NextEra Energy Partners(US:NEP)2024-01-30 16:13Financial Data and Key Metrics Changes - NextEra Energy reported full year adjusted earnings per share (EPS) of $3.17, an increase of over 9% from 2022, exceeding the high end of adjusted EPS expectations [18] - The company achieved compound annual adjusted EPS growth of roughly 10% over the past 10 years, the highest among the top 10 power companies [20] - Adjusted EBITDA for NextEra Energy Partners for the full year 2023 was approximately $1.9 billion, up 13.6% year-over-year [34] Business Line Data and Key Metrics Changes - Florida Power & Light (FPL) adjusted EPS increased by $0.22 versus 2022, driven by a regulatory capital employed growth of approximately 12.5% [29] - Energy Resources added approximately 9,000 megawatts of new renewables and battery storage projects to its backlog, reflecting strong demand [31] - FPL's capital expenditures were approximately $9.4 billion for the full year, supporting the commissioning of roughly 1,200 megawatts of solar in 2023 [29] Market Data and Key Metrics Changes - Florida's GDP is now roughly $1.6 trillion, an increase of 9.3% over last year, indicating a strong economic environment [30] - FPL's retail sales increased 1.6% in Q4 2023 on a weather-normalized basis, driven by strong customer growth [30] - The demand for renewables has never been stronger, with Energy Resources positioned to capitalize on this trend [13] Company Strategy and Development Direction - NextEra Energy aims to increase FPL's solar generation from 5% to roughly 35% by 2032, adding over 15,000 incremental megawatts [23] - The company is focused on optimizing its existing footprint and has a substantial development pipeline, including roughly 150 gigawatts of interconnection queue positions for new renewables and storage projects [26] - NextEra Energy is strategically positioned to benefit from the shift towards electrification, with renewables expected to double to over 30% of the U.S. generating mix by 2030 [26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2024, citing declining inflation and interest rates as potential tailwinds for renewables demand [21] - The company has taken steps to mitigate exposure to interest rate volatility through its interest rate hedging program [21] - Management emphasized the importance of their world-class team and culture of continuous improvement as key competitive strengths [28] Other Important Information - The company successfully navigated supply chain challenges and higher inflation over the past two years, establishing new solar supply chains leading to lower solar panel prices [7] - NextEra Energy has a strong balance sheet and has constructed and placed in service roughly 6,800 megawatts of new renewables and storage projects in 2023 [12] - The partnership does not expect to require growth equity until 2027, indicating a stable financial outlook [27] Q&A Session Summary Question: Funding for higher repowering opportunities - Management indicated they are considering project financing and tax equity as options for funding repowering opportunities [38] Question: Update on FEC investigation - Management stated there has been no update from the FEC regarding the investigation and emphasized the lack of a prescribed timeline for a response [40][69] Question: Thoughts on the sustainability of IRA provisions - Management expressed confidence that existing laws, including IRA provisions, are unlikely to be repealed, citing historical precedents [72][89] Question: Details on origination trends - Management noted strong demand for solar and storage, with wind bookings being lower, but expressed confidence in meeting development expectations [46][77] Question: Growth opportunities in transmission - Management highlighted that transmission opportunities take time to materialize but are expected to contribute significantly to EBITDA over the coming years [99]