Q1 2020 Earnings Call
[music].
Good morning, welcome to the Nextera Energy, Eric Nextera Energy Partners LP Earnings Conference call, all participants will be in listen only mode should you need assistance. Please state your corporate.
Yes, hi cuts or your Starkey followed by zero. After today's presentation, there will be an opportunity to ask questions. That's good question. You May Press Star then one on your Touchtone phone. So withdraw your question. Please press Star then too.
Please note. This about is being recorded I would now like to turn the conference over time that raw Scott director of Investor Relations.
Please go ahead.
Thank you Greg Good morning, everyone and thank you for joining our first quarter 2020, combined earnings conference call for Nextera energy and Nextera Energy partners.
With me this morning, our general Chairman and Chief Executive Officer, Nextera Energy, Rebecca Chialva Executive Vice President and Chief Financial Officer Nextera energy.
John catch them, President and Chief Executive Officer of Nextera Energy resources, and more kicks in executive Vice President of Nextera Energy Alton were also officers of Nextera energy partners as well as Eric Silagy, <unk>, President and Chief Executive Officer, Florida Power <unk> Light company.
Jim will provide some opening remarks, and we'll then turn the call or Rebecca for a review of.
Our first quarter results, our executive team will then be available to answer your questions.
Well, we will be making forward looking statements. During this call based on current expectations and assumptions, which are subject to risks and uncertainties actual results could differ materially from our forward looking statements. If any of our key assumptions are incorrect well because of other factors discussed.
In today's earnings news release, and the comments made during this conference call and the risk factor section of the accompanying presentation on our latest reports and filings with the Securities and Exchange Commission each of which can be found on our web sites Nextera energy Dot Com Nextera energy partners Dotcom, we do not undertake any duty to update any forward looking statements today.
Today's presentation also includes references to non-GAAP financial measures you should refer to the information contained in the slides accompany today's presentation for Definitionally information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure with that I will turn the call over to Jim.
Thanks, Matt and good morning, everyone.
Before I begin I want to take a moment to extend our deepest sympathies to all those who've been personally affected by the coupon 19 pandemic.
The country in the world are facing devastating impact from the spread of the virus and we remain resolutely focused on doing our part by continuing to deliver affordable and reliable power.
Never before has it been more clear how critical electricity is to the world.
And our team is laser focused on ensuring its owner uninterrupted delivery. So first responders can help those need businesses can continue to operate were possible governments can continue to function and our customers can go about their daily lives to the grid.
Extent possible during these challenging times.
As part of Nextera Energy's core commitment to do the right thing at both FPL and Gulf power, we've taken steps to help customers face the challenges that the pandemic has created.
Both utilities assist have suspended electric just connections during the state of emergency.
To ensure our customers have continued access to power regardless of their economic circumstances.
Additionally, next month, the typical FPL Gulf power residential customers will receive a onetime build decrease of approximately 25, and 40% respectively as an accelerated flow back of lower fuel costs.
The Nextera energy companies employees have also committed more than 4 million an emergency assistance funds.
To provide critical support to the most vulnerable members of the community.
Our hope is that these steps will help customers navigate this difficult in unsettling time.
And support a more rapid recovery for them enough.
Florida economy generally.
We remain deeply engage in helping Florida return from this pandemic stronger than ever and we will continue to do our part to support that outcome.
It is during challenging times like these that the culture of Nextera energy shines through <unk>.
Culture focused on readership.
Stability, a passion to be the best and a focus on flawless execution.
Nextera Energy's employees of exemplified these characteristics over the past several weeks.
I'm very proud of how they stepped up once again confirming my belief that we have the best team in the industry.
And that our culture in our.
Our most important nason.
Despite their daily lives being disrupted by the ongoing effects of the pandemic our employees focused on continuing to do their jobs and delivered a central resource for customers in our economy has been unwavering.
I'd like to take a moment to thank all Nextera energy employees for their continued.
Focus hard work and execution during these challenging times.
It is because of them that I've never been more confident in our ability to deliver on all our expectations to our customers shareholders and other stakeholders.
As we focus on execution the safety of our employees in the community is always.
These are number one priority.
To ensure that are critical operations, including the grid within Florida and are generating facilities, particularly our nuclear sites continue to operate safely and remain available to serve our customers we've instituted our pandemic plan.
Which was most recently updated last year.
And have taken aggressive.
Message to protect our employees.
We understand the critical role that electricity plays in the economy in the daily lives of Floridians NFP on Gulf power remain steadfastly focused on meeting their commitments as we face the challenges created by the pandemic, we're fortunate that preparedness and crisis planning our in our DNA.
For nearly 70 years, we've had enrolled drills to prepare for disruptions to our business and while the circumstances of this situation or unique is that preparation to deal with the unexpected is allowing our company to continue to deliver for our customers through this challenging time.
Over the past several months.
Their energy has continued to execute across the board.
Our transmission and distribution systems continue to perform in line with the typical high reliability standards the more than $5 billion that FPL was invested since 2006 to build a stronger and smarter grid allow us to leverage automation and manage the team.
The system remotely.
I'd automation and its ability to limit human or human intervention has never been more important than today.
Operations at all are generating facilities at FPL Gulf power and energy resources have been modified to protect the health and safety of our employees.
And the pandemic has not caused any meaningful impact.
And on.
In addition to ensuring continued <unk> in addition to ensuring continued safe and reliable operations at our plants. Our nuclear team also delivered outstanding performance during the recent refueling outages at Saint Lucie endpoint Beach.
In fact, the point Beach refueling outage was one of the shortest outages.
In our entire nuclear fleet in the past 20 years.
The ongoing outages at Turkey point in Seabrook also continues to progress well.
One of our most important core values is our commitment to excellence and all that we do.
[noise] over a long period of time, we've invested significant time and effort.
And developing key strategic partnerships, particularly related to our supply chain to help support our ability to execute during challenging times like these.
Over the past several months our key strategic partners have continued to deliver highlighting the value of deep long lasting relationships with best in class companies.
These deeper.
Shifts in our position as the industry leader give us confidence that our equipment deliveries should.
Should remain on track, even if others face supply issues over the coming months.
Our engineering and construction team also continues to perform exceptionally well keeping the largest pro construction program and Nextera Energy's history on.
On schedule and on budget.
Nextera Energys financial performance for the first quarter reflects the strong operating performance across all our businesses with adjusted EPS, increasing more than 8% year over year.
Let me now turn to our strategic focus which remains unchanged.
At FPL and Gulf power, our focus has been and we'll continue to be on delivering an outstanding value proposition of low bills high reliability outstanding customer service and clean energy solutions for our customers.
The value of FPL Smart capital investments, we've made over the past several decades of have never has never been more.
Clear.
These investments, including FPL highly efficient generation portfolio, and a stronger and smarter grid, allowing FPL to continue to efficiently.
To continue efficiently delivering affordable reliable and clean energy to our customers.
While we continue to monitor the situation.
Our capital investment program remains on track at FPL and Gulf power.
The investments that we're making today, including one of the world's largest solar expansions are expected to provide meaningful customer benefits over the coming years.
As we move toward the current challenges it will be important that we continue to provide a low cost.
I will service to our customers to support the recovery.
The flexibility provided by FPL is reserve immunization mechanism combined with our best in class operational cost effectiveness help position FPL to meet its financial commitments, while making smart long term investments during this uncertain time.
The Gulf power.
Remain committed to delivering on the objectives that we have previously outlined and continue to expect to generate significant customer and shareholder value over the coming years.
Similar to FPL and Gulf power, our strategic vision at energy resources remains unchanged and we believe the market opportunity for low cost renewables has never been greater.
In times when.
When consumers and businesses are dealing with the challenges of economic uncertainty, we expect our customers will help ease these impacts by lowering the cost of power for their customers through new renewable generation.
Reflecting the strong customer demand for new enables the energy resources team had another terrific quarter of origination adding approximately.
1600 megawatts to our backlog since the last earnings call, including our first 600 megawatts of wind projects for 2022 and beyond.
Most of this quarter's backlog additions were negotiated remotely while employees operated under stay at home orders the ability to add nearly 1600 megawatts. Despite these conditions is a testament.
But to our strong customer relationships pipeline and development skills.
Also included in these backlog additions are approximately 460 megawatts of battery storage products projects.
Almost all of which will be added to existing solar sites to take advantage of the ITC and enhance the value of our existing projects for.
Customers.
With the significant recent growth in our battery storage backlog, we increasingly see storage as an important stand alone business in its own right.
Nextera Energy's battery storage investments in 2021 are now expected to exceed $1 billion, which we believe would be the largest.
Ever annual battery storage investment by any power company in the World and have a total gigawatt hour capacity the discharges enough electricity to us to power the entire state of Rhode Island for four hours.
This highlights the rapid transition to the next phase of renewables development that pairs low cost.
Wind and solar energy with a low cost battery storage solution.
We continue to expect that by the middle of this decade without incentives new near near from wind in new near from solar will be cheaper than the operating costs of most existing coal nuclear and less efficient oil and gas fired generation units.
As a result.
We expect that the long term projections for wind and solar that we've previously shared will be achieved or exceeded over the coming decade, representing a tremendous growth opportunity for energy resources.
As we celebrate the Fiftyth anniversary birthday today, we're proud of our track record of improving environment, particularly through the.
Joe to reductions that we've delivered as a result of our clean energy efforts across the country.
We're at the Vanguard and building a sustainable energy era that is both clean and affordable and we're driving very hard to continue to be at the forefront of disruption is occurring within the energy sector.
To capitalize on the.
Significant growth opportunity energy resources expects to extend its long track record of excellence in execution.
By leveraging our strong relationships with our equipment suppliers and contractors that I previously mentioned and using the significant experience that we've developed over our more than 20 years in the renewable business, we've been able to keep our construction.
Suction program on track despite the significant disruptions that are occurring both globally and locally.
Energy resources 2020 wind turbine deliveries remain ahead of schedule, we're not currently experiencing any significant equipment or labor issues at any of the more than 5000 megawatts of wind and solar projects that we expect to complete this year.
While we continue.
To monitor the situation closely we expect that all of our plan 2020 renewable construction projects will achieve their in service dates this year and believe it we will extend our track record of having never missed a PTC deadline on one of our wind projects.
Energy resources track record of execution has been a key competitive advantage over time.
In periods of uncertainty we like we are currently experiencing we expect customers will increasingly want confidence in the company's ability to deliver on its commitments.
Energy resources extensive experience combined with our customer supplier contractor in financing relationships all separate us from other developers during these challenging times in addition.
We expect that some of our competitors may falter as a result of these challenges and we will look to leverage any opportunities that this may present.
To support the execution of FPL Gulf power and energy resources strategic objectives over the past several months, we've focused on ensuring nextera Energy's continued strong access to.
Capital.
The strength of Nextera Energy's balance sheet and access to ample liquidity have always been and we'll always continue to be a core strategic focus for us in times of financial market disruption like we've recently experienced the value of balance sheet strength and access to liquidity had become even more apparent.
We entered the year with meaningful cushion against our credit metrics and access to significant liquidity through the largest and most diversified bank group in our sector and maintenance of the industry's largest credit facilities.
In the Middle of February we issued $2.5 billion, an equity units to add additional cushion against our credit metrics and further supplement our.
Liquidity.
Additionally, since the market disruption began we further improved our liquidity position with an additional roughly $4 billion in longer term financings, including 1.1 billion FPL first mortgage bonds.
1.25 billion of capital Holdings debentures, and an additional $1.8 billion in capital holdings term loans.
Following these issuances Nextera energy now has approximately $12 billion and liquidity to help support the largest capital investment program in our history and we plan to continue to be prudent in our financing plan going forward.
In summary, Nextera energy remains well positioned to continue to execute over both the near and long term horizon.
Since.
Over a long period of time, we've focused on building a business that is resilient and able to deliver for our customers and shareholders, regardless of the economic and market conditions, and we remain laser focused on extending that track record today.
Even throughout the greatest market dislocations last month.
Sarah energy maintained ongoing access to capital, which is a reflection of the strength of its balance sheet as well as the overall resilience of Nextera energys underlying businesses.
FPL and Gulf power operate in what we believe is one of the most constructive regulatory environments in the country.
The strength of FPL and.
Gulf power is balance sheets and capital structures combined with the constructive stable and forward thinking approach of Florida is regulatory environment and our long track record of execution should provide investors confidence that both car companies will continue to be able to deliver for customers and perform well and a variety of economic environments.
At energy resources the portfolio is focused.
On long term contracted clean energy projects with high credit quality customers, which we expect will be largely insulated from changes in the underlying economy.
Despite the current economic challenges and as a result of the strengthen diversity of Nextera Energy's underlying businesses.
I will be disappointed if we're not able to deliver financial results at or near the top end of our adjusted earnings per share expectation ranges in 2020, 2021 and 2022, while at the same time, maintaining our strong credit ratings and most importantly, continuing to reliably deliver for our customers.
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 current pandemic.
Let me now turn to Nextera energy partners.
While the covert 19 pandemic has.
Created significant uncertainty throughout the economy Nextera energy partners remains well positioned to continue to deliver on its objectives and its commitments.
We do not currently expect any material financial or operational impacts as a result of the pandemic.
Additionally, as a.
Well to the actions that we took last year, including two significant acquisitions, the organic growth investments that are being executed in the steps taken to reduce its overall cost of capital.
Nextera energy partners entered 2020, particularly well positioned.
This favorable positioning is even more valuable during times of.
Certainty what we're experiencing today.
The benefit of last year's execution is apparent in our first quarter results with adjusted EBITDA and cash available for distribution, increasing roughly 30% and 200% respectively year over year.
We expect to achieve Nextera energy partners 2020.
Distribution growth objectives, while maintaining a trailing 12 month payout ratio in the mid 70% range, even after excluding cash distributions from our desert sunlight projects highlighting the significant flexibility NDP has going forward.
Why we do while we will continue to be opportunistic.
The.
Favourable position with which Nextera energy partners ended the year gives it the flexibility to achieve its long term distribution growth objectives without the need to make any acquisitions until 2022, one year later than we previously disclosed.
Nextera energy partners liquidity position also supports its flexibility and achieving.
Its long term growth objectives at the ended the first quarter.
Nextera energy partners, maintaining liquidity, a net liquidity position, including cash on hand of approximately $650 million.
Nextera energy partners only near term debt maturity is a 300 million convertible debt issuance that matures in September of this year, which may.
I would be converted to net units if the conversion price has achieved.
Without any near term acquisition needs and no other corporate level debt maturities until 2024.
Nextera energy partners maintains significant liquidity to help achieve its objectives.
The steps that Nextera energy partners is executed in the past year such as the.
As an extension of its revolving credit facility.
As well as the project Recapitalisations that creates significant project finance debt capacity within the any portfolio give us confidence that sufficient liquidity will be maintained.
We also expect that the diversification of financing alternatives that NDP has pursued since its IPO.
Joe will provide flexibility and continued access to capital regardless of potential disruption in the capital markets by leveraging the significant private infrastructure capital that has a strong demand for high quality long term contracted clean energy assets Nextera energy partners maintains an attractive additional financing.
In summary, we believe any P is well positioned to execute on accretive acquisitions for LP unit holders going forward.
With the tremendous expected long term renewables growth combined with the strength of Nextera energy partners existing portfolio and continued access to low cost sources of capital we believe.
He is uniquely positioned to take advantage of the disruptive factors reshaping the energy industry.
With access to energy resources unparalleled portfolio renewables projects that now totals roughly 25, gigawatts, including the sign backlog as well as the ability to execute on third party acquisitions and organic growth opportunities.
We have as much confidence in Nextera energy partners long term future as we ever have had we look forward to delivering on that potential over the coming years.
In closing while the covert 19 pandemic has created significant uncertainty throughout the economy. It has not changed the fundamental value proposition of Nextera and.
Energy or Nextera energy partners over a long period of time, we focused on building Brazilian companies.
That are able to deliver on all their commitments throughout market in economic cycles, and we entered the current period of disruption uniquely well positioned despite the ongoing challenges the core strategic focus.
Across all of our businesses remains unchanged.
And we believe we're well positioned to deliver on our objectives going forward.
I'll now turn the call over to Rebecca to review the first quarter results.
Thank you Jim and good morning, everyone, Let's now turn to the detailed results beginning with happy hour.
But the first quarter 2020 FPL reported.
Reported net income at $649 or $1.31 per share earnings per share increased nine cents year over year.
Regulatory capital employed increased by approximately 9% over the same quarter last year. It lays the principal driver at FPL is net income growth of roughly 9%.
Capital expenditures.
There are approximately $1.4 billion for the quarter and we expect our full year capital investments to be between 5.8 billion and $6.3 billion.
Yeah, It's reported our leave for regulatory purposes will be approximately 11.6% at 12 months ending March 2020, because at the upper end they.
While band of 9.6% to 11.6% and our current rate agreement.
During the quarter, we utilized $149 million have reserve amortization to achieve our target by the Tory RSV, leaving FPL like a balance at $744 million.
The amount of reserve amortization the FPL utilize this.
Quarter with below that was liquid utilized in the first quarter 2019.
As we previously discussed FPL historically utilizing more reserve amortization in the first half it here given the pattern of an underlying revenues and expenses and we expect this year to be no different.
We continue to expect that FPL and 20.
Money with a sufficient amount of reserve amortization to continue operating under the base rate settlement agreement through 2021, creating further customer benefits by avoiding a base rate increase during this time.
Turning to our development efforts, we recently filed an updated tenure site plan for FPL in Gulf power that highlights the next phase.
It's not capital investment opportunities across Florida systems.
The filing reflects an expectation that FPL and golf tower will begin to operate as an integrated electric system and 2022.
As we previously discussed since the acquisition closed in 2019 FPL in Gulf power has been revealing the potential benefits of.
Turning into a single larger Florida utility company.
Based on this review the company's expect that that a merger will create both operational and financial benefits for its customers.
As a result, FPL and Gulf power plan to take additional steps to merge over the coming months I continue to expect to file a combined rate case in the first quarter of 2021.
Our new rates effective in January of 2022.
The combined tenure site plan projects and the guests and approximately 70% increase the amount of zero emission electricity generated in 2029 relative to 2019 as a result at FPL is continued rapid expansion at solar energy.
For the execution of its 30 by 30 plan.
We ended this decade FPL projects that will have more than 10000 megawatts of installed solar capacity.
Including nearly 1600 megawatts within the current Gulf Power service territory.
At this total capacity approximately 1500 megawatts are expected to be.
Did under FPL has recently approved sell their together program, which has been nations largest community solar program.
Since the official onto the program last month cut their demand across all Reclasses has been substantial let's demand from residential customers in one week, surpassing the total residential private sell their capacity that has.
And installed over the past 10 years.
It's strong demand is a reflection of increasing customer interest in cost effective clean energy solutions.
The innovative program is expected to generate $249 million up total net cost savings product or participating and not participating.
Summers over its life.
Beyond the significant sell their expansion a 10 year site plan also highlight FPL has other efforts to supply its customers with energy that has the clean and affordable.
Relative to last year site plan, there is a dramatic increase in the battery storage deployment.
Hey, total of approximately 1200.
Got a storage capacity now expected by 2029.
Additionally, the site plan reflects FPL, eliminating essentially all of the coal from its integrated system, including the phase out at the last operating coal plant within Florida later this year.
Finally, this year site plan reflects FPL further diversifying its generation.
Portfolio like elimination at the combined cycle natural gas plant at FPL and golf Tyler that were previously expected to be constructed in the middle of this decade.
This plan reflects our belief that renewable generation and particularly sell their paired with battery storage and Florida is an increasingly cost effective fallen generation in most parts of.
Yes.
As FPL and Gulf power execute on these opportunities to further modernize their combined generation fleet.
We expect to enhance our customer value proposition, while also reducing our CFO to admissions rate, which is already among the lowest in the nation and is targeted to be 67% below the 2000.
And then five U.S. electric industry average I 2030.
Despite the challenges presented by the Cobot 19 panic all of that Appeals major capital projects remain on track and on budget.
In late January the first six seller together projects totaling approximately 450 megawatts entered service.
An additional 450 megawatt facility together sites as well as the final 300 megawatts I still are being built under the seller base rate adjustment or soap mechanism that sales base rate settlement agreement remain on track to be placed in service this year.
The on solar construction at the highly efficient roughly 1200.
A lot Dania Beach clean Energy center remained on schedule and on budget as that continues to advance towards its projected commercial operation date in 2022.
We continue to expect that FPL ongoing smart investment opportunities will support a compound annual growth rate and regulatory capital employed at approximately nine.
Percent I'm 2018 through 2022, well further enhancing our best in class value proposition.
Let me now turn to Gulf power, which reported first quarter 2020, net income of $40 million or eight cents per share.
Gulf capital expenditures for $340 million for the quarter as they continue.
In used to execute on smart capital investments for the benefit of customers.
And we continue to expect its full capital full year capital investments to be between 800 $900 million.
As a result of these ongoing investments regulatory capital employed increase by approximately 25% year over year.
But.
Powers reported our OE for regulatory purposes will be approximately 11.2% for the 12 months ending March 2020.
The overall execution of golf powers capital program continues to progress well.
<unk> Power's first solar project, the roughly 75 megawatt blue Indigo sell the energy center was placed into.
Service earlier this month.
All of its other major capital investments, including the North, Florida, resiliency connection and the plant crust coal to natural gas conversion continue to remain on track.
Now I'd like to S&P is one notch upgrade as those FPL in Gulf power in late December It recently upgraded golf credit ratings by.
Notches, well, citing its strong financial position, resulting from the reduction in operating costs and ongoing modernization efforts.
We're pleased with these upgrades, which we believe our reflection of successful execution, it's the Gulf power acquisition closed and which further strengthened nextera energys overall credit position.
Similar to other parts of the country, the Florida economy is being impacted by the ongoing Coca 19 pandemic.
Recent economic data reflects Florida unemployment rate beginning to increase and a significant decline in consumer confidence.
As Florida continues to deal with the impacts of the pandemic. We are encouraged that the trailing seven day average revenue.
That 19 cases has modestly declined in the past two weeks.
Oh it is unclear at this point how severely the economy will be impacted we believe the strength with which Florida entered this crisis combined with a continued attraction at its low that low tax pro business policies position, Florida, well for a rebound once the worst.
As a pandemic is behind us.
During the quarter Apios average number of customers continued its recent trend a strong underlying growth.
Increasing by approximately 72000 from the comparable prior year quarter.
Feels first quarter retail sales increased 3.3% year over year, driven primarily by.
Favorable weather comparison.
On a weather normalized basis appeals retail sales declined 5.7% as customer growth was more than offset by a reduction and underlying usage per customer.
We continue to evaluate the effects of the pandemic on Apios retail sales, which are heavily weighted to residential customers.
At more than 50% and then we have a very limited exposure to industrial load at less than 3%.
Additionally, since approximately 40% of Apios load is cooling related and therefore important for both comfort and building maintenance. We expect this demand driver to remain relatively stable, especially as we head into the warmer months.
It's at the year.
Weather normalized retail sales for the past four weeks are down approximately 2% relative to the prior two years with increased residential sales, partially offsetting declines in other classes.
However, its underlying usage decline has been more than offset by strong weather with overall usage.
In the past four weeks, increasing nearly 10% relative to the prior to your average.
Well the ultimate impact that they've pandemic on underlying usage cannot be known at this time, we continue to expect that flexibility provided by a reserve amortization mechanism to offset any fluctuation and retail sales or bad debt expense.
And support regulatory our Lee at the upper end at the allowed band of 9.6% to 11.6% under our current rate agreement.
For Gulf power, the average number of customers increased approximately 1.1% versus the comparable prior year quarter.
Powers first quarter retail sales increased roughly 8.6.
<unk> percent year over year.
As customer growth and an increase in underlying usage per customer are largely offset by unfavorable weather comparison relative to 2019.
Over the last four weeks golf powers weather normalized retail sales have declined approximately 9% versus the prior to your average.
Then let Kathy.
Now over this period strong weather offset the decline in underlying usage and overall retail sales increased nearly 4% versus the prior to year average.
As a reminder, unlike FPL Gulf power does not have a reserve amortization mechanism under settlement agreement offset the fluctuations in revenues are costs.
Any variability with therefore have more and Pat to golf earnings and RSV and on FPL.
As we have often discussed weather normalization is in precise and it's particularly so when evaluating short periods of time.
We are providing our assessment of the changes in load in an effort to be transparent that costs.
And that they should be considered as indicative and assessed together with the overall changes and usage.
Additional details on retail sales at FPL and Gulf power are included in the appendix of today's presentation.
Let me now turn to energy resources, which reported first quarter 2020, GAAP earnings of $318 million.
Or 65 cents per share and adjusted earnings of $529 million or a dollar eight per share.
Isn't it is an increase in adjusted earnings per share of 11 cents or approximately 11% from last year's comparable quarter results.
As a reminder, last year's first quarter results have been restated to reflect the results of.
Our nextera energy transmission projects for Middle reported in the corporate another segment.
New investments, including more than 1500 megawatts, a new contracted wind and solar projects that were commissioned during 2019 added eight cents per share.
Contributions from existing generation assets also increased by nine cents per share.
Due to an improvement in wind resource and increased PTC volume from RV powered wind projects.
Fleetwide wind resource was at 96% the long term average versus 91% during the first quarter of 2019.
Also contributing favorably, where nextera energy transmission, where country contribution increased by.
Four cents versus 2019, and our gas infrastructure business, including our existing pipelines, which increased results by two cents year over year.
These favorable contributions were partially offset by lower contributions from our customers supply and trading business, which declined two cents versus the particularly strong first quarter last year.
Here.
All other impacts reduced results by 10 cents per share primarily as a result in increased interest expense, reflecting continued growth in the business and share dilution.
I just mentioned earlier energy resources development team had another strong quarter of origination.
Since the last call we've added.
190 megawatts of renewable projects to our backlog, including 600 megawatts of wind 420 megawatts of solar 457 megawatts battery storage and 113 megawatts of wind Repowering projects.
With with this quarter's backlog additions and with two and a half years.
Remaining in the period, we are now well within that 2019 to 2022 renewables development rent ranges that we introduced in the middle of last year.
At this early stage, we're tracking extremely well against the total development forecast for this period and our backlog continues to track against the assumptions supporting.
Our previously announced financial expectations.
For the post 2020 to 2022 period, our backlog now includes wind solar and storage projects totaling approximately 3200 megawatts, placing us far ahead of our historical origination at this stage and further supporting energy resources.
Long term growth visibility.
Beyond renewables, we continue to work with our partners on Mountain Valley pipeline and with the relevant agencies to resolve the issues related to MVP is biological opinion.
We are encouraged by the tone of the oral arguments that the Supreme Court on the Atlantic Coast pipelines case related to its Appalachian Trail crossing.
The relation and remain hopeful that the fourth circuit courts original decision will be overturned resolving similar issues for MVP.
We're also evaluating the recent Montana Federal Court decision supporting two in joined the Army Corps of engineers from issuing permits under the nationwide 12 program.
We believe the ruling out of the court is incorrect.
And anticipate that the federal government will seek to fix the situation rapidly.
Assuming a successful resolution along the currently expected timeline of all of these issues. We continue to target a full in service date for the pipeline during 2020 and expect an overall project estimate at approximately $5.4 billion.
Turning now to the consolidated results for Nextera energy for the first quarter of 2020, GAAP net income attributable Nextera energy was $421 million or 86 cents per share.
Extra energy's 2021st quarter adjusted earnings and adjusted EPS were $1.17 billion and $2.38 per share.
Actively.
Adjusted earnings from the corporate another segment were roughly flat year over year.
As Jim mentioned Nextera Energy's current liquidity position is approximately $12 billion, ensuring that we are well positioned to execute on our strategic plans regardless of potential market disruptions.
Financing that we have executed.
Year to date represent a significant portion of our expected 2020 financing plan and we remain confident about our ability to execute the financing Pat plan for the balance of the year and beyond.
In the near term, we have to the positive cash balances, helping to ensure ample liquidity as we execute on our current investment programs.
Energy resources currently has commitments for substantially all of its that's expected to 2020 tax equity financings, which we expect to close as the renewable projects are placed in service later this year.
The financial expectations, which we extended last year through 2020 to remain unchanged.
We continue to expect an extra.
Energy's adjusted EPS compound annual growth rate to be in a range at 6% to 8% through 2021 off at the 2018 adjusted EPS of $7 in 70 cents.
Plus the accretion of 15 cents and 20 cents in 2020, and 2021, respectively from the Florida acquisitions.
For 2020, we continue to expect that our adjusted EPS to be in the range at $8 in 70 cents to $9 in 20 cents and as Jim highlighted we will be disappointed if we are not able to deliver financial results at or near the top end of this range.
For 2022, we expect to grow adjusted EPS in a range.
The 8% off at the 2021 adjusted EPS.
Insulating to a range of $10 to $10.75 per share.
2018 to 2022, we continue to expect that operating cash flow will grow roughly inline with our adjusted S compound annual growth rate range.
As Jim noted.
While our expectations always assuming normal weather and operating conditions as we consider a reasonable range of impacts related to the current pandemic, we feel comfortable with the expectations that we have outlined.
As we announced in February the board of Nextera energy approved the an updated dividend policy for beyond 2020, which is expected.
Good to translate to a growth rate and dividends per share of roughly 10% per year through at least 2022 off of a 2020 base.
The boards approval to continue to grow our dividends per share in excess of our expected adjusted earnings per share growth rate is a reflection of the continued strength in earnings and operating cash flow.
No growth at Nextera energy, and we remain well positioned to support the dividend policy going forward.
Let me now turn to Nextera energy partners, which delivered outstanding operational and financial performance for the quarter.
First quarter, adjusted EBITDA was $294 million and cash available for distribution.
You shouldn't including all distributions from the desert sunlight projects in both periods was $130 million up 31% and more than 200% respectively against the prior year comparable quarter.
Including full contributions from the desert sunlight projects Nextera energy partners would have achieved Kathy growth of 187%.
Percent versus 2019.
Contributions from portfolio acquisitions, and an improvement in wind resource for the principal drivers of growth.
New projects added 54 million of adjusted EBITDA, and 44 million of cash available for distribution.
For the any portfolio wind resource was 98%.
The long term average versus 89% in the first quarter of 2019.
Cash available for distribution also benefited from a reduction in project level debt service, primarily as a result at the retirement of the outstanding notes that are Genesis project and the receipt of higher year over year Paygo payments.
The reduction in project.
Level debt service was partially offset by higher corporate level interest expense.
As a reminder, these results are net of IDR fees since we considered ease as an operating expense.
Additional details are shown on the accompanying slide.
Yesterday, the Nextera Energy partners Board declared a quarterly distribution of 55.
0.5 cents per common unit or $2.22 per common unit on an annualized basis, continuing our track record of growing distributions at the top end up our 12% to 15% per year growth rate range.
As Jim mentioned earlier, the transactions that Nextera energy partners executed in 2019 allowed it to enter 2020.
Well positioned to withstand the recent market turmoil.
During 2019, Nextera energy partners raised approximately $1.8 billion through three convertible equity portfolio financings.
With low initial coupons the convertible equity portfolio financings provide more cash LP unit holders, which we expect will allow an extra.
Andy partners to acquire fewer assets to achieve the same level a future distribution growth and therefore also reduce future financing needs.
The benefits of these financings are large reason the Nextera energy partners now has the flexibility to execute on its long term distribution growth objectives without the need for additional.
<unk> acquisitions until 2022.
At times of market stress reduce future asset and financing needs are tremendous advantage and help further improve nextera energy partners ability to execute on its long term growth objectives.
As Nextera energy partners advance to towards its organic with investments in 2019.
I mean, it took steps to support the financing for these investment opportunities as well.
He was a recapitalization of the Texas pipelines, a project finance facility related and the pipeline expansion project and it's advance discussions for tax equity financing related to the two when repowering.
Next R&D partner is expected to finance these accretive investments.
Through attractive sources of long term capital.
Last year Nextera Energy partners also purchased all of the outstanding holding company operating company notes or Genesis project.
Assuming favorable resolution for our PGT related assets about which we continue to remain confident.
The cash flows from the Genesis project can support significant long term.
Financing capacity.
Additionally, falling p. ginnies emergence from bankruptcy, we expect cash that is currently chapter desert sunlight to 50 and 300 projects to be distributed.
As of the ended the first quarter approximately 48 million of distributions have been restricted or with held at the projects.
The Genesis.
I think capacity and the release of the desert sunlight trapped cash our additional potential sources of capital and liquidity for Nextera energy partners.
Finally over the last year Xtandi partners revolving credit facility was upsized by $500 million to 1.25 billion and the churn was extended out to 2000.
25.
This incremental liquidity further supports next foundry partners financing position and provides flexibility in how any p. executes on its long term growth objectives.
Prudent capital management is a hallmark of our approach to how we manage all of our businesses as a result of the actions taken over the past year, We believe next changi.
This is particularly well positioned to achieve its long term growth expectations.
Let me now turn to next energy partners expectations, which remain unchanged, including full contribution PG any related projects year end 2020 run rate cash available for distribution is expected to be in a range of 560 million.
Others to $640 million, reflecting calendar year, 21, 2021 expectations for the forecasted portfolio at the end of 2020.
Excluding all contributions from the desert sunlight projects Nextera Energy partners continues to expect yearend 2020 run rate for Kathy to be in the range at 505 million to.
$585 million.
Your end 2020 run rate adjusted EBITDA is expected to be in a range of 1.2 to 5 billion to $1.54 billion, which assumes full contributions from the projects related to P. Ginny as revenue is expected to continue to be recognized.
Similar to Nextera energy while.
Our expectation is always assume normal weather and operating conditions as we consider a reasonable range of impacts related to the current pandemic. They continue to feel comfortable with these expectations.
As a reminder, all of our expectations include the impact of anticipated IDR fees as we treat these that's an operating expense.
From a base.
Our fourth quarter 2019 distribution per common unit at an annualized rate of $2 in 14 cents, we continue to see 12% to 15% growth per year, and LP distributions as being a reasonable range of expectations through at least 2024.
We expect the annualized rate at fourth quarter 2020 distribution.
That is payable in February 2021 to be in a range of $2.40 to $2.46 per common unit.
As I previously noted extra Angie partners now expects to be able to achieve its long term distribution growth expectations without the need for additional asset acquisitions until 2022.
In summary, and as Jim highlighted we continue to believe that despite the ongoing challenges in the market and the economy, those extra energy and Nextera energy partners continue to execute and maintain their excellent prospects for growth.
We continue to remain enthusiastic about our future and are focused on delivering shareholder value going forward.
That concludes our prepared remarks, and with that we'll open up the line for questions.
[laughter].
We will now begin the question answer session ask your question Unit Press Star then one earlier Touchtone phone.
If you're using us.
Speakerphone, please pick up your house out before personalities.
Withdraw your question. Please press Star then Sue at this time, we'll pause momentarily to assemble roster.
Our first question comes from Julien Dumoulin Smith with Bank of America. Please go ahead.
Oh, Oh, it looks like we're going to go with sharp.
So with Guggenheim Partners. Please go ahead.
Hey, guys good morning.
Good morning.
So a couple of questions here.
First on the regulatory side, we've seen commissions get a bit challenges in 2020 proceedings their drilling schedules in some states. The process to Reengage is kind of open ended I know you have one of your peers is looking to falling Florida. Later. This year on you guys are planning to file a GRC until early next year combined.
Two entities that said you guys are in the process are preparing your fact, finding your meeting with various stakeholders within and outside of Nextera are you seeing any sort of colder related delays, especially as you're currently setting up to file a rate case in early next year.
Yeah, sorry, I appreciate the.
And then of course and regulatory.
Any sort of procedures and and questions that we havent funded the regulators are top of mind to us, but as we've highlighted over the last couple of months then very typical with with prior on preparation on Neal our focus for this year ahead I'm ahead of our potential filing at the beginning of.
Next year is really preparation and laying a lot of groundwork.
So at this stage in April we've got a lot of time between now and year end and really into the beginning of next year on to evaluate how things have changed and you know they adapt accordingly, but at this point our teams focus is very much on the preparation and we continue to progress well on that.
Got it and then just on near I'm, Obviously, very solid addition to the backlog than you'd certainly you and Jim gave a pretty good development landscape in the prepared remarks, but are you sort of seeing any hesitation on the part of Counterparties.
You know he does the current economic dropped backdrop kind of.
Some of these counterparties and.
So you still have about four to have to five gigawatts that are waiting for PPA phase over the next couple of years. So I'm just curious if you're seeing any kind of counterparties bulk.
So we're very pleased with where we are obviously highlighted in the prepared remarks that we are now well within the range.
For the development expectations that we laid out last year, which at this stage in in and progression towards the end of 2022, we are very well positioned to execute on everything that we've laid out I'm more specifically in the last couple of weeks on this we also highlight in the prepared remarks, John in the energy resources team has executed.
Good terrifically, well and many if not most of those contracts that we highlighted I have been signed on since you know the pandemic was starting to emerge and ultimately on the top of mind of of our customers.
So if you think about the backdrop of why that might be.
It renewables are the lease costs one of generation.
And in many cases are far cheaper than the alternate form a generation is that's continuing to operate a very inexpensive excuse me very expensive and inefficient coal and some nuclear facilities and our customers will save their customers money when they turn those plants off and replace them with renewables.
So we.
I'd expect that as our customers focus on what's best for their customers. They will continue to continue to want to build renewables and into their portfolio and we're very well positioned to execute.
Got it and that is once you are this is this is John I mean, just add onto that.
We are seeing just so terrific development and.
Our men in front of US you know for all the reasons that.
Rebecca mentioned and the fact that we buy cheaper rebuild cheaper we operate cheaper we have the best development skills in the industry customers more than anything right now.
Want confidence and.
Certainly.
That are project is going to get built so we're actually seeing more opportunities come our way.
Given that we compete against a lot of small players in both solar and wind.
Access to capital.
In a balance sheet, which we have.
It is extremely important and are something that we plan to leverage to create even more opportunities going forward. So actually on a current environment has created a better environment for us.
Perfect and then just maybe I'm, Jim just one strategy question per.
Okay and that you'd love to address these there's obviously theres, obviously been a lot of valuation dispersions in this space in our Jacksonville, and Santee Cooper it looks like they're done I mean, you've been highlighted in media with potential interest in Kansas and Missouri.
Do you have any sort of refresh thoughts, especially given the recent lost.
Annuities I can I just mentioned as you sort of think about consolidation.
So first of all.
Just to address Simi Cooper for for a moment soon Cooper is by no means gum and I think you all saw the speaker the house a.
The letter to Sandy Cooper basic calling them a road agency the governor wants to sell them. So it's not done a you know it you know the disagreements in the Senate around or what to do see any cooper with a bit of a stand off around the budget in the middle demand dynamic and you can obviously.
It's a topic that is a quite hotly debated in South Carolina, but I would say by no means is a city Cooper Dawn and are there there remains a lot of.
A lot of energy still behind a wanting to sell Santee Cooper.
So.
Just strategically overall from an M&A standpoint, I always like to just remind reman remind everyone always what are what are you know kind of gating.
Dating elements of anything that we would do it has has to make sense strategically.
Has to be significantly accretive.
No you all know how we finance these things historically its been with very little risk I'm, not a big believer in and financing.
These things in a way that either takes risk or puts it puts the balance sheet.
Risk you know strong credit rating is really critical.
Yes, and critical to our strategy. So you know all those things remain the same I think what you're going to see a in terms of the environment. Obviously is with the uncertainty in the financial markets and the uncertainty that's the with the economy, that's been driven by the.
Pandemic that I think you're gonna see counterparties.
You know take a pause right I mean, that's a natural that's a natural reaction to the environment that we're in but.
Our our strategic thinking around it remains unchanged and our approach to it.
You know remains unchanged in the you know it will be.
He has to be strategic has to be accretive has to be consistent with a very strong balance sheet.
Got it congrats guys on these results congrats again.
Thank you.
[laughter].
Our next question will come from Steve question.
Look Wolfe research. Please go ahead.
Yes, good morning.
Just a couple of questions on any PD.
Actually the.
The extension of non leading any new assets.
Through 20, I guess through the end of 21 to meet your.
Dividend growth targets is that also true for any equity financing.
For them.
Ah, yes, essentially it's Steve the on there wouldn't be any need obviously, we had the existing comfortable equity portfolio financings and the convertible to that that would potentially you convert into equity in its.
For this year, but there's no new issuances required on and we highlighted I'm on the a in the prepared remarks that we had significant liquidity a mere foreign access has other of what we would need particularly since we don't need acquisitions to meet those distribution growth targets a until 2022.
And then secondly, I think there was a comment.
And I guess it was Jim slide that.
The private infrastructure capital demand for high quality.
Clean energy assets provides attractive financing source even in this environment.
Or regardless of market conditions, maybe give a little more color.
On.
On your thought process there.
Yeah, Steve on it is as you well no one of the things that we've been particularly attuned to over the last I call. It 18 months on is that there is a lot of private infrastructure capital and the evidence of that is apparent with the convertible equity portfolio financings that we have executed.
Since that time and since the you know I'll just call. It the pandemic timeframe. So in the last couple of months a there's continued to be a significant amount of inbound interest and continuing conversations with the number of those parties to provide capital to any p. and various forms on so we have not seen any changes.