Q3 2021 Nextera Energy Inc and Nextera Energy Partners LP Earnings Call

October 20, 2021

Operator: Good morning, everyone, and welcome to the NextEra Energy and NextEra Energy Partners Q3 2021 earnings call. All participants will be in a 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. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Jessica Aldridge, Director of Investor Relations. Ma'am, please go ahead.

Good morning, everyone and welcome to the Nextera energy and Nextera Energy Partners Q3, 2021 earnings call.

All participants will be in a listen only mode should you need assistance.

Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, there will be an opportunity to ask questions. Please.

Please also note today's event is being recorded.

At this time I'd like to turn the conference call over to Jessica Aldridge Director of Investor Relations Ma'am. Please.

It's been said.

Jessica Aldridge: Thank you, Jamie. Good morning, everyone, and thank you for joining our Q3 2021 combined earnings conference call for NextEra Energy and NextEra Energy Partners. With me this morning are Jim Robo, Chairman and Chief Executive Officer of NextEra Energy; Rebecca Kujawa, Executive Vice President and Chief Financial Officer of NextEra Energy; John Ketchum, President and Chief Executive Officer of NextEra Energy Resources; and Mark Hickson, Executive Vice President of NextEra Energy, all of whom are also officers of NextEra Energy Partners, as well as Eric Silagy, President and Chief Executive Officer of Florida Power & Light Company. Rebecca will provide an overview of our results, and 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.

Thank you Jamie.

Good morning, everyone and thank you for joining our third quarter 2021, combined earnings conference call for Nextera energy and Nextera Energy partners.

With me. This morning are Jim Robo, Chairman and Chief Executive Officer of Nextera Energy, Rebecca Kujawa Executive Vice President and.

Please go ahead and actual officer of Nextera Energy, John Ketchum, President and Chief Executive Officer of Nextera Energy resources, and Mark Hickson Executive Vice President of Nextera Energy all of whom are also officers of Nextera energy partners as well as Eric <unk>, President and Chief Executive Officer of Florida Power and light company.

Rebecca will provide an overview of our results, and 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. 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, in the comments made during this conference call, in the risk factor 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 websites, nexteraenergy.com and nexteraenergypartners.com.

Chief Rebecca will provide an overview of our results and 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.

Jessica Aldridge: 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, in the comments made during this conference call, in the risk factor 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 websites, nexteraenergy.com and nexteraenergypartners.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. As a reminder, Gulf Power legally merged into Florida Power & Light Company effective on 1 January 2021.

Actual results could differ materially from our forward looking statements.

<unk> 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 websites Nextera energy Dot com.

Sarah Energy Partners' dotcom.

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. As a reminder, Gulf Power legally merged into Florida Power & Light Company effective on 1 January 2021.

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 definitions all information and reconciliations of historical.

Oracle non-GAAP measures to the closest GAAP financial measure.

As a reminder, Gulf power legally merged into Florida power and light company effective on January one 2021.

Jessica Aldridge: Gulf Power will continue as a separate reportable segment within Florida Power & Light and NextEra Energy through 2021, serving its existing customers under separate retail rates. Throughout today's presentation, when we refer to FPL, we are referring to Florida Power & Light excluding Gulf Power unless otherwise noted or when using the term combined. With that, I will turn the call over to Rebecca.

Gulf Power will continue as a separate reportable segment within Florida Power & Light and NextEra Energy through 2021, serving its existing customers under separate retail rates. Throughout today's presentation, when we refer to FPL, we are referring to Florida Power & Light excluding Gulf Power unless otherwise noted or when using the term combined. With that, I will turn the call over to Rebecca.

Gulf Power will continue as a separate reportable segment within Florida power and light and Nextera energy through 2020.

One serving its existing customers under separate retail rates.

Throughout today's presentation, when we refer to F. P. L. We're referring to Florida power and light, excluding Gulf power, unless otherwise noted or when using the term combined.

With that I will turn the call over to Rebecca.

Rebecca J. Kujawa: Thank you, Jessica, and good morning, everyone. NextEra Energy delivered strong Q3 results with adjusted earnings per share increasing by approximately 12% year over year. Both the principal businesses executed well on major initiatives, and we continue to advance our opportunity set for new renewables and storage. Building upon solid progress made in the first half of the year, NextEra Energy is well-positioned to meet its overall objectives for 2021 and beyond. Earlier this month, we were honored to be named on Fortune's 2021 Change the World list, the only electric utility in the world to be recognized. This recognition is a testament to NextEra Energy's best-in-class position in the renewable energy sector and our continued commitment to the customers and communities that we serve. At FPL, net income increased approximately 10% versus the prior year comparable period, reflecting contributions from continued investment in the business.

Rebecca Kujawa: Thank you, Jessica, and good morning, everyone. NextEra Energy delivered strong Q3 results with adjusted earnings per share increasing by approximately 12% year over year. Both the principal businesses executed well on major initiatives, and we continue to advance our opportunity set for new renewables and storage. Building upon solid progress made in the first half of the year, NextEra Energy is well-positioned to meet its overall objectives for 2021 and beyond. Earlier this month, we were honored to be named on Fortune's 2021 Change the World list, the only electric utility in the world to be recognized.

Thank you Jessica and good morning.

Morning, everyone Nextera energy delivered strong third quarter results with adjusted earnings per share increasing by approximately 12% year over year.

Both the principal businesses executed well on major initiatives and we continue to advance our opportunity set for new renewables and storage building upon solid progress made in the first half of the year.

Year, Nextera energy is well positioned to meet its overall objectives for 2021 and beyond.

Earlier. This month, we were honored to be named Unfortunately, 2021 change the World list the only electric utility in the world to be recognized.

This recognition is a testament to NextEra Energy's best-in-class position in the renewable energy sector and our continued commitment to the customers and communities that we serve. At FPL, net income increased approximately 10% versus the prior year comparable period, reflecting contributions from continued investment in the business. Most notably, during the quarter, we reached what we believe is a fair and constructive long-term settlement agreement with a number of interveners in our rate case, continuing a long history of negotiated outcomes that benefit both customers and shareholders.

This recognition is a testament to Nextera Energy's best in class position in the.

<unk> energy sector, and our continued commitment to the customers and communities that we serve.

At FPL net income accrete increased approximately 10% versus the prior year comparable period, reflecting contributions from continued investment in the business.

Rebecca J. Kujawa: Most notably, during the quarter, we reached what we believe is a fair and constructive long-term settlement agreement with a number of interveners in our rate case, continuing a long history of negotiated outcomes that benefit both customers and shareholders. We believe the agreement, if approved, should enable us to continue to focus on operating the business efficiently while investing in the future to ensure resilience, reliability, affordability, and clean energy for generations to come in Florida. We expect the Florida Public Service Commission to vote on our agreement at its agenda conference on 26 October, and I'll provide more details on the proposed agreement in a few minutes.

Notably during the quarter, we reached what we believe is a fair and constructive long.

Our renewable I'm in agreement with a number of intervenors in our rate case, continuing a long history of negotiated outcomes that benefit both customers and shareholders.

We believe the agreement, if approved, should enable us to continue to focus on operating the business efficiently while investing in the future to ensure resilience, reliability, affordability, and clean energy for generations to come in Florida. We expect the Florida Public Service Commission to vote on our agreement at its agenda conference on 26 October, and I'll provide more details on the proposed agreement in a few minutes. FPL's major capital initiatives continue to progress well, including what will be the world's largest integrated solar power battery system, the 409-MW FPL Manatee Energy Storage Center that is now 75% complete and on track to begin serving customers later this year.

We believe the agreement if approved should enable us to continue to focus on operating the business efficiently while investing in the future to ensure resilience reliable.

Term subtlety affordability and clean energy for generations to come in Florida.

We expect the Florida Public service Commission to vote on our agreement and its agenda conference on October 26, and I'll provide more details on the proposed agreement in a few minutes.

Rebecca J. Kujawa: FPL's major capital initiatives continue to progress well, including what will be the world's largest integrated solar power battery system, the 409-MW FPL Manatee Energy Storage Center that is now 75% complete and on track to begin serving customers later this year. Gulf Power also had a great quarter of execution, and its strong year-to-date financial performance is attributable to continued successful implementation of the cost reduction initiatives and smart capital investments that we previously outlined. Gulf Power's year-to-date net income contribution increased approximately 14% versus the prior year comparable period, and we remain focused on improving Gulf Power's value proposition by providing lower costs, higher reliability, outstanding customer service, and clean energy solutions for the benefit of our customers. At Energy Resources, adjusted earnings for the quarter increased by approximately 12% year over year.

Fpl's major capital initiatives continue to progress well, including.

A liability the worlds largest integrated solar power battery system. The 409 megawatt S. P. L. Manatee energy storage center that is now 75% complete and on track to begin serving customers later this year.

Gulf Power also had a great quarter of execution, and its strong year-to-date financial performance is attributable to continued successful implementation of the cost reduction initiatives and smart capital investments that we previously outlined. Gulf Power's year-to-date net income contribution increased approximately 14% versus the prior year comparable period, and we remain focused on improving Gulf Power's value proposition by providing lower costs, higher reliability, outstanding customer service, and clean energy solutions for the benefit of our customers. At Energy Resources, adjusted earnings for the quarter increased by approximately 12% year over year.

Gulf Power also had a great quarter of execution and its strong year to date financial performance is attributable.

What will be the continued successful implementation of the cost reduction initiatives and smart capital investments that we previously outlined.

Gulf Power's year to date net income contribution increased approximately 14% versus the prior year comparable period, and we remain focused on improving Gulf power value proposition by providing lower costs.

Higher reliability outstanding customer service and clean energy solutions for the benefit of our customers.

At energy resources adjusted earnings for the quarter increased by approximately 12% year over year.

Rebecca J. Kujawa: Our development team had another terrific quarter of new renewables and storage origination, adding approximately 2,160 megawatts to our backlog since the last earnings call, marking the best quarter of overall origination and the best quarter of new wind additions in Energy Resources history. These backlog additions include approximately 225 megawatts of combined solar and storage projects and a 500-megawatt wind project that is intended to power an adjacent new green hydrogen facility, which I'll provide some additional details on in just a few minutes. We continue to expect that our competitive advantages will drive meaningful growth in renewables and various forms of energy storage at Energy Resources in the coming years as the trend towards broad decarbonization across many facets of the US economy takes hold.

Our development team had another terrific quarter of new renewables and storage origination, adding approximately 2,160 megawatts to our backlog since the last earnings call, marking the best quarter of overall origination and the best quarter of new wind additions in Energy Resources history. These backlog additions include approximately 225 megawatts of combined solar and storage projects and a 500-megawatt wind project that is intended to power an adjacent new green hydrogen facility, which I'll provide some additional details on in just a few minutes.

Our development team had another terrific quarter of new renewables and storage origination adding approximately.

2160 megawatts to our backlog since the last earnings call, marking the best quarter of overall origination and the best quarter of new wind additions in energy Resources' history.

These backlog additions include approximately 225 megawatts of combined solar and storage projects and a 500 megawatt.

What wind project that is intended to power an adjacent new green hydrogen facility, which I'll provide some additional details on in just a few minutes.

We continue to expect that our competitive advantages will drive meaningful growth in renewables and various forms of energy storage at Energy Resources in the coming years as the trend towards broad decarbonization across many facets of the US economy takes hold. Overall, with three strong quarters complete in 2021, we are pleased with the progress we are making at NextEra Energy, and we are well-positioned to achieve the full-year financial expectations that we have previously discussed, subject to our usual caveats. Now let's look at the detailed results, beginning with FPL. For Q3 2021, FPL reported net income of $836 million, or $0.42 per share, which is an increase of $79 million and $0.04 per share, respectively, year-over-year.

We continue to expect that our competitive advantages will drive meaningful growth in renewables and various forms of energy storage at energy resources in the coming years.

As the trend towards broad de.

Carbonization across many facets of the U S economy takes hold.

Rebecca J. Kujawa: Overall, with three strong quarters complete in 2021, we are pleased with the progress we are making at NextEra Energy, and we are well-positioned to achieve the full-year financial expectations that we have previously discussed, subject to our usual caveats. Now let's look at the detailed results, beginning with FPL. For Q3 2021, FPL reported net income of $836 million, or $0.42 per share, which is an increase of $79 million and $0.04 per share, respectively, year-over-year. Regulatory capital employed increased by approximately 10.5% over the same quarter last year and was the principal driver of FPL's year-over-year net income growth of approximately 10%. FPL's capital expenditures were approximately $1.5 billion in the third quarter, and we expect its full-year capital investments to total between $6.6 and 6.8 billion.

Overall with three strong quarters complete in 2021, we are pleased with the progress we are making at Nextera energy and we are well positioned to achieve the full year financial expectations that we have previously discussed subject to our usual caveats.

So let's look at the detailed results beginning with FPL.

For the third quarter of 2021, FPL reported net income of 836 million or <unk> 42 per share, which is an increase of $79 million.04 per share respectively year over year.

Regulatory capital employed increased by approximately 10.5% over the same quarter last year and was the principal driver of FPL's year-over-year net income growth of approximately 10%. FPL's capital expenditures were approximately $1.5 billion in the third quarter, and we expect its full-year capital investments to total between $6.6 and 6.8 billion. Our reported ROE for regulatory purposes will be approximately 11.6% for the 12 months ended September 2021. During the quarter, we restored $124 million of reserve amortization, leaving FPL with a balance of $597 million.

Regulatory regulatory capital employed increased.

Next only 10, 5% over the same quarter last year and was the principal driver of Fpl's year over year net income growth of approximately 10%.

Fpl's capital expenditures were approximately $1 $5 billion in the third quarter and we expect its full year capital investments to total between $6 six and $6 $8 billion.

Rebecca J. Kujawa: Our reported ROE for regulatory purposes will be approximately 11.6% for the 12 months ended September 2021. During the quarter, we restored $124 million of reserve amortization, leaving FPL with a balance of $597 million. As you know, much of the East Coast of the US was recently impacted by Hurricane Ida, which made landfall on the Gulf Coast as a Category 4 hurricane and also caused catastrophic flooding across the northeastern US. Our deepest sympathies are with those that have been impacted by Ida's widespread destruction. We value deeply the industry's commitment to mutual assistance, and we were fortunate to be in a position to assist other utilities this year. As part of our assistance efforts, we sent more than 1,250 of our employees and contractors, as well as transmission equipment and other supplies, to help rebuild the grid to support the restoration efforts of the impacted utilities.

By our prior reported ROE for regulatory purposes will be approximately 11, 6% for the 12 months ended September 2021.

During the quarter, we restored $124 million of reserve amortization, leaving FPL with a balance of $597 million.

As you know, much of the East Coast of the US was recently impacted by Hurricane Ida, which made landfall on the Gulf Coast as a Category 4 hurricane and also caused catastrophic flooding across the northeastern US. Our deepest sympathies are with those that have been impacted by Ida's widespread destruction. We value deeply the industry's commitment to mutual assistance, and we were fortunate to be in a position to assist other utilities this year. As part of our assistance efforts, we sent more than 1,250 of our employees and contractors, as well as transmission equipment and other supplies, to help rebuild the grid to support the restoration efforts of the impacted utilities.

As you know much of.

Coasts of the U S was recently impacted by Hurricane Ida, which made landfall in the Gulf Coast as a category four hurricane and also caused catastrophic flooding across the northeastern U S.

Our deepest sympathies are with those that have been impacted by either as widespread destruction.

We value deeply the industry's commitment to view to mutual.

Eastern and we were fortunate to be in a position to assist other utilities this year.

As part of our assistance efforts, we sent more than 1250 of our employees and contractors as well as transmission equipment and other supplies to help rebuild the grid to support the restoration efforts of the impacted utilities.

Rebecca J. Kujawa: Let me now turn to Gulf Power, which reported third quarter 2021 net income of $91 million, or $0.05 per share. Gulf Power's third quarter EPS contribution was flat versus the prior year comparable quarter. As a reminder, the third quarter of 2020 benefited from the reversal of COVID-19-related expenses that had occurred earlier in that year. During the quarter, Gulf Power's regulatory capital employed grew by approximately 13% year over year. Gulf Power's capital expenditures were approximately $200 million during the third quarter, and we expect its full-year capital investments to be roughly $800 million. For the full year 2021, we continue to expect Gulf Power's regulatory ROE to be in the upper half of the allowed band of 9.25% to 11.25%. All of our major capital initiatives at Gulf Power are progressing well.

Let me now turn to Gulf Power, which reported third quarter 2021 net income of $91 million, or $0.05 per share. Gulf Power's third quarter EPS contribution was flat versus the prior year comparable quarter. As a reminder, the third quarter of 2020 benefited from the reversal of COVID-19-related expenses that had occurred earlier in that year. During the quarter, Gulf Power's regulatory capital employed grew by approximately 13% year over year. Gulf Power's capital expenditures were approximately $200 million during the third quarter, and we expect its full-year capital investments to be roughly $800 million.

The system, let me now turn to Gulf power, which reported third quarter 2021, net income of $91 million or <unk> <unk> per share.

Gulf Power's third quarter, EPS contribution was flat versus the prior year comparable quarter.

As a reminder, the third quarter of 2020 benefited from the reversal of COVID-19 related expenses that had occurred earlier.

Yeah.

During the quarter Gulf Power's regulatory capital employed group grew by approximately 13% year over year.

Gulf Power's capital expenditures were approximately $200 million during the third quarter and we expect its full year capital investments to be roughly $800 million.

For the full year 2021, we continue to expect Gulf Power's regulatory ROE to be in the upper half of the allowed band of 9.25% to 11.25%. All of our major capital initiatives at Gulf Power are progressing well. Gulf Power anticipates bringing approximately 150MW of cost-effective zero-emission solar capacity online within the next six months. The North Florida Resiliency Connection, which, among other things, will allow customers to benefit from greater diversity in solar output across the two different time zones, is expected to be in service in mid-2022. These continued smart capital investments in renewables and core infrastructure are expected to drive customer benefits for many years to come.

For the full year 2021, we continue to.

Or in that Gulf Power's regulatory Roe to be in the upper half of the allowed band of $9 two 5% to 11.25%.

All of our major capital initiatives at Gulf power are progressing well.

Rebecca J. Kujawa: Gulf Power anticipates bringing approximately 150MW of cost-effective zero-emission solar capacity online within the next six months. The North Florida Resiliency Connection, which, among other things, will allow customers to benefit from greater diversity in solar output across the two different time zones, is expected to be in service in mid-2022. These continued smart capital investments in renewables and core infrastructure are expected to drive customer benefits for many years to come. During the quarter, Gulf Power was impacted by Tropical Storm Fred, which experienced an unexpected change in path before striking the service territory. Through a restoration workforce of roughly 1,700 personnel, Gulf Power was able to restore service to essentially all of the approximately 20,000 customers impacted by Fred in Northwest Florida in less than 24 hours. Moreover, the average customer outage was restored in less than two hours.

Gulf power anticipates, bringing approximately 150 megawatts of cost effective zero emission solar capacity.

We expect online within the next six months.

The North, Florida, resiliency connection, which among other things will allow customers to benefit from greater diversity in solar output across the two different time zones is expected to be in service in mid 2022.

These continued smart capital investments in renewables and core infrastructure.

Capacity to drive customer benefits for many years to come.

During the quarter, Gulf Power was impacted by Tropical Storm Fred, which experienced an unexpected change in path before striking the service territory. Through a restoration workforce of roughly 1,700 personnel, Gulf Power was able to restore service to essentially all of the approximately 20,000 customers impacted by Fred in Northwest Florida in less than 24 hours. Moreover, the average customer outage was restored in less than two hours. Our culture of preparation, including our annual storm drills and the team's focused execution, helped ensure an efficient, timely, and safe response to the tropical storm.

During the quarter Gulf power was impacted by tropical storm, Fred which experienced an unexpected change in past before striking the service territory.

Through a restoration workforce of a roughly 1700 personnel Gulf power was able to restore service to essentially all.

All of the approximate approximately 20000 customers impacted by Fred in northwest, Florida, and less than 24 hours.

Moreover, the average customer outage was restored in less than two hours.

Rebecca J. Kujawa: Our culture of preparation, including our annual storm drills and the team's focused execution, helped ensure an efficient, timely, and safe response to the tropical storm. The economy in Florida continues to grow at a healthy pace and remains among the strongest in the nation. Florida's labor force participation rate has recovered to its highest level in nearly 18 months, reflecting the ongoing recovery following the onset of the COVID-19 pandemic last year. The real estate sector in Florida also continues to grow, with a three-month average new housing start up over 40% year over year. In August alone, there were twice as many new housing starts in Florida than in the average over the last 10 years. Florida building permits, a leading indicator of residential new service accounts, are up 47% year over year and have outpaced the nation's quarterly growth by 32%.

Our culture of a preparation, including our annual storm drills and the team's focused execution helped ensure an efficient.

Timely and safe response to the tropical storm.

The economy in Florida continues to grow at a healthy pace and remains among the strongest in the nation. Florida's labor force participation rate has recovered to its highest level in nearly 18 months, reflecting the ongoing recovery following the onset of the COVID-19 pandemic last year. The real estate sector in Florida also continues to grow, with a three-month average new housing start up over 40% year over year. In August alone, there were twice as many new housing starts in Florida than in the average over the last 10 years. Florida building permits, a leading indicator of residential new service accounts, are up 47% year over year and have outpaced the nation's quarterly growth by 32%.

The economy in Florida continues to grow at a healthy pace and remains among the strongest in the nation.

Corridors Labor force participation rate has recovered to its highest level in nearly 18 months, reflecting the ongoing recovery. Following the onset of the COVID-19 pandemic last year.

The real estate sector in Florida also continues to grow with a three month average new housing starts up over 40% year over year.

In August alone. There are there were twice as many new housing starts in Florida than in the average over the last 10 years.

Florida building permits a leading indicator of residential.

<unk> service accounts are up 47% year over year and have outpaced the nation's quarterly growth by 32%.

Rebecca J. Kujawa: As another indicator of Florida's economic health, Florida's retail sales index is up nearly 60% versus the prior year. During the quarter, FPL's average number of customers increased by approximately 77,500, or 1.5% from the comparable year prior quarter, driven by continued solid underlying population growth. FPL's third quarter retail sales decreased 1.4% from the prior year comparable period. A decline in weather-related usage per customer of approximately 2.7% offset the benefits of customer growth. On a weather-normalized basis, third quarter sales increased 1.3%, with continued strong underlying usage contributing favorably. For Gulf Power, the average number of customers grew 1.6% versus the comparable prior year quarter, and Gulf Power's third quarter retail sales increased 0.6% year over year, with strong usage from increased customer growth contributing favorably.

As another indicator of Florida's economic health, Florida's retail sales index is up nearly 60% versus the prior year. During the quarter, FPL's average number of customers increased by approximately 77,500, or 1.5% from the comparable year prior quarter, driven by continued solid underlying population growth. FPL's third quarter retail sales decreased 1.4% from the prior year comparable period. A decline in weather-related usage per customer of approximately 2.7% offset the benefits of customer growth. On a weather-normalized basis, third quarter sales increased 1.3%, with continued strong underlying usage contributing favorably.

As another indicator of Florida's economic Health, Florida retail sales index is up nearly 60% versus the prior year.

During the quarter Fpl's average number of customers increased by approximately.

<unk> 7500, or one 5% from the comparable year prior quarter, driven by driven by continued solid underlying population growth.

<unk> third quarter retail sales decreased one 4% from the prior year comparable period.

A decline in weather related usage per customer of approximately two 7% offer.

17th fits of customer growth.

On a weather normalized basis third quarter sales increased one 3% with continued strong underlying usage contributing favorably.

For Gulf Power, the average number of customers grew 1.6% versus the comparable prior year quarter, and Gulf Power's third quarter retail sales increased 0.6% year over year, with strong usage from increased customer growth contributing favorably. As a reminder, on 12 March, we initiated Florida Power & Light's 2021 base rate proceeding for rate relief beginning in January 2022.

For Gulf power. The average number of customers grew one 6% versus the comparable prior year quarter and Gulf Power's third quarter retail sales increased <unk> six.

The band at year over year with strong usage from increased customer growth contributing favorably.

Rebecca J. Kujawa: As a reminder, on 12 March, we initiated Florida Power & Light's 2021 base rate proceeding for rate relief beginning in January 2022. After months of negotiation, we reached a proposed settlement agreement in early August with a number of interveners in the proceeding: the Office of Public Counsel, the Florida Retail Federation, the Florida Industrial Power Users Group, the Southern Alliance for Clean Energy, Vote Solar, the CLEO Institute, and the Federal Executive Agencies all joined the agreement, reflecting a broad set of constituents across our customer base. The four-year proposed agreement, which begins on January 2022, provides for retail base revenue adjustments, as shown on the accompanying slide, an allowed regulatory return on equity of 10.6% with a range of 9.7% to 11.7%, and no change to FPL's equity ratio from investor sources for the combined system. Should the average 30-year US

As a reminder, on March 12, we initiated Florida highlights 2021 base rate proceeding for rate relief beginning in January of 2022.

After months of negotiation, we reached a proposed settlement agreement in early August with a number of interveners in the proceeding: the Office of Public Counsel, the Florida Retail Federation, the Florida Industrial Power Users Group, the Southern Alliance for Clean Energy, Vote Solar, the CLEO Institute, and the Federal Executive Agencies all joined the agreement, reflecting a broad set of constituents across our customer base. The four-year proposed agreement, which begins on January 2022, provides for retail base revenue adjustments, as shown on the accompanying slide, an allowed regulatory return on equity of 10.6% with a range of 9.7% to 11.7%, and no change to FPL's equity ratio from investor sources for the combined system.

After months of negotiation, we reached a proposed settlement agreement in early.

Six first of all guest with a number of intervenors in the proceeding.

The office of public counsel, the Florida retail Federation, the Florida Industrial power users group.

The Southern Alliance for clean energy votes solar the Clio Institute and the federal executive agencies, all joined the agreement, reflecting a broad set of constituents.

Early offs, our customer base.

The four year proposed agreement, which begins in January 2022 provides for retail base revenue adjustments as shown on the accompanying slide and allowed regulatory return on equity of 10, 6% with a range of nine 7% to 11, 7%.

And no change.

Across Fpl's equity ratio from Investor sources for the combined system.

Should the average 30-year US Treasury yield is 2.49% or greater over any consecutive six-month period during the term of the agreement, Florida Power & Light's allowed regulatory ROE would increase to 10.8% with a range of 9.8% to 11.8%. Additionally, if federal or state permanent corporate income tax changes become effective during the term of the proposed agreement, Florida Power & Light would be able to prospectively adjust base rates after review of the impacts on base revenue requirements. The proposed agreement also includes flexibility over the four-year term to amortize up to $1.45 billion of depreciation reserve surplus.

Should the average 30 year U S treasury yield b, 2.49% or greater over any consecutive six months period. During the term of the agreement, Florida power and light allowed regulatory ROE E with increased to 10, 8% with a range of.

Rebecca J. Kujawa: Treasury yield is 2.49% or greater over any consecutive six-month period during the term of the agreement, Florida Power & Light's allowed regulatory ROE would increase to 10.8% with a range of 9.8% to 11.8%. Additionally, if federal or state permanent corporate income tax changes become effective during the term of the proposed agreement, Florida Power & Light would be able to prospectively adjust base rates after review of the impacts on base revenue requirements. The proposed agreement also includes flexibility over the four-year term to amortize up to $1.45 billion of depreciation reserve surplus. Consistent with the rate plan filed in March, the proposed settlement agreement would unify the rates and tariffs of FPL and Gulf Power by implementing a five-year transition rider and credit mechanism to address the initial differences in costs of serving the existing FPL and Gulf Power customers.

Of nine 8% to 11, 8%.

Additionally, if federal or state permanent corporate income tax changes become effective during the term of the proposed agreement.

Florida power and light would be able to prospectively adjust base rates. After a review of the impacts on base revenue requirements.

The proposed agreement also includes.

<unk> flexibility over the four year term to amortize up to $145 billion of depreciation reserve surplus.

Consistent with the rate plan filed in March, the proposed settlement agreement would unify the rates and tariffs of FPL and Gulf Power by implementing a five-year transition rider and credit mechanism to address the initial differences in costs of serving the existing FPL and Gulf Power customers. Additionally, the proposed settlement agreement also provides for solar base rate adjustments, or SOBRA, upon reaching commercial operations of up to 894 megawatts annually of new solar generation in each of 2024 and 2025, subject to a cost cap of $1,250 per kilowatt and showing of an overall cost-effectiveness for FPL's customers.

Consistent with the rate plan filed in March the proposed settlement agreement with unify the rates and tariffs of FPL and Gulf power by implementing a five year transition writer and credit mechanism to address the initial.

It is in cost of serving the existing FPL and Gulf power customers.

Rebecca J. Kujawa: Additionally, the proposed settlement agreement also provides for solar base rate adjustments, or SOBRA, upon reaching commercial operations of up to 894 megawatts annually of new solar generation in each of 2024 and 2025, subject to a cost cap of $1,250 per kilowatt and showing of an overall cost-effectiveness for FPL's customers. FPL would also be authorized to expand its SolarTogether Voluntary Community Solar Program by constructing an additional 1,788 megawatts of solar generation through 2025, which would more than double the size of our current SolarTogether program and is expected to save our customers millions of dollars over the lifetime of the assets. In addition to solar energy, the settlement agreement would support FPL's green hydrogen pilot project in Okeechobee County. This innovative technology could one day unlock 100% carbon-free electricity that's available 24 hours a day.

Additionally, the proposed settlement agreement also provides for solar base rate adjustments or sopra upon reaching commercial operations of up to 894 megawatts annually of new solar generation in each of 2024 and 2020.

Different subject to a cost cap of $250 per month per kilowatt and showing up and overall cost effectiveness for fpl's customers.

FPL would also be authorized to expand its SolarTogether Voluntary Community Solar Program by constructing an additional 1,788 megawatts of solar generation through 2025, which would more than double the size of our current SolarTogether program and is expected to save our customers millions of dollars over the lifetime of the assets. In addition to solar energy, the settlement agreement would support FPL's green hydrogen pilot project in Okeechobee County. This innovative technology could one day unlock 100% carbon-free electricity that's available 24 hours a day.

FPL would also be authorized to expand its solar together voluntary community solar program by constructing an additional 1788 megawatts.

Five generation through 2025, which would more than double the size of our current solar together program and is expected to save our customers millions of dollars of the lifetime of the assets.

In addition to solar energy the settlement agreement with support Fpl's Green hydrogen pilot project in Okeechobee.

County, this innovative technology could one day unlock 100% carbon free electricity, that's available 24 hours a day.

Rebecca J. Kujawa: The proposed settlement agreement also introduces several electric vehicle programs and pilots designed to accelerate the growth of electric vehicle adoption and charging infrastructure investment across Florida, with a total capital investment of more than $200 million. Under the proposed agreement, FPL would continue to recover prudently incurred storm costs consistent with the framework in the current settlement agreement. Future storm restoration costs would be recoverable on an interim basis beginning 60 days from the filing of a cost recovery petition, but capped at an amount that could produce a surcharge of no more than $4 for every 1,000 kilowatt-hour of usage on residential bills during the first 12 months of cost recovery. Any additional costs would be eligible for recovery in subsequent years. If storm restoration costs were to exceed $800 million in any given calendar year, FPL could request an increase to the $4 surcharge.

The proposed settlement agreement also introduces several electric vehicle programs and pilots designed to accelerate the growth of electric vehicle adoption and charging infrastructure investment across Florida, with a total capital investment of more than $200 million. Under the proposed agreement, FPL would continue to recover prudently incurred storm costs consistent with the framework in the current settlement agreement.

With a total capital investment of more than $200 million.

Under the proposed agreement FPL would continue to recover prudently incurred storm costs consistent with the framework in the current settlement agreement.

Future storm restoration costs would be recoverable on an interim basis beginning 60 days from the filing of a cost recovery petition, but capped at an amount that could produce a surcharge of no more than $4 for every 1,000 kilowatt-hour of usage on residential bills during the first 12 months of cost recovery. Any additional costs would be eligible for recovery in subsequent years. If storm restoration costs were to exceed $800 million in any given calendar year, FPL could request an increase to the $4 surcharge.

Future storm restoration costs would be recoverable on an interim basis, beginning 60 days from the filing of a cost recovery petition.

But capped at an amount that could produce a surcharge of no more than $4 for every 1000 kilowatt hour of usage on residential bills. During the first 12 months of cost recovery.

Any additional costs would be eligible for recovery in subsequent years.

If storm restoration costs were to exceed $800 million in any given calendar year.

Year, FPL could request an increase to the $4 surcharge.

Rebecca J. Kujawa: We believe the proposed settlement is fair, balanced, and constructive, and supports our continued ability to provide highly reliable, low-cost service for our customers through the end of the decade. FPL's typical residential bill is lower today than it was 15 years ago and is well below the national average. The proposed agreement would keep typical residential bills well below the national average and among the lowest in Florida through 2025. Let me now turn to energy resources, which reported Q3 2021 GAAP losses of $428 million, or $0.22 per share. Adjusted earnings for the third quarter were $619 million, or $0.31 per share, which is an increase of $68 million and $0.03 per share, respectively, year over year.

We believe the proposed settlement is fair, balanced, and constructive, and supports our continued ability to provide highly reliable, low-cost service for our customers through the end of the decade. FPL's typical residential bill is lower today than it was 15 years ago and is well below the national average. The proposed agreement would keep typical residential bills well below the national average and among the lowest in Florida through 2025. Let me now turn to energy resources, which reported Q3 2021 GAAP losses of $428 million, or $0.22 per share. Adjusted earnings for the third quarter were $619 million, or $0.31 per share, which is an increase of $68 million and $0.03 per share, respectively, year over year.

We believe the proposed settlement is fair balanced and constructive and supports our continued ability to provide highly reliable low cost service for our customers through the end of the decade.

Fpl's typical residential bill is lower today.

Hey than it was 15 years ago and is well below the national average the proposed agreement would keep typical residential bills well below the national average and among the lowest in Florida through 2025.

Let me now turn to energy resources, which reported third quarter 2021, GAAP losses of $428 million.

Or <unk> 22 per share adjusted earnings for the third quarter were $619 million or <unk> 31 per share, which is an increase of $68 million and <unk> <unk> per share respectively year over year.

Rebecca J. Kujawa: The effect of mark-to-market on non-qualifying hedges, which is excluded from adjusted earnings, was the primary driver of the difference between energy resources' third quarter GAAP and adjusted earnings results. Contributions from new investments added $0.03 per share relative to the prior year comparable quarter, primarily reflecting continued growth in our contracted renewables and battery storage program. The contribution from existing generation assets increased $0.01 per share year over year. Our customer supply and trading business contribution was $0.02 higher year over year due to favorable market conditions in our retail supply and power marketing businesses. All other impacts decreased results by $0.03 per share versus 2020, driven primarily by miscellaneous tax items. As I mentioned earlier, the energy resources development team had a record quarter of origination success, adding approximately 2,160MW to our backlog.

The effect of mark-to-market on non-qualifying hedges, which is excluded from adjusted earnings, was the primary driver of the difference between energy resources' third quarter GAAP and adjusted earnings results. Contributions from new investments added $0.03 per share relative to the prior year comparable quarter, primarily reflecting continued growth in our contracted renewables and battery storage program. The contribution from existing generation assets increased $0.01 per share year over year. Our customer supply and trading business contribution was $0.02 higher year over year due to favorable market conditions in our retail supply and power marketing businesses.

The effect of Mark to market on non qualifying hedges, which is excluded from adjusted earnings was the primary driver of the.

The difference between energy Resources' third quarter, GAAP and adjusted earnings results.

Contributions from new investments added <unk> <unk> per share relative to the prior year comparable quarter, primarily reflecting continued growth in our contracted renewables and battery storage program.

The contribution from existing generation assets increased <unk> <unk> per share.

Share year over year.

Our customer supply and trading business contribution was <unk> higher year over year due to favorable market conditions, and our retail supply and power marketing businesses.

All other impacts decreased results by $0.03 per share versus 2020, driven primarily by miscellaneous tax items. As I mentioned earlier, the energy resources development team had a record quarter of origination success, adding approximately 2,160MW to our backlog. Since our last earnings call, we have added approximately 1,240 megawatts of new wind projects, 515 megawatts of new solar projects, and 345 megawatts of new storage assets to our renewables and storage backlog. In addition, our backlog increased by NextEra Energy Resources' share of NextEra Energy Partners' planned acquisition of an approximately 100-megawatt operating wind project that the partnership is announcing today.

All other impacts decreased results by <unk> <unk> per share versus 2020, driven primarily by miscellaneous tax items.

As I mentioned.

Earlier energy resources development team had a record quarter of origination success, adding approximately 2160 megawatts to our backlog.

Rebecca J. Kujawa: Since our last earnings call, we have added approximately 1,240 megawatts of new wind projects, 515 megawatts of new solar projects, and 345 megawatts of new storage assets to our renewables and storage backlog. In addition, our backlog increased by NextEra Energy Resources' share of NextEra Energy Partners' planned acquisition of an approximately 100-megawatt operating wind project that the partnership is announcing today. Through Q1, Q2, Q3 of 2021, we have added more than 5,700 megawatts to our renewables and storage backlog. NextEra Energy Resources' backlog of signed contracts now stands at approximately 18,100 megawatts. At this early stage, we have made terrific progress towards our long-term development expectations, with more than 7,600 megawatts of projects already in our post-2022 backlog. Our backlog additions for Q3 include a 500-megawatt wind project, the majority of which is contracted with a hydrogen fuel cell company.

Since our last earnings call. We have added approximately 1240 megawatts of new wind projects 515 megawatts of new solar projects and 300.

45 megawatts of new storage assets to our renewables and storage backlog.

In addition, our backlog increased by energy resources share of <unk> Energy partners planned acquisition of an approximately 100 megawatt operating wind project that the partnership is announcing today.

Through Q1, Q2, Q3 of 2021, we have added more than 5,700 megawatts to our renewables and storage backlog. NextEra Energy Resources' backlog of signed contracts now stands at approximately 18,100 megawatts. At this early stage, we have made terrific progress towards our long-term development expectations, with more than 7,600 megawatts of projects already in our post-2022 backlog. Our backlog additions for Q3 include a 500-megawatt wind project, the majority of which is contracted with a hydrogen fuel cell company.

Through the first three quarters of 2021.

We have added more than 5700 megawatts to our renewables and storage backlog.

Energy Resources' backlog of signed contracts now stands at approximately 18100 megawatts.

At this early stage, we have made terrific progress towards our long term development expectations with more than 7600.

<unk> megawatts of projects already in our post 2022 backlog.

Our backlog additions for the third quarter include a 500 megawatt wind project the majority of which is contracted with the hydrogen fuel cell company.

Rebecca J. Kujawa: The project's customer intends to construct a nearby hydrogen electrolyzer facility that will use the wind energy production to supply up to 100% of the facility's load requirements. The hydrogen manufactured by the facility would enable commercial and industrial end users to replace their current gray hydrogen and fossil fuel purchases with emissions-free green hydrogen, further accelerating the decarbonization of the industrial and transportation sectors. Energy resources also add nearly 300MW of battery storage projects in California, and we continue to experience significant demand from California-based utilities and commercial and industrial customers for reliable energy storage solutions. We are currently developing nearly 2,400MW of additional co-located and standalone battery storage projects in California, with the potential to be deployed in 2023 and 2024 to enhance reliability and help meet the state's energy storage capacity requirements, and ambitious clean energy goals.

The project's customer intends to construct a nearby hydrogen electrolyzer facility that will use the wind energy production to supply up to 100% of the facility's load requirements. The hydrogen manufactured by the facility would enable commercial and industrial end users to replace their current gray hydrogen and fossil fuel purchases with emissions-free green hydrogen, further accelerating the decarbonization of the industrial and transportation sectors. Energy resources also add nearly 300MW of battery storage projects in California, and we continue to experience significant demand from California-based utilities and commercial and industrial customers for reliable energy storage solutions.

The projects customer intends to construct a nearby hydrogen electrolyze our facility that will use the wind.

Production to supply up to 100% of the facility's load requirements.

The hydrogen manufactured by the facility would enable commercial and industrial end users to replace their current gray hydrogen and fossil fuel purchases with emissions free green hydrogen further accelerating the decarbonization of the industrial and transportation.

And energy sectors.

Energy resources also add nearly 300 megawatts of battery storage projects in California, and we continue to experience significant demand from California, based utilities, and commercial and industrial customers for reliable energy storage solutions.

We are currently developing nearly 2,400MW of additional co-located and standalone battery storage projects in California, with the potential to be deployed in 2023 and 2024 to enhance reliability and help meet the state's energy storage capacity requirements, and ambitious clean energy goals.

We are currently developing nearly 2400 megawatts.

Expertise additional co located and Standalone battery storage projects in California, with a potential to be deployed in 2023, and 2024 to enhance reliability and help meet the state's energy storage capacity requirements and ambitious clean energy goals.

Rebecca J. Kujawa: More than 30 years, we have been investing in clean energy in California and are proud to help the state lead the country to a carbon-free, sustainable future. Consistent with our focus on growing our rate-regulated and long-term contracted business operations, during Q3, energy resources entered into an agreement to acquire a portfolio of rate-regulated water and wastewater utility assets in eight counties near Houston, Texas. The proposed acquisition expands our regulated utility business in an attractive market with significant expected customer growth and furthers our strategy to build a world-class water utility in the coming years. Subject to regulatory approvals, the acquisition is expected to close in 2022.

More than 30 years, we have been investing in clean energy in California and are proud to help the state lead the country to a carbon-free, sustainable future. Consistent with our focus on growing our rate-regulated and long-term contracted business operations, during Q3, energy resources entered into an agreement to acquire a portfolio of rate-regulated water and wastewater utility assets in eight counties near Houston, Texas. The proposed acquisition expands our regulated utility business in an attractive market with significant expected customer growth and furthers our strategy to build a world-class water utility in the coming years. Subject to regulatory approvals, the acquisition is expected to close in 2022.

More than 30 years, we have been investing in clean energy.

It's of California and are proud to help the state lead the country to a carbon free sustainable future.

Consistent with our focus on growing our rate regulated and long term contracted business operations. During the third quarter energy resources entered into an agreement to acquire a portfolio our rate regulated water and wastewater utility assets.

<unk> and eight counties near Houston, Texas.

Post acquisition expands our regulated utility business in an attractive market with significant expected customer growth and furthers our strategy to build a world class water utility in the coming years.

Subject to regulatory approvals the acquisition is expected to close in 2020.

You too.

Rebecca J. Kujawa: Energy Resources is also currently in construction on an innovative water reuse and reclamation project that would help our customer achieve significant savings on its water supply needs and make its operations more efficient and sustainable, while at the same time delivering attractive returns to NextEra Energy Resources. While the roughly $45 million total equity investment for these transactions is small in context of our overall capital program, we are optimistic about the strong growth anticipated in this new market and the potential for clean water solutions to generate additional contracted renewables opportunities going forward. Turning now to the consolidated results for NextEra Energy. For the third quarter of 2021, GAAP net income attributable to NextEra Energy was $447 million, or $0.23 per share. NextEra Energy's 2021 third quarter adjusted earnings and adjusted EPS were $1.48 billion and $0.75 per share, respectively.

Energy Resources is also currently in construction on an innovative water reuse and reclamation project that would help our customer achieve significant savings on its water supply needs and make its operations more efficient and sustainable, while at the same time delivering attractive returns to NextEra Energy Resources. While the roughly $45 million total equity investment for these transactions is small in context of our overall capital program, we are optimistic about the strong growth anticipated in this new market and the potential for clean water solutions to generate additional contracted renewables opportunities going forward.

Energy resources is also currently in construction on an innovative water reuse and reclamation project that would help our customer achieve significant savings on its water supply needs and make its operations more efficient and sustainable while at the same time delivering attractive returns to energy resources.

While the roughly.

$45 million total equity investment for these transactions is small in context of our overall capital program. We are optimistic about the strong growth anticipated in this new market and the potential for clean water solutions to generate additional contracted renewables opportunities going forward.

Turning now to the consolidated results for NextEra Energy. For the third quarter of 2021, GAAP net income attributable to NextEra Energy was $447 million, or $0.23 per share. NextEra Energy's 2021 third quarter adjusted earnings and adjusted EPS were $1.48 billion and $0.75 per share, respectively.

Turning now to the consolidated results.

Nextera energy for the third quarter of 2021, GAAP net income attributable to Nextera energy was $447 million or 23 per share.

Extra Energy's 2021 third quarter adjusted earnings and adjusted EPS were $1.48 billion.75 per share respectively.

Rebecca J. Kujawa: Adjusted results from corporate and other segment increased by $0.01 year over year. Our long-term financial expectations through 2023 remain unchanged. For 2021, NextEra Energy expects adjusted earnings per share to be in a range of $2.40 to 2.54, and we would be disappointed not to be at or near the high end of this range. While we are pleased with our year-to-date results, which have exceeded the top end of our growth rate expectations so far for the year, we expect the Q4 results to include impacts from certain liability management activities that we are currently reviewing to take advantage of the low interest rate environment. These initiatives could generate negative adjusted EPS impacts of as much as $0.08 to $0.10 in Q4 before translating to favorable net income contributions in future years and an overall improvement in net present value for our shareholders.

Adjusted results from corporate and other segment increased by $0.01 year over year. Our long-term financial expectations through 2023 remain unchanged. For 2021, NextEra Energy expects adjusted earnings per share to be in a range of $2.40 to 2.54, and we would be disappointed not to be at or near the high end of this range. While we are pleased with our year-to-date results, which have exceeded the top end of our growth rate expectations so far for the year, we expect the Q4 results to include impacts from certain liability management activities that we are currently reviewing to take advantage of the low interest rate environment.

Adjusted results.

From corporate and other segment increased by one cent year over year.

Our long term financial expectations through 2023 remain unchanged for 2021, Nextera energy expects adjusted earnings per share to be in a range of $2 40 to.

To $2.54 and we would be disappointed not to be at.

At or near the high end of this range.

While we are pleased with our year to date results, which have exceeded the top end of our growth rate expectations. So far for the year. We expect the fourth quarter results to include impacts from certain liability management activities that we are currently reviewing to take advantage of the low interest rate environment.

These initiatives could generate negative adjusted EPS impacts of as much as $0.08 to $0.10 in Q4 before translating to favorable net income contributions in future years and an overall improvement in net present value for our shareholders. Looking further ahead for 2022 and 2023, NextEra Energy expects to grow 6% to 8% off of the expected 2021 adjusted earnings per share, and we would be disappointed if we are not able to deliver financial results at or near the top end of these ranges in 2022 and 2023. Our earnings expectations are supported by what we believe is the most attractive organic investment opportunity set in our industry.

These initiatives.

Could generate negative adjusted EPS impacts of as much as 8% to 10 cents in the fourth quarter before translating to favorable net income contributions in future years, and an overall improvement in net present value for our shareholders.

Rebecca J. Kujawa: Looking further ahead for 2022 and 2023, NextEra Energy expects to grow 6% to 8% off of the expected 2021 adjusted earnings per share, and we would be disappointed if we are not able to deliver financial results at or near the top end of these ranges in 2022 and 2023. Our earnings expectations are supported by what we believe is the most attractive organic investment opportunity set in our industry. From 2018 to 2023, we continue to expect that operating cash flow will grow roughly in line with our adjusted EPS compound annual growth rate range. We also continue to expect to grow our dividends per share at roughly 10% rate per year through at least 2022 off of a 2020 base. As always, our expectations assume normal weather and operating conditions.

Looking further ahead for 2022 and 2023 Nextera energy expects.

To grow 6% to 8% off of the expected too.

2021, adjusted earnings per share and we would be disappointed if we're not able to deliver financial results at or near the top end of these ranges in 2022 and 2023.

Our earnings expectations are supported by what we believe is the most attractive organic <unk>.

The opportunity set in our industry.

From 2018 to 2023, we continue to expect that operating cash flow will grow roughly in line with our adjusted EPS compound annual growth rate range. We also continue to expect to grow our dividends per share at roughly 10% rate per year through at least 2022 off of a 2020 base. As always, our expectations assume normal weather and operating conditions. Let me now turn to NextEra Energy Partners, which performed well and delivered third quarter results generally in line with our expectations.

From 2018 to 2023, we continue to expect that operating cash flow will grow roughly in line with our adjusted EPS compound annual growth rate range.

We also continue to expect to grow our dividends per share at roughly 10% rate per year through at least 2022.

Off of a 2020 base.

As always our expectations assume normal weather and operating conditions.

Rebecca J. Kujawa: Let me now turn to NextEra Energy Partners, which performed well and delivered third quarter results generally in line with our expectations. Yesterday, the NextEra Energy Partners board declared a quarterly distribution of $0.685 per common unit, or $2.74 per common unit on an annualized basis, continuing our track record of growing distributions at the top end of our 12% to 15% per year growth range. Inclusive of this increase, NextEra Energy Partners has now grown its distribution per unit by more than 265% since the IPO. NextEra Energy Partners continues to execute against its growth initiatives during the quarter. Since the last earnings call, NextEra Energy Partners closed on its previously announced acquisitions of approximately 400MW of operating wind projects from a third party and approximately 590 net MW of geographically diverse wind and solar projects from NextEra Energy Resources.

Let me now turn to Nextera energy partners, which performed well and delivered third quarter results generally in line with our expectations.

Yesterday, the NextEra Energy Partners board declared a quarterly distribution of $0.685 per common unit, or $2.74 per common unit on an annualized basis, continuing our track record of growing distributions at the top end of our 12% to 15% per year growth range. Inclusive of this increase, NextEra Energy Partners has now grown its distribution per unit by more than 265% since the IPO. NextEra Energy Partners continues to execute against its growth initiatives during the quarter. Since the last earnings call, NextEra Energy Partners closed on its previously announced acquisitions of approximately 400MW of operating wind projects from a third party and approximately 590 net MW of geographically diverse wind and solar projects from NextEra Energy Resources.

Yesterday, the Nextera energy Partners' Board declared a quarterly distribution of <unk>.

68, and a half cents per common unit or $2 74 per common unit on an annualized basis, continuing our track record of growing distributions at the top end of our 12% to 15% per year growth range.

Inclusive of this increase Nextera energy partners has now grown its distribution per unit by more than 200.

<unk> hundred 65% since the IPO.

Next strategy partners continues to execute against its growth initiatives during the quarter since the last earnings call Nextera Energy partners closed on its previously announced acquisitions of approximately 400 megawatts of operating wind projects from a third party.

And approximately 590 net megawatts.

Lots of geographically diverse wind and solar projects from energy resources.

Rebecca J. Kujawa: In addition, today we are announcing an agreement to acquire an approximately 100MW operating wind asset in California from a third party to further expand NextEra Energy Partners' portfolio and enhance its long-term growth visibility. The project is located in a strategic market with strong expected growth in renewables demand, and it also offers significant optionality to NextEra Energy Partners in terms of operational savings and long-term value creation. NextEra Energy Partners intends to purchase the asset for a total consideration of approximately $280 million, subject to closing adjustments, which includes the assumption of approximately $150 million in existing project finance debt estimated at the time of closing. NextEra Energy Partners expects to recapitalize this project finance debt in 2022 as it executes on its overall financing plan for the year. We expect to fund the approximately $130 million balance of the purchase price using existing debt capacity.

In addition, today we are announcing an agreement to acquire an approximately 100MW operating wind asset in California from a third party to further expand NextEra Energy Partners' portfolio and enhance its long-term growth visibility. The project is located in a strategic market with strong expected growth in renewables demand, and it also offers significant optionality to NextEra Energy Partners in terms of operational savings and long-term value creation. NextEra Energy Partners intends to purchase the asset for a total consideration of approximately $280 million, subject to closing adjustments, which includes the assumption of approximately $150 million in existing project finance debt estimated at the time of closing.

In addition, today, we are announcing an agreement to acquire an approximately 100 megawatt operating wind asset in California from a third party to further expand Nextera energy partners' portfolio and enhance its long term growth visibility.

The project.

Is located in a strategic market with strong expected growth in renewables demand and it also offers significant optionality to next turn to your partners in terms of operational savings and long term value creation.

Nextera energy partners intends to purchase the asset for total consideration of approximately 280.

Million.

Subject to closing adjustments.

Which includes the assumption of approximately $150 million in existing project finance debt estimated at the time of closing.

NextEra Energy Partners expects to recapitalize this project finance debt in 2022 as it executes on its overall financing plan for the year. We expect to fund the approximately $130 million balance of the purchase price using existing debt capacity. Subject to regulatory approvals, the acquisition is expected to close later this year or in 2022. Following the project debt paydown next year, the asset is expected to contribute adjusted EBITDA and unlevered cash available for distribution of approximately $22 to $27 million, each on a five-year average annual run rate basis beginning 31 December 2022.

Nextera energy partners expects to recapitalize. This project finance debt in 2022 as it executes on its overall financing plan for the year.

We expect.

To fund the approximately $138 million balance of the purchase price using existing debt capacity.

Rebecca J. Kujawa: Subject to regulatory approvals, the acquisition is expected to close later this year or in 2022. Following the project debt paydown next year, the asset is expected to contribute adjusted EBITDA and unlevered cash available for distribution of approximately $22 to $27 million, each on a five-year average annual run rate basis beginning 31 December 2022. NextEra Energy Partners continues to leverage its competitive advantages to be successful in third-party M&A and extend its long runway of growth. Consistent with our long-term growth prospects, today we are also introducing year-end 2022 run rate expectations, which are built upon its strong existing portfolio cash generation and continued ability to access low-cost capital to acquire accretive renewable energy projects. Overall, we are pleased with year-to-date execution at NextEra Energy Partners, and we believe we are well-positioned to continue delivering LP unit holder value going forward. Now let's look at the detailed results.

Subject to regulatory approval. The acquisition is expected to close later this year or in 2022.

Following the project debt pay down next year, the asset is expected to contribute adjusted EBITDA and unlevered cash available for distribution.

Of approximately $22 million to $27 million each on a five year average run rate annual run rate basis, beginning December 31 2022.

NextEra Energy Partners continues to leverage its competitive advantages to be successful in third-party M&A and extend its long runway of growth. Consistent with our long-term growth prospects, today we are also introducing year-end 2022 run rate expectations, which are built upon its strong existing portfolio cash generation and continued ability to access low-cost capital to acquire accretive renewable energy projects. Overall, we are pleased with year-to-date execution at NextEra Energy Partners, and we believe we are well-positioned to continue delivering LP unit holder value going forward. Now let's look at the detailed results.

Exterran partners continues to leverage its competitive advantages to be successful in third party M&A and extend its long runway of growth.

Considered.

Fusion or long term growth prospects. Today. We are also introducing year end 2022 run rate expectations, which are built upon its strong existing portfolio cash generation and continued ability to access low cost capital to acquire accretive renewable energy projects.

Overall, we are pleased with year to date execution and Exterran partners.

And we believe we are well positioned to continue delivering LP unitholder value going forward.

Now, let's look at the detailed results.

Rebecca J. Kujawa: Q3 adjusted EBITDA was $334 million, up approximately 7% from the prior year comparable quarter due to growth in the underlying portfolio. New projects, which primarily reflect the asset acquisitions that closed at the end of 2020 and the recently closed acquisition of 391MW of operating wind assets from a third party, contributed $23 million. Existing assets contributed $7 million, primarily driven by the wind repowerings that occurred in Q4 of last year and an improvement in wind resource. Wind resource for Q3 was 101% of the long-term average versus 96% in Q3 2020. These favorable impacts were partially offset by lower solar resource in Q3 of this year.

Q3 adjusted EBITDA was $334 million, up approximately 7% from the prior year comparable quarter due to growth in the underlying portfolio. New projects, which primarily reflect the asset acquisitions that closed at the end of 2020 and the recently closed acquisition of 391MW of operating wind assets from a third party, contributed $23 million. Existing assets contributed $7 million, primarily driven by the wind repowerings that occurred in Q4 of last year and an improvement in wind resource. Wind resource for Q3 was 101% of the long-term average versus 96% in Q3 2020. These favorable impacts were partially offset by lower solar resource in Q3 of this year.

Third quarter, adjusted EBITDA was $334 million up approximately 7% from the prior year comparable quarter due to growth in the underlying portfolio.

New projects.

Just sit with primarily reflect the asset acquisitions that closed at the end of 2020 and the recently closed acquisition of 391 megawatts of operating wind wind assets from a third party contributed $23 million.

Existing assets contributed $7 million, primarily driven by the wind repowering that occurred in the fourth quarter of last year.

Switched and improvement in wind resource when.

Wind resource for the third quarter was 101% of the long term average versus 96% in the third quarter of 2020. These.

These favorable impacts were partially offset by lower solar resource in the third quarter.

This year.

Rebecca J. Kujawa: Cash available for distribution of $158 million for the third quarter declined by $4 million versus the prior year, primarily as a result of lower year-over-year paygo payments after a weaker wind resource period in the second quarter of this year. As a reminder, NextEra Energy Partners recapitalized its Genesis solar project and other existing assets at the end of last year, and the impact of this new project-level financing cost versus the prior year was offset by an associated reduction in corporate-level interest expense, as reflected in our other category. Additional details of our third quarter results are shown on the accompanying slide. On a year-to-date basis versus 2020, adjusted EBITDA and cash available for distribution have increased by roughly 9% and 6%, respectively, and NextEra Energy Partners remains well-positioned to continue to deliver on its outstanding growth objectives.

Cash available for distribution of $158 million for the third quarter declined by $4 million versus the prior year, primarily as a result of lower year-over-year paygo payments after a weaker wind resource period in the second quarter of this year. As a reminder, NextEra Energy Partners recapitalized its Genesis solar project and other existing assets at the end of last year, and the impact of this new project-level financing cost versus the prior year was offset by an associated reduction in corporate-level interest expense, as reflected in our other category. Additional details of our third quarter results are shown on the accompanying slide.

Cash available for distribution of 158 million.

And in the third quarter declined by $4 million versus the prior year, primarily as a result of lower year over year Paygo payments after a weaker wind resource period in the second quarter of this year.

As a reminder, nextera partners' recapitalized, its Genesis solar project and other existing assets at the end of last year.

And the impact of this new.

Fifth level financing costs versus the prior year was offset by an associated reduction in corporate level interest expense as reflected in our other category.

Additional details of our third quarter results are shown on the accompanying slide.

On a year-to-date basis versus 2020, adjusted EBITDA and cash available for distribution have increased by roughly 9% and 6%, respectively, and NextEra Energy Partners remains well-positioned to continue to deliver on its outstanding growth objectives. We continue to expect NextEra Energy Partners' portfolio to support an annualized rate of fourth quarter 2021 distribution that is payable in February of 2022 to be in a range of $2.76 to $2.83 per common unit. From a base of our fourth quarter 2020 distribution per common unit at an annualized rate of $2.46, we continue to see 12% to 15% growth per year in LP distributions as being a reasonable range of expectations through at least 2024.

On a year to date basis versus 2020, adjusted EBITDA and cash available for.

New projections have increased by roughly 9% and 6% respectively and.

And Nextera energy partners remains well positioned to continue to deliver on its outstanding growth objectives.

Rebecca J. Kujawa: We continue to expect NextEra Energy Partners' portfolio to support an annualized rate of fourth quarter 2021 distribution that is payable in February of 2022 to be in a range of $2.76 to $2.83 per common unit. From a base of our fourth quarter 2020 distribution per common unit at an annualized rate of $2.46, we continue to see 12% to 15% growth per year in LP distributions as being a reasonable range of expectations through at least 2024. NextEra Energy Partners continues to expect to be in the upper end of our previously disclosed year-end 2021 run rate adjusted EBITDA and cash available for distribution expectation ranges of $1.44 billion to 1.62 billion and $600 million to 680 million, respectively. We expect to achieve our 2022 distribution growth of 12% to 15% while maintaining a trailing 12-month payout ratio in the low 80% range.

We continue to expect Nextera energy partners' portfolio to support an annualized rate of fourth quarter 2021 distribution that is paid.

<unk> in February of 2022 to be in a range of $2 76 to $2 83 per common unit.

From a base of our fourth quarter 2020 distribution per common unit at an annualized rate of $2.46. We continue to see 12% to 15% growth per year in LP distributions.

<unk> as being a reasonable range of expectations through at least 2024.

NextEra Energy Partners continues to expect to be in the upper end of our previously disclosed year-end 2021 run rate adjusted EBITDA and cash available for distribution expectation ranges of $1.44 billion to 1.62 billion and $600 million to 680 million, respectively. We expect to achieve our 2022 distribution growth of 12% to 15% while maintaining a trailing 12-month payout ratio in the low 80% range. By year-end 2022, we expect the run rate for adjusted EBITDA to be in a range of $1.775 to 1.975 billion and run rate for cash available for distribution to be in the range of $675 to 765 million.

Nextera energy partners continues to expect to be in the upper end of our previously disclosed year end 2021 run rate adjusted EBITDA and cash available for distribution expectation ranges of.

1.44 billion to $1 six 2 billion.

And 600 million to $680 million respectively.

We expect to achieve our 2022 distribution growth of 12% to 15%, while maintaining a trailing 12 month payout ratio in the low 80% range.

Rebecca J. Kujawa: By year-end 2022, we expect the run rate for adjusted EBITDA to be in a range of $1.775 to 1.975 billion and run rate for cash available for distribution to be in the range of $675 to 765 million. At the midpoints, these revised expectations ranges reflect estimated growth in adjusted EBITDA, and cash available for distribution of roughly 23% and 13%, respectively, from the comparable year-end 2021 run rate expectations. These growth rates are supported by our strong execution against our long-term growth objectives in 2021, including opportunistic third-party transactions that were not previously in our plan. As a reminder, all of our expectations are subject to our normal caveats and include the impact of anticipated IDR fees as we treat these as an operating expense.

By year end 2022, we expect the run rate for adjusted EBITDA to be in a range.

<unk> 1.7 hundred 75 billion to $1 97, 5 billion and run rate for cash available for distribution to be in the range of 675 million to $765 million.

At the midpoints, these revised expectations ranges reflect estimated growth in adjusted EBITDA, and cash available for distribution of roughly 23% and 13%, respectively, from the comparable year-end 2021 run rate expectations. These growth rates are supported by our strong execution against our long-term growth objectives in 2021, including opportunistic third-party transactions that were not previously in our plan. As a reminder, all of our expectations are subject to our normal caveats and include the impact of anticipated IDR fees as we treat these as an operating expense.

At the mid points. These revised expectations ranges reflect estimated gross and adjusted EBITDA and cash available.

Range of distribution of roughly 23% and 13% respectively from the comparable year end 2021 run rate expectations.

These growth rates are supported by our strong execution against our long term growth objectives in 2021 include.

Including opportunistic third party transactions that were not previously in our plan.

As a reminder, all of our expectations are subject to our normal caveats and include the impact of anticipated <unk> fees as we treat these as an operating expense.

Rebecca J. Kujawa: Finally, during the quarter, S&P updated its ratings methodology for NextEra Energy Partners, and in particular, it will now evaluate NextEra Energy Partners' debt metrics on a funds-from-operations, or FFO, to debt basis, with a downgrade threshold of 14% instead of a debt-to-EBITDA basis. We believe that the combination of S&P's updated methodology, its assessment of NextEra Energy Partners' improving diversity, and its use of less conservative assumptions in the portfolios and renewable generation cash flows will allow for $700 million more of financing flexibility relative to our previous assumptions, providing the partnership with even greater flexibility going forward to finance accretive acquisition for the benefits of our unit holders. In summary, we continue to believe that both NextEra Energy and NextEra Energy Partners have some of the best opportunity sets and execution track records in the industry, and we remain as enthusiastic as ever about our future prospects.

Finally, during the quarter, S&P updated its ratings methodology for NextEra Energy Partners, and in particular, it will now evaluate NextEra Energy Partners' debt metrics on a funds-from-operations, or FFO, to debt basis, with a downgrade threshold of 14% instead of a debt-to-EBITDA basis.

Finally during the quarter S&P updated its ratings methodology for Nextera energy partners and in particular, it will now evaluate nextera energy partners' debt metrics on a funds.

Well for drum operations or <unk> to debt basis with the downgrade thresholds are 14% instead of a debt to EBITDA basis.

We believe that the combination of S&P's updated methodology, its assessment of NextEra Energy Partners' improving diversity, and its use of less conservative assumptions in the portfolios and renewable generation cash flows will allow for $700 million more of financing flexibility relative to our previous assumptions, providing the partnership with even greater flexibility going forward to finance accretive acquisition for the benefits of our unit holders. In summary, we continue to believe that both NextEra Energy and NextEra Energy Partners have some of the best opportunity sets and execution track records in the industry, and we remain as enthusiastic as ever about our future prospects.

We believe that the combination of S&P's updated methodology its assessment of Nextera energy partners, improving diversity and its use of less conservative assumptions in the portfolio's renewable.

Mobile generation cash flows will allow for $700 million more a financing flexibility relative to our previous assumptions provided me of partnership with even greater flexibility going forward to finance accretive acquisition for the benefit of our unitholders.

In summary, we continue to believe that both.

Funds Nextera energy and Nextera energy partners have some of the best opportunity sets and execution track records in the industry and we remain as enthusiastic as ever about our future prospects.

Rebecca J. Kujawa: That concludes our prepared remarks, and with that, we will open up the line for questions. Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then 1 on your touch-tone telephones. If you are using a speakerphone, we do ask you to please pick up your handset before pressing the keys. To withdraw your questions, you may press star and 2. Once again, that is star and then 1 to ask a question. We'll pause momentarily to assemble the roster. And our first question comes from Julian Dumolin-Smith from Bank of America. Please go ahead with your question. Hey, good morning, team. Thank you for the time. I appreciate it. Impressive continued results here.

That concludes our prepared remarks, and with that, we will open up the line for questions.

That concludes our prepared remarks, and with that we will open up the line for questions.

Operator: Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then 1 on your touch-tone telephones. If you are using a speakerphone, we do ask you to please pick up your handset before pressing the keys. To withdraw your questions, you may press star and 2. Once again, that is star and then 1 to ask a question. We'll pause momentarily to assemble the roster. And our first question comes from Julian Dumolin-Smith from Bank of America. Please go ahead with your question.

Both gentlemen at this time well begin the question and answer session to ask a question you May Press Star and then one on your touched on telephones.

If you are using a speaker phone would you ask you. Please pickup your handset before pressing the keys.

To withdraw your question you May press Star two.

Once again that is star and then one.

Good question.

We will pause momentarily to assemble the roster.

Uh huh.

And our first question comes from Julien Dumoulin Smith from Bank of America. Please go ahead with your question.

Julien Dumoulin-Smith: Hey, good morning, team. Thank you for the time. I appreciate it. Impressive continued results here. Just if I can ask you at the outset here, can you perhaps describe how you see the backdrop here given the litany of different policy efforts underway around the availability of panel imports and just how that positions your ability to execute right now? I certainly hear it echoing through your comments, but I just want to speak to that a little bit more specifically if we can. And then subsequently, on the origination side, obviously well done again, how do you think about just the elevated energy price backdrop that we're seeing today?

Hey, good morning team. Thank you.

For the time I appreciate it.

Impressive continued results here.

Rebecca J. Kujawa: Just if I can ask you at the outset here, can you perhaps describe how you see the backdrop here given the litany of different policy efforts underway around the availability of panel imports and just how that positions your ability to execute right now? I certainly hear it echoing through your comments, but I just want to speak to that a little bit more specifically if we can. And then subsequently, on the origination side, obviously well done again, how do you think about just the elevated energy price backdrop that we're seeing today? How quickly is that fomenting sort of a reinvigorated demand backdrop, and when could that materialize as you think about the backdrop and the 2023, 2024 backdrop or beyond? Thank you, Julian. Appreciate the questions and good morning.

Just if I can ask you at the outset here can you perhaps describe how you see the backdrop here given the litany of different policy efforts underway around the availability of a panel imports and just how that positions you ability to execute right now I certainly hear echoing through your comments, but I just wanted to.

Is that a little bit more specifically, if we can and then subsequently on the origination side, obviously well done again, how do you think about just the elevated energy price backdrop that we're seeing today.

How quickly is that fomenting sort of a reinvigorated demand backdrop, and when could that materialize as you think about the backdrop and the 2023, 2024 backdrop or beyond?

How quickly is that fermenting, a sort of a reinvigorated our demand backdrop and when could that materialize as you think about the backdrop in.

In the 'twenty, three 'twenty four backdrop or beyond.

Rebecca Kujawa: Thank you, Julian. Appreciate the questions and good morning. As you even prefaced in your set of questions, we're pretty excited about the opportunities for both of the major businesses, both Florida Power & Light and NextEra Energy Resources, and specifically on the renewable side and Energy Resources. The team just had an awesome origination quarter, and that's kind of on the heels of other awesome origination quarters going back now for quite some time, setting us up for tremendous growth in the coming years.

Thank you Julian and appreciate the questions and good morning, as you prefaced in your set of questions. We're pretty excited about the opportunities for both of the major businesses that Florida power and light and energy resources and specifically.

Rebecca J. Kujawa: As you even prefaced in your set of questions, we're pretty excited about the opportunities for both of the major businesses, both Florida Power & Light and NextEra Energy Resources, and specifically on the renewable side and Energy Resources. The team just had an awesome origination quarter, and that's kind of on the heels of other awesome origination quarters going back now for quite some time, setting us up for tremendous growth in the coming years. So in terms of demand backdrop, to kind of answer the second question first, it's terrific, and we're really excited about the value proposition of renewables looking forward, both in terms of being low cost and the ability to decarbonize both the electricity sector and other sectors, as we've talked about.

On the renewable side and energy resources and the team just had an awesome origination quarter on and that's kind of on the heels of other awesome origination quarters going back now for quite some time setting us up for a tremendous growth in the coming years. So in terms of demand backdrop kind of answer the.

So in terms of demand backdrop, to kind of answer the second question first, it's terrific, and we're really excited about the value proposition of renewables looking forward, both in terms of being low cost and the ability to decarbonize both the electricity sector and other sectors, as we've talked about. It's been an exciting 18 months for our integrated supply chain and engineering construction teams, lots of opportunities to navigate uncertainties, the likes of which we in the industry probably haven't seen in quite some time. It's also in the midst of enormous growth for us, a record year of renewables deployment last year and another terrific capital deployment year this year.

The second question first it's terrific and we're really excited about the value proposition of renewables looking forward both in terms of being low cost and the ability to decarbonize boasts the electricity sector and other sectors as as we've talked about it's been an exciting 18 months.

Rebecca J. Kujawa: It's been an exciting 18 months for our integrated supply chain and engineering construction teams, lots of opportunities to navigate uncertainties, the likes of which we in the industry probably haven't seen in quite some time. It's also in the midst of enormous growth for us, a record year of renewables deployment last year and another terrific capital deployment year this year. Both growth and opportunities to show what we can do. It's good to be us, and we've highlighted that in the past in the sense of being large in this industry, having significant capital dollars to put to work enables us to have strong relationships and extensive relationships with those in the supply chain to help navigate these uncertainties. We feel good about our ability to navigate them.

For our integrated supply chain and engineering.

In engineering construction teams lots of opportunities to navigate a uncertainties are.

Six of which we and the industry, probably havent seen in quite some time and it's also in the midst of enormous growth for US you know a record year of of renewables deployment.

Last year and another terrific capital deployment year this year.

Both growth and opportunities to show what we can do. It's good to be us, and we've highlighted that in the past in the sense of being large in this industry, having significant capital dollars to put to work enables us to have strong relationships and extensive relationships with those in the supply chain to help navigate these uncertainties. We feel good about our ability to navigate them.

So both growth and opportunities to to show what we can do them you know, it's good to be us and we've highlighted that in the past in the sense of being large in this industry I'm, having significant capital dollars to put to work.

Lachapelle zoster have strong relationships and.

And extensive relationships with those in the supply chain to help navigate these uncertainties.

We feel good about our ability to navigate them you know the plan does get iterate. It from time to time as is the circumstances change but.

Rebecca J. Kujawa: The plan does get iterated from time to time as the circumstances change, but we feel good about the long-term view for renewables and our ability to deliver on our expectations. Hey, Julian. Hey, Julian. Go for it, Jim. The only thing I'd add is I think people don't really appreciate the 10-year strip is up a buck since January. That's hugely positive for the renewable business, enormously positive, right? So. Our next question comes from Steve Fleishman from Wolfe Research. Please go ahead with your question. Thanks, and good morning. Just could you maybe just give the name of who the counterparty is for the green hydrogen project? Yeah, prefer not to, Steve. We're obviously really excited about the opportunity to supply them and provide this energy, and we think it is a great start to the hydrogen economy, but we'll leave that discussion for a later date. Okay.

The plan does get iterated from time to time as the circumstances change, but we feel good about the long-term view for renewables and our ability to deliver on our expectations.

But we feel good about the long term view for renewables in our ability.

And able to deliver on our expectations.

Jim Robo: Hey, Julian.[crosstalk].

Okay.

Julien Dumoulin-Smith: Go for it, Jim.

Hey, Good morning, Jeff Jim just the only thing I'd add is.

Jim Robo: The only thing I'd add is I think people don't really appreciate the 10-year strip is up a buck since January. That's hugely positive for the renewable business, enormously positive, right? So.

Yeah.

People don't really appreciate.

The 10 year strip is up a buck.

<unk> since January that's huge positive for the renewable business enormously positive right. So.

Yeah.

Operator: Our next question comes from Steve Fleishman from Wolfe Research. Please go ahead with your question.

Our next question comes from Steve.

Steve Fleishman from Wolfe Research. Please go ahead with your question.

Steve Fleishman: Thanks, and good morning. Just could you maybe just give the name of who the counterparty is for the green hydrogen project?

Okay.

Thanks, and good morning.

Just could you maybe just give the name of the.

Who the counterparty is for the Green hydrogen project.

Rebecca Kujawa: Yeah, prefer not to, Steve. We're obviously really excited about the opportunity to supply them and provide this energy, and we think it is a great start to the hydrogen economy, but we'll leave that discussion for a later date.

Yeah, I'd prefer not to Steve. We're obviously really excited about the opportunity to supply them and provide this this energy and we think it is a great start to the to the hydrogen.

In the economy, but we'll we'll leave that discussion.

A discussion for a later date.

Steve Fleishman: Okay. Then just on a different way to ask the supply chain question, just within your obviously you add a lot to your backlog. If you look at the existing backlog, did anything move around meaningfully between years?

Okay.

Rebecca J. Kujawa: Then just on a different way to ask the supply chain question, just within your obviously you add a lot to your backlog. If you look at the existing backlog, did anything move around meaningfully between years? Not meaningfully. Not in the backlog? No, I appreciate the question. No, nothing that I would consider to be meaningful at all. There's a couple of projects that moved out and a couple of projects that moved in in terms of time frames, but very much consistent with our expectations. And as I highlighted at a very high level in response to Julian's question, we feel good about our plans of bringing in the projects we expect to bring into service in 2021 and have a good line of sight for executing on the development plans thereafter. Okay.

Then just on the different way to ask the supply chain question just within your.

Obviously, you had a lot to your backlog if you look at the existing backlog did anything move around meaningfully between years.

Rebecca Kujawa: Not meaningfully.

Not meaningful.

Steve Fleishman: Not in the backlog?

Rebecca Kujawa: No, I appreciate the question. No, nothing that I would consider to be meaningful at all. There's a couple of projects that moved out and a couple of projects that moved in in terms of time frames, but very much consistent with our expectations. And as I highlighted at a very high level in response to Julian's question, we feel good about our plans of bringing in the projects we expect to bring into service in 2021 and have a good line of sight for executing on the development plans thereafter.

Mark.

No no I appreciate the question no nothing that I would consider to be meaningful at all there's a couple of projects and moved out in a couple of projects that moved in in terms of time frames, but very much consistent with with our expectations.

And as I highlighted at a very high level in response to Julian.

Julians question, we feel good about our plans of bringing in the projects, we expect to bring into service in 2021 and have good line of sight for executing on the development plans thereafter.

Steve Fleishman: Okay. And then last question, just obviously have to ask about the DC and the proposed clean energy credits and the reconciliation, etc. Maybe just latest thoughts on what's most important to you and the likelihood and path to passage, how you're feeling about it.

Rebecca J. Kujawa: And then last question, just obviously have to ask about the DC and the proposed clean energy credits and the reconciliation, etc. Maybe just latest thoughts on what's most important to you and the likelihood and path to passage, how you're feeling about it. So, Steve, it's Jim. I would say that we remain cautiously optimistic that something happens on that front. I think I said earlier, if there is a reconciliation bill, I would be shocked if there isn't a long-term extension of the credits embedded in that. And I think that's reasonably high odds if the Democrats can come to terms among themselves around what would be in the reconciliation bill. And that's not an easy, as we've seen play out over the last several weeks, and there's obviously within that caucus a lot of varying views across the board.

Okay, and then last question just.

Obviously, you have to ask about the.

D C and the.

Proposed clean energy credits and a reconciliation et cetera, maybe just latest thoughts on.

What's most important to you.

And the likelihood and pass to passage, how you're feeling about it.

Jim Robo: So, Steve, it's Jim. I would say that we remain cautiously optimistic that something happens on that front. I think I said earlier, if there is a reconciliation bill, I would be shocked if there isn't a long-term extension of the credits embedded in that. And I think that's reasonably high odds if the Democrats can come to terms among themselves around what would be in the reconciliation bill. And that's not an easy, as we've seen play out over the last several weeks, and there's obviously within that caucus a lot of varying views across the board.

So Steve it's Jim.

I would say that we.

We remain cautiously optimistic that that.

That something happens on that front I think.

I think I said.

Earlier, if there is a reconciliation bill.

Would be shocked.

If there isn't a long term extension of the credits embedded in that.

And I think that's that's reasonably high odds if the Democrats.

Kratz can can come to terms amongst themselves around what would be in the reconciliation bill and and that's not an easy.

As we've seen play out over the last several weeks that's not an easy.

That's that's not easy in.

Theres, obviously within that caucus a lot of.

A lot of varying views across the board, but yes.

Rebecca J. Kujawa: But I think so I remain cautiously optimistic that something happens there. And then if something happens there, we feel good about the fact that there'll be a long-term extension of the credits and that there'll be support for other types of clean energy such as hydrogen, stand-alone storage, ITC, etc. So it would be very constructive for us. We think it's an important part of the decarbonization of the US economy to accelerate that. And I mean, we've increasingly, as we think about our own strategy going forward, we're increasingly thinking about ourselves as the company that's going to lead not only the clean energy transformation of the electric grid, but really the clean energy transformation of the US economy and the decarbonization of the US economy because the electric grid's going to be the key to decarbonizing the transport sector.

But I think so I remain cautiously optimistic that something happens there. And then if something happens there, we feel good about the fact that there'll be a long-term extension of the credits and that there'll be support for other types of clean energy such as hydrogen, stand-alone storage, ITC, etc. So it would be very constructive for us. We think it's an important part of the decarbonization of the US economy to accelerate that.

I think so I remain cautiously optimistic that something happens there and then if something happens there.

We feel good about the.

The fact that there'll be.

<unk>.

Long term extension of the credits and.

But there'll be support for other types of clean energy.

Such as such.

Such as hydrogen as standalone storage ITC et cetera. So.

Yes, it would be very constructive for us we think it's important.

Part of the de carbonization of the U S economy to accelerate that and.

I mean, we've increasingly, as we think about our own strategy going forward, we're increasingly thinking about ourselves as the company that's going to lead not only the clean energy transformation of the electric grid, but really the clean energy transformation of the US economy and the decarbonization of the US economy because the electric grid's going to be the key to decarbonizing the transport sector. It's going to be the key to decarbonizing the industrial sector. And so we're really positioning ourselves to be the leader there, and I feel very good about both the policy tailwinds that we have as well as how our business is executing along those goals.

And I mean, we've increasingly.

As we think about our own.

Strategy going forward, we are increasingly thinking about ourselves as is the company that's going to lead.

Not only that clean energy transformation.

<unk> of the electric grid, but really the clean energy transformation of the U S economy, and the de carbonization of the U S economy, because the electric grid is going to be the key to decarbonising. The transport sector, it's going to be the key to decarbonising.

Rebecca J. Kujawa: It's going to be the key to decarbonizing the industrial sector. And so we're really positioning ourselves to be the leader there, and I feel very good about both the policy tailwinds that we have as well as how our business is executing along those goals. And I'm sorry, just one follow-up. This wind project for green hydrogen, does it depend on the hydrogen PTC passing, or does it happen either way? No, it's a contract with the customer irrespective of any sort of subsequent policy changes. Great. Thank you very much. Thank you, Steve. Our next question comes from Shar Pourreza from Guggenheim Partners. Please go ahead with your question. Hey, good morning, guys. Good morning, Shar. Okay. I just wanted to maybe just drill down a little bit more on the backlog there.

The industrial sector and so.

We're really positioning ourselves.

To be the leader there and I feel very good about both the policy tailwind that we have as well as <unk>.

As well as how our business is executing along those goals.

Steve Fleishman: And I'm sorry, just one follow-up. This wind project for green hydrogen, does it depend on the hydrogen PTC passing, or does it happen either way?

And I'm, sorry, just wanted to follow up the.

Wind project for Green hydrogen is it.

Right.

Does it depend on the hydrogen P. T C passing or is it happening either way.

Rebecca Kujawa: No, it's a contract with the customer irrespective of any sort of subsequent policy changes.

No. It's a it's a contract with the customer irrespective of any sort of subsequent policy changes.

Steve Fleishman: Great. Thank you very much.

Great. Thank you very much.

Rebecca Kujawa: Thank you, Steve.

Operator: Our next question comes from Shar Pourreza from Guggenheim Partners. Please go ahead with your question.

Thank you Steve.

Our next question.

Comes from Shar <unk> from Guggenheim Partners. Please go ahead with your question.

Shar Pourreza: Hey, good morning, guys.

Hey, good morning, guys.

Rebecca Kujawa: Good morning, Shar.

Shar Pourreza: Okay. I just wanted to maybe just drill down a little bit more on the backlog there. Can you just maybe talk a little bit about what you're seeing in terms of the higher input costs for projects? I mean, we've seen some headwinds from developers and manufacturers recently around the labor, steel, transportation, etc. And we're hearing some commercial and utility-scale projects are being pushed out. What are you seeing? Are you seeing any impact to project economics, especially for the ones that are marginal? Is anyone kind of with signed contracts maybe balking, especially if the PPA terms are somewhat flexible as we think about when a shovel needs to be put in the ground?

Good morning Shar.

Okay I just wanted to maybe just drill down a little bit more on on the backlog can.

Rebecca J. Kujawa: Can you just maybe talk a little bit about what you're seeing in terms of the higher input costs for projects? I mean, we've seen some headwinds from developers and manufacturers recently around the labor, steel, transportation, etc. And we're hearing some commercial and utility-scale projects are being pushed out. What are you seeing? Are you seeing any impact to project economics, especially for the ones that are marginal? Is anyone kind of with signed contracts maybe balking, especially if the PPA terms are somewhat flexible as we think about when a shovel needs to be put in the ground? So you're not seeing it right now, but is there any inklings on potential projects potentially being shifted out as buyers wait for some input cost relief? Shar, I'm not sure I'm following completely the question.

Can you just maybe talk a little bit about what you're seeing in terms of the higher input cost.

Projects I mean, we've seen some headwinds from developers and manufacturers recently amount of labor steel.

Inspiration etcetera, what are you and we're hearing some commercial and utility scale projects are being pushed out.

What are you seeing are you seeing any impacts of the project economics, especially.

Especially for the ones.

At our marginal is anyone kind of sign contracts, maybe bulking, especially if the PPA terms are somewhat flexible as we think about when they show up on needs to be put in the ground. So you're not seeing it right now but is there any inklings on potential projects potentially being shifted out as buyers wait for some input costs really.

So you're not seeing it right now, but is there any inklings on potential projects potentially being shifted out as buyers wait for some input cost relief?

Rebecca Kujawa: Shar, I'm not sure I'm following completely the question. Are you asking whether or not there are other projects, not our projects, but other projects that might be experiencing those, or are you asking for us because I wasn't sure who the buyers were in your question?

And so I'm not sure I'm. Following completely. The question are you are you asking whether or not there are other projects not our projects, but other projects that might be experiencing those or are you asking for us because I wasn't sure who the buyers were in that in that in your question.

Rebecca J. Kujawa: Are you asking whether or not there are other projects, not our projects, but other projects that might be experiencing those, or are you asking for us because I wasn't sure who the buyers were in your question? Sorry, specifically for your projects. We are not having anything notable from a buyer perspective. From our customer's perspective, we have a contract, and we are expecting to execute against what's laid out in those contracts. From a supply chain standpoint, I think we're very well positioned to navigate these uncertainties. As I highlighted, line of sight of bringing out the projects that we intend to bring in in 2021 into service and have great plans for executing against our 2022 development program.

Shar Pourreza: Sorry, specifically for your projects.

Specifically for your projects.

Rebecca Kujawa: We are not having anything notable from a buyer perspective. From our customer's perspective, we have a contract, and we are expecting to execute against what's laid out in those contracts. From a supply chain standpoint, I think we're very well positioned to navigate these uncertainties. As I highlighted, line of sight of bringing out the projects that we intend to bring in in 2021 into service and have great plans for executing against our 2022 development program.

We we are not having any you know any.

No.

Notable from a buyer perspective and from our customers' perspective, we have a contract and we are expecting to execute against them. You know what you laid out in those contracts.

And from a supply chain standpoint, we're very well positioned to navigate these uncertainties and as I highlighted your line of sight of bringing out the projects that we.

Intend to bring in in 'twenty one into service.

And have great plans for executing against our 22 development program and and obviously beyond that one there's a lot still to be seen as to what those those conditions will ultimately be because now we're talking two plus years out but.

Rebecca J. Kujawa: And obviously, beyond that, one, there's a lot still to be seen as to what those conditions will ultimately be because now we're talking two-plus years out. But great team and great position in the industry to be able to navigate those. From a customer standpoint, we're continuing to see strong demand for new renewables. I think that's obvious from the contract signings that we were able to announce today. And John and his team have terrific backlog beyond that of opportunities that we have yet to sign. And the team is really excited about being out in the field and talking with our customers. It is just a terrific time for renewables in our industry. Got it. Thank you for that. Thanks for the elaboration. Maybe just quickly shifting to the regulated utility.

Obviously, beyond that, one, there's a lot still to be seen as to what those conditions will ultimately be because now we're talking two-plus years out. But great team and great position in the industry to be able to navigate those. From a customer standpoint, we're continuing to see strong demand for new renewables. I think that's obvious from the contract signings that we were able to announce today. And John and his team have terrific backlog beyond that of opportunities that we have yet to sign. And the team is really excited about being out in the field and talking with our customers. It is just a terrific time for renewables in our industry.

Great team and great position in the industry to be able to navigate those.

From a customer standpoint, we're continuing to see strong demand for new renewables I think that's obvious from the contract signings that we were able to announce today and John and his team have terrific your backlog beyond that.

Of opportunities that we have yet to sign and the team is really excited.

Being out in and out in the field and talking with our customers. It is a just a terrific time for renewables and in our industry.

Shar Pourreza: Got it. Thank you for that. Thanks for the elaboration. Maybe just quickly shifting to the regulated utility. Just wondering also how much more headroom from incremental O&M efficiencies do you still anticipate from the legacy Gulf asset? And how has that sort of headroom impacted from the recent run-up in commodity costs, mainly natural gas, right? So a bit of an efficiency and bill headroom question embedded there.

Got it. Thank you for the thanks for the elaboration, maybe just quickly shifting to the regulators.

Rebecca J. Kujawa: Just wondering also how much more headroom from incremental O&M efficiencies do you still anticipate from the legacy Gulf asset? And how has that sort of headroom impacted from the recent run-up in commodity costs, mainly natural gas, right? So a bit of an efficiency and bill headroom question embedded there. Sure, Shar. And obviously, we continue to work diligently at now what's going to be FPL going forward, particularly assuming the settlement agreement is approved next week by the commission. Gulf will be fully incorporated into the broader FPL enterprise. It largely is today, but obviously, from a regulatory standpoint, operates separately, at least through the end of this year. We think there are continued opportunities to focus on optimization across the businesses.

What are your just wondering also how much more headroom from incremental O&M efficiencies do you still anticipate from the legacy golf asset.

How is that sort of headwind impacted from the recent run up in commodity costs mailing natural gas rate, so a bit of an efficient team Bill headroom question embedded there.

Rebecca Kujawa: Sure, Shar. And obviously, we continue to work diligently at now what's going to be FPL going forward, particularly assuming the settlement agreement is approved next week by the commission. Gulf will be fully incorporated into the broader FPL enterprise. It largely is today, but obviously, from a regulatory standpoint, operates separately, at least through the end of this year. We think there are continued opportunities to focus on optimization across the businesses.

You took a shower and obviously, we continue to work diligently and know what it's going to be F. P. O going forward, particularly assuming the settlement agreement is approved next week by the commission Gulf will be fully incorporated into the into the broader FPL enterprise. It largely is today, but obviously from a regulatory standpoint operates.

It's separately at least through the end of this year.

We think there are continued opportunities to focus on on optimization.

Across the businesses, that's part of what we do as a company is look for those opportunities to take.

Rebecca J. Kujawa: That's part of what we do as a company is look for those opportunities to take opportunities to bring efficiencies to the business and, of course, invest capital to take cost out and lower fuel costs over time. One of the great ways that FPL, and that includes Gulf as part of it, will be to continue to deploy solar over the long term because, as you all well know, not only does it have the clean energy benefits, but it has low operating costs and no fuel costs, which will be a great offset and diversification in the state of Florida from our existing generation set. So I think there's continued opportunities. There's still a lot of work to be done. We focus hard on that every day, and we think the team has all the cards in the hand to be able to continue executing. Got it.

That's part of what we do as a company is look for those opportunities to take opportunities to bring efficiencies to the business and, of course, invest capital to take cost out and lower fuel costs over time. One of the great ways that FPL, and that includes Gulf as part of it, will be to continue to deploy solar over the long term because, as you all well know, not only does it have the clean energy benefits, but it has low operating costs and no fuel costs, which will be a great offset and diversification in the state of Florida from our existing generation set. So I think there's continued opportunities. There's still a lot of work to be done. We focus hard on that every day, and we think the team has all the cards in the hand to be able to continue executing.

Take care.

Opportunities to bring efficiencies to the business and of course invest capital.

To take cost out and lower fuel cost fuel costs over time, one of the great ways that.

F P O and that includes Gulf as part of it will be to continue to deploy solar over the long term.

Because as you all well know not only does it have to clean energy benefits, but it has low operating costs and.

Fuel costs, which will be a great offset in diversification and the state of Florida are from our existing generation set. So I think there's continued opportunities there's still a lot of work to be done we focus hard on that every day and we think the team is all the cards in hand to be able to continue executing.

Shar Pourreza: Got it. So I guess just not to paraphrase, but the recent jump in gas and, obviously, Jim highlighted the move and the forwards, that shouldn't really impact sort of the bill headroom just given the other levers you have at the business.

Rebecca J. Kujawa: So I guess just not to paraphrase, but the recent jump in gas and, obviously, Jim highlighted the move and the forwards, that shouldn't really impact sort of the bill headroom just given the other levers you have at the business. Yeah. So, Shar, I would think if you look back at where we have taken the opportunity to invest capital historically, it really is on bringing long-term value to our customers. So being able to deliver lower costs over time, higher reliability, greater resilience, greater diversification in those clean energy benefits. And it would be short-sighted to stop investing in opportunities that are really clearly good for customers. We're very mindful of customer bills. You hear that from us in all of our communications, and it's what we focus on day-to-day is making sure we have a terrific value proposition for our customers.

Got it so I guess just to paraphrase, but the recent jump in gas and obviously, Jim highlighted the move in the forwards that shouldn't really impact sort of the bill headroom.

Just given the other levers you have at the business.

Rebecca Kujawa: Yeah. So, Shar, I would think if you look back at where we have taken the opportunity to invest capital historically, it really is on bringing long-term value to our customers. So being able to deliver lower costs over time, higher reliability, greater resilience, greater diversification in those clean energy benefits. And it would be short-sighted to stop investing in opportunities that are really clearly good for customers. We're very mindful of customer bills. You hear that from us in all of our communications, and it's what we focus on day-to-day is making sure we have a terrific value proposition for our customers. And we will do everything we can to moderate those impacts over time.

So you know Shar I would think if.

If you look back at where we have taken the opportunity.

You need to invest capital historically, it really is on on bringing long term value to our customers, so being able to deliver lower cost over time higher reliability greater resilience gray.

Greater diversification and those clean energy benefits and it would be shortsighted to to stop investing in.

And the opportunities that are really clearly good for our customers. We're very mindful of customer bills, you hear that from us from everyday in all of our communications and it's what we focus on day to day is making sure we have a terrific value proposition for our customers and we will do everything we can to moderate those impacts them overtime.

Rebecca J. Kujawa: And we will do everything we can to moderate those impacts over time. Terrific. Thank you very much. Appreciate it. Thank you. Our next question comes from Michael Lapides from Goldman Sachs. Please go ahead with your question. Hey, guys. Thank you for taking my question. I have one or two here. First of all, the water and wastewater utility system acquisitions in Texas. Can you talk about just the size and scale of the capital you're employing there for that? And then more long-term, kind of more strategic, how do you think about the opportunity for growth in that business? Is it more organic? Is it more kind of continuing to roll up neighboring systems, or are you thinking about a national strategy here? Hey, Michael, and good morning, and thanks for the question. We did include in the prepared remarks the comment about the $45 million.

Shar Pourreza: Terrific. Thank you very much. Appreciate it.

Terrific. Thank you very much I appreciate it thank you.

Rebecca Kujawa: Thank you.

Operator: Our next question comes from Michael Lapides from Goldman Sachs. Please go ahead with your question.

Our next question comes from Michael Lapides from Goldman Sachs. Please go ahead with your question Hey, guys. Thank you for taking my question have one or two here first of all the water and wastewater utility system acquisitions in Texas can you talk about just the.

Michael Lapides: Hey, guys. Thank you for taking my question. I have one or two here. First of all, the water and wastewater utility system acquisitions in Texas. Can you talk about just the size and scale of the capital you're employing there for that? And then more long-term, kind of more strategic, how do you think about the opportunity for growth in that business? Is it more organic? Is it more kind of continuing to roll up neighboring systems, or are you thinking about a national strategy here?

Size and scale of the capital Youre employing there for that and then more long term kind of more strategic how do you think about the opportunity for growth in that business.

Is it more organic is it more kind of continuing to roll up neighboring systems are you thinking about a national strategy here.

Rebecca Kujawa: Hey, Michael, and good morning, and thanks for the question. We did include in the prepared remarks the comment about the $45 million.That $45 million includes both the acquisition of the regulated utility assets as well as that innovative water reuse and reclamation project that we talked about also at Energy Resources. In terms of our capital program, investing $15 billion a year and more over time, it's pretty small. We referenced it for a good reason, and that's because we're excited about the opportunities. I think it's a lot like transmission in the sense that it will be built slowly over time and create opportunities for us to continue to have that regulated and long-term contracted base of value creation for shareholders.

Hey, Michael.

Good morning, and thanks for the question. We did include in the prepared remarks, the comment about the $45 million and that $45 million includes both the acquisition of the regulated utility assets.

Rebecca J. Kujawa: That $45 million includes both the acquisition of the regulated utility assets as well as that innovative water reuse and reclamation project that we talked about also at Energy Resources. In terms of our capital program, investing $15 billion a year and more over time, it's pretty small. We referenced it for a good reason, and that's because we're excited about the opportunities. I think it's a lot like transmission in the sense that it will be built slowly over time and create opportunities for us to continue to have that regulated and long-term contracted base of value creation for shareholders.

Assets as well as that innovative.

You know water reuse and reclamation project that we talked about it and also at energy resources. So in terms of our capital program investing $15 billion, a year and more over time, it's pretty small.

But we we referenced it for a good reason and that's because we're excited about the opportunities.

I think it's a lot like transmission in a sense.

So that it will be built slowly over time, and Ah and create opportunities for us to continue to have that regulated long term contracted base of of value creation for shareholders on the other part of the kind of innovative use and reclamation project that we that.

Rebecca J. Kujawa: On the other part, the kind of innovative use and reclamation project that we talked about on the Energy Resources side, those also bring clean energy renewable opportunities as we're able to bring this broad suite of clean energy and ESG-focused investment opportunities for our commercial and industrial customers. That gives us the opportunity to have a deep relationship with them, not just bring one solution, but bring a portfolio of options to them. So we think it's a terrific opportunity for our Energy Resources team to develop those meaningful relationships with our customers. So it's both an investment and a strategic opportunity from our perspective. Got it. And then one question on Seabrook. And I know in the grand scheme of NEER's earnings power, Seabrook, while it's a large plant, is nowhere near the biggest contributor of that.

On the other part, the kind of innovative use and reclamation project that we talked about on the Energy Resources side, those also bring clean energy renewable opportunities as we're able to bring this broad suite of clean energy and ESG-focused investment opportunities for our commercial and industrial customers. That gives us the opportunity to have a deep relationship with them, not just bring one solution, but bring a portfolio of options to them. So we think it's a terrific opportunity for our Energy Resources team to develop those meaningful relationships with our customers. So it's both an investment and a strategic opportunity from our perspective.

We talked about on the energy resources side.

There was also bring clean energy renewable opportunities as we're able to bring this broad suite of of clean energy and ESG focused investment opportunities for our commercial and industrial customers that gives us the opportunity to have a deep relationship with them not just bring one solution that bring a poor.

Both options to them. So we think it's a terrific opportunity for energy resources team to develop those meaningful relationships with our customers. So it's both an investment and a strategic opportunity from our perspective.

Michael Lapides: Got it. And then one question on Seabrook. And I know in the grand scheme of NEER's earnings power, Seabrook, while it's a large plant, is nowhere near the biggest contributor of that.

Got it and then one question.

On C broke and I know in the Grand scheme.

Fully mirrors earnings powers, Hugh Brooks, while it's a large plant. It is nowhere near the biggest contributor of that but just curious how should we think about how much you financially hedged. She broke I'm just thinking about given the move in forward power prices and Jim referenced the move in natural gas. The dollar dollar increase in the strip.

Rebecca J. Kujawa: But just curious, how should we think about how much you financially hedge Seabrook? I'm just thinking about, given the move in forward power prices, and Jim referenced the move in natural gas, the dollar increase in the strip, how we should think about whether Seabrook actually benefits from that materially, or had you already significantly hedged it out prior? Yeah. So we have an ongoing hedging program that we execute methodically over time, executing a percentage of Seabrook's forward generation. So I would characterize it as pretty well hedged in the next couple of years. And then as you get out into the latter part of the 2020s and into the 2030s and beyond, less so.

But just curious, how should we think about how much you financially hedge Seabrook? I'm just thinking about, given the move in forward power prices, and Jim referenced the move in natural gas, the dollar increase in the strip, how we should think about whether Seabrook actually benefits from that materially, or had you already significantly hedged it out prior?

We should think about whether see broke actually benefits from that materially or had you already significantly hedged it out prior.

Rebecca Kujawa: Yeah. So we have an ongoing hedging program that we execute methodically over time, executing a percentage of Seabrook's forward generation. So I would characterize it as pretty well hedged in the next couple of years. And then as you get out into the latter part of the 2020s and into the 2030s and beyond, less so. So obviously, it would benefit that if you mark to market that forward position. Clearly, there's been some upside with increase in natural gas prices and some of the congestion you've seen in the Northeast in terms of electricity prices. Whether that lasts in the long term, I think, remains to be seen, but certainly an opportunity for Seabrook.

Yeah, So we have.

Ongoing hedging program that we execute ratably.

Ratably over time executing our percentage of Seabrook's forward generation, So I would characterize.

How is pretty well hedged in the next couple of years and then as you get out to the latter part of the 2000 Twenty's end and into the 'twenty three and beyond are less so so it obviously would benefit that if you mark to market that forward position clearly theres been some upside with the increase in natural gas prices and in some of the congestion you've.

Rebecca J. Kujawa: So obviously, it would benefit that if you mark to market that forward position. Clearly, there's been some upside with increase in natural gas prices and some of the congestion you've seen in the Northeast in terms of electricity prices. Whether that lasts in the long term, I think, remains to be seen, but certainly an opportunity for Seabrook. We continue to believe Seabrook is very well placed. It is in a particularly advantageous load zone. It's obviously in a region that values clean energy deeply. And you think about broad decarbonization in any part of the US, including the Northeast, well-positioned nuclear assets will be a key part of making it happen. So we very much appreciate our nuclear team and think they do a terrific job every day. And Seabrook is a key part of that. Got it. Thank you. Much appreciated. Thank you, Michael.

Or is it in the northeast in terms of electricity prices.

Whether that last in the long term I think remains to be seen but certainly an opportunity for seabrook.

We continue to believe Seabrook is very well placed. It is in a particularly advantageous load zone. It's obviously in a region that values clean energy deeply. And you think about broad decarbonization in any part of the US, including the Northeast, well-positioned nuclear assets will be a key part of making it happen. So we very much appreciate our nuclear team and think they do a terrific job every day. And Seabrook is a key part of that.

We continue to believe Seabrook is very well placed.

Is in a particularly advantageous load a zone, it's obviously in a region that valley.

C N as clean energy deeply and you think about broad de carbonization in any part of the U S, including the northeast well positioned nuclear assets will be a key part of making that happen.

So we very much appreciate the our nuclear team and think they do a terrific job every day and and Seabrook as a key part of that.

Michael Lapides: Got it. Thank you. Much appreciated.

Got.

Thank you much appreciated.

Rebecca Kujawa: Thank you, Michael.

Thank you Michael.

Rebecca J. Kujawa: Our next question comes from Maheep Mandloi from Credit Suisse. Please go ahead with your question. Hey, thanks. I'm taking a question. Two on NEP, actually. So one on the multiple for the acquisition comes out around 11x here versus the 9x we saw for the prior two acquisitions, so dropped down. Just want to understand, is that the new normal you're seeing for asset acquisitions or anything specific to these projects? And just second one on the 2022 CAFD walk, just want to confirm if it includes any repayment for the first BlackRock CEPF closed in 2018. Thanks. So I'll come back to the second question. In terms of the transaction, as we highlighted, it was a third-party transaction, so it reflects a negotiated outcome.

Operator: Our next question comes from Maheep Mandloi from Credit Suisse. Please go ahead with your question.

Our next question comes from.

My Boy from Credit Suisse. Please go ahead with your question.

Maheep Mandloi: Hey, thanks. I'm taking a question. Two on NEP, actually. So one on the multiple for the acquisition comes out around 11x here versus the 9x we saw for the prior two acquisitions, so dropped down. Just want to understand, is that the new normal you're seeing for asset acquisitions or anything specific to these projects? And just second one on the 2022 CAFD walk, just want to confirm if it includes any repayment for the first BlackRock CEPF closed in 2018. Thanks.

Hey, Thanks for taking our question.

Actually two.

One on the multiple for the acquisition.

Got it because at around 11 times EBITDA versus the main times, we saw for the prior to acquisition so dropdown.

I wanted to understand.

Is that the new normal you're seeing for asset acquisitions or anything specific to these projects.

And just second one on the 2022 cavity walk.

I can confirm if it includes any repayment for the the.

Blackrock C P F closer in 2018.

Rebecca Kujawa: So I'll come back to the second question. In terms of the transaction, as we highlighted, it was a third-party transaction, so it reflects a negotiated outcome. And we continue to believe that the renewable sector remains of high interest for a lot of folks and expected to be competitive over time. But I think you can see with this transaction and with a prior third-party transaction that we announced and closed earlier this year, there are some specific advantages that NextEra Energy Partners has, both in its ability to find attractive financing, but also the relationship it has with NextEra Energy Resources of being able to add value on the operating side and bring to bear all of the scale benefits that we have.

So I'll come back to the second question in terms of the transaction as we highlighted it was a a third party transaction. So it reflects a negotiated outcome and we continue to believe that.

Rebecca J. Kujawa: And we continue to believe that the renewable sector remains of high interest for a lot of folks and expected to be competitive over time. But I think you can see with this transaction and with a prior third-party transaction that we announced and closed earlier this year, there are some specific advantages that NextEra Energy Partners has, both in its ability to find attractive financing, but also the relationship it has with NextEra Energy Resources of being able to add value on the operating side and bring to bear all of the scale benefits that we have. So in terms of the second part of the question, I think you were asking about the 2018 SEPF and ultimately the conversion that will happen in the very latter part of this year.

Some of the renewable sector remains of high interest for a lot of folks and expect it to be competitive over time, but I think you can see with this transaction and with a prior third party transaction that we announced and closed earlier. This year. There are some specific advantages the nextera energy partners has.

Both in its ability to you'll find attractive financing, but also the relationship. It has with Nextera energy resources are being able to add value on the operating side and bring to.

Bear all of the scale benefits that we have so in terms of the the.

So in terms of the second part of the question, I think you were asking about the 2018 SEPF and ultimately the conversion that will happen in the very latter part of this year. And we're still, obviously, some significant part of that gets converted, up to 70% of it in NEP units, and the balance is paid in cash. And we are still working through what the full impacts are and how we will finance that over time. But as we've laid out in terms of our run rate expectations, we will expect that year-end 2022 to be in the ranges that we outlined today.

The second part of the question I think you were asking about the 2018 on surface.

And ultimately the conversion that will happen in the very latter part of this year and we're still obviously some significant part of that gets converted up to 70% of it in NEP units.

Rebecca J. Kujawa: And we're still, obviously, some significant part of that gets converted, up to 70% of it in NEP units, and the balance is paid in cash. And we are still working through what the full impacts are and how we will finance that over time. But as we've laid out in terms of our run rate expectations, we will expect that year-end 2022 to be in the ranges that we outlined today. Got it. Thanks for taking questions. Thank you. Our next question comes from Durgesh Chopra from Evercore ISI. Please go ahead with your question. Hey, good morning, team. Thank you for taking my question. I just wanted to go back. I just wanted to go back to the water utility acquisition strategy a bit.

The balance.

Balance is paid in cash and we are still working through what the full impacts are and how we will finance that overtime, but as we've laid out in terms of our run rate expectations. We will expect that year end 'twenty two to be in the ranges they may outlined today.

Maheep Mandloi: Got it. Thanks for taking questions.

Thanks for taking the questions.

Rebecca Kujawa: Thank you.

Thank you.

Operator: Our next question comes from Durgesh Chopra from Evercore ISI. Please go ahead with your question.

Our next question comes from <unk> Chopra from Evercore ISI. Please go ahead with your question.

Durgesh Chopra: Hey, good morning, team. Thank you for taking my question. I just wanted to go back. I just wanted to go back to the water utility acquisition strategy a bit. Obviously, this is in Texas, but there's obviously a ton of small municipal systems across the country which are sort of owned by small mom-and-pop type facilities. Just, are you going to sort of be more aggressive throughout the country, or is there something specific about Texas as we think about you sort of competing for these small water utility systems?

Hey, good morning team. Thank you for taking my question.

Wanted to go back.

I just wanted to go back to the water utility acquisition.

Strategy a bit.

Rebecca J. Kujawa: Obviously, this is in Texas, but there's obviously a ton of small municipal systems across the country which are sort of owned by small mom-and-pop type facilities. Just, are you going to sort of be more aggressive throughout the country, or is there something specific about Texas as we think about you sort of competing for these small water utility systems? Yeah, I think it's a great question. As we've highlighted, I highlighted it, obviously, in the prepared remarks, and Jim's highlighted elsewhere in recent months. We're really excited about building a significant presence in the water business. We think there's a lot of skills, capabilities, and, of course, the broad platform we have that we could bring real value in these acquisitions. But as you highlighted, they tend to be very small.

Obviously this is in Texas, but there's obviously a ton of small municipal systems across the country.

Yes.

You're sort of owned by small mom and pop.

Oh facilities just.

Are you going to sort of.

Be more aggressive towards the country or theres.

But you can think about Texas.

You'd think about you sort of.

Competing for these a small water utility systems.

Rebecca Kujawa: Yeah, I think it's a great question. As we've highlighted, I highlighted it, obviously, in the prepared remarks, and Jim's highlighted elsewhere in recent months. We're really excited about building a significant presence in the water business. We think there's a lot of skills, capabilities, and, of course, the broad platform we have that we could bring real value in these acquisitions. But as you highlighted, they tend to be very small. And whether they're privately owned or owned by municipalities, almost regardless of the ownership structure, they tend to be small. Even the one I talked about today is incorporated with something else, and it totals up $45 million in context of our $15 billion capital program.

Yeah, I think it's a great question as we've highlighted I highlighted obviously in our prepared remarks and in Jim's highlighted elsewhere in recent months, we're really excited about building.

Some significant presence in the water business and we think there's a lot of skills and capabilities and of course, the broad platform. We have there where he can bring real value in these acquisitions, but as you highlighted are they tend to be very small and you know whether they are privately owned or owned by municipalities.

Rebecca J. Kujawa: And whether they're privately owned or owned by municipalities, almost regardless of the ownership structure, they tend to be small. Even the one I talked about today is incorporated with something else, and it totals up $45 million in context of our $15 billion capital program. I expect us to be active. There's probably some regions of the US where the team in the near term will be more active than others for a variety of reasons. But it's probably not exclusively Texas. It'll build over time. We'll let you know as the team continues to have success. Understood. Thank you for the time. Thank you. Our next question comes from Jeremy Tonet from JPMorgan. Please go ahead with your question. Hi, good morning. Good morning. Thanks. Just wanted to pivot back to hydrogen for a minute if we could here.

You know almost.

Regardless of the ownership structure they tend to be small even the one I talked about today is incorporated with something else and it totals up $45 million in context of our $15 billion capital program.

I expect us to be active. There's probably some regions of the US where the team in the near term will be more active than others for a variety of reasons. But it's probably not exclusively Texas. It'll build over time. We'll let you know as the team continues to have success.

So I expect us to be active on there's probably some regions of the U S for the team in the near term will be more active than.

Six are for a variety of reasons, but it's probably not exclusively Texas and it'll build over time and and well, let you know as that as the team continues to have success.

Durgesh Chopra: Understood. Thank you for the time.

Understood. Thank you for the time.

Rebecca Kujawa: Thank you.

Operator: Our next question comes from Jeremy Tonet from JPMorgan. Please go ahead with your question.

Thank you.

Our next question comes from Jeremy Tonet from Jpmorgan. Please go ahead with your question.

Jeremy Tonet: Hi, good morning.

Others.

Rebecca Kujawa: Good morning.

Hi, good morning, they're more than just thanks, I just wanted to pivot back to hydrogen for a minute. If we could here and just wanted to see on what timeline do you see green hydrogen being competitive and how much money you're currently spending on hydrogen and.

Jeremy Tonet: Thanks. Just wanted to pivot back to hydrogen for a minute if we could here. Just wanted to see, on what timeline do you see green hydrogen being competitive, and how much money is NextEra currently spending on hydrogen projects, and where could that ramp to over time?

Rebecca J. Kujawa: Just wanted to see, on what timeline do you see green hydrogen being competitive, and how much money is NextEra currently spending on hydrogen projects, and where could that ramp to over time? I think it's a great question. I think in the electricity sector, when it's going to be particularly relevant is the latter part of the 2020s into 2030s and beyond. For the key reason for that being that you really need to have the need for long-duration storage. It is particularly attractive when you have very, very low-cost energy input and particularly low-cost renewables, which will inevitably have when you have substantial renewable deployment, again, probably in the latter part of the 2020s and beyond.

Hydrogen projects and where could that ramp to over time.

Rebecca Kujawa: I think it's a great question. I think in the electricity sector, when it's going to be particularly relevant is the latter part of the 2020s into 2030s and beyond. For the key reason for that being that you really need to have the need for long-duration storage. It is particularly attractive when you have very, very low-cost energy input and particularly low-cost renewables, which will inevitably have when you have substantial renewable deployment, again, probably in the latter part of the 2020s and beyond.

I think it's a great question I think in the in the electricity sector. When it's going to be particularly relevant is the latter part of the 2000 twenty's into 'twenty and beyond and for the key reason of them for that being that.

That you really need that they have the need for long duration storage and it is particularly attractive.

Time, when you have very very low cost energy input and particularly low cost renewables, which will inevitably have when you have substantial renewable deployment again, probably in the latter part of the 2000 Twenty's and beyond what may be different is in the transportation and industrial sector, where there is already built.

Rebecca J. Kujawa: What may be different is in the transportation and industrial sector, where there is already built-in use of gray hydrogen and other fossil fuels that could be supplanted with green hydrogen when it's competitive. The big question mark would be whether or not there's a hydrogen production tax credit ultimately in the final reconciliation bill. Clearly, there's one anticipated today. And at $3 a kilogram production tax credit, that really closes the gap between gray hydrogen and green hydrogen alternatives. And so that's a terrific opportunity to see growth in the nearer term. And what that would represent is using green hydrogen alternatives to supplant gray hydrogen. From our perspective, that's opportunities, clearly, to build a lot of renewables. And you saw the first step in that direction in our announcement today about a power purchase agreement that we've entered into.

What may be different is in the transportation and industrial sector, where there is already built-in use of gray hydrogen and other fossil fuels that could be supplanted with green hydrogen when it's competitive. The big question mark would be whether or not there's a hydrogen production tax credit ultimately in the final reconciliation bill. Clearly, there's one anticipated today. And at $3 a kilogram production tax credit, that really closes the gap between gray hydrogen and green hydrogen alternatives. And so that's a terrific opportunity to see growth in the nearer term. And what that would represent is using green hydrogen alternatives to supplant gray hydrogen.

Built in use of great.

<unk> and other fossil fuels that could be supplanted with green hydrogen when it's competitive.

The big question, Mark would be whether or not there's a hydrogen production tax credit ultimately in a in the final reconciliation Bill clearly, there's one anticipated today and at $3 a kilogram no production tax credit.

Hi, it you're not really closes the gap between gray hydrogen.

And green hydrogen alternatives and so that's a terrific opportunity to see growth in the nearer term and what that would represent as using green hydrogen alternatives as a support to supplant gray hydrogen from our perspective that's opportunities.

From our perspective, that's opportunities, clearly, to build a lot of renewables. And you saw the first step in that direction in our announcement today about a power purchase agreement that we've entered into. But there would be a lot more like that in not just the renewable side, but also an opportunity for us to invest in the actual hydrogen production equipment such as the electrolyzer. So we'll see. We'll know a lot more in January once we've seen the final package, if there is one, as Jim highlighted. And it'll develop over time in terms of opportunities. We think it's exceptionally likely. It's really just a matter of timing.

<unk> is clearly to build a lot of renewables and you saw the first step in that direction in our announcement today about a power purchase agreement that we've entered into but there would be more a lot more like that and not just the renewable side, but also an opportunity for us to invest in the actual.

Rebecca J. Kujawa: But there would be a lot more like that in not just the renewable side, but also an opportunity for us to invest in the actual hydrogen production equipment such as the electrolyzer. So we'll see. We'll know a lot more in January once we've seen the final package, if there is one, as Jim highlighted. And it'll develop over time in terms of opportunities. We think it's exceptionally likely. It's really just a matter of timing. Got it. That's very helpful. And then maybe just pivoting over real quick towards transmission, obviously, to optimize and maximize renewables deployment for the country. Transmission buildout is a key ingredient there, yet, as you well know, it's difficult and timely to complete. Just wondering, I guess, your latest thoughts on what expectations you might have for transmission buildout and what role NextEra could play there. Yeah, we're really excited about transmission opportunities.

Hydrogen production equipments, such as the electric.

Credit Suisse.

So we'll see you know we'll know a lot more in January once we've seen the the final package. If there is one as Jim highlighted Ah and and end it will develop over time in terms of opportunities. We think it's exceptionally likely it's really just a matter of timing.

Jeremy Tonet: Got it. That's very helpful. And then maybe just pivoting over real quick towards transmission, obviously, to optimize and maximize renewables deployment for the country. Transmission buildout is a key ingredient there, yet, as you well know, it's difficult and timely to complete. Just wondering, I guess, your latest thoughts on what expectations you might have for transmission buildout and what role NextEra could play there.

Got it that's that's very helpful.

And then maybe just pivoting over real quick towards transmission, obviously to optimize and maximize renewables deployment for the country.

Transmission build out is a key ingredient there yet it's a as you well know, it's a difficult and timely to complete just wondering I guess your latest thoughts on you know.

What expectations you might have for trans.

July and build out and what role you could play there.

Rebecca Kujawa: Yeah, we're really excited about transmission opportunities. Our NextEra Energy Transmission team has built a terrific business over the last decade with a number of organic wins as well as some acquisitions, as we've talked about in the past, of not only Trans Bay Cable, but GridLiance more recently. We see a ton of opportunities going forward for us to be successful in winning some of those big opportunities to invest, realizing great returns. But also the strategic side of it, of ensuring that it happens so that we can continue to realize the substantial renewables buildout that we already are seeing, and we expect to only continue to grow in its opportunity size over time.

Yeah, we're really excited about transmission opportunities our nextera energy transmission team has built a terrific business over the last decade with a number of organic wins as well as some acquisitions as we've talked about in the past of not only Trans Bay cable.

Rebecca J. Kujawa: Our NextEra Energy Transmission team has built a terrific business over the last decade with a number of organic wins as well as some acquisitions, as we've talked about in the past, of not only Trans Bay Cable, but GridLiance more recently. We see a ton of opportunities going forward for us to be successful in winning some of those big opportunities to invest, realizing great returns. But also the strategic side of it, of ensuring that it happens so that we can continue to realize the substantial renewables buildout that we already are seeing, and we expect to only continue to grow in its opportunity size over time. It may not be imperative today to have new transmission, but it's really, really important to start today because it will be imperative in the next decade.

Michelle grid lines more recently, and we see a ton of opportunities going forward for us to be successful in.

Winning some of those big opportunities to invest realizing great returns.

But also the strategic side of it of ensuring that it happens so that we can continue to realize the substantial renewables.

Cabled that we already are seeing and we expect to only continue to grow and its opportunity size over time.

It may not be imperative today to have new transmission, but it's really, really important to start today because it will be imperative in the next decade. Some of the policy considerations that SARC is undertaking today could be helpful to bringing that to reality over time.

It's it may not be imperative today to have new transmission, but it's really really important to start today, because it will be imperative in the next decade, and and some of the policy considerations that.

Rebecca J. Kujawa: Some of the policy considerations that SARC is undertaking today could be helpful to bringing that to reality over time. Great. Thank you so much for the color. Great. Thank you. Ladies and gentlemen, that will conclude today's question and answer session as well as today's conference call. We do thank you for attending the presentation. You may now disconnect your lines.

Sorry, because undertaking today.

They could be helpful to bringing that to reality.

Jeremy Tonet: Great. Thank you so much for the color.

Overtime.

Great. Thank you so much for the color.

Rebecca Kujawa: Great. Thank you.

Operator: Ladies and gentlemen, that will conclude today's question and answer session as well as today's conference call. We do thank you for attending the presentation. You may now disconnect your lines.

Great. Thank you.

And ladies and gentlemen that will conclude today's question and answer session as well as today's conference call. We do thank you for attending the presence.

It isn't.

You may now disconnect your lines.

Yeah.

Q3 2021 Nextera Energy Inc and Nextera Energy Partners LP Earnings Call

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