Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NextEra Energy Inc (NEE, Financial) reported a 10% year-over-year increase in adjusted earnings per share for the third quarter, indicating strong financial and operational performance.
- The company added approximately 3 gigawatts to its renewables and storage backlog for the second consecutive quarter, bringing the total to approximately 11 gigawatts over the past four quarters.
- NextEra Energy Inc (NEE) announced new framework agreements with two Fortune 50 customers for potential development of up to 10.5 gigawatts of renewables and storage projects by 2030.
- Florida Power & Light (FPL) demonstrated resilience during Hurricanes Helene and Milton, restoring power to 95% of affected customers within days and showcasing the effectiveness of its smart grid investments.
- NextEra Energy Inc (NEE) continues to expect strong growth, with plans to potentially double its renewable generation portfolio from 38 gigawatts to 81 gigawatts by the end of 2027.
Negative Points
- The company faced significant challenges due to Hurricanes Helene and Milton, which caused widespread power outages affecting millions of FPL customers.
- FPL's storm recovery costs are estimated at approximately $1.2 billion, which will be recovered from customers through a surcharge in 2025.
- The customer supply and trading business saw a decrease in contributions by $0.10 per share year-over-year, attributed to normalization of origination activity and margins.
- NextEra Energy Partners experienced a decline in third-quarter adjusted EBITDA and cash available for distribution, impacted by the divestiture of the Texas pipeline portfolio and higher debt service costs.
- The company is facing uncertainties regarding its distribution growth targets and is reviewing its capital allocation strategy, which has caused some market jitters.
Q & A Highlights
Q: Can you provide more details on the framework agreements with Entergy and the two Fortune 50 companies?
A: John Ketchum, CEO, explained that these agreements offer flexibility in asset allocation and create close partnerships, enhancing business opportunities. Rebecca Kujawa, CEO of NextEra Energy Resources, added that these agreements reflect the significant and urgent energy needs of customers, showcasing NextEra's unique position with a substantial pipeline of projects.
Q: Are the framework agreements with technology companies, and will you disclose the names of these companies?
A: John Ketchum stated that the agreements are not with technology companies but with Fortune 50 companies outside the tech industry. The names will likely be disclosed alongside transaction announcements. Rebecca Kujawa emphasized that these agreements highlight broad-based demand beyond just the tech sector.
Q: What are the key steps and costs associated with the potential recommissioning of the Duane Arnold nuclear plant?
A: John Ketchum mentioned that they are evaluating the recommissioning, focusing on engineering assessments and stakeholder engagement. The plant's simpler boiling water reactor design offers optimism for cost-effective recommissioning. The asset is seen as attractive for long-term ownership.
Q: Can you elaborate on the strategic review of NextEra Energy Partners (NEP) and its distribution growth targets?
A: John Ketchum noted that they are reviewing NEP's cost of capital and considering a strategic shift towards growing underlying cash flow rather than focusing solely on distributions. The review will conclude by the year-end call, with updated feedback on distribution policy expected.
Q: How is NextEra Energy addressing potential risks related to safe harboring assets amid changing political landscapes?
A: John Ketchum assured that NextEra has fully derisked its safe harbor program through 2029 and has secured critical electric infrastructure to avoid delays, positioning the company to meet future demands effectively.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
