NextEra Energy Q1 2025 Earnings Report

NextEra Energy EPS Results

• Actual EPS: $0.99
• Consensus EPS: $0.99
• Beat/Miss: Met Expectations
• One Year Ago EPS: $0.91

NextEra Energy Revenue Results

• Actual Revenue: $6.25 billion
• Expected Revenue: $6.58 billion
• Beat/Miss: Missed by -$331.12 million
• YoY Revenue Growth: +9.00%

NextEra Energy Announcement Details

• Quarter: Q1 2025
• Date: 4/23/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, April 23, 2025
• Conference Call Time: 9:00AM ET

NextEra Energy (NYSE:NEE) (NYSE: NEE), headquartered in Juno Beach, Florida, is a leading clean energy company with both regulated utility operations and competitive renewable generation businesses. The company’s principal operating subsidiaries include Florida Power & Light Company (FPL), a regulated electric utility serving customers in Florida, and NextEra Energy Resources, which develops, constructs, owns and operates a large portfolio of wind, solar and energy storage projects. Together these businesses provide electricity supply, transmission and distribution services as well as utility-scale renewable generation and related services.

NextEra’s activities cover the full lifecycle of power assets, from project development and construction to operation, maintenance and asset optimization. FPL focuses on delivering reliable electricity and grid services to retail customers in Florida, while NextEra Energy Resources sells power into wholesale markets under long-term contracts and merchant arrangements and invests in battery storage to support grid reliability and the integration of intermittent renewables. The company also engages in energy trading and other energy-related services that support its generation and utility operations.

Rooted historically in Florida’s utility sector and expanded through a strategic emphasis on renewables, NextEra repositioned itself over time from a traditional utility parent to a diversified energy company with substantial investments in wind, solar and storage, primarily across the United States and Canada. The company is led by an experienced executive team based at its corporate headquarters and maintains a business strategy focused on low‑carbon electricity generation, infrastructure investment and regulatory engagement in the markets it serves.

NextEra Energy Q1 2025 Earnings Call Transcript

Key Takeaways

• NextEra Energy delivered solid first quarter results with adjusted EPS up nearly 9% year-over-year, driven by strong performance at FPL and Energy Resources.
• FPL placed 894 MW of new solar and storage into service and Energy Resources originated ~3.2 GW of renewables and battery storage—boosting a combined backlog of roughly 28 GW amid sustained demand.
• Strategic supply-chain diversification has limited tariff exposure to under $150 million (<0.2% of expected capex), and domestic battery sourcing has effectively eliminated trade-risk on storage projects.
• FPL’s 2026–2029 base rate filing requests ~$1.5 billion in revenue increases, targeting ~2.5% average annual residential bill growth through 2029—keeping typical bills ~25% below the national average.
• NextEra Energy announced leadership transitions, with Brian Bolster named President & CEO of Energy Resources and Mike Dunn promoted to CFO of NextEra Energy, ensuring experienced management continuity.

Presentation

[Operator]

Good morning and welcome to the NextEra Energy first quarter 2025 earnings conference call. All participants will be in the listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mark Eidelman, Director of Investor Relations. Please go ahead.

[Mark Eidelman, Director of Investor Relations at NextEra Energy]

Thank you, Darwin. Good morning everyone and thank you for joining our first quarter 2025 financial results conference call for NextEra Energy. With me this morning are John Ketchum, Chairman, President and Chief Executive Officer of NextEra Energy, Brian Bolster, Executive Vice President and Chief Financial Officer of NextEra Energy, Armando Pimentel, President and Chief Executive Officer of Florida Power & Light Company, Rebecca Kujawa, President and Chief Executive Officer of NextEra Energy Resources, Mark Hickson, Executive Vice President of NextEra Energy, and Mike Dunne, Treasurer of NextEra Energy. John will start with opening remarks and then Mike will provide an overview of our first quarter results. Our executive team will then be available to answer your questions. We will be making forward-looking statements during this call based on current expectations and assumptions which are subject to risks and uncertainties.

[Mark Eidelman, Director of Investor Relations at NextEra Energy]

Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect or because of other factors discussed in today's earnings news release and the comments made during this conference call in the risk factors section of the accompanying presentation or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found on our website, www.nexteraenergy.com. We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. With that, I'll turn the call over to John.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Thanks Mark and good morning everyone. NextEra Energy is once again off to a strong start for the year, delivering solid first quarter results. Adjusted earnings per share increased by nearly 9% year-over-year reflecting solid financial and operational performance across FPL and energy resources. FPL placed into service 894 MW of new solar and energy resources originated approximately 3.2 GW of new renewables and storage projects. We continue to see strong demand for new sources of generation across all sectors of the U.S. economy. For perspective, we expect more than 450 GW of cumulative demand for new generation between now and 2030 in the United States. To meet this demand, we believe it's important to exercise what I describe as energy realism and energy pragmatism. Let me explain.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Energy realism is about embracing all forms of energy solutions and understanding the demand for electricity in the United States is here now and it's not slowing down. Frankly, it's unlike anything we've ever seen since the end of World War II. Energy pragmatism is about recognizing some technology is ready at scale today and other technology needs more time to get there. There will be significant trade offs with regard to the timing and cost of each. Today, renewables and battery storage are the lowest cost form of power generation and capacity and we can build these projects and get new electrons on the grid in 12-18 months. We should be thinking about renewables and battery storage as a critical bridge to when other technology is ready at scale like new gas-fired plants.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

We expect 75 GW of new gas to come online between now and 2030. That is significant for sure, but nowhere close to meeting the over 450 GW of total generation we believe are needed. It's also important to understand that gas-fired plants will come online at a higher cost than renewables and storage. That's because gas turbines are in short supply and in high demand. It's also proving difficult to reestablish the highly skilled workforce required to build these complex power plants. Gas-fired combined cycle plants rely on approximately 1,000 workers across dozens of niche trades. We've learned EPCs are hiring thousands of extra people to address high washout rates, with some workers leaving earlier for higher paying jobs building, for example, LNG terminals, data centers, semiconductor chip manufacturing facilities and other industrial facilities.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Other workers are showing up to job sites without the necessary skills. All of this puts upward pressure on prices and the time to build gas plants. It is why the cost to build a gas-fired plant has tripled in the last few years and is poised to increase even further due to tariff exposure. We believe nuclear will continue to play an important role in meeting demand, but again, we need to be practical about when that will happen. There are limited opportunities to restart shuttered nuclear units. Two are underway in our sector and we continue to evaluate bringing our own Duane Arnold facility in Iowa back online. Beyond those limited opportunities, SMR technology is still 10 years away at scale in the best of scenarios and at a much higher price point than gas-fired generation. There is also an option to defer coal retirements to meet demand.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Even if we kept online every coal plant in America slated to retire, it would only add approximately 40 GW to the grid and many are months away from retirement or are already slated to be converted to gas and again, far short of the over 450 GW needed between now and 2030. Bottom line, do not take this as picking winners and losers. It is not, nor can it be. America is going to need all forms of energy to meet this enormous demand. We need to be practical about when technologies will be available at scale and how much they will cost when they show up. All of which factors into how much Americans pay on their electric bill each month.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

This is why energy policy in Washington is so important and why we cannot isolate ourselves to just a couple of technologies like gas and nuclear, which are much more expensive than they've ever been and take far longer to build. We say all this as a company in our space that does it all. NextEra Energy is the quintessential all forms of energy company. We know renewables and storage because we're a world leader in the space. We know gas because we operate the largest gas-fired fleet in America and have built more gas-fired generation than anyone over the last two decades. We know nuclear because we operate one of the largest fleets in the United States. We know how to serve growth because we've been doing it for decades across the United States and in Florida.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Which brings me to Florida Power & Light Company. FPL is proof that embracing all forms of energy works, especially during periods of growth. Florida is the nation's third largest state and people continue to move here. In fact, we've added more than 1.3 million new customer accounts in the last 20 years, making us roughly 30% larger than we were in 2005. Despite the incredible growth, FPL consistently delivers high reliability while having customer bills significantly below the national average. We continue to deliver what we believe is the best customer value proposition. As we celebrate our 100-year anniversary at FPL, our vision remains the same. To continue making smart capital investments for the benefit of our customers, be an industry leader on cost and deliver high reliability and outstanding customer service while keeping bills low for our customers.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

To continue driving customer value and to power Florida's growth, we've been deploying the most cost effective option for customers, solar and storage, and now have approximately 8.4 GW of solar and batteries installed across Florida. In all, our generation strategy has saved customers more than $16 billion in avoided fuel costs since 2001. Looking ahead at FPL, we continue to see growth on the horizon and we are projecting to add roughly 335,000 customer accounts through 2029 to continue to meet growth and reliably serve customers. FPL plans to invest nearly $50 billion from 2025 to 2029 and add more than 25 GW of new generation of battery storage by 2034. On February 28th, we submitted testimony and detailed information for FPL's 2025 base rate proceeding. The overall proposal for our 2026 through 2029 base rate plan is consistent with the test year letter filed in December.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

The stability of multi-year plans has allowed FPL to focus on efficiency in the business, which is critical to keeping customer bills low, and has enabled FPL to maintain a strong balance sheet, which allows for consistent access to the capital markets. We look forward to the opportunity to showcase our long-term track record of providing low bills and high reliability for Floridians and our plans to build an even more resilient energy future for Florida. We believe FPL is strategically positioned as Florida remains one of the fastest growing states in the U.S., and we plan to meet Florida's long-term growth outlook with investments in generation, transmission, and distribution infrastructure, which we believe will further enhance our best-in-class customer value proposition. Energy Resources had a strong quarter originating approximately 3.2 GW of new renewables and battery storage projects.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

This marks the fifth time over the past seven quarters that Energy Resources has added more than 3 GW to its backlog, a sign of the continued strong demand for new generation. Energy Resources also had its largest solar origination quarter and largest solar and battery storage origination quarter ever, again demonstrating the strong demand for renewables and storage because they are low cost and can be deployed. Now, assuming we achieve the midpoint of our development expectations range, Energy Resources will be operating a more than 70 GW generation storage portfolio by the end of 2027. Taking FPL and Energy Resources together, we believe NextEra Energy has the most comprehensive power generation business in the world and is well positioned to capitalize on long-term growth prospects. There has been ample discussion about tariffs these last few weeks.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

While this has forced some companies to look at their supply chains for the first time, we've spent the last three years diversifying and domesticating ours to strategically position our supplier relationships to manage potential disruption. For perspective, we've dramatically diversified where we source our solar panels. As a result, we don't source solar panels from countries impacted by the anti-dumping and countervailing duty tariff rates announced earlier this week. Plus, we source our wind turbines from the U.S. with manufacturing in Florida and because of our buying power, we have been able to significantly shift tariff risk to suppliers. After discussion with our suppliers, we currently estimate Energy Resources has less than $150 million in tariff exposure through 2028 on over $75 billion in expected capital spend.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

That's less than 0.2% of potential impact to our capital spend before exercising contractual trade measure protections in our contracts with customers. Size and scale matter more than ever in today's environment. Suppliers want us to be repeat customers and our customers want certainty. Certainty that comes with doing business with an industry leader like NextEra Energy that has a long track record of delivering on its commitments. Once we work with our customers, we expect our $150 million tariff exposure to be significantly reduced, potentially down to zero. Still, we continue to look for ways to further mitigate trade risk and use our supply chain management capabilities to create new opportunities.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Our team had the foresight last year to secure arrangements to purchase U.S. made batteries for a significant portion of our backlog, with the remainder of the batteries sourced outside of China where tariff exposure is contractually allocated to the supplier. Batteries are already more than two times cheaper than gas-fired plants available now and much more flexible to interconnect to the grid. Taking most tariff exposure off the table for our customers in need of battery storage solutions is a big win and a way for us to meet demand while keeping bills low for customers. Our battery sourcing strategy gives us optionality and favorable pricing through our already secured domestic battery supply contracts.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

In short, our tariff exposure on batteries is expected to be negligible and we expect our domestic sourcing options to create significant competitive advantages for us and our customers going forward as we originate new battery storage projects. Finally, we now have nearly $37 billion of interest rate hedges in place that allows us to flexibly manage interest rate exposure over the coming years, including interest rate hedges on 100% of our backlog and a large portion of our upcoming maturities. In fact, we entered into swaps as part of our programmatic hedging strategy when interest rates sharply declined in early April after reciprocal tariffs were announced, putting our hedged risk-free rate at roughly 3.9%. Our interest rate sensitivity is included in the appendix of today's presentation. Before I hand it over to Mike, I want to briefly touch on last month's planned leadership transition announcement.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

As we announced in March, after 18 years of service to NextEra Energy, Rebecca Kujawa will be retiring. Rebecca has had an incredible career at our company and has brought a strong strategic perspective and leadership approach to everything she's accomplished. Brian Bolster will succeed Rebecca as President and CEO at NextEra Energy Resources. Brian has done an amazing job as our CFO and has the ideal combination of capabilities, experience and customer relationships to lead one of America's largest energy infrastructure development companies. Mike Dunne has been promoted and will succeed Brian as CFO of NextEra Energy. Mike has deep financial acumen and vast knowledge of the energy industry. Having spent his entire career in this sector, both Brian and Mike are effectively transitioning into their new roles. We believe we have the best team in the industry with a track record of delivering day in and day out.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

There is no team better equipped or better positioned to help meet this unique moment. That's not to say it will be easy. The enormous electricity demand of the United States creates challenges and not getting this right risks higher power prices. This is where NextEra Energy shines. We thrive when the stakes are high. We lean into complexity. It's what differentiates us. So many companies are approaching this moment from a standing start. We've been running this marathon for decades and I couldn't be more optimistic about our prospects to deliver for our customers with the outstanding team we have in place. With that, let me turn it over to Mike who will review first quarter results in more detail.

[Mike Dunne, Treasurer at NextEra Energy]

Thanks, John. For the first quarter of 2025, FPL's earnings per share increased $0.07 year over year. The principal driver of this performance was FPL's regulatory capital employed growth of approximately 8.1% year-over-year. We continue to expect FPL to realize more than 10% average annual growth in regulatory capital employed over our current rate agreement's four-year term, which runs through 2025. FPL's capital expenditures were approximately $2.4 billion for the quarter, and we expect FPL's full-year capital investments to be between $8 billion and $8.8 billion for the 12 months ending March 2025. FPL's reported return on equity for regulatory purposes will be approximately 11.6%. During the first quarter, we utilized approximately $622 million of reserve amortization, leaving FPL with a balance of roughly $274 million.

[Mike Dunne, Treasurer at NextEra Energy]

As we previously discussed, FPL historically uses more reserve amortization in the first half of the year. We expect this trend to continue this year. This quarter FPL placed into service 894 MW of new cost effective solar, putting FPL's owned and operated solar portfolio at over 7.9 GW, which is the largest utility-owned solar portfolio in the country. In April, FPL filed its annual 10-year site plan, which continues to indicate that solar and storage are the most cost-effective options for customers to add reliable grid energy and capacity over the next decade. The 2025 plan projects the need for over 17 GW of cost-effective solar generation across our service territory over the next 10 years. As a complement to FPL's planned solar additions, FPL is planning to deploy over 7.6 GW of battery storage, which provides cost-effective capacity.

[Mike Dunne, Treasurer at NextEra Energy]

With this plan, we expect to increase FPL solar mix from approximately 9% of our total generation in 2024 to approximately 35% in 2034 while continuing to provide customers with low cost and reliable energy. As John mentioned on February 28th we submitted testimony and detailed supporting information for FPL's 2025 base rate proceeding. We are requesting a base rate adjustment of approximately $1.5 billion starting in January 2026, $927 million in January 2027 and a Solar and Base Rate Adjustment or SoBRA mechanism to recover revenue requirements for solar and battery storage projects in 2028 and 2029.

[Mike Dunne, Treasurer at NextEra Energy]

With the proposed base rate adjustments and current projections for fuel and other costs, we believe that FPL's typical residential customer bill will grow at an average rate of about 2.5% from January in 2025 through the end of 2029, which is expected to result in FPL's typical residential bill being approximately 25% below the projected national average and more than 20% lower than our typical bills 20 years ago when adjusted for inflation. Florida Public Service Commission has established a schedule for this proceeding beginning with quality of service hearings in May and technical hearings in mid-August. The proceedings would likely conclude in the fourth quarter with staff recommendation and Commission rulings on revenue requirements and rates.

[Mike Dunne, Treasurer at NextEra Energy]

We look forward to the opportunity to present our case to the Commission this summer and are focused on achieving a balanced outcome that supports continued smart investments for the benefit of our customers. Key indicators show that Florida's economy remains healthy. Florida continues to be one of the fastest growing states in the United States and had three of the five fastest growing US metro areas between 2023 and 2024. FPL had a strong quarter of customer growth with the average number of customers increasing by nearly 108,000 from the comparable prior year period. FPL's first quarter retail sales increased by approximately 1.8% year-over-year. After taking weather into account, first quarter retail sales increased by roughly 0.6% on a weather normalized basis from the comparable prior year period, driven primarily by continued favorable underlying population growth.

[Mike Dunne, Treasurer at NextEra Energy]

Now let's turn to Energy Resources which reported adjusted earnings growth of nearly 10% year-over-year. Contributions from new investments increased $0.12 per share year-over-year, primarily reflecting continued growth in our power generation portfolio. Our existing clean energy portfolio declined $0.03 per share during the quarter associated with various puts and takes in the business and the comparative contribution from our customer supply business decreased by $0.01 per share. Contributions from NextEra Energy Transmission increased $0.01 per share year-over-year. All other impacts decreased by $0.05 per share driven by higher interest costs of $0.06 per share, half of which are related to new borrowing costs to support our new investments. As we previously disclosed and as we deemphasize the business, we have reclassified gas infrastructure to include gas pipelines in existing clean energy and upstream gas infrastructure.

[Mike Dunne, Treasurer at NextEra Energy]

In customer supply, gas pipelines and upstream gas infrastructure each had a $0.01 decline in the quarter. Energy resources originated approximately 3.2 GW of new renewables and storage to the backlog. With these additions, our backlog now totals roughly 28 GW after taking into account 0.7 GW of new projects placed into service since our last earnings call. This highlights the continued strong growth for renewables and storage. We're also excited to announce our first solar repowering project which we expect to be completed in 2026. Going forward, we plan to include both wind and solar repowering megawatts in the newly updated repowering line of our development expectations. Our backlog additions represent the diverse power demand that we are seeing across industries.

[Mike Dunne, Treasurer at NextEra Energy]

Roughly 40% of our backlog additions are driven by commercial and industrial customer demand, while 60% are driven by demand from power companies as evidenced by our nearly 1 GW additions. Our customers continue to choose battery storage as the lowest-cost ready-now solution to meet their capacity needs. Turning now to our first quarter 2025 consolidated results, adjusted earnings from corporate and other decreased by $0.03 per share year-over-year. Our long term financial expectations remain unchanged. We will be disappointed if we are not able to deliver financial results at or near the top end of our adjusted EPS expectation ranges in 2025, 2026 and 2027. From 2023 to 2027, we expect that our average annual growth in operating cash flow will be at or above our adjusted EPS compound annual growth rate range.

[Mike Dunne, Treasurer at NextEra Energy]

We also continue to expect to grow our dividends per share at a roughly 10% rate per year through at least 2026 off of a 2024 base. As always, our expectations assume our caveats. That concludes our prepared remarks. With that, we will open the line for questions.

[Operator]

We will now begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Steve Fleishman with Wolfe Research. Please go ahead.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research]

Yeah, good morning.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research]

Thank you.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research]

First, just related to the tariff.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research]

Disclosure you provided, which sounded very good. The battery portion, where you're moving a lot domestic, I assume that means you're also getting domestic battery cells as part of that.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research]

Is that right?

[John Ketchum, Chairman, President and CEO at NextEra Energy]

The way the contract works, we get certain components. Oh, Steve, sorry, I cut off there for a minute. Let me start over. With the battery, the domestic battery contract that we have entered into, it is assembled here in the United States. There are certain components that come in from outside the United States, but because it's assembled here and it has enough concentration in here in the U.S. it qualifies for domestic content. We have contractual protections in the agreement in place regarding the qualification for domestic content. Also, to the extent that there is any tariff exposure related to any imported parts or components related to those batteries, those are protected as well and backstopped by substantial credit. That is a domestic contract. Domestic contract. That is the way investors should think about it.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research]

Got it. Thanks for that.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research]

Just in terms of the exposure on the tariff, exposure which, you know, you've talked for a long time about making sure that you're protected there with your suppliers. Obviously, one of the issues can be, you know, making sure that the suppliers still supply while they absorb tariffs. Just how do you feel about the supplier health to kind of meet the commitments as well?

[John Ketchum, Chairman, President and CEO at NextEra Energy]

I feel good. I feel very good for two reasons. You know, one, you know, given the buying power that NextEra has, suppliers don't want to disappoint and they want to make sure they follow through. They're looking at this as a long game, you know, for their business. Second, the way our contracts are set up with our credit protections in the agreement, there's very strong incentive to follow through on those commitments.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

The third point that I would make is that the U.S. still remains an extremely attractive market to suppliers across the globe. Being that they have a lot of margin when they deliver into the U.S. and we put those three things together, I lose no sleep over whether or not our suppliers will follow through on their commitments and deliver into the U.S.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research]

Yep, got it. Makes sense. Just on the switching to a lot of focus these days on IRA, obviously, and changes and specifically on transferability. Maybe just one clarification on transferability is in the event, hypothetically, if it were to go away in the future in a bill, do you, would it still be applicable for existing assets that were done under transferability as well as safe harbor assets on transferability?

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Yeah.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

I mean, there was a recent piece of legislation, you know, that was brought forward that basically, you know, the Fedorchak, you know, bill, I'll use that as an example to answer the question. On the Fedorchak bill, the way it was structured is that, you know, you'd see tech neutral, you know, eliminated, you know, through a phase down, but you know, with transferability of, you know, eventually being phased out there. However, under the non tech neutral, you know, portion, there would be an ability to continue, you know, to safe harbor, you know, for four years and transferability is left in place there. It all comes down to the drafting, Steve. At the end of the day, that's how that bill was drafted. It would depend on, you know, the ultimate outcome and drafting of future bills.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Let me just make a couple of comments on transferability. We spent a lot of time, you know, obviously advocating for tax credits and transferability for good reason. You know, the reasons are, I think, well known by investors. You know, gas has its limitations in terms of availability. For the reasons I went through in the prepared remarks, they are a lot more expensive. Gas turbines have been hit by tariffs too. A lot of folks do not talk about that, which is actually going to, I think we had put the proxy at $2,400 a kW at our development day. It is probably closer to $2,600-$2,800 today when you factor in tariffs. Gas turbines have actually been hit harder than, I think, solar or wind or storage in that regard.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

We need a bridge and that bridge has to come from renewables and storage because we have all this demand today. It has to be met by something. The ability to transfer credits goes hand in glove with the credit itself. You have to be able to monetize the credit to be able to get the benefit back to the customer. I'll use a couple of examples. I mean, utilities, for example. Right. This is one of the things that we continue to stress in Washington. You know, utilities, you know, historically have struggled to use tax equity financing. Commissions will not approve it. You have to sell half the plant, you know, to qualify for tax equity financing.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

How do you get the benefit, which we calculate to be a 12% increase in household income to the ultimate utility customer without the ability to transfer the credit? Nuclear, I'll use as an example. So with nuclear, you know, a tax equity structure doesn't work.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Right.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

There's no bank that's going to take a 50% ownership interest in a nuclear plant. You have to have transferability for nuclear as well. Nuclear, you know, is going to play an important part of our future. It's definitely a focus of this administration. 45x as well. You know, if you didn't have transferability on credits, you know, for wind, solar, storage, nuclear, 45x becomes very difficult. Right. How do you stimulate all these investments, 80% of which are going into Republican jurisdictions, when you're trying to convince a CEO to build a manufacturing facility under 45x, but if the credit's not there with the ability to transfer it on the back end for wind, solar, battery storage, the demand for the product is not there either. What's the incentive to invest billions of dollars in the manufacturing facility under a 45x credit?

[John Ketchum, Chairman, President and CEO at NextEra Energy]

When you put all these things together, credits and transferability go together. You can't have one without the other. That's a message we're bringing to Washington. It's one that's being well understood. I think the evidence lies in the fact that, you know, we just had 21 House representatives, Republican House representatives sign on to a letter saying, don't touch the credits, don't touch transferability. We had four senators say the same, you know, sign on to a very similar letter. They get it, they get the two go together. It will be a little bit of a bumpy ride as we maybe see some proposed bills. Sure. I think at the end of the day, folks in Washington understand that transferability and tax credits are hand in glove and go together. You have to have an ability to monetize the tax credit.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research]

Great.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research]

Thank you very much.

[Operator]

Our next question comes from Julien Dumoulin-Smith with Jefferies, please go ahead.

[Julien Dumoulin-Smith, Research Analyst at Jefferies]

Hey, John, team, thank you all very much and it's congrats again on all the new roles here. Very well deserved. Hey, John, maybe just to start with a little bit of a more mundane question, you're talking about going to the higher end of the range here at near. Do you want to talk a little bit what the contributing factors are there for 2025? And then I've got a quick follow up on what you just said there.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Yeah, so when I think about higher end of the range, I start with the first quarter results. Right. I mean, we're, you know, we're already out of the gate at 9% and, you know, we have a business plan that, you know, we feel good about. Feel good about executing against. I don't think there's a whole lot more to say about that.

[Julien Dumoulin-Smith, Research Analyst at Jefferies]

Awesome. Thank you. Really appreciate the details and transferability. I know folks have been very keen to hear from you guys on that related here. Can you speak a little bit on the timing dynamics on when and how that ultimately will work? You say in your remarks, once we work with our customers, how do you think about the impact 150 from a timing perspective on 2025 versus is that really going to get to that zero in 20`26? It seems like this is sort of an assumption that principally the tariff impact is going to impact customers with higher PPAs and you're going to go back to them today, perhaps like what we saw before with maybe some of the COVID impacts.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Julien, your question's on tariffs, right? Not transferability.

[Julien Dumoulin-Smith, Research Analyst at Jefferies]

Yeah, sorry. No, I. Thank you on the transferability.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Let me make sure I got. I got focused on transferability. You pivoted tariffs. Can you clarify your question on tariffs just so I understand?

[Julien Dumoulin-Smith, Research Analyst at Jefferies]

Yeah, sorry. The timing of that. Right. You talk about supply chain. You say once you work with your customers, how do you think about the timeline for working with your customers? Is the reason for your tariff exposure to be fairly low, principally because you are passing along those costs to your customers in revised PPAs or do you have existing contractual terms?

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Yeah, so let me take those in pieces. Let's just start with the supplier first. When we look at our entire backlog, right, and we look at our projected Q2 originations and we look out at development expectations that we've told investors, we think that we're looking at, you know, around $150 million of exposure on tariffs, that is based on the contractual protections we have in our existing contracts with suppliers and the discussions that we have had with them since Liberation Day on April 2nd. That's the first piece. That works you down to $150 million then. The point we were making in the prepared remarks is that not only do we have the ability to shift tariff risk to suppliers and supply contracts, which I just covered, we also have trade measure protection provisions in our customer contracts.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

We believe we got a really good shot at working with our customers to take that $150 million exposure down significantly and perhaps even down to zero if we use the track record we had around circumvention. A lot of lessons learned. These are rights that we already have embedded in our agreements. When I think about, you know, where we stand, you know, I feel very good about tariffs. It's just not going to have much of an impact at all on our business.

[Julien Dumoulin-Smith, Research Analyst at Jefferies]

If I can clarify quickly, the reason there's 150 is because you have to go back and clarify the contracts.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

The reason that it is 150 is that there are certain risk sharing mechanisms in contracts. Most of the contracts, the supplier takes all the risks. Some of the contracts, they take almost all the risk except for a small sliver that we work through with them.

[Julien Dumoulin-Smith, Research Analyst at Jefferies]

All right, thank you guys very much. Thank you, Doc.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Hey, and Julien, I want to make one more point and I want to make sure folks understand this. You know, from the remarks, that's $150 million on $75 billion of CapEx. That's less than 0.2% and we feel like we've got a good shot at getting that to zero.

[Julien Dumoulin-Smith, Research Analyst at Jefferies]

Incredible.

[Julien Dumoulin-Smith, Research Analyst at Jefferies]

Honestly.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

The final point I'll make is, you know, Steve asked me a little bit about it, but there's been a lot written about battery exposure. We don't have battery exposure, full stop. We do not have battery exposure. We are really well positioned. We entered into a domestic contract. We have actually a real opportunity rather than a risk around batteries.

[Operator]

Thank you. The next question comes from Nick Campanella with Barclays. Please go ahead.

[Nick Campanella, Director at Barclays]

Hey, good morning and thanks for taking the question. Maybe just to close the loop on the tariff discussions, just where do you think returns are from an IRR perspective or an ROE perspective? These protections that you have in place versus your competitors should make you more competitive, I would think. Does that boost your returns or do you see these remaining flat in the post tariff world? Maybe you could address that.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Yeah.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

That's a great question, Nick. I look at it a couple different ways. First of all, we're in great shape on our returns for all the obvious reasons we just covered. I don't think I need to spend time on that. I look at this as a huge opportunity for us because, you know, we compete again against a lot of small developers and they don't have the buying power, the leverage in contracts to be able to shift risk like we can. You know, we started looking at this three years ago. We've been at it, you know, we didn't just wake up on November 6th and say, you know, oh my God, what do we do about our supply chain? I mean, we've been thinking about this for years. And so we put the right things in place.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

This is going to create a lot of opportunity for u`s. If circumvention is any example, what happened in circumvention is a lot of small developers blew themselves up, could not satisfy their commitments with their customers, and a lot of demand came our way. I would expect, that is my point around opportunity, that given the position that we are in around tariffs, I expect a lot of opportunity to come our way as small developers just are not in the position we are. They are trying to absorb significant amount of risk, particularly those that have entered into contracts for batteries because they probably are buying from Chinese manufacturers and do not have domestic contracts and have the position that we have.

[Nick Campanella, Director at Barclays]

Thanks for that. Maybe a quick update on where you stand in the Duane Arnold contracting opportunity. I think you were working through an engineering study beforehand. How is that kind of progressing and how have discussions been in terms of getting a contract for this site?

[Nick Campanella, Director at Barclays]

Thanks.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

It's going great. We continue to make a lot of progress at Duane Arnold. We have seen no showstoppers there and continue to see a lot of demand for generation from the project. I think it continues to be an opportunity that's exciting for us. Look, we continue to work it as we move forward.

[Nick Campanella, Director at Barclays]

Thank you.

[Operator]

The next question comes from Jeremy Tonette with JPMorgan. Please go ahead.

[Jeremy Tonet, Research Analyst and Managing Director at JPMorgan]

Hi, good morning.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Good morning.

[Jeremy Tonet, Research Analyst and Managing Director at JPMorgan]

I just want to touch base, I guess, on the GEV partnership and if there's any updates that you can provide to us. You know, granted it's recent since you talked about the Developer Day, but just wondering, any updated thoughts to share there?

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Yeah, I mean, things with our, you know, under the framework agreement, continue to advance. We've been doing work together on the customer origination side. As a matter of fact, we hosted an event last week that we called Deploy following Development Day where Scott and I jointly hosted, you know, a number, you know, of companies across various sectors and very fruitful and you know, we continue to try to advance opportunities on that front, particularly around large scale load.

[Jeremy Tonet, Research Analyst and Managing Director at JPMorgan]

Okay, great, thanks. Maybe just kind of continuing with this a little bit more. Just wanted to see, I guess as you know you talked a lot about, you know, gas development timeline for new turbines.

[Jeremy Tonet, Research Analyst and Managing Director at JPMorgan]

Just as we look, you know.

[Jeremy Tonet, Research Analyst and Managing Director at JPMorgan]

In the outer years here, just wondering how you think. I guess, you know, gas power factors in for hyperscalers specifically, I guess how conversations are going there, you know, given decarbonization goals, but you know, the attributes that gas can offer as well. Just any updated thoughts there would be great.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Yeah, you know, it's interesting because, you know, we talked a lot about this at Development Day. I mean, there's three things we shoot for, right? One is just achieving the development expectations, I'll call it kind of the status quo, you know, plain vanilla business, you know, that we advance every quarter. The second is large load. That kind of falls into two camps. One is behind the meter discussions and the second is front of the meter discussions. We continue to see a strong preference by hyperscalers for front of the meter solutions, which means ultimately a three-way conversation, right, between us, investor-owned utilities, and the hyperscaler. Because the hyperscaler wants two things, right? They want the reliability that comes with being interconnected to the grid that you don't get from behind the meter.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

They want the optionality of being able to monetize power if need be, which also comes by being interconnected to the grid. That is kind of how I see the market moving forward. We also do continue dialogue around behind the meter. There is a premium obviously that has to be paid for the additional redundancy you have to build on the generation side. For some that is worth pursuing because the grid can be difficult to access in certain parts of the United States, can take five, seven years. Is the additional premium for redundant generation worth the avoided cost of not having to go through trying to get interconnected? Even in those situations they are looking for a path ultimately to be interconnected to the grid.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

From a gas standpoint, which is really, you know, your question, definitely something that they are looking at as part of the solution.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

They also remain observant and cautious about, you know, wanting to understand what the carbon offset is to the emissions off the plant, which is, I think, where our skill set, you know, comes in, comes to bear perfectly because we can, you know, through VPPAs and other arrangements, provide a nice combination of gas-fired generation together with renewable solutions that provide a nice large-scale fix that can leave the site essentially carbon neutral or close to carbon neutral at the end of the day, which is very attractive to these customers and I think is why we are uniquely positioned to serve that market in partnership with the terrific relationships that we've been able to build with investor-owned utilities over the last 20 or 30 years and with the strong relationships we have with the hyperscale market. More to come on that.

[Jeremy Tonet, Research Analyst and Managing Director at JPMorgan]

Got it. That's helpful. I'll leave it there, thanks.

[Operator]

Our next question comes from David Arcaro with Morgan Stanley. Please go ahead.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Hey, good morning.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Thanks so much.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Wanted to go back to transferability just for a quick follow up there. Wondering what the contingency plan might be.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

If there were changes or restrictions on the use of tax credit transfers, what would the financing alternative be as you think about your overall kind of holistic financing plan.

[Mike Dunne, Treasurer at NextEra Energy]

Great question. As we look and if you think about our company over two decades before 2022, we had, you know, we used tax equity to finance our tax credits and we were able to do that in a very programmatic and good basis. If we look today, we are seeing a flight to quality from tax equity providers coming to us where they are looking because our projects get done on time, because they perform. What we have seen over the course of the last two years is essentially a doubling of the tax equity providers looking to work with us.

[Mike Dunne, Treasurer at NextEra Energy]

Also a key piece of our transfer program allows us to pick the best project returns between transferability and tax equity. When it comes to PTC projects, the returns can be higher in times of transferability, but from a credit perspective, essentially the same outcome. As we work through, we've done this for 20 years, we're seeing tax equity come to us and we're not saying that there will be no impacts. We feel very good about where we sit from a financing perspective for transferability.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Got it.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Okay, that's helpful. I appreciate the comments you.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Gave to Jeremy's question.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

I was wondering maybe a bit higher level, what are you seeing in terms.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Of renewable demand trends from tech customers.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Specifically and data center opportunities?

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Has there been, I guess?

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Any change.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Is there interest there or the load growth or demand growth that you're seeing from the data center side of things?

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Short answer is no change. You know, we continue to see a lot of appetite for renewables. And you know, it fits perfectly with the discussion that you know, we continue to have on the GE Vernova side around providing gas-fired generation as a potential, you know, solution as well. They remain very focused too on renewables, right? They're ready now, they're low cost, they're an offset for gas if they ultimately decide to go that route in a part of the country that doesn't have excess grid capacity and the load study is taking too long to complete. When I look at the demand and the outlook in the renewable sector going forward and you know we always are looking a quarter out or so.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

I mean we could, you know, we just continue to see strong demand across the board and with hyperscalers being a nice sized part of that.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Okay, excellent. Thank you.

[Operator]

The next question comes from Carly Davenport with Goldman Sachs. Please go ahead.

[Carly Davenport, VP of Equity Research at Goldman Sachs]

Hey, good morning. Thanks so much for taking the questions.

[Carly Davenport, VP of Equity Research at Goldman Sachs]

Maybe a higher level one.

[Carly Davenport, VP of Equity Research at Goldman Sachs]

Just as you think about the backlog additions, can you talk a bit about the 2024-2027 plan relative to the additions for post-2027 delivery? Do any risk around project slippage beyond the current plan into 2028 plus just.

[Carly Davenport, VP of Equity Research at Goldman Sachs]

Given the more uncertain macro environment and potentially more complex contract discussions for you.

[Carly Davenport, VP of Equity Research at Goldman Sachs]

Still feel confident in the execution there?

[John Ketchum, Chairman, President and CEO at NextEra Energy]

Yeah, Carly, I mean good question. Maybe I'll start just with circumvention and remind folks that, you know, when we saw circumvention, we did see some shifting out in demand. Right. That impacted, I think, some of the near-term development expectations with us forecast to come in the low end of the range on the 2024, 2025 numbers. You can see that in the development forecast write up. We were also able to push those projects into 2026, 2027, 2028 and some of the out years. I think that dynamic was more specific to circumvention than it is here. I think here there's just so much demand and a need for electrons right now where customers just can't afford to wait. Gas is such a long-term solution.

[John Ketchum, Chairman, President and CEO at NextEra Energy]

I mean we've gone up from four and a half years to build a combined cycle unit to six or longer, and so needing the electrons now, I think that is forcing more near-term demand. Obviously, you know, some of the impact too will ultimately depend on where we come out with Washington. But you know, you've heard my comments there.

[Carly Davenport, VP of Equity Research at Goldman Sachs]

Great, that's really helpful, thank you. I'll leave it there.

[Operator]

The next question comes from Bill Appicelli with UBS, please go ahead.

[Bill Appicelli, Executive Director and Head of North America Power & Utilities Research at UBS]

Hi, good morning.

[Bill Appicelli, Executive Director and Head of North America Power & Utilities Research at UBS]

Just a couple questions on the utility.

[Bill Appicelli, Executive Director and Head of North America Power & Utilities Research at UBS]

The 10-year site plan that you.

[Bill Appicelli, Executive Director and Head of North America Power & Utilities Research at UBS]

Guys filed, how should we think about that impacting the capital expenditure program relative to the $34 billion-$37 billion? Does that have any impact on that or is it sort of post that.

[Bill Appicelli, Executive Director and Head of North America Power & Utilities Research at UBS]

Should we assume a higher run rate than the sort of 8.8 to.

[Bill Appicelli, Executive Director and Head of North America Power & Utilities Research at UBS]

8.9 that you've outlined for 2026-2027?

[Armando Pimentel, President and CEO at Florida Power & Light Company]

It's Armando. Bill, good morning. I don't think you think about it any differently. The CapEx plan that we filed in our rate case for the next four years is roughly $50 billion of CapEx, right? Over the next, over the next four years. The 8.8% or so that you just highlighted is roughly in line with what our expectations would be over the next four years. It's driven by making sure that we continue to do the best thing for our customers. We expect 335,000 new customers over the next four years in the FPL area and that drives a lot of investment, one, and then the additional investment part of that $50 billion is to make sure that we can continue to make our customers' value proposition better. I think it's more of the same.

[Bill Appicelli, Executive Director and Head of North America Power & Utilities Research at UBS]

Okay, and then regarding the rate case, is settlement still a preferred outcome here and is that window of time ahead of those technical hearings in August?

[Armando Pimentel, President and CEO at Florida Power & Light Company]

I think settlement's always something that's, you know, that's on the table. Obviously it takes two sides to, in our case, since there's a number of interveners, more than two sides to come together to get to, for us, a conclusion that's good for our customers. Right. This is all about our customers and making sure that we can get the best outcome for them long term. If you look at historically, excuse me, where we've had settlements, they've generally been anywhere from six weeks before the rate case is supposed to start, which in this case would be mid-August, to right before, right after the actual rate case. If there is going to be a settlement, then that's the likely outcome. Certainly it could happen outside of that time, it could happen at any time.

[Armando Pimentel, President and CEO at Florida Power & Light Company]

Our focus right now is really on putting together the best case that we can for our customers starting mid-August.

[Bill Appicelli, Executive Director and Head of North America Power & Utilities Research at UBS]

Okay.

[Bill Appicelli, Executive Director and Head of North America Power & Utilities Research at UBS]

Just one last quick one. The 11.6% ROE, given the amount of surplus amortization that was utilized, I mean.

[Bill Appicelli, Executive Director and Head of North America Power & Utilities Research at UBS]

Should that trend a little bit lower.

[Bill Appicelli, Executive Director and Head of North America Power & Utilities Research at UBS]

Over the balance of the year or is the expectation that that can be maintained?

[Armando Pimentel, President and CEO at Florida Power & Light Company]

We are required at the beginning of the year to file with our commission and let them know what our expectations are for the year. Obviously, that can change. You saw that change last year when we lowered it. Our expectation is that 11.6% is about right. Based on the expectations that we have for normal weather this year. We will obviously take a look at that every quarter. 11.6% is our expectation for the year right now.

[Bill Appicelli, Executive Director and Head of North America Power & Utilities Research at UBS]

Great. Thank you so much.

[Operator]

Thank you. This concludes our question-and-answer session and our conference. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Mike Dunne, Treasurer
• John Ketchum, Chairman, President and CEO
• Mark Eidelman, Director of Investor Relations

Analysts

• Jeremy Tonet, Research Analyst and Managing Director at JPMorgan
• Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research
• Carly Davenport, VP of Equity Research at Goldman Sachs
• Bill Appicelli, Executive Director and Head of North America Power & Utilities Research at UBS
• Julien Dumoulin-Smith, Research Analyst at Jefferies
• David Arcaro, Executive Director of Equity Research at Morgan Stanley
• Nick Campanella, Director at Barclays
• Armando Pimentel, President and CEO at Florida Power & Light Company