NextEra Energy, Inc. · NYSE:NEE
NextEra Energy — Investor Presentation (August 2013)
19 slides from NextEra Energy's investor presentation, August 2013
Slide 1: FPL Institutional Investor Information
FPL Institutional Investor Information August 2013
Slide 2: What is the Earnings Surveillance Reporting (ESR)?
What is the Earnings Surveillance Reporting (ESR)? Florida Public Service Commission (FPSC) Surveillance Reporting • Monitors the reasonableness of Florida Power & Light’s (FPL) base rates • Filed monthly with the FPSC • Rolling twelve months of results • Utilizes a 13-month average balance sheet 2
Slide 3: Regulatory capital employed: Retail and Other
Regulatory capital employed is the capital in which we are able to earn a return on at FPL and we separate it into two categories: “Retail” and “Other” Average Regulatory Capital Employed $30 Includes: $25.2 B Wholesale rate base, $25 clause-related $21.8 B investments, and $19.6 B AFUDC projects $2
Slide 4: Retail Rate Base (13-month average)
The overall purpose of the earnings surveillance report is to monitor the reasonableness of FPL’s base rates and for the FPSC to know that FPL is earning within its allowed ROE band Retail Rate Base (13-month average) • The monthly ESRs are posted to the FPSC’s website(1) • The retail rate base is t
Slide 5: System per books vs jurisdictional per books: wholesale rate base
The difference between system per books and jurisdictional per books is primarily the inclusion of wholesale rate base and FERC regulated transmission in system per books Wholesale Rate Base (Schedule 2: Page 1 of 3) • Total net PP&E in the 10-K is greater than system per books net utility plant – F
Slide 6: Clause-Related Investments & AFUDC Projects
Clause-Related Investments & AFUDC Projects (Schedule 2: Page 3 of 3) Gross Plant in Service: $2,014,785,228 Less: Depreciation ($152,021,066) Net Plant in Service $1,862,764,162 Add: CWIP and AFUDC projects $2,573,851,648 Total: $4,436,615,810 6
Slide 7: Allowed regulatory ROE on average retail rate base
We are allowed to earn a regulatory ROE of between 9.5% and 11.5% on our $20.3B of average retail rate base, 10.5% on clause-related investments and AFUDC projects totaling $4.4B, and various ROE ranges on wholesale Regulatory Capital Employed $30 Includes: Non-retail/Wholesale $25.2 B rate base: $2
Slide 8: ROEs at Florida Power & Light
ROEs at Florida Power & Light Retail Rate Base 10.5% midpoint; able to earn +/- 1% from midpoint Wholesale Varies by contract Nuclear Clause(1) 10.5% Environmental Clause 10.5% Conservation Clause 10.5% (1) Effective July 1, 2013, the nuclear cost recovery clause earns at the midpoint of FPL’s allow
Slide 9: Reconciliation of Reported Net Income and Net Operating Income
Reconciliation of Reported Net Income and Net Operating Income (NOI) 2012 ($ millions) Net Income reported on 10-K $1,240 Add back below the line expenses: Long Term Debt Expense ~$280 (total) Other Interest Expense Other Income/Deductions NOI(1) (Total Company) $1,520 Add: FPSC Adjustments(2) ($96)
Slide 10: 2013: Key Assumptions for FPL
2013: Key Assumptions for FPL • Key assumptions at FPL: – FPL: Expected ROE: 11.0% - 11.25% Regulatory equity ratio: 47% Normal weather patterns and operating conditions Customer growth: 0.6% - 0.7% Customer usage growth: 0.5% - 1.5% O&M expenses projected to be flat in nominal terms Surplus depreci
Slide 11: Appendix
11 Appendix NeExTera’ ENERGY
Slide 12: What is included in a typical retail residential bill?
What is included in a typical retail residential bill? Typical 1,000 kWh Retail Residential Bill (As of 5/1/2013) Components Amount % of Total Subject to Base $ 51.33 54% review in a retail base rate case Cost Recovery Clauses: Fuel $ 26.33 28% Capacity(1) 9.38 10% Conservation 2.33 2% Environmental
Slide 13: Overview of Clauses
Overview of Clauses • Specific vehicles designed to recover ongoing costs outside a normal base rate proceeding – Costs are not recovered through any other cost recovery mechanism • Costs are: – Variable and/or Volatile in nature – Driven by legislation – Caused by extraordinary circumstances • Fore
Slide 14: What costs are recovered through clauses?
What costs are recovered through clauses? • O&M • Capital (applicable only to nuclear(1), conservation & environmental): includes LMS equipment, meters, computer & software equipment in conservation clause and the environmental clause includes 3 solar plants – Depreciation – Return on Investment (RO
Slide 15: Fuel Cost Recovery Clause
Fuel Cost Recovery Clause • Established by FPSC Order No. 14546 • Designed to collect: – Cost of fuel used by FPL to generate electricity – Cost of fuel/energy portion of purchased power Economy purchases Power from qualifying facilities (QF’s) Unit Power Sales Contracts • Generating Performance Inc
Slide 16: Capacity Cost Recovery Clause
Capacity Cost Recovery Clause • Established by FPSC Order No. 25773 • Designed to collect capacity costs (Purchase Power Agreements) for: – Power from QF’s – Unit Power Purchases • Includes nuclear cost recovery for uprates, and preconstruction and carrying charges of new nuclear power plants 16
Slide 17: Energy Conservation Cost Recovery (ECCR)
Energy Conservation Cost Recovery (ECCR) • Established by FPSC Rule 25-17.015 • Designed to collect amount FPL spends on FPSC approved programs designed to reduce electric consumption – Helps defer construction of new power plants • Reduce Peak Load: – On Call Programs & Commercial/Industrial (C/I)
Slide 18: Environmental Cost Recovery Clause (ECRC)
Environmental Cost Recovery Clause (ECRC) • Established by Florida Statute 366.8255 (1) (d) • Designed to recover environmental costs prudently incurred after April 13, 1993 • Legally required to comply with an Environmental laws and regulation • Includes recovery for: – Low Emissions, St. Lucie Tur
Slide 19: NEX Tera
NEX Tera ENERGY &