NextEra Energy, Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Company Overview: NextEra Energy delivered strong Q3 results with adjusted earnings per share increasing 9.7% year-over-year. FPL and NextEra Energy Resources performed well. America's power demand is high, and NextEra is uniquely positioned to lead the development of energy infrastructure.
• FPL Performance: FPL serves Florida's growing economy, keeping bills low and reliability high. FPL's nonfuel O&M costs are 70% lower than the national average. Plans to invest approximately $40 billion over 4 years in energy infrastructure, including solar, storage, and gas peaker. A proposed 4-year rate settlement would keep residential bills up approximately 2% annually.
• Energy Resources: Adjusted earnings up 13% year-over-year. Strong renewables and storage origination, with 3 gigawatts added to the backlog. Backlog now ~30 gigawatts. Confident in renewables build with federal tax credits through 2030. Originated 2.8 gigawatts of new battery storage in Q2-Q3.
• Duane Arnold Nuclear Plant: Entered a 25-year power purchase agreement with Google to recommission the Duane Arnold Nuclear Plant. Expected to return to operation by Q1 2029. Collaborated with CIPCO to acquire a 30% interest, assuming decommissioning liability.
• Development Platform: An AI-driven platform, strong balance sheet, and supply chain capabilities enable growth in various energy forms (renewables, storage, gas, nuclear). Leading transmission infrastructure development.

Segment Performance

• Florida Power & Light Company (FPL): Earnings per share increased by $0.08 year-over-year. Regulatory capital employed grew ~8% year-over-year. Capital expenditures for the quarter were approximately $2.5 billion, with full-year expected to be between $9.3 billion and $9.8 billion. Retail sales decreased 1.8% year-over-year due to milder weather, but weather-normalized sales increased 1.9% due to customer growth and underlying usage.
• NextEra Energy Resources: Adjusted earnings grew approximately 13% year-over-year. Adjusted EPS increased $0.06 year-over-year. Contributions from new investments increased $0.09 per share, driven by growth in the renewables portfolio. Existing clean energy portfolio contribution unchanged despite weaker wind resource. Customer supply business contribution increased $0.06 per share. Other impacts decreased $0.09 per share. Added 3 gigawatts to the backlog, with 1.9 gigawatts in battery storage origination. Backlog now totals nearly 30 gigawatts after recent additions.

Guidance

• Consolidated: Adjusted earnings per share from Corporate and Other decreased $0.04 per share year-over-year. Long-term financial expectations unchanged. Expect to deliver financial results at or near the top end of adjusted earnings per share ranges for 2025-2027. Average annual growth in operating cash flow at or above adjusted earnings per share compound annual growth rate. Dividends per share to grow roughly 10% per year through at least 2026.
• Energy Resources: Backlog additions to go into service over the next few years to 2029. Strong customer demand for ready now capacity solutions, especially in battery storage.

Risks

• Regulatory Risks: Uncertainty around FPL rate proposal approval by the Florida Public Service Commission.
• Supply Chain Risks: Potential impacts on project timelines and costs due to supply chain issues.
• Market Risks: Fluctuations in energy prices and demand could affect financial performance.
• Nuclear Risks: Unforeseen challenges in recommissioning nuclear plants like Duane Arnold, including technical or regulatory hurdles.

Question and Answer

Q: Sense on cost of restarting Duane Arnold and buy-in price of CIPCO/Corn Belt's 30% stake A: John Ketchum said they won't disclose CapEx but feel confident in efficient recommissioning. Buyout of CIPCO/Corn Belt was in exchange for assuming decommissioning liability, with ample funds already set aside.

Q: 1 GW removal from backlog and reason A: John Ketchum explained 650 MW removed due to conservative management of smaller projects, with plan to get back in 2026-2027. 250 MW delayed due to permitting, shifting to 2026.

Q: Next wave of deals for Energy Resources, CCGTs demand A: John Ketchum mentioned NextEra has many growth ways, including new gas-fired technology. They have a 20-GW gas pipeline developed, partnered with GE, and see demand for CCGTs.

Q: Nuclear appetite, SMRs, and future deals A: NextEra has Duane Arnold, Point Beach, Seabrook, and 6 GW SMR capacity. Focused on disciplined capital allocation, limiting financial exposure. Strong balance sheet and development platform enable SMR and greenfield site exploration.

Q: Backlog additions beyond 2027, tax credit pull forward A: John Ketchum said demand pull forward escalates closer to 2030. Feels good about '26-'27, but '28-'30 have significant opportunities due to natural pull forward and FEOC position.

Q: Cadence of Duane Arnold's $0.16 accretion, year-to-year variability A: John Ketchum said there's not significant year-to-year variability, but refueling outages cause minor movement around those years.

Q: Renewables interaction with data centers, project returns A: Data centers need load interconnects, and renewables/storage help secure them. Returns are high due to supply-demand imbalance, strong pipeline, and supply chain position.

Q: Portfolio evolution, transmission, gas, etc.

A: NextEra's portfolio includes regulated businesses (FPL, NEET), energy resources (renewables, storage, nuclear, gas), and large load customer solutions. Transmission and gas pipelines have growth opportunities.

Q: Nuclear fuel supply chain, Russia's impact A: John Ketchum said U.S. government and industry are focused on fuel supply, and NextEra is disciplined in securing long-term fuel, confident in current position.