NextEra Energy (NYSE:NEE), apparently not content with being one of the biggest kids on the utility block, is now dipping its toe into regulated water utilities.
The company said Wednesday that its NextEra Energy Resources (NEER) subsidiary has entered into a $45 million agreement to acquire a portfolio of regulated water and wastewater assets in eight counties near Houston that furthers its strategy to build a “world-class” water utility. And that could just be the beginning.
NextEra CFO Rebecca Kujawa | NextEra Energy“We’re really excited about building a significant presence in the water business,” CFO Rebecca Kujawa said during NextEra’s third-quarter earnings call with financial analysts. “It’s good to be us.”
Kujawa said that while the $45 million pales in comparison to NextEra’s annual $15 billion capital investment program, the company referenced it in its prepared remarks because of the potential opportunities.
“I think it’s a lot like transmission in the sense that it will be built slowly over time and create opportunities for us to continue to have that regulated and long-term contracted base of value creation,” she said.
Already generating more electricity from wind and solar resources than any other company in the world with a market capitalization of more than $100 billion, NextEra has added 5.7 GW to its renewables and storage backlog this year. NEER now has about 18.1 GW of signed contracts in the backlog and is looking to add more in California, where it has nearly 300 MW of projects and is developing nearly 2.4 GW of additional storage projects.
“We are proud to help the state lead the country to a carbon-free, sustainable future,” Kujawa said.
Ironically, Bloomberg reported Monday that NextEra was among three renewable technology heavyweights that have been removed from S&P Dow Jones Indices’ Global Clean Energy Index because of tightened membership requirements.
NextEra also told analysts that its Florida Power & Light subsidiary has filed a proposed rate-case settlement with regulators that will be heard on Wednesday. The settlement, which includes its recent acquisition of Gulf Power, would result in a $1.25 billion rate increase over the next two years.
The Juno Beach, Fla.-based company posted earnings of $447 million ($0.23/share), compared to $1.23 billion ($0.62/share) during the third quarter of 2020. The results included unrealized gains and losses on equity securities held in NEER’s nuclear decommissioning funds and other than temporary impairments.
NextEra’s shares opened at $82.03 on Wednesday and shot to $84.41 before closing at $83.92, a 2.3% increase.
