Profile: NextEra Energy Inc (NEE.N)

NEE.N on New York Stock Exchange

98.45USD
29 Aug 2014
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NextEra Energy, Inc. (NEE), incorporated on September 10, 1984, is an electric power company. The Company has over 42,000 megawatt of generating capacity in 26 states in the United States and four provinces in Canada. It also purchases electric power for resale to its customers and provides risk management services related to power and gas consumption for a limited number of customers. It is the generator in North America of renewable energy from the wind and sun. It owns and operates approximately 17% of the installed base of United States wind power production capacity and operates approximately 14% of the installed base of United States utility-scale solar power production capacity as of December 31, 2012. It also owns and operates one of the fleets of nuclear power stations in the United States, with eight reactors at five sites located in four states, representing approximately 6% of United States nuclear power electric generating capacity as of December 31, 2012.

NEE's generation fleet has significantly lower rates of emissions of carbon-dioxide (CO2), sulphur dioxide (SO2) and NOx than the average rates of the United States electric power industry with approximately 97% of its 2012 generation, measured by megawatt hour produced, coming from renewables, nuclear and natural gas-fired facilities. Certain environmental attributes of NEE's electric generating facilities, such as renewable energy credits, emissions reductions, offsets, allowances and the avoided emission of GHG pollutants, have been or likely will be sold or transferred to third parties, who are solely entitled to the reporting rights and ownership of the environmental attributes.

FPL

FPL is a rate-regulated electric utility and is the electric utility in the state of Florida and one of the electric utilities in the United States based on retail megawatts hour sales. FPL, with 24,057 megawatts of generating capacity at December 31, 2012, supplies electric service throughout of the east and lower west coasts of Florida, serving more than 8.9 million people through approximately 4.6 million customer accounts. FPL's service to its retail customers is provided primarily under franchise agreements negotiated with municipalities or counties. Alternatively, municipalities and counties may form their own utility companies to provide service to their residents. In a few cases, an FPL franchise agreement provides the municipality or county the right to buy the distribution assets serving local residents at the end of the agreement. FPL's primary source of operating revenues is from its retail customer base; it also serves a limited number of wholesale customers within Florida.

FPL seeks to maintain attractive rates for its customers. Since rates are largely cost-based, maintaining low rates requires a strategy focused on developing and maintaining a low cost position. A key element of FPL's strategy is to providereliable service to its customers. The transmission and distribution system is susceptible to interruptions or outages from a wide variety of sources including weather, animal interference, traffic accidents, equipment failure and many others, and FPL seeks to reduce or eliminate outages where economically practical and to restore service rapidly when outages occur. FPL's 2012 average cost per 1,000 kilowatt hour of monthly residential usage was the lowest of the 55 electric utilities within Florida.

As of December 31, 2012, FPL's resources for serving load consisted of 26,020 megawatt, of which 24,057 megawatts were from FPL-owned facilities and 1,963 megawatts were available through purchased power agreements.

Occasionally, unusually cold temperatures during the winter months result in increases in electricity usage for short periods of time. However, customer usage and operating revenues are typically higher during the summer months, largely due to the prevalent use of air conditioning in FPL's service territory. FPL provides service to its customers through an integrated transmission and distribution system that links its generation facilities to its customers. FPL also maintains interconnection facilities with neighboring utilities and wholesale power providers, enabling it to buy and sell wholesale electricity outside its service territory and to enhance the reliability of its own network and support the reliability of neighboring networks. FPL's transmission system carries high voltage electricity from its generating facilities to substations where the electricity is stepped down to lower voltage levels and is sent through the distribution system to its customers. As of December 31, 2012, FPL owned and operated 73 units that used fossil fuels, such as natural gas and/or oil, and had a joint ownership interest in three coal units, which combined provided 20,696 megawatts of generating capacity for FPL. These fossil units are out of service from time to time for routine maintenance or on standby during periods of reduced electricity demand.

FPL's natural gas plants require natural gas transportation, supply and storage. In December 2012, FPL issued an RFP for an approximately 700-mile natural gas pipeline that will help FPL identify and evaluate options for new natural gas transportation infrastructure in Florida to meet the growing need for natural gas power. The upstream segment will originate at an existing hub in western Alabama and end at a new hub to be built in Central Florida that will allow the new pipeline to interconnect with peninsular Florida's two existing natural gas pipelines. The downstream segment will originate at the new Central Florida hub and end in Martin County, Florida at FPL's Martin power plant. FPL plans to propose a self-build option for the downstream segment of the pipeline, which, if selected, is expected to be built, owned and operated by a FERC-regulated affiliate.

Solar generation can be provided primarily through two conventions: utility-owned and customer-owned. In utility-owned solar generation, the energy generated goes directly to the transmission grid, whereas customer-owned solar generation goes directly to the location it is serving. There are two principal solar technologies used for utility-scale projects: photovoltaic and thermal.

NEER

NEER engages in power and gas marketing and trading activities, including entering into financial and physical contracts, to hedge the production from its generating assets that is not sold under long-term power supply agreements. These activities include providing full energy and capacity requirements services primarily to distribution utilities in certain markets and offering customized power and gas and related risk management services to wholesale customers. NEER also participates in natural gas production through non-operating ownership interests and pipeline infrastructure development, hereafter referred to as the gas infrastructure business, and owns a retail electricity provider serving customers in 13 states and the District of Columbia.

NEER, through its subsidiaries owns, develops, constructs, manages and operates electric generating facilities in wholesale energy markets primarily in the U.S., as well as in Canada and Spain. NEER is one of the wholesale generators of electric power in the U.S., with 18,122 megawatt of generating capacity across 24 states and four Canadian provinces as of December 31, 2012. NEER produces the majority of its electricity from clean and renewable sources as described more fully below. NEER is the owner of wind and utility-scale solar energy projects in North America. Since 2002, NEER has more than doubled its generating capacity, primarily through the development of new wind projects and acquisition of nuclear projects.

In general, U.S. electricity markets encompass three classes of product: energy, capacity and ancillary services. Energy services relate to the physical delivery of power; capacity services relate to the availability of mw capacity of a power generation asset; and ancillary services are other services related to power generation assets, such as load regulation and spinning and non-spinning reserves. The exact nature of these classes of product is defined in part by regional tariffs. Not all regions have a capacity product class, and the specific definitions of ancillary services vary from region to region.

The NEER wind generation portfolio produces renewable energy credits (RECs) which are typically sold along with the energy from the plants under long-term contracts. A small portion of the wind portfolio generation is sold under short-term contracts and the RECs and other environmental attributes may be sold separately. NEER categorizes its portfolio in a number of different ways for different business purposes. NEER's operations also include the gas infrastructure business and the customer supply and power and gas trading businesses. As of December 31, 2012, the gas infrastructure business had non-operating investments located in shale formations primarily in Texas, Oklahoma, Wyoming, North Dakota and Louisiana. As of December 31, 2012, NEER had ownership interests in wind generating facilities with a total capacity of 10,057 megawatt (net ownership). NEER operates substantially all of these wind facilities, which are located in 19 states and Canada. During the year ended December 31, 2012, NEER added approximately 1,520 megawatts of new wind generation and sold a wind facility with 30 megawatts of generating capacity. NEER's nuclear facilities use both on-site storage pools and dry storage casks to store spent nuclear fuel generated by these facilities, which are expected to allow NEER to store spent nuclear fuel at these facilities through license expiration.

NEER is one of the owners of utility-scale solar energy projects in North America, principally through 310 megawatts facility in California's Mojave Desert, of which 148 megawatts is owned by NEER as of December 31, 2012. NEER and its affiliates are in the process of constructing solar thermal facilities with generating capacity of 99.8 megawatts in Spain (Spain solar projects) and 250 megawatts in California (Genesis solar project). During year ended December 31, 2012, NEER acquired 40 megawatts of new solar generation in Canada.

PMI, a subsidiary of NEER, buys and sells wholesale energy commodities, such as electricity, natural gas and oil. PMI sells the output from NEER's plants that is not sold under long-term contracts and procures the non-nuclear fuel for use by NEER's generation fleet. Its primary role is to manage the commodity risk of NEER's portfolio. PMI uses derivative instruments such as swaps, options, futures and forwards to manage the risk associated with fluctuating commodity prices and to optimize the value of NEER's power generation assets.

OTHER NEE OPERATING SUBSIDIARIES

NEE's Corporate and Other segment represents other business activities, primarily NEET and FPL FiberNet. NEET, a wholly-owned subsidiary of NEECH, is a limited liability company organized under the laws of Delaware. NEET conducts its business primarily through two subsidiaries, Lone Star and NHT, and is pursuing opportunities to develop, build and operate new transmission facilities throughout North America. Lone Star is a limited liability company organized under the laws of Delaware. Lone Star, a rate-regulated transmission service provider in Texas, is constructing approximately 330 miles of 345 kilovolt transmission lines and other associated facilities. Lone Star's transmission lines are part of a transmission grid improvement program that will add approximately 2,300 miles of 345 kv lines to deliver power from the Competitive Renewable Energy Zones in west Texas and the Texas panhandle to the Dallas/Fort Worth area and other population centers in Texas.

NHT, a rate-regulated transmission owner in ISO-NE, is a limited liability company organized under the laws of Delaware. NHT owns transmission facilities which connect NEER's Seabrook nuclear facility to the New England transmission grid and interconnect three 345 kilovolt transmission lines in New England. NHT is subject to regulation by a number of federal, state and other agencies, including, but not limited to, the New Hampshire Public Utility Commission, ISO-NE, the FERC, the NERC and the EPA. NHT wholesale transmission revenues are provided through an ISO-NE tariff.

FPL FiberNet conducts its business through two separate wholly-owned subsidiaries of NEECH. One subsidiary was formed in 2000 to enhance the value of NEE's fiber-optic network assets that were originally built to support FPL operations and the other was formed in 2011 to hold fiber-optic network assets which were acquired. Both subsidiaries are limited liability companies organized under the laws of Delaware. FPL FiberNet leases fiber-optic network capacity and dark fiber to FPL and other customers, primarily telephone, wireless, Internet and other telecommunications companies. FPL FiberNet's networks cover of the metropolitan areas in Florida and several in Texas. FPL FiberNet also has a long-haul network providing bandwidth at wholesale rates. The long-haul network connects cities in Florida and Texas with additional connectivity to Atlanta, Georgia and the South Central United States, including Arkansas, Louisiana and Oklahoma. As of December 31, 2012, FPL FiberNet's network consisted of approximately 8,600 route miles. FPL FiberNet is subject to regulation by the Federal Communications Commission which has jurisdiction over wire and wireless communication networks and by the public utility commissions in the states in which it provides intrastate telecommunication services.

Company Address

NextEra Energy Inc

700 Universe Boulevard
JUNO BEACH   FL   33408
P: +1561.6944000

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