NextEra Energy said Wednesday that it will combine its two Florida utilities into a single entity that will stretch from the Panhandle to Miami Beach.
During its first-quarter earnings call, Florida-based NextEra said it has filed with the Public Service Commission to reflect the expectation that Florida Power & Light and Gulf Power will begin to operate as an integrated system in 2022. The utilities plan to file a combined rate case in the first quarter of 2021 for new rates that begin in 2022, NextEra said.
In its earnings release, NextEra said, “The companies expect that a merger will create both operational and financial benefits for customers.”
FPL serves more than 5 million customer accounts along Florida’s Atlantic coast and is the nation’s largest rate-regulated electric utility, as measured by retail electricity produced and sold. Pensacola-based Gulf Power has more than 460,000 customers. NextEra struck a $6.5 billion deal with Southern Power in 2018 to acquire the utility. (See FERC Approves NextEra’s Gulf Power Acquisition.)
The companies filed a “Ten Year Site Plan” that projects an approximately 70% increase in zero-emission electricity that is generated in 2029, relative to 2019, largely through solar power. NextEra said FPL expects to have more than 10 GW of installed solar capacity, including nearly 1.6 GW within the current Gulf Power service territory, by the end of the decade.
CEO Jim Robo said FPL has six new solar energy centers operating, with four more scheduled to enter service in May. The 10 solar centers, FPL said, represent 745 MW of new capacity.
NextEra plans to connect the two systems with a new 161-kV transmission line. According to the PSC filing, the project will be completed before 2022.
The company’s first-quarter earnings surpassed expectations. NextEra reported earnings of $421 million ($0.86/share), compared to $680 million ($1.41/share) for the first quarter of 2019.
When adjusted for nonqualifying hedges, net investment gains and other impairments, and profit from disposal of a business, NextEra’s earnings were $2.38/share. Analysts polled by Zacks Investment Research had projected adjusted earnings of $2.21/share.
NextEra said it continues to expect year-end adjusted earnings of $8.70 to $9.20/share.
“While our expectations always assume normal weather and operating conditions, I have confidence in our ability to meet these expectations even when accounting for a reasonable range of impacts and outcomes that may result from the COVID-19 pandemic,” Robo said.
Robo did not address recent market rumors about an acquisition of Kansas City-based Evergy. (See NextEra Said to be Eyeing Evergy as Acquisition Target.)
Asked about another target, South Carolina’s state-run Santee Cooper utility, which the state’s governor has called a “rogue agency,” Robo said state lawmakers are in a budget standoff over the utility’s “hotly debated” sale.
“By no means is Santee Cooper done. There remains a lot of energy still behind wanting to sell Santee Cooper,” Robo said.
NextEra’s share price gained $11.75 on Wednesday, closing at $247.17 as Wall Street stopped a two-day slide.
