NextEra says FPL well-positioned to meet CO2 standards in Florida

NextEra Energy (NYSE:NEE) officials said Jan. 28 that they expect the carbon reduction requirements of Environmental Protection Agency (EPA) Clean Power Plan to drive demand for new renewables projects over the next few years.

Company officials made the remarks during a quarterly earnings conference call with financial analysts.

The EPA rule, which already faces legal challenges, would have states draft implementation plans to cut power sector CO2 emissions 32% by 2030.

Subsidiary NextEra Energy Resources (NEER) signed about 2,100 MW of new contracted renewable agreements. Company officials were also happy to see Congress approve extensions for various federal tax credits for wind and solar energy.

“We now have greater certainty regarding Federal tax incentives for renewables, as Congress took action in December to extend the 2014 wind PTC [Production Tax Credit] and the 2016 solar ITC [Investment Tax Credit] programs over a five year “phase-down” period,” said NextEra Senior Vice President/Finance John Ketchum.

“We expect that the IRS will provide start of construction guidance with a two-year safe harbor period for wind and solar similar in form to what was put in place for the 2014 PTC,” Ketchum said.

NEE utility Florida Power & Light (FPL) is already well-positioned to comply with the anticipated standards in Florida, company officials said. Officials noted that the Florida Public Service Commission has approved the planned 1,600-MW Okeechobee Energy Center (OCEC) combined-cycle natural gas plant.

FPL is filing a base rate proceeding with the Florida PSC, in part to ensure rate recovery for Okeechobee, which is scheduled to go online in mid-2019.

NextEra officials also reported a very low forced outage rate at its fossil, nuclear and renewable generation fleets.

It was also noted that NextEra affiliate Florida Southeast Connection is a partner in major new gas pipeline infrastructure projects in the state. FPL gas-fueled power plants will be a major customer of the new pipeline development.

NextEra today reported 2015 fourth-quarter net income attributable to NextEra Energy on a GAAP basis of $507m, or $1.10 per share, compared to $884m, or $2.00 per share, in 4Q 2014.

On other issues, NextEra was affected by unusually warm weather during the fourth quarter as well as the best economic growth in Florida since 2008.

Looking ahead, El Nino weather patterns could depress wind resources for the first half of 2016, the company said.

FPL expecting smart solar measure to make it on Florida ballot

During a question-and-answer session, FPL President and CEO Eric Silagy said that he expects a solar power voter question will make it onto the Florida ballot during the November election.

The organization, Consumers for Smart Solar, has passed some tests, including the required number of petition signers. The language has to be verified by the Florida Supreme Court by April 1 in order to be placed upon the ballot.

The court could rule on this without oral arguments if it chooses, the FPL official said. The Consumers for Smart Solar petition says that consumers can own or lease solar power equipment on their property to generate electricity – however, “state and federal governments shall retain their abilities to protect consumer rights and public health, safety and welfare, and to ensure that consumers who do not choose to install solar are not required to subsidize the costs of backup power and electric grid access to those who do.”

This utility-backed proposal should not be confused with one being advanced by Floridians for Solar Choice. The ‘Solar Choice’ organization says that Florida is one of only four states that prohibit citizens from buying electricity from anyone other than a utility.

Floridians for Solar Choice is promoting a Florida constitutional amendment ballot initiative that would give Florida’s families and businesses the right to choose solar power.

One of the key elements the Florida Supreme Court will soon consider is whether or not the utility-backed proposal is misleading to voters, according to Floridians for Solar Choice.

 

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.