling critical electrical infrastructure components like transformers and switchgears. These actions have been taken to avoid the delays that are affecting smaller developers in the industry, ensuring NextEra Energy's resilience and readiness for potential challenges and growth.

In this article paragraph, utility customers are increasingly seeking to work with established developers like NextEra due to their reliability in completing projects on time, as opposed to smaller developers who face chronic issues. Julien Dumoulin-Smith inquires about plans for long-term energy arrangements in New England, particularly around nuclear facilities like Seabrook. John Ketchum explains that NextEra approaches its nuclear fleet as part of a larger data center strategy and highlights the company's diverse expertise across various energy sources, including renewables and nuclear. The focus is on providing comprehensive, cost-effective clean energy solutions. David Arcaro from Morgan Stanley asks about the potential for incorporating Small Modular Reactors (SMRs) into the resource mix at Florida Power & Light (FPL).

The paragraph discusses the company's perspective on Small Modular Reactors (SMRs). The company has a dedicated team monitoring the SMR market and has advised Fortune 100 companies on the technology. They observe that there are around 9 to 11 SMR Original Equipment Manufacturers (OEMs), but many are financially strained. Only a few are sufficiently capitalized to be sustainable. SMRs are considered first-of-a-kind and unproven with significant risk and high costs, especially as renewables become cheaper. Issues such as the nuclear fuel supply chain and the need for HALEU fuel further complicate their viability. Consequently, the company is not optimistic about SMRs in the near term but continues to closely monitor the developments, considering potential future integration at their facilities.

The paragraph discusses the strong demand and positive trajectory for renewable energy projects, highlighting the company's success in securing agreements and the opportunities to improve margins. Rebecca Kujawa emphasizes their disciplined approach to capital allocation and response to changing rates, suggesting a favorable market dynamic for the company. When Jeremy Tonet asks about expected additions to their project backlog, given the recent increase of 3 gigawatts per quarter, he inquires whether this implies an annual addition of around 12 gigawatts or potential for more growth.

In the paragraph, Rebecca Kujawa addresses a question about the demand growth for renewables and NextEra's market share outlook. She cautions against viewing the current gigawatt signings as a constant trend, citing variability quarter-to-quarter. However, she acknowledges the significant increase in demand for renewable energy, driven by both market commentary and actual needs. Kujawa emphasizes NextEra's strategic investments in greenfield development and technology, which enable them to deliver high-quality projects effectively with their customers. She expresses confidence in meeting the development expectations set for 2027, noting positive progress. Finally, she admits missing the second part of the question related to market share but implies their outlook is optimistic.

Rebecca Kujawa discusses maintaining a consistent market share of around 20% in renewable energy technologies while prioritizing projects with high returns for shareholders. She emphasizes balancing market share and profit margins. Regarding the opportunities in solar and wind energy, she notes a stronger trend toward solar and energy storage, driven by economic advantages and increased demand for capacity value. The Production Tax Credit (PTC) has enhanced solar's attractiveness, and energy storage is crucial for meeting the rising energy and capacity demands utilities face.

The paragraph discusses the current state of wind energy within a renewable energy development program, noting that wind's strength has weakened compared to earlier decades, but there remains significant customer interest and a robust project pipeline across the U.S. The company values diverse energy resource projects, including wind, solar, and battery storage, as they help provide comprehensive energy solutions. In response to Andrew Weisel's questions, John Ketchum states that transmission constraints for restarting the Duane Arnold nuclear plant are not a concern due to the company's large project pipeline. Additionally, Ketchum indicates that a framework agreement involving Entergy, featuring 15 gigawatts of capacity, may not influence the near-term plans of adding 40 gigawatts by 2027 but will contribute to their expectations.

In the paragraph, Andrew Weisel and John Ketchum discuss their company's performance and future expectations. John Ketchum explains that their framework agreements enhance their ability to achieve better results, aiming to exceed the midpoint of their development expectations. They note a $0.10 year-over-year drag in customer supply, attributed to diminishing gas prices and volatility compared to 2022, which had resulted in high margins. Although the margins have normalized, the business remains strong and is expected to continue contributing positively. The paragraph concludes with congratulations on effective storm restoration efforts.

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