NextEra Energy Partners(NEP) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Adjusted earnings per share for Q3 2024 increased approximately 10% year-over-year, reflecting solid performance at both Florida Power & Light (FPL) and Energy Resources [6][30] - FPL's earnings per share increased by $0.05 year-over-year, driven by a 9.5% growth in regulatory capital employed [26] - Adjusted EPS for the consolidated results was$ 1.03 per share, with expectations to deliver results at or near the top end of adjusted EPS expectation ranges for 2024-2027 [32] Business Line Data and Key Metrics Changes - Energy Resources reported adjusted earnings growth of approximately 11% year-over-year, with adjusted EPS increasing by $0.04 [30] - Contributions from new investments increased$ 0.15 per share year-over-year, primarily due to growth in the renewables portfolio [30] - FPL's capital expenditures were approximately $2 billion for the quarter, with full-year expectations between$ 8 billion and $8.8 billion [27] Market Data and Key Metrics Changes - FPL's retail sales increased by 1% year-over-year, with a 1.6% increase on a weather-normalized basis [27] - The U.S. data center power demand is expected to increase significantly, adding approximately 460 terawatt hours of new electricity demand at a compound annual growth rate of 22% from 2023 to 2030 [14] - Forecasts predict a tripling in renewables growth over the next seven years compared to the previous seven [21] Company Strategy and Development Direction - The company is focused on capital investments in low-cost solar generation and battery storage, which have saved customers nearly$ 16 billion since 2001 [15] - The strategy includes a mix of new renewable storage and gas generation to meet growing power demand [16] - The company aims to grow its renewable generation portfolio from 38 gigawatts today to potentially 81 gigawatts by the end of 2027 [22] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of a reliable and resilient power grid, especially in light of increased power demand forecasts [13] - The company is well-positioned to capitalize on the significant demand growth for renewables and storage, with a unique market position and a substantial project pipeline [21][24] - Management expressed confidence in achieving financial results at or near the top end of adjusted EPS expectations for the coming years [32] Other Important Information - The company has added approximately 3 gigawatts to its backlog for the second consecutive quarter, bringing the total backlog to over 24 gigawatts [31] - NextEra Energy Partners declared a quarterly distribution of $0.9175 per common unit, up nearly 6% from a year earlier [33] - The partnership's organic growth opportunities have expanded, increasing the wind repowering target to approximately 1.9 gigawatts through 2026 [34] Q&A Session Summary Question: More details on the framework agreements - Management explained that the framework agreements with Fortune 50 companies provide flexibility in asset allocation and create close partnerships for securing incremental business [38][39] Question: Will the names of the agreements be disclosed? - Management indicated that names may be disclosed alongside the announcement of specific deals, emphasizing that the agreements are with non-technology companies [42] Question: Thoughts on Duane Arnold nuclear plant - Management is evaluating the recommissioning of the Duane Arnold plant, conducting necessary assessments and expressing strong interest from customers [45][46] Question: Confidence in NEP's financial review timeline - Management confirmed that the review of NEP's cost of capital is nearing conclusion, with updates expected in the fourth quarter call [50][51] Question: Insights on SMRs as an asset - Management expressed skepticism about SMRs due to their unproven nature and high costs, prioritizing other generation resources for the time being [58][59]