NextEra Energy, Inc. (NEE)

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NextEra Energy, Inc. (NEE)

Q3 2010 Earnings Call Transcript

October 29, 2010 9:00 am ET

Executives

Rebecca Kujawa – Director, IR

Lew Hay – Chairman and CEO

Armando Pimentel – EVP, Finance and CFO

Jim Robo – President and COO

Armando Olivera – President and CEO, Florida Power & Light Company

Analysts

Daniel Eggers – Credit Suisse

Greg Gordon – Morgan Stanley

Steve Fleishman – Bank of America-Merrill Lynch

John [ph] – Duquesne Capital

Jonathan Arnold – Deutsche Bank

Ted Heyn – Catapult

Ashar Khan – Visium Asset Management

Jay Dobson – Wunderlich Securities

Presentation

Operator

Good day, everyone. Welcome to the NextEra Energy third quarter 2010 earnings release conference call. Today’s conference is being recorded.

At this time, for opening remarks, I would like to turn the call over to Rebecca Kujawa, Director of Investor Relations. Please go ahead, ma’am.

Rebecca Kujawa

Thank you, Scott. Good morning, everyone, and welcome to our third quarter 2010 earnings conference call. Lew Hay, NextEra Energy’s Chairman and Chief Executive Officer will provide an overview of NextEra Energy’s performance and recent accomplishments. Lew will be followed by Armando Pimentel, our Chief Financial Officer, who will discuss the specifics of our financial results.

Also joining us this morning are Jim Robo, President and Chief Operating Officer of NextEra Energy; Armando Olivera, President and Chief Executive Officer of Florida Power & Light Company; and Mitch Davidson, President and Chief Executive Officer of NextEra Energy Resources, which we will refer to as Energy Resources in this presentation. Following our prepared remarks, our senior management team will be available to take your questions.

We’ll be making statements during this call that are forward-looking. These statements are based on our actual or current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements, if any of our key assumptions are incorrect or because of other factors discussed in today’s earnings news release, in the comments made during this conference call, in the risk factors section of the accompanying presentation, or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found in the Investors’ section of our Web site, www.nexteraenergy.com. We do not undertake any duty to update any forward-looking statements.

Please also note that today’s presentation includes references to adjusted earnings, which is a non-GAAP financial measure. You should refer to the information contained in the slides accompanying this presentation for definitional information and reconciliations of the non-GAAP measure to the closest GAAP financial measure.

With that, I will turn the call over to Lew Hay. Lew?

Lew Hay

Okay. Thank you, Rebecca, and good morning, everyone. NextEra Energy continued to deliver solid results in the third quarter of 2010, increasing adjusted earnings per share by more than 5% over the prior year quarter from $1.38 to $1.45.

The most significant development during the quarter was the settlement agreement we reached with the principal parties involved in our rate case. We believe this agreement is in the best interest of all the parties involved, especially the approximately 8.7 million Floridians we serve. FPL’s typical residential customer bill is already the lowest of all 55 utilities in the State of Florida and under the terms of this agreement which is awaiting approval by the Florida Public Service Commission, retail base rates would remain frozen through 2012.

Armando Pimentel will discuss the elements of the agreement in greater detail. For my part, I want to thank those who represent Florida’s electric consumers for working with us to craft an agreement that should provide financial stability for customers and the Company alike.

Our investments in Florida’s electrical infrastructure which this rate settlement will allow us to continue have provided significant benefits for our customers. Compared to the national average, our bills are 24% lower, our operating and maintenance cost are 34% lower, our reliability is 46% higher and our fleet is cleaner producing electricity with 35% fewer carbon dioxide emissions, 55% fewer sulfur dioxide emissions and 75% fewer nitrogen oxide emissions.

In other developments at FPL, we continue to make progress on our third combined cycle unit at the West County Energy Center which is expected to come online around the middle of 2011. When complete, the West County Energy Center will be one of the largest and cleanest fossil fuel facilities in the United States.

In addition, we have begun construction activities at our Cape Canaveral plant. The modernized Canaveral and Riviera Beach facilities which are scheduled to come online in 2013 and 2014 respectively are designed to have a heat rate below 6500 compared to a current industry average of more than 10,000. They are expected to be among the most efficient natural gas plants in the nation with significant customer benefits in terms of fuel and other savings.

Environmentally, the new units are expected to be far cleaner than the units they replace, reducing the rate of sulfur dioxide emissions by 98%, the rate of nitrogen oxide emissions by 93% and the rate of particulate emissions by 89%.

At Energy Resources we have added approximately 1260 megawatts of new win capacity since the end of the second quarter 2009, and expect that at year end 2010 we will continue to be the nation’s leader in wind energy generation.

Looking ahead, while we clearly see some uncertainty in the renewables development business, we continue to see profitable growth opportunities in both the wind and solar businesses. To that end, we are cautiously optimistic that in 2011 we will add approximately 700 to 1000 megawatts of wind assets to the portfolio.

Now also encouraging is the renewed interest we are seeing in differential membership transaction, otherwise known as tax equity deals which had all vanished during the recession.

During the quarter, we entered into an innovative transaction that will allow us to reduce the amount of production tax credit that we may have otherwise deferred on our balance sheet in the future.

On the solar front, our 250 megawatt Genesis solar project has now received the majority of the necessary permits and approvals including all required approvals from the State of California.

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