Q4 2023 NextEra Energy Inc Earnings Call

January 25, 2024

Operator: Good morning and welcome to the NextEra Energy, Inc. and NextEra Energy Partners, LP Q4 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Kristen Rose, Director of Investor Relations. Please go ahead.

Good morning, and welcome to the Nextera Energy, Inc, and Nextera Energy partners L. P fourth quarter 2023 earnings conference call.

Speaker Change: All participants will be in listen only mode.

Speaker Change: Did you need assistance. Please signal a conference specialist by pressing star key followed by zero.

Speaker Change: After todays presentation, there will be an opportunity to ask questions.

Speaker Change: I'll ask a question you May press Star then one on your telephone keypad.

Speaker Change: To withdraw your question. Please press Star then two.

Speaker Change: Please note this event is being recorded.

Speaker Change: I would now like to turn the conference over to you Kristian Rose director of Investor Relations. Please go ahead.

Kristen Rose: Thank you, Andrea. Good morning, everyone, and thank you for joining our Q4 and full year 2023 combined financial results conference call for NextEra Energy and NextEra Energy Partners. With me this morning are John Ketchum, Chairman, President, and Chief Executive Officer of NextEra Energy, Kirk Crews, Executive Vice President and Chief Financial Officer of NextEra Energy, Rebecca Kujawa, 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 Armando Pimentel, President and Chief Executive Officer of Florida Power & Light Company. John will provide some opening remarks and will then turn the call over to Kirk for a review of our Q4 and full year results. Our executive team will then be available to answer your questions.

Kristin Rose: Thank you, Andrea. Good morning, everyone, and thank you for joining our Q4 and full year 2023 combined financial results conference call for NextEra Energy and NextEra Energy Partners. With me this morning are John Ketchum, Chairman, President, and Chief Executive Officer of NextEra Energy, Kirk Crews, Executive Vice President and Chief Financial Officer of NextEra Energy, Rebecca Kujawa, 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 Armando Pimentel, President and Chief Executive Officer of Florida Power & Light Company. John will provide some opening remarks and will then turn the call over to Kirk for a review of our Q4 and full year results. Our executive team will then be available to answer your questions.

Kristian Rose: Thank you Andrea good morning, everyone and thank you for joining our fourth quarter and full year 2023 combined financial results conference call for Nextera Energy and Nextera Energy partners with me. This morning are John Ketchum, Chairman, President and Chief Executive Officer of Nextera Energy Kirk cruise Executive Vice President and.

Kristian Rose: Chief Financial Officer of Nextera Energy, Rebecca Kiana, 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 Armando Pimentel.

Armando Pimentel: President and Chief Executive Officer of Florida Power and light company.

John W. Ketchum: John will provide some opening remarks and will then turn the call over to Kirk for a review of our fourth quarter and full year results. Our executive team will then be available to answer your questions.

Kristen Rose: 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 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, www.nexteraenergy.com and www.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. With that, I will turn the call over to John.

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 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, www.nexteraenergy.com and www.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. With that, I will turn the call over to John.

John W. Ketchum: We will be making forward looking statements. During this call based on current expectations and assumptions, which are subject to risks and uncertainties.

John W. Ketchum: Actual results could differ materially from our forward looking statements if any of our key assumptions are incorrect or because of other factors discussed in today's earnings news release and the comments made during this conference call and 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 www.

Kirk: W Dot Nextera energy Dot com and Www Nextera energy Partners' Dot 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 reckon.

John W. Ketchum: Filiation of historical non-GAAP measures to the closest GAAP financial measure with that I will turn the call over to John.

John Ketchum: Thanks, Kristen, and good morning. NextEra Energy had strong operational and financial performance at both FPL and Energy Resources in 2023. NextEra Energy delivered full-year Adjusted Earnings Per Share of $3.17, up over 9% from 2022, exceeding the high end of our adjusted EPS expectations range. From solar supply chain challenges to higher inflation and interest rates, NextEra Energy navigated through a challenging environment the last two years, delivering compound annual adjusted EPS growth of roughly 11.5% since 2021. These were unprecedented events for our sector and clear headwinds for renewables, but disruption often presents opportunity. At NextEra Energy, we relied on our 25 years of renewables experience and our culture of execution to navigate this tough environment.

John W. Ketchum: Thanks, Kristen and good morning, Nick.

John W. Ketchum: Nextera energy had strong operational and financial performance at both FPL and energy resources in 2023.

John W. Ketchum: Nextera energy delivered full year adjusted earnings per share of $3.17 up over 9% from 2022 exceeding the high end of our adjusted EPS expectations range.

Kristen Smith: From solar supply chain challenges, the higher inflation and interest rates Nextera energy navigated through a challenging environment. The last two years delivering compound annual adjusted EPS growth of roughly 11, 5% since 2021.

Kristen Smith: These were unprecedented.

Kristen Smith: Precedented events for our sector and clear headwinds for renewables, but disruption often presents opportunity.

Kristen Smith: At Nextera energy, we relied on our 25 years of renewables experience and our culture of execution.

Kristen Smith: NAV against this tough environment on the strengths of our scale and competitive advantages our world class supply chain capabilities customer relationships access to and cost of capital advantages the strength of our balance sheet, our data driven development playbook and our team just to name a few.

John Ketchum: On the strengths of our scale and competitive advantages, our world-class supply chain capabilities, customer relationships, access to and cost of capital advantages, the strength of our balance sheet, our data-driven development playbook, and our team, just to name a few, we successfully managed through the disruption. Our scale and competitive advantages served as key differentiators and allowed us to continue to deliver for our customers and extend our long track record of earnings and dividend growth. Over the past 10 years, we have delivered compound annual growth in adjusted EPS of roughly 10%, which is the highest among all top 10 power companies. Over that same period, the remaining top 10 power companies have achieved, on average, compound annual growth in adjusted EPS of roughly 2%.

On the strengths of our scale and competitive advantages, our world-class supply chain capabilities, customer relationships, access to and cost of capital advantages, the strength of our balance sheet, our data-driven development playbook, and our team, just to name a few, we successfully managed through the disruption. Our scale and competitive advantages served as key differentiators and allowed us to continue to deliver for our customers and extend our long track record of earnings and dividend growth. Over the past 10 years, we have delivered compound annual growth in adjusted EPS of roughly 10%, which is the highest among all top 10 power companies. Over that same period, the remaining top 10 power companies have achieved, on average, compound annual growth in adjusted EPS of roughly 2%.

Kristen Smith: We successfully managed through the disruption.

Kristen Smith: Our scale and competitive advantages served as key differentiators and allowed us to continue to deliver for our customers and extend our long track record of earnings and dividend growth.

Over the past 10 years, we have delivered compound annual growth in adjusted EPS of roughly 10%, which is the highest among all top 10 power companies.

Kristen Smith: Over that same period, the remaining top 10 power companies have achieved on average compound annual growth and adjusted EPS of roughly 2%.

John Ketchum: Notwithstanding the strong adjusted EPS results, we recognize and are disappointed by the underperformance in the share price, and as we start 2024, we remain steadfast in our continued focus on execution and creating long-term value for shareholders. We believe the disruption over the last two years has made NextEra Energy an even stronger company. Our business model is more resilient, our development platform is even more advanced, and our supply chain is more diversified than it has ever been. Bottom line, we believe NextEra Energy is well positioned headed into 2024, and there is good reason for optimism at NextEra Energy. Although nobody can predict with certainty what 2024 will bring, inflation and interest rates have declined from their peak, and NextEra Energy has taken steps to mitigate its exposure to interest rate volatility through its interest rate hedging program.

Notwithstanding the strong adjusted EPS results, we recognize and are disappointed by the underperformance in the share price, and as we start 2024, we remain steadfast in our continued focus on execution and creating long-term value for shareholders. We believe the disruption over the last two years has made NextEra Energy an even stronger company. Our business model is more resilient, our development platform is even more advanced, and our supply chain is more diversified than it has ever been. Bottom line, we believe NextEra Energy is well positioned headed into 2024, and there is good reason for optimism at NextEra Energy. Although nobody can predict with certainty what 2024 will bring, inflation and interest rates have declined from their peak, and NextEra Energy has taken steps to mitigate its exposure to interest rate volatility through its interest rate hedging program.

Kristen Smith: Notwithstanding the strong adjusted EPS results, we recognize and are disappointed by the underperformance in the share price and as we start 2024, we remain steadfast in our continued focus on execution and creating long term value for shareholders.

We believe the disruption over the last two years has made nextera energy, an even stronger company. Our business model is more resilient. Our development platform is even more advanced and our supply chain is more diversified than it has ever been.

Kristen Smith: Line, we believe Nextera energy is well positioned headed into 2024.

Kristen Smith: And there is good reason for optimism at Nextera energy, although nobody can predict with certainty what 'twenty 'twenty four will bring inflation and interest rates have declined from their peak and Nextera energy has taken steps to mitigate its exposure to interest rate volatility through its interest rate hedging program the.

John Ketchum: The Commerce Department has provided the final determination around circumvention, providing solar suppliers with more certainty around the rules and expectations of importing solar equipment. New solar supply chains have been established in the US and internationally, leading to lower solar panel prices, and we see the continued longer-term push towards EVs as being incrementally positive for continued reductions in battery prices. Solar panel and battery prices have already declined by roughly 25% from their peak over the last 24 months heading into 2024. We have proactively procured critical electrical equipment to complete our renewable projects, securing enough transformers and breakers to cover our expected build through 2027. Due to our scale and construction partnerships, we have not experienced any labor shortages impacting project timelines.

The Commerce Department has provided the final determination around circumvention, providing solar suppliers with more certainty around the rules and expectations of importing solar equipment. New solar supply chains have been established in the US and internationally, leading to lower solar panel prices, and we see the continued longer-term push towards EVs as being incrementally positive for continued reductions in battery prices. Solar panel and battery prices have already declined by roughly 25% from their peak over the last 24 months heading into 2024. We have proactively procured critical electrical equipment to complete our renewable projects, securing enough transformers and breakers to cover our expected build through 2027. Due to our scale and construction partnerships, we have not experienced any labor shortages impacting project timelines.

Kristen Smith: The Commerce Department has provided the final determination around circumvention, providing solar suppliers with more certainty around the rules and expectations.

Of importing solar equipment.

Kristen Smith: New solar supply chains have been established in the U S and internationally, leading to lower solar panel prices and we see the continued long longer term push towards evs as being incrementally positive for continued reductions in battery prices.

Kristen Smith: Solar panel of battery prices have already declined by roughly 25% from their peak over the last 24 months heading into 2024, we are proactively procured critical electrical equipment to complete our renewable projects securing enough transformers breakers to cover our.

Kristen Smith: <unk> build through 2027.

Kristen Smith: And due to our scale and construction partnerships, we have not experienced any labor shortages impacting project type timelines.

John Ketchum: Ultimately, all these tailwinds are great for customers, and we believe should drive greater renewables demand in 2024 and beyond, all on the heels of consecutive record years for new renewables originations at Energy Resources in 2022 and 2023, totaling over 17GW. NextEra Energy offers a unique value proposition with two strong businesses that we believe are strategically positioned with outstanding prospects for future growth. FPL, which represents more than two-thirds of our company, is the nation's largest electric utility and continues to deliver what we believe is the best customer value proposition in one of the fastest-growing states in the US. Energy Resources, the world's renewables leader, has differentiated itself in an industry in which scale, experience, and being well-capitalized matters. At NextEra Energy, the plan is simple.

Ultimately, all these tailwinds are great for customers, and we believe should drive greater renewables demand in 2024 and beyond, all on the heels of consecutive record years for new renewables originations at Energy Resources in 2022 and 2023, totaling over 17GW. NextEra Energy offers a unique value proposition with two strong businesses that we believe are strategically positioned with outstanding prospects for future growth. FPL, which represents more than two-thirds of our company, is the nation's largest electric utility and continues to deliver what we believe is the best customer value proposition in one of the fastest-growing states in the US. Energy Resources, the world's renewables leader, has differentiated itself in an industry in which scale, experience, and being well-capitalized matters. At NextEra Energy, the plan is simple.

Kristian Rose: Ultimately all of these <unk> are great for customers and we believe should drive greater renewables to me into 2024 and beyond.

Kristian Rose: Oh on the hills of consecutive record years for new renewables originations at energy resources in 2022, and 2023 totaling over 17 Gigawatts.

Kristian Rose: Nextera energy offers a unique value proposition with two strong businesses that we believe are strategically positioned with outstanding prospects for future growth.

Kristian Rose: F P L, which represents more than two thirds of our company is the nation's largest electric utility and continues to deliver what we believe is the best customer value proposition you know one of the fastest growing states in the U S.

Kristian Rose: Energy resources, the worlds renewables leader has differentiated itself in an industry in which scale experience and being well capitalized matters.

Kristian Rose: At Nextera energy. The plan is simple our two businesses are deploying capital in renewables and transmission for the benefit of customers, providing visible growth opportunities for shareholders.

John Ketchum: Our two businesses are deploying capital in renewables and transmission for the benefit of customers, providing visible growth opportunities for shareholders. At FPL, we identify investment opportunities that drive value for customers and support Florida's growing economy while keeping bills approximately 30% lower than the national average. We focus on running the business efficiently and continue to lead the industry with the lowest non-fuel O&M per MWh of any large utility in the nation. Our emphasis on modernizing FPL's generation fleet to improve efficiency and reduce fuel costs has saved customers over $15 billion since 2001. We continue this trend in 2023 by placing into service approximately 1,200MW of cost-effective solar and expect to add roughly 4,800MW over the current rate agreement. By 2032, we expect to increase FPL's solar from 5% of our total generation today to roughly 35% by adding over 15,000MW.

Our two businesses are deploying capital in renewables and transmission for the benefit of customers, providing visible growth opportunities for shareholders. At FPL, we identify investment opportunities that drive value for customers and support Florida's growing economy while keeping bills approximately 30% lower than the national average. We focus on running the business efficiently and continue to lead the industry with the lowest non-fuel O&M per MWh of any large utility in the nation. Our emphasis on modernizing FPL's generation fleet to improve efficiency and reduce fuel costs has saved customers over $15 billion since 2001. We continue this trend in 2023 by placing into service approximately 1,200MW of cost-effective solar and expect to add roughly 4,800MW over the current rate agreement. By 2032, we expect to increase FPL's solar from 5% of our total generation today to roughly 35% by adding over 15,000MW.

Kristen Smith: At FPL, we identify investment opportunities that drive value for customers and support Florida growing economy, while keeping bills approximately 30% lower than the national average, we focus on running the business efficiently and continue to lead the industry with the lowest non fuel O&M.

Kristen Smith: <unk> per megawatt hour of any large utility in the nation.

Kristen Smith: Our emphasis on modernizing fpl's generation fleet to improve efficiency and reduce fuel costs.

Kristen Smith: Save customers over $15 billion since 2001.

Kristen Smith: We continue this trend in 2023 by placing into service approximately 200 megawatts of cost effective solar and expect to add roughly 4800 megawatts over the current rate agreement.

Kristen Smith: And by 2032, we expect to increase FPL solar from 5% of our total generation today to roughly 35% by adding over 15000 incremental megawatts.

John Ketchum: We are also continuing to invest in FPL's grid to make it stronger and more resilient for our customers. Almost all of FPL's transmission system has been hardened with concrete or steel towers or poles, and we continue to invest in undergrounding our distribution system to further enhance reliability and resiliency for customers. The capital plan and the current rate agreement of $32 to 34 billion extends our customer value proposition and provides clear visibility for growth through 2025. Beyond 2025, we continue to believe FPL is strategically well positioned as Florida remains one of the fastest-growing states in the US, with a population growth that is expected to roughly double the national average through 2030. Florida's economy is also growing and is now the 14th largest in the world if Florida were a country.

We are also continuing to invest in FPL's grid to make it stronger and more resilient for our customers. Almost all of FPL's transmission system has been hardened with concrete or steel towers or poles, and we continue to invest in undergrounding our distribution system to further enhance reliability and resiliency for customers. The capital plan and the current rate agreement of $32 to 34 billion extends our customer value proposition and provides clear visibility for growth through 2025. Beyond 2025, we continue to believe FPL is strategically well positioned as Florida remains one of the fastest-growing states in the US, with a population growth that is expected to roughly double the national average through 2030. Florida's economy is also growing and is now the 14th largest in the world if Florida were a country.

Kristen Smith: We are also continuing to invest in fpl's grid to make us stronger and more resilient for our customers almost all of Fpl's transmission system has been heartened with concrete or steel towers are poles, and we continue to invest in underground and our distribution system to further enhance reliability and <unk>.

Kristen Smith: Zillions C for customers.

Kristen Smith: The capital plan the current rate agreement of $32 billion to $34 billion extends our customer value proposition and provides clear visibility for growth through 2025.

Kristen Smith: Beyond 2025, we continue to believe FPL is strategically well positioned as Florida remains one of the fastest growing states in the U S. With a population growth that is expected to roughly double the national average through 2030.

Kristen Smith: Florida's economy is also growing and is now the 14th largest in the world, If Florida, where our country FPL is responsible for keeping the lights on for approximately $2 billion per day of Florida's GDP.

John Ketchum: FPL is responsible for keeping the lights on for approximately $2 billion per day of Florida's GDP. These long-term growth prospects, coupled with investment opportunities in renewables, transmission, and distribution infrastructure, enhance our best-in-class customer value proposition and support our belief that FPL is the highest quality rate-regulated utility in the country. Energy Resources' deep expertise in renewables and transmission serves as a key differentiator with customers. As a result of our data-driven development playbook, Energy Resources had a record year of new renewables and storage origination, adding approximately 9,000MW to our backlog. Driven in part by the roughly 5,600MW placed in service in 2023, Energy Resources grew adjusted earnings almost 13% versus 2022. Energy Resources continues to see strong demand and is well positioned to realize its development expectations over the four-year period ending 2026.

FPL is responsible for keeping the lights on for approximately $2 billion per day of Florida's GDP. These long-term growth prospects, coupled with investment opportunities in renewables, transmission, and distribution infrastructure, enhance our best-in-class customer value proposition and support our belief that FPL is the highest quality rate-regulated utility in the country. Energy Resources' deep expertise in renewables and transmission serves as a key differentiator with customers. As a result of our data-driven development playbook, Energy Resources had a record year of new renewables and storage origination, adding approximately 9,000MW to our backlog. Driven in part by the roughly 5,600MW placed in service in 2023, Energy Resources grew adjusted earnings almost 13% versus 2022. Energy Resources continues to see strong demand and is well positioned to realize its development expectations over the four-year period ending 2026.

Kristen Smith: These long term growth prospects, coupled with investment opportunities in renewables and transmission and distribution infrastructure enhance our best in class customer value proposition and support our belief that FPL has the highest quality rate regulated utility in the country.

Kristen Smith: Energy resources deep expertise in renewables and transmission serves as a key differentiator with customers.

Kristen Smith: As a result of our data driven development playbook energy resources had a record year of new renewables and storage origination, adding approximately 9000 megawatts to our backlog.

Kristen Smith: Driven in part by the roughly 5600 megawatts placed in service in 2023 energy resources grew adjusted earnings almost 13% versus 2022.

Kristen Smith: Energy resources continues to see strong demand and is well positioned to realize its development expectations over the four year period ending 2026.

John Ketchum: Assuming we achieve the midpoint of the range, Energy Resources will be operating a roughly 63GW renewable portfolio by the end of 2026 that would be larger than the installed renewables capacity of all but nine countries. Energy Resources also is extending its excellent track record of optimizing our existing footprint to create additional shareholder value. To date, we have repowered 6GW of our existing 24GW wind operating fleet, investing roughly 50 to 80% of the cost of a new build and starting a new 10 years of production tax credits, resulting in attractive returns for shareholders. By 2026, Energy Resources' wind footprint could be roughly 32GW, and with over a decade to potentially qualify for repowering, it represents a great opportunity set.

Assuming we achieve the midpoint of the range, Energy Resources will be operating a roughly 63GW renewable portfolio by the end of 2026 that would be larger than the installed renewables capacity of all but nine countries. Energy Resources also is extending its excellent track record of optimizing our existing footprint to create additional shareholder value. To date, we have repowered 6GW of our existing 24GW wind operating fleet, investing roughly 50 to 80% of the cost of a new build and starting a new 10 years of production tax credits, resulting in attractive returns for shareholders. By 2026, Energy Resources' wind footprint could be roughly 32GW, and with over a decade to potentially qualify for repowering, it represents a great opportunity set.

Kristen Smith: Assuming we achieve the midpoint of the range energy resources will be operating a roughly 63 gigawatt gigawatt renewable portfolio by the end of 2026 that would be larger than the installed renewables capacity of all but nine countries.

Kristen Smith: Energy resources also is extending its excellent track record of optimizing our existing footprint to create additional shareholder value to date, we have re powered six gigawatts of our existing 24 gigawatt wind operating fleet investing roughly 50% to 80% of the cost of a newbuild.

Kristen Smith: And starting a new 10 years of production tax credits, resulting in attractive returns for shareholders.

By 2026 energy Resources' wind footprint could be roughly 32 gigawatts.

Kristen Smith: And with over a decade to potentially qualify for repowering. It represents a great opportunity set.

John Ketchum: We believe there are multiple opportunities to drive value from the existing footprint: multiple wind repowers, adding solar underneath existing wind, and co-locating battery storage with existing wind and solar. We have dedicated teams leveraging our development playbook to optimize our existing and future fleet. We can maximize existing land, permits, interconnection capacity, and operations to provide enhanced value to customers and shareholders. By 2026, Energy Resources could operate up to 53GW of generation with the potential to co-locate battery storage, which represents a great long-term opportunity, especially considering the likely future capacity needs of customers. Throughout 2023, Energy Resources also continues to build what we believe is the nation's leading competitive transmission business. As growth in renewables occurs throughout the US, there is a growing imperative to build additional or upgrade existing transmission. 2023 was a record year for our competitive transmission business.

We believe there are multiple opportunities to drive value from the existing footprint: multiple wind repowers, adding solar underneath existing wind, and co-locating battery storage with existing wind and solar. We have dedicated teams leveraging our development playbook to optimize our existing and future fleet. We can maximize existing land, permits, interconnection capacity, and operations to provide enhanced value to customers and shareholders. By 2026, Energy Resources could operate up to 53GW of generation with the potential to co-locate battery storage, which represents a great long-term opportunity, especially considering the likely future capacity needs of customers. Throughout 2023, Energy Resources also continues to build what we believe is the nation's leading competitive transmission business. As growth in renewables occurs throughout the US, there is a growing imperative to build additional or upgrade existing transmission. 2023 was a record year for our competitive transmission business.

Kristen Smith: We believe there are multiple opportunities to drive value from the existing footprint multiple wintry powers, adding solar underneath existing wind and co locating battery storage with existing wind and solar and we have dedicated teams leveraging our development playbook to optimize our existing and future fleet.

Kristen Smith: We can maximize existing land permits interconnection capacity and operations to provide enhanced value to customers and shareholders by.

Kristen Smith: By 2026 energy resources could operate up to 53 gigawatts of generation with a potential to co locate battery storage, which represents a great long term opportunity, especially considering the likely future capacity needs of customers.

Kristen Smith: Throughout 2023 energy resources also continued to build what we believe is the nation's leading competitive transmission business as.

Kristen Smith: As growth in renewables occurs throughout the U S. There is a growing imperative to build additional or upgrade existing transmission.

2023 was a record year for our competitive transmission business.

John Ketchum: NextEra Energy Transmission was awarded projects to construct transmission in PJM, CAISO, and SPP that would roughly double the investments made in the existing business. We anticipate deploying approximately $1.9 billion of capital through 2027 to complete these transmission projects, which we estimate could enable up to 12GW of new renewables. Beyond 2026, Energy Resources is strategically positioned to benefit significantly from the irreversible shift towards electrification. With renewables only comprising roughly 16% of the US generating mix, Energy Resources is just getting started. Renewable penetration is expected to double to over 30% by 2030, and Energy Resources is ready. We have a substantial development pipeline, including roughly 150GW of interconnection queue positions for new renewables and storage projects. We believe Energy Resources has the most comprehensive renewable energy business in the world and is better positioned than ever to capitalize on long-term growth prospects.

NextEra Energy Transmission was awarded projects to construct transmission in PJM, CAISO, and SPP that would roughly double the investments made in the existing business. We anticipate deploying approximately $1.9 billion of capital through 2027 to complete these transmission projects, which we estimate could enable up to 12GW of new renewables. Beyond 2026, Energy Resources is strategically positioned to benefit significantly from the irreversible shift towards electrification. With renewables only comprising roughly 16% of the US generating mix, Energy Resources is just getting started. Renewable penetration is expected to double to over 30% by 2030, and Energy Resources is ready. We have a substantial development pipeline, including roughly 150GW of interconnection queue positions for new renewables and storage projects. We believe Energy Resources has the most comprehensive renewable energy business in the world and is better positioned than ever to capitalize on long-term growth prospects.

Nextera energy transmission was awarded projects to construct transmission in PJM, Cal ISO and SPP that would roughly double the investments made in the existing business.

Kristen Smith: We anticipate deploying approximately $1 $9 billion of capital through 2027 to complete these transmission projects, which we estimate could enable up to 12 gigawatts of new renewables.

Kristen Smith: Beyond 2026 energy resources is strategically positioned to benefit significantly from the irreversible shift towards electrification with renewables only comprising roughly 16% of the U S generating mix energy resources is just getting started renewed.

Kristen Smith: Mobile penetration is expected to double to over 30% by 2030 and energy resources is ready we have a substantial development pipeline, including roughly 150 gigawatts of interconnection queue positions for new renewables and storage projects, we believe energy resource.

Kristen Smith: <unk> has the most comprehensive renewable energy business in the world and is better positioned than ever to capitalize on long term growth prospects.

John Ketchum: FPL and Energy Resources individually have executed well, delivering value for our customers. Both businesses complement each other, push one another to be better, and together create scale and foster innovation. We have one of the sector's strongest balance sheets and constructed and placed into service roughly 6,800MW of new renewables and storage projects in 2023. To put that into context, 6,800MW of installed US renewable generating capacity is enough on its own to rank as the fourth-largest US renewable energy company and the 14th-largest utility. Turning to NextEra Energy Partners, we continue to focus on executing against the partnership's transition plans and delivering an LP distribution growth target of 6% through at least 2026. Last September, we made the tough decision to reduce the target distribution growth rate to 6% when NextEra Energy Partners no longer benefited from a competitive cost of capital.

FPL and Energy Resources individually have executed well, delivering value for our customers. Both businesses complement each other, push one another to be better, and together create scale and foster innovation. We have one of the sector's strongest balance sheets and constructed and placed into service roughly 6,800MW of new renewables and storage projects in 2023. To put that into context, 6,800MW of installed US renewable generating capacity is enough on its own to rank as the fourth-largest US renewable energy company and the 14th-largest utility. Turning to NextEra Energy Partners, we continue to focus on executing against the partnership's transition plans and delivering an LP distribution growth target of 6% through at least 2026. Last September, we made the tough decision to reduce the target distribution growth rate to 6% when NextEra Energy Partners no longer benefited from a competitive cost of capital.

Kristen Smith: FPL and energy resources individually have executed well delivering value for our customers both businesses complement each other push one another to be better and together create scale and foster innovation, we have one of the sector's strongest balance sheets and constructed in <unk>.

Kristen Smith: <unk> and the servers, roughly 6800 megawatts of new renewables and storage projects in 2023 to put that into context 6800 megawatts of installed U S. Renewable generating capacity is enough on its own to rank as the fourth largest U S renewable energy company.

Kristen Smith: And the 14th largest utility.

Kristen Smith: Turning to Nextera energy partners, we continue to focus on executing against the partnership's transition plans and delivering an LP distribution growth target of 6% through at least 2026.

Kristen Smith: Last September we made the tough decision to reduce the target distribution growth rate to 6% with Nextera energy partners' no longer benefited from a competitive cost of capital.

John Ketchum: With a growth rate now comparable to its peers, we are focused on the partnership's cost of capital improving, which is critical for its future success. Towards that end, we are evaluating alternatives to address the remaining convertible equity portfolio financings with equity buyout obligations in 2027 and beyond. We are executing against the transition plans, and with the closing of the Texas Pipeline Portfolio sale, the partnership has addressed two of the three near-term convertible equity portfolio financings. The STX Midstream convertible equity portfolio financing has been extinguished, and we have sufficient proceeds available to complete the NEP Renewables II buyouts that are due in June 2024 and 2025. The third convertible equity portfolio financing associated with the Meade natural gas pipeline assets is expected to be addressed in 2025.

With a growth rate now comparable to its peers, we are focused on the partnership's cost of capital improving, which is critical for its future success. Towards that end, we are evaluating alternatives to address the remaining convertible equity portfolio financings with equity buyout obligations in 2027 and beyond. We are executing against the transition plans, and with the closing of the Texas Pipeline Portfolio sale, the partnership has addressed two of the three near-term convertible equity portfolio financings. The STX Midstream convertible equity portfolio financing has been extinguished, and we have sufficient proceeds available to complete the NEP Renewables II buyouts that are due in June 2024 and 2025. The third convertible equity portfolio financing associated with the Meade natural gas pipeline assets is expected to be addressed in 2025.

Kristen Smith: With a growth rate now comparable to its peers. We are focus on the partnerships cost of capital improving which is critical for its future success towards that end, we are evaluating alternatives to address the remaining convertible equity portfolio financings with equity buyout obligations in 2027 and beyond.

Kristen Smith: We are executing against the transition plans and with the closing of the Texas pipeline portfolio sale. The partnership has addressed two of the three near term convertible equity portfolio financings. The SPX midstream convertible equity portfolio financing has been extinguished.

Kristen Smith: And we have sufficient proceeds available to complete the MEP renewables to buyouts that are due in June 2024, and 2025, the third convertible equity portfolio financing associated with the <unk> natural gas pipeline assets is expected to be addressed in 2025.

Kristen Smith: Yeah.

John Ketchum: Looking ahead to 2024 and beyond, NextEra Energy Partners does not expect to need an acquisition in 2024 to meet the 6% growth in LP distributions per unit target. The partnership does not expect to require growth equity until 2027. We are executing against the growth plans and have identified approximately 985MW of wind repowers through 2026, making progress against our expectations. As we turn the page on 2023 and head into 2024, we are optimistic about the renewable sector, about our opportunity set, about customer demand, and about NextEra Energy's future. Demand for renewables has never been stronger, and yet the challenges have never been more complex, making the stakes even higher for customers. Our scale and competitive advantages are enabling us to be the partner of choice with both power and commercial and industrial customers.

Looking ahead to 2024 and beyond, NextEra Energy Partners does not expect to need an acquisition in 2024 to meet the 6% growth in LP distributions per unit target. The partnership does not expect to require growth equity until 2027. We are executing against the growth plans and have identified approximately 985MW of wind repowers through 2026, making progress against our expectations. As we turn the page on 2023 and head into 2024, we are optimistic about the renewable sector, about our opportunity set, about customer demand, and about NextEra Energy's future. Demand for renewables has never been stronger, and yet the challenges have never been more complex, making the stakes even higher for customers. Our scale and competitive advantages are enabling us to be the partner of choice with both power and commercial and industrial customers.

Kristen Smith: Looking ahead, the 2024 and beyond Nextera energy partners does not expect to need an acquisition in 2024 to meet the 6% growth in LTE LP distributions per unit target.

Kristen Smith: The partnership does not expect to require growth equity until 2027, we.

Kristen Smith: We are executing against the growth plans and have identified approximately 985 megawatts of wind repower through 2026, making progress against our expectations.

Kristen Smith: As we turn the page on 2023 and headed into 2024, we are optimistic about the renewable sector, a better opportunity set about customer demand and about Nextera Energy's future.

Kristen Smith: Demand for renewables has never been stronger and yet the challenges have never been more complex, making mistakes even higher for customers our scale and competitive advantages are enabling us to be the partner of choice with both power and commercial and industrial customers.

John Ketchum: On 14 March, we will discuss Energy Resources' development process in greater detail at our development investor event in Juno Beach and illustrate how our proprietary tools differentiate Energy Resources with customers. Then on 11 June, we will hold our NextEra Energy Investor Day in New York to discuss our long-term plans for both Energy Resources and FPL. Our optimism for NextEra Energy's future flows from the strength of our two world-class businesses, FPL and Energy Resources, that leverage our scale and competitive advantages to differentiate themselves as leaders. Our optimism is driven from our proven playbooks of deploying capital in renewables and transmission to create value for customers. But I am most optimistic because we have spent the last two decades building a world-class team at NextEra Energy, and it is by far our greatest competitive strength.

On 14 March, we will discuss Energy Resources' development process in greater detail at our development investor event in Juno Beach and illustrate how our proprietary tools differentiate Energy Resources with customers. Then on 11 June, we will hold our NextEra Energy Investor Day in New York to discuss our long-term plans for both Energy Resources and FPL. Our optimism for NextEra Energy's future flows from the strength of our two world-class businesses, FPL and Energy Resources, that leverage our scale and competitive advantages to differentiate themselves as leaders. Our optimism is driven from our proven playbooks of deploying capital in renewables and transmission to create value for customers. But I am most optimistic because we have spent the last two decades building a world-class team at NextEra Energy, and it is by far our greatest competitive strength.

Kristen Smith: March 14th we will discuss energy Resources' development process in greater detail at our development Investor event, and Juno Beach, and illustrate how our proprietary tools differentiate energy resources with customers.

Kristen Smith: And then on June 11th we will hold our Nextera energy Investor Day in New York to discuss our long term plans for both energy resources and FPL.

Kristen Smith: Our optimism for Nextera Energy's future flows from the strength of our two world class businesses.

Kristen Smith: And energy resources that leverage our scale and competitive advantages to differentiate themselves as leaders.

Our optimism is driven from our proven playbooks of deploying capital in renewables and transmission to create value for customers, but I am most optimistic because we have spent the last two decades building a world class team at Nextera energy and it is by far our greatest competitive strength.

John Ketchum: Our team lives and breathes a culture of continuous improvement, working together to solve the tough challenges of the day. We drive innovation relying on data analytics and automation to make better decisions, and we have developed and deployed smart, low-cost, clean energy solutions that lead our industry. Most importantly, our team remains hyper-focused on continuing our long track record of execution, serving our customers with excellence, and providing long-term value for shareholders. With that, let me turn it over to Kirk, who will review the 2023 results in more detail. Thanks, Sean. Let's begin with FPL's detailed results. For the full year 2023, FPL's adjusted earnings per share increased $0.22 versus 2022. FPL's adjusted earnings results exclude the approximately $300 million after-tax gain on the sale of Florida City Gas, which closed on 30 November 2023.

Our team lives and breathes a culture of continuous improvement, working together to solve the tough challenges of the day. We drive innovation relying on data analytics and automation to make better decisions, and we have developed and deployed smart, low-cost, clean energy solutions that lead our industry. Most importantly, our team remains hyper-focused on continuing our long track record of execution, serving our customers with excellence, and providing long-term value for shareholders. With that, let me turn it over to Kirk, who will review the 2023 results in more detail.

Kristian Rose: Our team lives and breathes a culture of continuous improvement working together to solve the tough challenges of the day.

Kristian Rose: We drive innovation, relying on data analytics and automation to make better decisions and we have developed and deployed smart low cost clean energy solutions that lead our industry. Most importantly, our team remains hyper focused on continuing our long track record of execution, serving our customers with exo.

Kristian Rose: <unk> and providing long term value for shareholders.

Speaker Change: With that let me turn it over to Kirk who will review the 2023 results in more detail.

Kirk Crews: Thanks, Sean. Let's begin with FPL's detailed results. For the full year 2023, FPL's adjusted earnings per share increased $0.22 versus 2022. FPL's adjusted earnings results exclude the approximately $300 million after-tax gain on the sale of Florida City Gas, which closed on 30 November 2023.

Kirk: Thanks, Sean let's begin with Fpl's detailed results.

Kirk: For the full year 2023, Fpl's adjusted earnings per share increased 22.

Kirk: Versus 2022.

Kirk: Adjusted earnings results exclude the approximately $300 million after tax gain on the sale of Florida City gas, which closed on November 32023.

John Ketchum: The principal driver of the 2023 full-year performance was FPL's regulatory capital employed growth of approximately 12.5%. We continue to expect FPL's average annual growth in regulatory capital employed to be roughly 9% over the four-year term of our current rate agreement, which runs through 2025. For the full year 2023, FPL's reported ROE for regulatory purposes will be approximately 11.8%. During the full year 2023, we used approximately $227 million of reserve amortization, leaving FPL with a year-end 2023 balance of roughly $1.2 billion. FPL's capital expenditures were approximately $2 billion in Q4, bringing its full-year capital investments to a total of roughly $9.4 billion. These capital investments supported the successful commissioning of roughly 1,200MW of solar in 2023, continued hardening of the grid, and our efforts to underground our distribution system.

The principal driver of the 2023 full-year performance was FPL's regulatory capital employed growth of approximately 12.5%. We continue to expect FPL's average annual growth in regulatory capital employed to be roughly 9% over the four-year term of our current rate agreement, which runs through 2025. For the full year 2023, FPL's reported ROE for regulatory purposes will be approximately 11.8%. During the full year 2023, we used approximately $227 million of reserve amortization, leaving FPL with a year-end 2023 balance of roughly $1.2 billion. FPL's capital expenditures were approximately $2 billion in Q4, bringing its full-year capital investments to a total of roughly $9.4 billion. These capital investments supported the successful commissioning of roughly 1,200MW of solar in 2023, continued hardening of the grid, and our efforts to underground our distribution system.

Kristian Rose: The principal driver of the 2023 full year performance with Fpl's regulatory capital employed growth of approximately 12, 5%.

Kristian Rose: We continue to expect Fpl's average annual growth in regulatory capital employed to be roughly 9% over the four year term of our current rate agreement, which runs through 2025.

Kristian Rose: For the full year 2023, Fpl's reported ROE for regulatory purposes will be approximately 11, 8%.

Kristian Rose: During the full year 2023, we used approximately $227 million of reserve amortization, leaving FPL with a year end 2023 balance of roughly $1 2 billion.

Kristian Rose: Fpl's capital expenditures were approximately $2 billion in the fourth quarter, bringing its full year capital investments to a total of roughly $9 4 billion.

Kristian Rose: These capital investments supported the successful commissioning of roughly 1200 megawatts of solar in 2023.

Kristian Rose: Continued hardening of the grid and our efforts to underground our distribution system.

John Ketchum: During the fourth quarter of 2023, our 25-MW hydrogen pilot at the Okeechobee Clean Energy Center successfully achieved commercial operations. As a reminder, we plan to utilize this facility together with adjacent solar projects to create green hydrogen and blend it with natural gas at our Okeechobee plant. Key indicators show that the Florida economy remains strong, and Florida's population continues to be one of the fastest growing in the country. Florida's economy continues to trend upward, and its GDP is now roughly $1.6 trillion, an increase of 9.3% over last year. For the fourth quarter of 2023, FPL's retail sales increased 1.6% from the prior year on a weather-normalized basis, driven primarily by continued strong customer growth, which increased by nearly 81,000 from the prior year comparable quarter.

During the fourth quarter of 2023, our 25-MW hydrogen pilot at the Okeechobee Clean Energy Center successfully achieved commercial operations. As a reminder, we plan to utilize this facility together with adjacent solar projects to create green hydrogen and blend it with natural gas at our Okeechobee plant. Key indicators show that the Florida economy remains strong, and Florida's population continues to be one of the fastest growing in the country. Florida's economy continues to trend upward, and its GDP is now roughly $1.6 trillion, an increase of 9.3% over last year. For the fourth quarter of 2023, FPL's retail sales increased 1.6% from the prior year on a weather-normalized basis, driven primarily by continued strong customer growth, which increased by nearly 81,000 from the prior year comparable quarter.

Kristian Rose: During the fourth quarter of 2023, or 25 megawatt hydrogen pilot at the Okeechobee Clean Energy Center successfully achieved commercial operation.

Kristian Rose: As a reminder, we plan to utilize this facility together with adjacent solar projects to create green hydrogen and blended with natural gas and our Okeechobee plant.

Kristian Rose: Key indicators show that the Florida economy remains strong and Florida's population continues to be one of the fastest growing in the country.

Kristian Rose: Florida's economy continues to trend upward and as GDP is now roughly one six trillion.

Kristian Rose: An increase of nine 3% over last year.

Kristian Rose: For the fourth quarter of 2023, Fpl's retail sales increased one 6% from the prior year on a weather normalized basis.

Kristian Rose: Driven primarily by continued strong customer growth, which increased by nearly 81000 from the prior year comparable quarter.

John Ketchum: For the full year 2023, FPL retail sales increased 0.6% from the prior year on a weather-normalized basis, also driven primarily by the strong customer growth in our service territory. Now, let's turn to Energy Resources, which reported full-year adjusted earnings growth of approximately 12.9% year over year. Contributions from new investments increased by $0.35 per share due to strong growth in our renewables and storage portfolio. Contributions from our existing clean energy assets decreased results by $0.11 per share, driven primarily by the impact of weaker wind resource. 2023 was the lowest wind resource on record over the past 30 years. Our customer supply and trading business increased results by $0.16 per share, primarily due to higher margins in our customer-facing businesses. Other decreased results by $0.26 per share year over year.

For the full year 2023, FPL retail sales increased 0.6% from the prior year on a weather-normalized basis, also driven primarily by the strong customer growth in our service territory. Now, let's turn to Energy Resources, which reported full-year adjusted earnings growth of approximately 12.9% year over year. Contributions from new investments increased by $0.35 per share due to strong growth in our renewables and storage portfolio. Contributions from our existing clean energy assets decreased results by $0.11 per share, driven primarily by the impact of weaker wind resource. 2023 was the lowest wind resource on record over the past 30 years. Our customer supply and trading business increased results by $0.16 per share, primarily due to higher margins in our customer-facing businesses. Other decreased results by $0.26 per share year over year.

Kristian Rose: For the full year 2023, FPL retail sales increased <unk>, 6% from the prior year on a weather normalized basis also driven primarily by the strong customer growth in our service territory.

Kristian Rose: Now, let's turn to energy resources, which reported full year adjusted earnings growth of approximately 12, 9% year over year.

Kristian Rose: Contributions from new investments increased by 35 per share due to strong growth in our renewables and storage portfolio.

Kristian Rose: Contributions from our existing clean energy assets decreased results by <unk> 11 per share driven primarily by the impact of weaker wind resource.

Kristian Rose: 2023, what's the lowest wind resource on record over the past 30 years.

Kristian Rose: Our customer supply and trading business increased results by <unk> 16 per share primarily due to higher margins in our customer facing businesses.

Kristian Rose: Other decreased results by <unk> 26 per share year over year.

John Ketchum: This decline reflects higher interest costs of $0.22 per share, of which $0.10 was driven by new borrowing costs to support new investments. Energy Resources delivered our best year ever for origination, adding approximately 9000MW of new renewables and battery storage projects to our backlog, which includes approximately 2060MW since our last call. Our 2023 origination performance reflects continued strong demand from power customers looking for the least-cost alternative to serve load and to replace uneconomic generation, and commercial and industrial customers looking to help decarbonize their operation or meet their data center and AI demand. Our renewables backlog now stands at more than 20GW after taking into account roughly 2470MW of new projects placed into service since our Q3 call. We believe our 20GW backlog provides clear visibility into Energy Resources' ability to deliver for shareholders through 2026 and beyond.

This decline reflects higher interest costs of $0.22 per share, of which $0.10 was driven by new borrowing costs to support new investments. Energy Resources delivered our best year ever for origination, adding approximately 9000MW of new renewables and battery storage projects to our backlog, which includes approximately 2060MW since our last call. Our 2023 origination performance reflects continued strong demand from power customers looking for the least-cost alternative to serve load and to replace uneconomic generation, and commercial and industrial customers looking to help decarbonize their operation or meet their data center and AI demand. Our renewables backlog now stands at more than 20GW after taking into account roughly 2470MW of new projects placed into service since our Q3 call. We believe our 20GW backlog provides clear visibility into Energy Resources' ability to deliver for shareholders through 2026 and beyond.

Kristian Rose: This decline reflects higher interest costs of 22 per share of which <unk> was driven by new borrowing costs to support new investments.

Kristian Rose: Energy resources delivered our best year ever for origination, adding approximately 9000 megawatts of new renewables and battery storage projects to our backlog, which includes approximately 2060 megawatts since our last call.

Kristian Rose: Our 2020 through 2023 origination performance reflects continued strong demand from power customers looking for the lease cost alternative to serve load and to replace uneconomic generation and commercial and industrial customers looking to help decarbonize their operation or <unk>.

Kristian Rose: Their data center and AI demand.

Kristian Rose: Our renewables backlog now stands at more than 20 gigawatt after taking into account roughly 2470 megawatts of new projects placed into service since our third quarter call.

Kristian Rose: We believe our 20 gigawatt backlog provides clear visibility into energy resources' ability to deliver for shareholders through 2026 and beyond.

John Ketchum: Turning now to the consolidated results for NextEra Energy. For the full year, adjusted earnings from our corporate and other segment decreased by $0.08 per share year over year, primarily driven by higher interest costs. We successfully supported the growth in our underlying businesses from our strong operating cash flows, including the sale of tax credits, as well as our historical funding sources. In 2023, we grew cash flow from operations well in excess of our adjusted earnings. We transferred approximately $400 million of tax credits, establishing relationships with numerous counterparties. We believe this will prove to be a competitive advantage as buyers look first to NextEra Energy given its size, experience, and the overall quality of its tax credit program. Overall, our funding plans for 2024 through 2026 remain consistent with the information we shared on the third quarter earnings call.

Turning now to the consolidated results for NextEra Energy. For the full year, adjusted earnings from our corporate and other segment decreased by $0.08 per share year over year, primarily driven by higher interest costs. We successfully supported the growth in our underlying businesses from our strong operating cash flows, including the sale of tax credits, as well as our historical funding sources. In 2023, we grew cash flow from operations well in excess of our adjusted earnings. We transferred approximately $400 million of tax credits, establishing relationships with numerous counterparties. We believe this will prove to be a competitive advantage as buyers look first to NextEra Energy given its size, experience, and the overall quality of its tax credit program. Overall, our funding plans for 2024 through 2026 remain consistent with the information we shared on the third quarter earnings call.

Kristian Rose: Turning now to the consolidated results for Nextera energy for the full year adjusted earnings from our corporate and other segment decreased by <unk> <unk> per share year over year, primarily driven by higher interest costs.

Kristian Rose: We successfully supported the growth in our underlying businesses from our strong operating cash flows, including the sale of tax credits as well as our historical funding sources.

Kristian Rose: In 2023, we grew cash flow from operations well in excess of our adjusted earnings we transferred approximately $400 million of tax credits establishing relationships with numerous counterparties.

Kristian Rose: We believe this will prove to be a competitive advantage as buyers look first in Nextera energy given its size experience and the overall quality of its tax credit program.

Kristian Rose: Overall, our funding plans for 2024 through 2026 remain consistent with the information we shared on the third quarter earnings call.

John Ketchum: We continue to believe NextEra Energy is well-positioned to manage the interest rate environment. While the recent decline in interest rates is encouraging, we remain committed to managing the business to deliver value for customers and shareholders. Overall, we believe we are well-positioned with $18.5 billion of interest rate swaps, and we will continue to closely monitor the interest rate environment as declines in rates certainly represent a tailwind for our sector and customers. Our long-term financial expectations remain unchanged. We will be disappointed if we are not able to deliver financial results at or near the top end of our adjusted EPS expectation ranges in 2024, 2025, and 2026. For the last 14 consecutive years, NextEra Energy has met or exceeded its financial expectation, which is a record we are proud of.

We continue to believe NextEra Energy is well-positioned to manage the interest rate environment. While the recent decline in interest rates is encouraging, we remain committed to managing the business to deliver value for customers and shareholders. Overall, we believe we are well-positioned with $18.5 billion of interest rate swaps, and we will continue to closely monitor the interest rate environment as declines in rates certainly represent a tailwind for our sector and customers. Our long-term financial expectations remain unchanged. We will be disappointed if we are not able to deliver financial results at or near the top end of our adjusted EPS expectation ranges in 2024, 2025, and 2026. For the last 14 consecutive years, NextEra Energy has met or exceeded its financial expectation, which is a record we are proud of.

Kristian Rose: We continue to believe Nextera energy is well positioned to manage the interest rate environment. While the recent decline in interest rates is encouraging we remain committed to managing the business to deliver value for customers and shareholders.

Kristian Rose: Overall, we believe we are well position with $18 5 billion of interest rate swaps and we will continue to closely monitor the interest rate environment as declines in rates certainly represent a tailwind for our sector and customers.

Kristian Rose: Our long term financial expectations remain unchanged.

Kristian Rose: We will be disappointed if we're not able to deliver financial results at or near the top end of our adjusted EPS expectation ranges in 2020 for 2025 and 2026.

Kristian Rose: For the last 14 consecutive years Nextera energy has met or exceeded its financial expectation, which is a record we are proud of.

John Ketchum: From 2021 to 2026, we continue to expect that our average annual growth in operating cash flow will be at or above our adjusted EPS compound annual growth rate, and we also continue to expect to grow our dividends per share at roughly 10% per year through at least 2024 off a 2022 base. As always, our expectations assume our caveats. Now let's turn to NextEra Energy Partners. In terms of the transition plans, NextEra Energy Partners closed the sale of the Texas Pipeline Portfolio in late December, providing net proceeds of approximately $1.4 billion. NextEra Energy Partners expects to complete the NEP Renewables II buyouts of roughly $190 million and $950 million on their stated minimum buyout dates of June 2024 and 2025, respectively, as the partnerships continue to benefit from the low cash coupon through 2025.

From 2021 to 2026, we continue to expect that our average annual growth in operating cash flow will be at or above our adjusted EPS compound annual growth rate, and we also continue to expect to grow our dividends per share at roughly 10% per year through at least 2024 off a 2022 base. As always, our expectations assume our caveats. Now let's turn to NextEra Energy Partners. In terms of the transition plans, NextEra Energy Partners closed the sale of the Texas Pipeline Portfolio in late December, providing net proceeds of approximately $1.4 billion. NextEra Energy Partners expects to complete the NEP Renewables II buyouts of roughly $190 million and $950 million on their stated minimum buyout dates of June 2024 and 2025, respectively, as the partnerships continue to benefit from the low cash coupon through 2025.

Kristian Rose: From 2021 to 2026, we continue to expect that our average annual growth in operating cash flow will be at or above our adjusted EPS compound annual growth rate range and we also continue to expect to grow our dividends per share at roughly 10% per year through at least 2024 off a 2022 base.

Kristian Rose: Yeah.

Kristian Rose: As always our expectations assume our caveat.

Kristian Rose: Now, let's turn to Nextera energy partners.

In terms of the transition plans Nextera energy partners closed the sale of the Texas pipeline portfolio in late December providing net proceeds of approximately $1 4 billion.

Kristen Smith: Thanks, Pierre Nextera energy partners expects to complete the NDP renewables to buyout of roughly $190 million and $950 million on their stated minimum buyout dates of June 2024, and 2025, respectively. As the partnerships continued to benefit from the low cash coupon through 2012.

Kristen Smith: Five.

John Ketchum: In terms of NextEra Energy Partners' growth plan, as a reminder, it involves organic growth, specifically repowerings of approximately 1.3GW of wind projects through 2026, as well as acquiring assets at attractive yields. Today, we are announcing plans to repower an additional approximately 245MW of wind facilities through 2026. The partnership has now announced roughly 985MW of repowers with strong cash available for distribution yield. While the partnership does not expect to need an acquisition in 2024, the LP distribution growth target of 6% is supported in part with roughly 175MW of wind repowers, which are expected to generate attractive cash available for distribution yields. Finally, we were pleased with the high-yield note issuance of $750 million, which was completed during Q4 2023. This opportunistic refinancing allowed the partnership to pay off its corporate revolver in mid-December.

In terms of NextEra Energy Partners' growth plan, as a reminder, it involves organic growth, specifically repowerings of approximately 1.3GW of wind projects through 2026, as well as acquiring assets at attractive yields. Today, we are announcing plans to repower an additional approximately 245MW of wind facilities through 2026. The partnership has now announced roughly 985MW of repowers with strong cash available for distribution yield. While the partnership does not expect to need an acquisition in 2024, the LP distribution growth target of 6% is supported in part with roughly 175MW of wind repowers, which are expected to generate attractive cash available for distribution yields. Finally, we were pleased with the high-yield note issuance of $750 million, which was completed during Q4 2023. This opportunistic refinancing allowed the partnership to pay off its corporate revolver in mid-December.

In terms of Nextera energy Partners' growth plan as a reminder, it involves organic growth specifically repowering of approximately one three gigawatts of wind projects through 2026, as well as acquiring assets at attractive yields.

Kristen Smith: Today, we are announcing plans to repower and an additional approximately 245 megawatts of wind facilities through 2026.

Kristen Smith: The partnership has now announced roughly 985 megawatts of Repowering with strong cash available for distribution yield.

Kristen Smith: While the partnership does not expect to need an acquisition in 2020 for the LP distribution growth target of 6% is supported in part with roughly 175 megawatts of wind Repowering, which are expected to generate attractive cash available for distribution yield.

Kristen Smith: Finally, we were pleased with the high yield note issuance of $750 million, which was completed during the fourth quarter of 2023.

This opportunistic refinancing allowed the partnership to pay off as corporate revolver in mid December.

John Ketchum: Let me now turn to the financial results for NextEra Energy Partners. Fourth quarter Adjusted EBITDA was $454 million, and Cash Available for Distribution was $86 million. Adjusted EBITDA growth versus the prior year comparable quarter was primarily due to new asset additions, and the Incentive Distribution Right fee suspension, while Cash Available for Distribution was also impacted by incremental debt service. For the full year 2023, Adjusted EBITDA was approximately $1.9 billion, up 13.6% year over year, and was primarily driven by the contribution from new projects acquired in late 2022 and during 2023, and the Incentive Distribution Right fee suspension. New investments added approximately $228 million, and the Incentive Distribution Right fee suspension added approximately $113 million of Adjusted EBITDA year over year. This growth was partially offset by a decline from existing projects driven primarily by weaker wind resource.

Let me now turn to the financial results for NextEra Energy Partners. Fourth quarter Adjusted EBITDA was $454 million, and Cash Available for Distribution was $86 million. Adjusted EBITDA growth versus the prior year comparable quarter was primarily due to new asset additions, and the Incentive Distribution Right fee suspension, while Cash Available for Distribution was also impacted by incremental debt service. For the full year 2023, Adjusted EBITDA was approximately $1.9 billion, up 13.6% year over year, and was primarily driven by the contribution from new projects acquired in late 2022 and during 2023, and the Incentive Distribution Right fee suspension. New investments added approximately $228 million, and the Incentive Distribution Right fee suspension added approximately $113 million of Adjusted EBITDA year over year. This growth was partially offset by a decline from existing projects driven primarily by weaker wind resource.

Kristen Smith: Let me now turn to the financial results for Nextera Energy partners.

Kristen Smith: Fourth quarter, adjusted EBITDA was $454 million and cash available for distribution was $86 million.

Kristen Smith: Adjusted EBITDA growth versus the prior year comparable quarter was primarily due to new asset additions and the incentive distributions right fee suspension, while cash available for distribution was also impacted by incremental debt service.

Kristen Smith: For the full year 2023, adjusted EBITDA was approximately $1 9 billion up 13, 6% year over year and was primarily driven by the contribution from new projects acquired in late 2022 and during 2023.

Kristen Smith: And the incentive distribution right fee suspension.

Kristen Smith: New investments added approximately $228 million and the incentive distribution right fee suspension added approximately $113 million of adjusted EBITDA year over year.

Kristen Smith: This growth was partially offset by a decline from existing projects driven primarily by weaker wind resource.

John Ketchum: Cash available for distribution was $689 million for the full year and primarily driven by contributions from new projects of approximately $42 million and the Incentive Distribution Right fee suspension of $113 million, while being partially offset by the weaker wind resource. Yesterday, the NextEra Energy Partners Board declared a quarterly distribution of $0.88 per common unit, or $3.52 per unit on an annualized basis, which reflects an annualized increase of 6% from its Q3 2023 distribution per unit. The partnership grew its LP distributions per unit by more than 8% year over year. From an updated base of our Q4 2023 distribution per common unit and an annualized rate of $3.52, we continue to see 5% to 8% growth per year in LP distributions per unit, with a current target of 6% growth per year as being a reasonable range of expectations through at least 2026.

Cash available for distribution was $689 million for the full year and primarily driven by contributions from new projects of approximately $42 million and the Incentive Distribution Right fee suspension of $113 million, while being partially offset by the weaker wind resource. Yesterday, the NextEra Energy Partners Board declared a quarterly distribution of $0.88 per common unit, or $3.52 per unit on an annualized basis, which reflects an annualized increase of 6% from its Q3 2023 distribution per unit. The partnership grew its LP distributions per unit by more than 8% year over year. From an updated base of our Q4 2023 distribution per common unit and an annualized rate of $3.52, we continue to see 5% to 8% growth per year in LP distributions per unit, with a current target of 6% growth per year as being a reasonable range of expectations through at least 2026.

Kristen Smith: Cash available for distribution was $689 million for the full year.

Kristen Smith: And primarily driven by contributions from new projects of approximately $42 million and the incentive distribution right fee suspension of $130 million, while being partially offset by the weaker wind resource.

Kristen Smith: Yesterday, the Nextera energy Partners' Board declared a quarterly distribution of <unk> 88 per common unit or $3 52 per unit on an annualized basis, which reflects an annualized increase of 6% from its third quarter 2023 distribution per unit.

Kristian Rose: The partnership LP distributions per unit by more than 8% year over year.

Kristian Rose: From an updated base of our <unk>.

Kristen Smith: Fourth quarter 2023 distribution per common unit at an annualized rate of $3 52.

Kristen Smith: We continue to see 5% to 8%.

St growth per year in LP distributions per unit with a current target of 6% growth per year as being a reasonable range of expectations through at least 2026.

John Ketchum: We continue to expect the partnership's payout ratio to be in the mid-90s through 2026. We expect the annualized rate of the Q4 2024 distribution that is payable in February 2025 to be $3.73 per common unit. NextEra Energy Partners is introducing 31 December 2024 run rate expectations for Adjusted EBITDA in a range of $1.9 to 2.1 billion, and cash available for distribution in a range of $730 to 820 million, reflecting calendar year 2025 expectations for the forecasted portfolio at year-end 2024. As a reminder, our expectations are subject to our caveats. That concludes our prepared remarks, and with that, we will open the line for questions. We will now begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

We continue to expect the partnership's payout ratio to be in the mid-90s through 2026. We expect the annualized rate of the Q4 2024 distribution that is payable in February 2025 to be $3.73 per common unit. NextEra Energy Partners is introducing 31 December 2024 run rate expectations for Adjusted EBITDA in a range of $1.9 to 2.1 billion, and cash available for distribution in a range of $730 to 820 million, reflecting calendar year 2025 expectations for the forecasted portfolio at year-end 2024. As a reminder, our expectations are subject to our caveats. That concludes our prepared remarks, and with that, we will open the line for questions.

Kristen Smith: We continue to expect the partnership's payout ratio to be in the mid 19th through 2026.

We expect the annualized rate of the fourth quarter 2024 distribution that is payable in February 2025 to be $3 73 per common unit.

Kristen Smith: Nextera Energy partners is introducing December 31, 2024 run rate expectations for adjusted EBITDA in a range of one 9% to $2 1 billion.

Kristen Smith: And cash available for distribution and a range of $730 million to $820 million, reflecting calendar year 2025 expectations for the forecasted portfolio at year end 2024.

Kristen Smith: As a reminder, our expectations are subject to a caveat.

Kristen Smith: That concludes our prepared remarks and with that we will open the line for questions.

Operator: We will now begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Kristen Smith: We will now.

Ill begin the question and answer session.

Kristen Smith: To ask a question you May press Star then one on your telephone keypad.

Kristen Smith: If you are using a speakerphone please pick up your handset before pressing the keys.

John Ketchum: To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble the roster. Our first question will come from Shar Pourreza of Guggenheim Partners. Please go ahead. Hey, good morning, guys. Morning, Shar. Good morning. Just starting on NEP, if it's okay, just on the higher repowering opportunities you announced, I guess, how are you sort of thinking about funding? And really, more importantly, is there any specific status on the money pool that could be looking to buy in directly into projects, whether it's dropdowns or organic growth at the NEP level? Could these sort of equity investors help solve the 2026 growth and financing issues? And I guess, when do you plan to update on that? Sure. So with respect to repowering, Shar, we look at that as on the project level, there's really two options there.

To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble the roster. Our first question will come from Shar Pourreza of Guggenheim Partners. Please go ahead.

Kristen Smith: To withdraw your question. Please press Star then two.

Kristen Smith: At this time, we will pause momentarily to assemble the roster.

Kristen Smith: And our first question will come from Shar <unk> of Guggenheim Partners. Please go ahead.

Shar Pourreza: Hey, good morning, guys.

Kristen Smith: Hey, good morning, guys.

John Ketchum: Morning, Shar.

Shar: Good morning Shar.

Shar Pourreza: Good morning. Just starting on NEP, if it's okay, just on the higher repowering opportunities you announced, I guess, how are you sort of thinking about funding? And really, more importantly, is there any specific status on the money pool that could be looking to buy in directly into projects, whether it's dropdowns or organic growth at the NEP level? Could these sort of equity investors help solve the 2026 growth and financing issues? And I guess, when do you plan to update on that?

Shar Pourreza: Good morning, just starting on NEP, if it's okay. Just on the higher Repowering opportunities you announced I guess, how are you sort of thinking about funding and really more importantly is there any specific status on the money pool that could be looking to buy in directly into projects, whether its dropdowns or organic growth at the NEP level.

Shar Pourreza: Could these sort of equity investors help solve the 26th growth in financing issues and I guess when do you plan to update on that.

Kristin Rose: Sure. So with respect to repowering, Shar, we look at that as on the project level, there's really two options there.

Shar Pourreza: Sure so with respect to Repowering shar.

Shar Pourreza: We.

Shar Pourreza: We look at that as an.

Shar Pourreza: The project level Theres really two options. There we can look at it from a project financing standpoint, and pair that with transferability or we can look at it is as tax equity. So we will look at both of those options and decide that at the time.

John Ketchum: We can look at it from a project financing standpoint and pair that with transferability, or we can look at it as tax equity. So we will look at both of those options and decide that at the time of the repowerings. With respect to your second question, we're looking at all options right now, as John said in the prepared remarks. We are exploring a number of opportunities and alternatives for addressing the convertible equity portfolio financings that are coming due in 2027 and beyond. There's really not a time frame in terms of the update now, but we are looking at all options with the goal of really maximizing unit holder value. Got it. Got it. And Shar, Shar does a job just adding on to that, again, on the repowers, just like we do at NEE.

We can look at it from a project financing standpoint and pair that with transferability, or we can look at it as tax equity. So we will look at both of those options and decide that at the time of the repowerings. With respect to your second question, we're looking at all options right now, as John said in the prepared remarks. We are exploring a number of opportunities and alternatives for addressing the convertible equity portfolio financings that are coming due in 2027 and beyond. There's really not a time frame in terms of the update now, but we are looking at all options with the goal of really maximizing unit holder value.

Shar Pourreza: The repowering.

Shar Pourreza: With respect to your second question.

Shar Pourreza: There is.

Shar Pourreza: We're looking at all options right now as John said in the prepared remarks, we are exploring a number of opportunities and alternatives for addressing.

Shar Pourreza: The convertible equity portfolio financings that are coming due in 2027 and beyond.

Shar Pourreza: Really not a timeframe in terms of the update now but.

Shar Pourreza: We are looking at all options with the goal of really maximizing unit holder value.

Shar Pourreza: Got it. Got it.

John Ketchum: And Shar, Shar does a job just adding on to that, again, on the repowers, just like we do at NEE.

Shar Pourreza: Got it yes.

Shar Pourreza: And so our short as John just adding onto that.

Shar Pourreza: On the re powers just like we do at Ethnie I mean, just think about it is tax equity and project finance.

John Ketchum: I mean, just think about it as tax equity and project finance. Got it. Okay. And again, the private capital raises provide us with a number of options, but we're looking at a lot of different alternatives, that being one of them. Okay. Perfect. And then lastly, John, we haven't had any updates from the FEC. Has anything sort of been communicated to you regarding sort of the investigation, how quickly you would look to settle, assuming they take up the case? And as we're kind of thinking about the process, right, it's confidential. So curious on how you're going to update investors. Would we see a press release or an 8-K from you confirming the FEC process and that you'll update investors in the future on next steps, or could we see a single communication on the FEC pickup and a concurrent settlement, let's say?

I mean, just think about it as tax equity and project finance. Got it. Okay. And again, the private capital raises provide us with a number of options, but we're looking at a lot of different alternatives, that being one of them.

Shar Pourreza: Got it.

Shar Pourreza: Again, the private capital raises provide us with the.

Shar Pourreza: And a number of options, but we're looking at a lot of different alternatives that being one of them.

Shar Pourreza: Okay. Perfect. And then lastly, John, we haven't had any updates from the FEC. Has anything sort of been communicated to you regarding sort of the investigation, how quickly you would look to settle, assuming they take up the case? And as we're kind of thinking about the process, right, it's confidential. So curious on how you're going to update investors. Would we see a press release or an 8-K from you confirming the FEC process and that you'll update investors in the future on next steps, or could we see a single communication on the FEC pickup and a concurrent settlement, let's say?

Shar Pourreza: Okay, Perfect and then lastly, John we haven't had.

Shar Pourreza: Any updates from the SEC has anything sort of been communicated to you regarding sort of the investigation. How quickly you would look to settle assuming they take up the case and as we're kind of thinking about the process right. It's confidential. So curious on how you're going to update investors like would we see a press release or 8-K.

John W. Ketchum: From you confirming the SEC process and that you'll update investors in the future on next steps or could we see single communication on the FTC pickup and a concurrent settlement lets say I'm just trying to assess how long this could be an overhang assuming the case moves forward and whether you've already laid the groundwork for all.

John Ketchum: I'm just trying to assess how long this could be an overhang, assuming the case moves forward, and whether you've already laid the groundwork for all options to get this kind of past this quick when a ruling comes out. Thank you. Yeah. Thanks for the question, Shar. So let me just take those in order. First of all, there's no update. We have not been contacted by the FEC. And I think just to remind investors of the timing, first of all, these are just guidelines I'm going to give you. I mean, there is no prescribed timeline in terms of the FEC providing a response to us. But as you may recall, we originally received the FEC complaint, I guess is what you would call it, that had been filed by a group called CREW back in November 2022.

I'm just trying to assess how long this could be an overhang, assuming the case moves forward, and whether you've already laid the groundwork for all options to get this kind of past this quick when a ruling comes out. Thank you.

John W. Ketchum: All options to get this kind of passed this quick when a ruling comes out thank you.

John Ketchum: Yeah. Thanks for the question, Shar. So let me just take those in order. First of all, there's no update. We have not been contacted by the FEC. And I think just to remind investors of the timing, first of all, these are just guidelines I'm going to give you. I mean, there is no prescribed timeline in terms of the FEC providing a response to us. But as you may recall, we originally received the FEC complaint, I guess is what you would call it, that had been filed by a group called CREW back in November 2022.

Shar Pourreza: Yeah. Thanks, Thanks for the question Shar. So let me just take those in order first of all there is no update.

Shar Pourreza: We have not been contacted by the SEC and I think.

Shar Pourreza: Just to remind investors of the timing first of all these are just guidelines I'm going to give you I mean, there is no prescribed timeline in terms of the SEC.

Shar Pourreza: Providing a response to us, but as you may recall.

Shar Pourreza: We originally received the FEC.

Shar Pourreza: Complain I guess is what you would call. It that had been filed by buyer group called crew back in November of 2022, and if you follow the historical precedent of the SEC. It's usually 12 to 18 months. After you first are notified of a client having been filed that you.

John Ketchum: And if you follow the historical precedent of the FEC, it's usually 12 to 18 months after you first are notified of a complaint having been filed that you would learn whether or not the FEC decides to find that there's reason to believe that they ought to conduct an investigation. We have not heard anything from the FEC in that regard. The second thing I would remind investors of is this is not material. Again, these were five allegations totaling political contributions of roughly $1.3 to 1.5 million. So we're talking about smaller dollar amounts. And how and when we would update investors would depend on what exactly we hear from the FEC. Perfect. Thank you very much. Appreciate it, guys. See you soon, and congrats on the results. Appreciate it. Thank you, Shar. Thanks, Shar. The next question comes from Steve Fleischman of Wolfe Research. Please go ahead.

And if you follow the historical precedent of the FEC, it's usually 12 to 18 months after you first are notified of a complaint having been filed that you would learn whether or not the FEC decides to find that there's reason to believe that they ought to conduct an investigation. We have not heard anything from the FEC in that regard. The second thing I would remind investors of is this is not material. Again, these were five allegations totaling political contributions of roughly $1.3 to 1.5 million. So we're talking about smaller dollar amounts. And how and when we would update investors would depend on what exactly we hear from the FEC.

Shar Pourreza: You would learn whether or not the SEC decides to.

Shar Pourreza: Find that there is reason to believe that they ought to conduct an investigation.

Shar Pourreza: We have not heard anything from the SEC in that regard.

Shar Pourreza: The second thing I'd remind investors of is this is not material.

Shar Pourreza: Again. These were were five allegations totaling political contributions of roughly one three to $1 $5 million. So we're talking about.

Shar Pourreza: Smaller.

Shar Pourreza: Amounts.

Shar Pourreza: How and when we would update investors.

Shar Pourreza: It would depend on what exactly we hear from the SEC.

Shar Pourreza: Perfect. Thank you very much. Appreciate it, guys. See you soon, and congrats on the results. Appreciate it.

Shar Pourreza: Perfect. Thank you very much appreciate it guys see you soon.

Shar Pourreza: And congrats on the results I appreciate it. Thank you shar. Thanks Shar.

John Ketchum: Thank you, Shar

Kirk Crews: Thanks, Shar.

Operator: The next question comes from Steve Fleischman of Wolfe Research. Please go ahead.

Shar Pourreza: The next question comes from Steve Fleishman of Wolfe Research. Please go ahead.

John Ketchum: Yeah. Hi. Good morning. Thanks. I guess a couple of big picture questions. First, obviously, a lot more focus in the elections now as we're in 2024. And curious your thoughts in the event of Republican trifecta, so to speak, just how you're thinking about the sustainability of IRA provisions. Sure, Steve. Let me go ahead and take that. This is John. First of all, in the 21 years I've been at the company, as we've changed administrations and we've seen changes in Congress, we've never seen a change or repeal of tax credits, no matter what form they've taken. IRA is the form we're talking about here. So that's the first point I would make. Second, it's really hard to overturn existing law. I think Obamacare is a very good example of that. It's just very difficult no matter what the political winds are.

Steve Fleishman: Yeah. Hi. Good morning. Thanks. I guess a couple of big picture questions. First, obviously, a lot more focus in the elections now as we're in 2024. And curious your thoughts in the event of Republican trifecta, so to speak, just how you're thinking about the sustainability of IRA provisions.

Shar Pourreza: Yes, hi, good morning. Thanks.

Shar Pourreza: I guess, a couple of big picture questions first obviously, a lot more focus in the elections now.

Shar Pourreza: We're in 'twenty four and.

Steve Fleishman: Curious your thoughts in the event of Republican Trifecta, so to speak.

Steve Fleishman: Just how youre thinking about the sustainability of IRR for efficiency.

Kirk Crews: Sure, Steve. Let me go ahead and take that. This is John. First of all, in the 21 years I've been at the company, as we've changed administrations and we've seen changes in Congress, we've never seen a change or repeal of tax credits, no matter what form they've taken. IRA is the form we're talking about here. So that's the first point I would make. Second, it's really hard to overturn existing law. I think Obamacare is a very good example of that. It's just very difficult no matter what the political winds are.

John W. Ketchum: Sure Steve Let me go ahead and take that this is John.

John W. Ketchum: First of all.

John W. Ketchum: And the 21 years I've been at the company as we've changed administrations.

John W. Ketchum: And we've seen changes in Congress, we've never seen.

John W. Ketchum: Change or appeal of of tax credits.

John W. Ketchum: No matter what form they've taken IRA is the form we're talking about here. So that's the first point I would make a second it's really hard to overturn existing law I think Obama care is a very good example of that is just it's just very difficult no matter, what the political wins or the <unk>.

John Ketchum: The third point I would make is that the IRA benefits both sides of the aisle. It certainly is advantageous for obvious reasons for Democrats, but it also has a big benefit to Republicans. Because if you think about where the investments are being made around IRA and where a lot of the benefit of IRA is flowing, it's flowing to Republican states, and it's flowing to parts of those states that are really difficult to stimulate economically. We're talking about rural communities in these states. So when we come in and we build a wind project, we build a solar project, we build a battery storage project, it's a complete turnaround for these communities. We're providing an economic base in the form of jobs. We're providing an economic base in the form of spending that occurs in that community.

The third point I would make is that the IRA benefits both sides of the aisle. It certainly is advantageous for obvious reasons for Democrats, but it also has a big benefit to Republicans. Because if you think about where the investments are being made around IRA and where a lot of the benefit of IRA is flowing, it's flowing to Republican states, and it's flowing to parts of those states that are really difficult to stimulate economically. We're talking about rural communities in these states. So when we come in and we build a wind project, we build a solar project, we build a battery storage project, it's a complete turnaround for these communities. We're providing an economic base in the form of jobs. We're providing an economic base in the form of spending that occurs in that community.

John W. Ketchum: Third point I would make is that the IRA benefits both sides of the aisle.

John W. Ketchum: Got it.

John W. Ketchum: It certainly is.

Kristen Smith: As advantageous for obvious reasons for.

Kristen Smith: Democrats, but it's also has a big benefit.

Kristen Smith: Republicans because if you think about where the investments are being made around IRA and where a lot of the benefit of IRA is flowing it's flowing to.

Kristen Smith: Republican States and it's flowing to parts of those states that are really difficult to stimulate economically and we're talking about rural communities in these states and so when we come in and we build a wind project. We built a solar project, we build a battery storage project, it's a complete.

Kristen Smith: <unk> turnaround for these communities were provided.

Kristen Smith: An economic base in the form of jobs, we're providing.

Kristen Smith: An economic base in the form of spending that occurs in that community will provide an economic base in the form of property taxes and sales tax revenues.

John Ketchum: We're providing an economic base in the form of property taxes and sales tax revenues. These are 180s for these rural communities and make a huge difference on their viability going forward. Just think about hospitals, staffing doctors at county hospitals, or paying teacher salaries. I mean, the property tax revenues have significant benefits. And so for those reasons, we've always been able to work with both sides of the aisle. So see any repeal of IRA as being unlikely. Okay. I guess two other big picture questions on the renewables business. Just any kind of new thoughts, caller, on your data center strategy and also your thoughts on hydrogen based on the proposed rules that came out? Good morning, Steve. It's Rebecca.

We're providing an economic base in the form of property taxes and sales tax revenues. These are 180s for these rural communities and make a huge difference on their viability going forward. Just think about hospitals, staffing doctors at county hospitals, or paying teacher salaries. I mean, the property tax revenues have significant benefits. And so for those reasons, we've always been able to work with both sides of the aisle. So see any repeal of IRA as being unlikely.

Kristen Smith: These are 100 Eighty's for these rural communities and make a huge dip.

Kristen Smith: <unk> difference on their viability going forward, just think about hospitals in staffing doctors as you know.

Kristen Smith: At county hospitals, or teach paying teacher salaries I mean, the property tax revenues have significant.

Kristen Smith: <unk> benefits and so for those reasons you know, we've always been able to work with.

Kristen Smith: With both sides of the aisle so see any repeal.

Kristen Smith: Of IRA as being unlikely.

Steve Fleishman: Okay. I guess two other big picture questions on the renewables business. Just any kind of new thoughts, caller, on your data center strategy and also your thoughts on hydrogen based on the proposed rules that came out?

Kristen Smith: Okay.

Kristen Smith: Yes.

Kristen Smith: Big picture questions on guidance.

Kristen Smith: Renewables business, just any kind of new thoughts color on your data centers.

Kristen Smith: <unk> and also your thoughts on hydrogen after the based on the proposed.

Kristen Smith: Our rules that came out.

Rebecca Kujawa: Good morning, Steve. It's Rebecca.

Rebecca Jones Kujawa: Good morning, Steve It's Rebecca.

John Ketchum: First, on the data centers, clearly, there's an enormous amount of demand being driven across the US economy by the growth in data centers, driven by a lot of things, of course, but specifically Generative AI, and that growth is pretty explosive at this point. And I think the characteristics of that demand are a little bit unique and driving different ways in approaching the marketplace for a number of these technology companies, where it is imperative that these projects get built on time, on budget, and produce the energy that they're expecting because the opportunity cost for these customers is so significant if they aren't able to power them and, of course, meet the commitments that they've made to their own stakeholders.

First, on the data centers, clearly, there's an enormous amount of demand being driven across the US economy by the growth in data centers, driven by a lot of things, of course, but specifically Generative AI, and that growth is pretty explosive at this point. And I think the characteristics of that demand are a little bit unique and driving different ways in approaching the marketplace for a number of these technology companies, where it is imperative that these projects get built on time, on budget, and produce the energy that they're expecting because the opportunity cost for these customers is so significant if they aren't able to power them and, of course, meet the commitments that they've made to their own stakeholders.

Rebecca Jones Kujawa: First on the data centers.

Rebecca Jones Kujawa: Clearly there is an enormous amount of demand being driven across the U S economy by the growth in data centers driven by a lot of things of course, but specifically gendered at AI and not.

Rebecca Jones Kujawa: Growth is pretty explosive at this point.

Rebecca Jones Kujawa: And I think in the characteristics of that demand are a little bit unique and driving different.

Rebecca Jones Kujawa: Weighs in approaching the marketplace for a number of these technology companies.

Rebecca Jones Kujawa: There. It is imperative that these projects get built on time on budget and produce the energy that they are expecting because the opportunity cost for these customers are so significant.

Rebecca Jones Kujawa: They aren't able to power that and then of course to meet the commitments that they've made.

To their own stakeholders, so we're seeing those relationships expand.

John Ketchum: So we're seeing those relationships expand and also deepen, where it's not just signing the megawatts of the day, but also working with them collaboratively over a long period of time to ensure that they get the energy and capacity that they need where they need it to support their projects. Just alone in our backlog, not even counting what we have installed, we have over 3GW of projects that we're building in the coming years for these customers. And I do believe that's the tip of the iceberg. And again, not even talking about what we already have installed. So it's pretty exciting, and our team is very ingrained in working with these customers, and we're excited about the years ahead.

So we're seeing those relationships expand and also deepen, where it's not just signing the megawatts of the day, but also working with them collaboratively over a long period of time to ensure that they get the energy and capacity that they need where they need it to support their projects. Just alone in our backlog, not even counting what we have installed, we have over 3GW of projects that we're building in the coming years for these customers. And I do believe that's the tip of the iceberg. And again, not even talking about what we already have installed. So it's pretty exciting, and our team is very ingrained in working with these customers, and we're excited about the years ahead.

Rebecca Jones Kujawa: And also deepened where it's not just signing the megawatts at the day, but also working with them collaboratively over a long period of time to ensure that they get the energy and capacity that they need where they need it to support their projects just alone in our backlog that even counting what we have installed we have.

<unk> three gigawatts of projects that we're building in the coming years. After these customers and I do believe that's the tip of the iceberg.

Rebecca Jones Kujawa: Again, not even talking about what we already have installed so it's pretty exciting and our team is very ingrained and working with these customers.

Rebecca Jones Kujawa: And we're excited about that for years ahead.

John Ketchum: Then turning to hydrogen, obviously, the guidance that first came out, the draft guidance in December, is really steering towards hydrogen projects that will be essentially from day one needing to match on an hourly basis. And that, of course, increases the ultimate cost of hydrogen. And unfortunately, I think if it stands as currently drafted, would limit to an extent how much will be built for the US market. We're obviously advocating for more of a relaxed matching requirement, so more of an annual match for a period of time and then transitioning to hourly over time so that you can kickstart a hydrogen market. And hopefully, the administration will hear that and know that having a kickstarted hydrogen economy will certainly further their ambitious goals, which, of course, we are very excited about meeting to see the full decarbonization of the US economy over time.

Then turning to hydrogen, obviously, the guidance that first came out, the draft guidance in December, is really steering towards hydrogen projects that will be essentially from day one needing to match on an hourly basis. And that, of course, increases the ultimate cost of hydrogen. And unfortunately, I think if it stands as currently drafted, would limit to an extent how much will be built for the US market. We're obviously advocating for more of a relaxed matching requirement, so more of an annual match for a period of time and then transitioning to hourly over time so that you can kickstart a hydrogen market. And hopefully, the administration will hear that and know that having a kickstarted hydrogen economy will certainly further their ambitious goals, which, of course, we are very excited about meeting to see the full decarbonization of the US economy over time.

Rebecca Jones Kujawa: And then turning to hydrogen obviously the guidance.

Rebecca Jones Kujawa: That first came out the draft guidance in December.

Really hearing towards hydrogen projects that will be essentially from day. One on meeting can match on an hourly basis and that of course increases the ultimate cost of hydrogen and unfortunately I think it stands as currently drafted would limit to an extent how much will be built.

Rebecca Jones Kujawa: For the U S market.

Kristen Smith: We're obviously advocating for more of a relaxed matching requirements and more of an annual match for a period of time and then transitioning to hourly overtime. So that you can.

Kristen Smith: Kickstart hydrogen market.

Kristen Smith: And hopefully the administration will hear that and know that that having a kick started hydrogen economy will certainly further their ambitious goals, which of course, we are very excited about meeting.

Kristen Smith: See the full decarbonization of the U S economy over time, so more work to be done and we're excited to pursue the marketplace.

John Ketchum: So more work to be done, and we're excited to pursue the marketplace. Regardless, these are probably end-of-the-decade type projects, so more of an investment in the near term for opportunities in the long term. Okay. Great. Thank you very much. Thanks, Steve. The next question comes from David Arcaro of Morgan Stanley. Please go ahead. Hey, good morning. Thanks so much for taking my question. Good morning, David. Maybe on the renewables demand side of things, could you give a little bit more detail on the origination trends that you're seeing? I guess it looked like solar and storage quite strong in the quarter, but then wind a little bit lower in terms of the new bookings added. Maybe what's your latest confidence in achieving those 2025 and 2026 targets, particularly on the wind side of the business? Hey, David. It's Rebecca. I'll take a first cut at that.

So more work to be done, and we're excited to pursue the marketplace. Regardless, these are probably end-of-the-decade type projects, so more of an investment in the near term for opportunities in the long term.

Kristen Smith: Our lessees are probably ended the decade type projects.

Kristen Smith: So more of an investment in the near term for opportunities in the long term.

Steve Fleishman: Okay. Great. Thank you very much.

Kristen Smith: Okay, great. Thank you very much.

Rebecca Kujawa: Thanks, Steve.

Kristen Smith: Steve.

Kristen Smith: Yeah.

Operator: The next question comes from David Arcaro of Morgan Stanley. Please go ahead.

Kristen Smith: The next question comes from David Arcaro of Morgan Stanley. Please go ahead.

Operator: Hey, good morning. Thanks so much for taking my question. Good morning, David. Maybe on the renewables demand side of things, could you give a little bit more detail on the origination trends that you're seeing? I guess it looked like solar and storage quite strong in the quarter, but then wind a little bit lower in terms of the new bookings added. Maybe what's your latest confidence in achieving those 2025 and 2026 targets, particularly on the wind side of the business?

David Arcaro: Hey, good morning, Thanks, so much for taking my question.

James L. Robo: Good morning, Jim maybe on the on the renewables demand side of things could you give a little bit more detail on the origination trends that youre seeing I guess, it looked like solar and storage quite strong in the quarter, but then wind a little bit lower in terms of the new bookings added.

What's your latest confidence in achieving those 25 in 2006 targets.

Jim: Particularly on the wind side of the business.

Rebecca Kujawa: Hey, David. It's Rebecca. I'll take a first cut at that.

Rebecca Jones Kujawa: Hey, Dave it's Rebecca.

Rebecca Jones Kujawa: Take a first cut at that we're obviously excited about the origination as John and corrective highlighted originating 17 gigawatts over the last two years in both years, serving as a record for this year topping last year's record is very exciting.

John Ketchum: We're obviously excited about the origination, as John and Kirk have highlighted, originating 17GW over the last two years and both years serving as a record. So this year topping last year's record is very exciting. We also, of course, see the mix being more focused towards solar and storage. And as I've commented in the past, I think some of this is an aftereffect of the strong demand that we saw going into 2020 when we and others thought that the production tax credit would ultimately phase down and then ultimately go to zero over a period of time. So there was a pull forward of demand. And then the second dynamic that I think has impacted the short term is that the solar production tax credit clearly stimulated near-term demand and deployments for our customers. And obviously, we're very excited about that.

We're obviously excited about the origination, as John and Kirk have highlighted, originating 17GW over the last two years and both years serving as a record. So this year topping last year's record is very exciting. We also, of course, see the mix being more focused towards solar and storage. And as I've commented in the past, I think some of this is an aftereffect of the strong demand that we saw going into 2020 when we and others thought that the production tax credit would ultimately phase down and then ultimately go to zero over a period of time. So there was a pull forward of demand. And then the second dynamic that I think has impacted the short term is that the solar production tax credit clearly stimulated near-term demand and deployments for our customers. And obviously, we're very excited about that.

Rebecca Jones Kujawa: We also of course see the mix being more focused towards solar and storage and as I've commented in the past I think some of this is.

Kristen Smith: And after effects of the strong demand that we saw going into 2020, when we and others thought that the production tax credit would ultimately phased down and then ultimately go to zero over a period of time. So there was a pull forward of demand and then the second dynamics that I think has impacted the short term is that the film.

Rebecca Jones Kujawa: Production tax credit clearly stimulated near term demand and deployments for our customers and obviously, we're very excited about that.

John Ketchum: Storage is growing at least as well as we thought, perhaps exceeding even our expectations in terms of adoption, not just in the Western markets, but now really spreading in a very constructive way through the Midwest. We've got, as John highlighted in the prepared remarks, a really advantaged position to be able to respond quickly to the demand characteristics that we're seeing where our customers need capacity quickly, where they hadn't anticipated the demand that they would see in their underlying business. So getting to market quickly is very much a premium and a priority, and we're there to serve them well. That storage market, as we've talked about from a returns characteristic standpoint, is an awful lot like wind and is certainly complex to deliver the value that our customers are looking for in the various streams.

Storage is growing at least as well as we thought, perhaps exceeding even our expectations in terms of adoption, not just in the Western markets, but now really spreading in a very constructive way through the Midwest. We've got, as John highlighted in the prepared remarks, a really advantaged position to be able to respond quickly to the demand characteristics that we're seeing where our customers need capacity quickly, where they hadn't anticipated the demand that they would see in their underlying business. So getting to market quickly is very much a premium and a priority, and we're there to serve them well. That storage market, as we've talked about from a returns characteristic standpoint, is an awful lot like wind and is certainly complex to deliver the value that our customers are looking for in the various streams.

Kristian Rose: <unk> is growing at least as well as we thought perhaps exceeding even our expectations in terms of adoption not just in the western markets, but now really spreading.

Very constructive ways through the Midwest and we've got as John highlighted in the prepared remarks, I really advantaged position to be able to respond quickly to the demand characteristics that we're seeing where our customers need capacity quickly where they hadn't anticipated the demand that they would see in the underlying business.

Kristian Rose: And so getting to market quickly is very much a premium and a priority and we're there to serve them well and that storage market as we've talked about from a returns characteristics standpoint is an awful lot like wind.

Kristian Rose: And it's certainly complex to deliver the value that our customers are looking for in the various various streams I'd say the other part that is at least as strong as we anticipated when we laid out the expectations is repowering.

John Ketchum: I'd say the other part that is at least as strong as we anticipated when we laid out the expectations is repowering. And we're excited about the economics of that, and economics specifically in context to the value that it brings to our customers, bringing some incremental generation and extending the life of these projects, often extending the contracts with our customers at the same times that we do repowering. So overall, with all those comments in context, I feel really good about meeting our development expectations in aggregate. We'll continue to look at the mix in individual technologies over time. But at this point, we're obviously leaving the ranges as we've had them now for a couple of years, in part to reflect what I'm sure you recall. Wind is a very short development cycle.

I'd say the other part that is at least as strong as we anticipated when we laid out the expectations is repowering. And we're excited about the economics of that, and economics specifically in context to the value that it brings to our customers, bringing some incremental generation and extending the life of these projects, often extending the contracts with our customers at the same times that we do repowering. So overall, with all those comments in context, I feel really good about meeting our development expectations in aggregate. We'll continue to look at the mix in individual technologies over time. But at this point, we're obviously leaving the ranges as we've had them now for a couple of years, in part to reflect what I'm sure you recall. Wind is a very short development cycle.

Steve Fleishman: And we're excited about the economics of that.

Kristen Smith: Economics, specifically in context to the value that it brings to our customers, bringing some incremental generation and extending the life of these projects often extending the contracts with our customers at the same time set we do repowering to overall.

Kristen Smith: All of those comments.

Kristen Smith: In context, I feel really good about meeting our development expectations in aggregate will continue to look at the mix in individual technologies over time.

Kristen Smith: But at this point you are obviously, leaving the ranges as we had them now for a couple of years in part to reflect what I'm sure you recall when does a very short development cycle, maybe not the actual laying the groundwork to be able to build a project, but when we enter into a contract and acquire the chairman and to put it into service can be as short as.

John Ketchum: Maybe not the actual laying the groundwork to be able to build a project, but when we enter into a contract and acquire the terms and put it into service can be as short as nine months. So there's still a lot of time left between now and the end of 2026 to add more wind to not only the backlog, but ultimately commission. And when I look at the forward couple of quarters, there are a couple of chunky opportunities that our teams are working on, and I feel good about bringing some of those to fruition. Excellent. Thanks for that. Very helpful. Thanks, Steve. And then maybe secondarily, just it sounds like the backdrop has gotten more challenging for small developers in the renewable space.

Maybe not the actual laying the groundwork to be able to build a project, but when we enter into a contract and acquire the terms and put it into service can be as short as nine months. So there's still a lot of time left between now and the end of 2026 to add more wind to not only the backlog, but ultimately commission. And when I look at the forward couple of quarters, there are a couple of chunky opportunities that our teams are working on, and I feel good about bringing some of those to fruition.

Steve Fleishman: Nine months.

So theres still a lot of time left between now and the end of 'twenty six to add more wind.

Steve Fleishman: It's not only the backlog, but ultimately commission and when I look at the forward couple of quarters. There are a couple of chunky opportunities that our teams are working on and I feel good about that bringing them some.

Steve Fleishman: All of this to fruition.

Rebecca Kujawa: Excellent. Thanks for that. Very helpful.

Steve Fleishman: Excellent. Thanks for that very helpful. And then maybe secondarily just it sounds like the backdrop has gotten more challenging for small developers in the renewable space wondering if youre seeing opportunities for market share gains as a result in potentially.

Rebecca Kujawa: Thanks, Steve.

David Arcaro: And then maybe secondarily, just it sounds like the backdrop has gotten more challenging for small developers in the renewable space.

John Ketchum: Wondering if you're seeing opportunities for market share gain as a result and potentially any development pipelines to pick up from developers that might be struggling right now? Sure. We always are out in the development rights acquisition market. In the recent couple of years, we've really prioritized our greenfield portfolio in part because of our ability to work so closely with our customers and make sure that we're building the projects over the long term where they need them. But we will always be opportunistic in the development project market to be selective and create opportunities where it may be particularly attractive. The dynamic from a couple of years ago where a number of the development portfolios were acquired by folks looking to, I would say, compete with us, but certainly have a bigger presence on the development side. We haven't seen those holistically come back to market.

Wondering if you're seeing opportunities for market share gain as a result and potentially any development pipelines to pick up from developers that might be struggling right now?

Steve Fleishman: Any any development pipelines.

Kristen Smith: To pick up from developers that might be struggling right now.

Rebecca Kujawa: Sure. We always are out in the development rights acquisition market. In the recent couple of years, we've really prioritized our greenfield portfolio in part because of our ability to work so closely with our customers and make sure that we're building the projects over the long term where they need them. But we will always be opportunistic in the development project market to be selective and create opportunities where it may be particularly attractive. The dynamic from a couple of years ago where a number of the development portfolios were acquired by folks looking to, I would say, compete with us, but certainly have a bigger presence on the development side. We haven't seen those holistically come back to market.

Sure.

Steve Fleishman: We always are out in the development rights acquisition market in the recent couple of years, we've really prioritized our.

Steve Fleishman: Our greenfield portfolio.

Steve Fleishman: Part because of our ability to to work so closely with our customers and make sure that we're building the projects over the long term where.

Steve Fleishman: Where they need them, but we will always be opportunistic and and development project market to be.

Be selective and create opportunities where it may be particularly attractive.

Steve Fleishman: <unk> from a couple of years ago, where a number of the development portfolios were acquired by folks looking to.

I would say compete with us, but it certainly has a bigger presence on the development side, we haven't seen those holistically come back to market I think that may change over time.

John Ketchum: I think that may change over time. I know the private equity cycle of wanting to be able to turn over capital quickly and realize isn't necessarily completely aligned with the development cycle, where sometimes things are a little bit faster, a little bit slower than you anticipated, and you need to be patient. So I'm optimistic there'll be opportunities. But most importantly, and this is one of the things that we'll focus on in March, is we want to keep our fate, our development opportunities in our own hands.

I think that may change over time. I know the private equity cycle of wanting to be able to turn over capital quickly and realize isn't necessarily completely aligned with the development cycle, where sometimes things are a little bit faster, a little bit slower than you anticipated, and you need to be patient. So I'm optimistic there'll be opportunities. But most importantly, and this is one of the things that we'll focus on in March, is we want to keep our fate, our development opportunities in our own hands.

Steve Fleishman: I know the private equity cycle of wanting to be able to churn out of our capital quickly and realize isn't necessarily completely aligned with the development cycle, where sometimes things are a little bit faster a little bit slower than you anticipated and you need to be patient.

Im optimistic there'll be opportunities, but most importantly, and this is one of the things that we'll focus on in March is we want to keep our feet our development opportunities in our own hands and I am Super excited about what our team is working on from a Greenfield development standpoint, and the competitive advantages that we're investing.

John Ketchum: I am super excited about what our team is working on from a greenfield development standpoint and the competitive advantages that we're investing in to make sure that we can serve our customers well, not just in the next two or three years, as we often talk about with you all, but the next five, seven, ten years plus down the road. Okay. Great. Thanks so much for all the color. The next question comes from Carly Davenport of Goldman Sachs. Please go ahead. Hey, good morning. Thanks so much for taking the questions. Wanted to just ask about transmission. You highlighted the $1.9 billion of capital through 2027 at NEER. And as we look at the EBITDA contributions at NEER for 2024, that piece is moving higher as well.

I am super excited about what our team is working on from a greenfield development standpoint and the competitive advantages that we're investing in to make sure that we can serve our customers well, not just in the next two or three years, as we often talk about with you all, but the next five, seven, ten years plus down the road.

Steve Fleishman: And to make sure that we can serve our customers well not just in the next two or three years as we often talk about with you all but next five 710 years plus down the road.

David Arcaro: Okay. Great. Thanks so much for all the color.

Steve Fleishman: Okay, great. Thanks, so much for all the color.

Operator: The next question comes from Carly Davenport of Goldman Sachs. Please go ahead.

Steve Fleishman: The next question comes from Carly Davenport Goldman Sachs.

Carly Davenport: Hey, good morning. Thanks so much for taking the questions. Wanted to just ask about transmission. You highlighted the $1.9 billion of capital through 2027 at NEER. And as we look at the EBITDA contributions at NEER for 2024, that piece is moving higher as well.

Steve Fleishman: Please go ahead.

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

Carly Davenport: I wanted to just ask about transmission you highlighted the $1 9 billion of capital through 2007 at Needham.

Carly Davenport: Look at the EBITDA contribution that Nir for 2024 that pieces is moving higher as well. So could you just talk a bit about what sort of growth you could see at need over the next several years and what that EBITDA contribution could be over time.

John Ketchum: So could you just talk a bit about what sort of growth you could see at NEER over the next several years and what that EBITDA contribution could be over time? Good morning, Carly. So from the pipeline perspective, as no doubt you appreciate, transmission opportunities take a couple of years to come to fruition. So we're thrilled with the awards that the team has been able to secure in the last year. On one part of it, building on investments that we already have, so expansion opportunities that are significantly enabling new renewables development headed into the California market, and then other parts of the US, competitive opportunities that we run through competitive processes. In terms of timing, as we highlighted in the prepared remarks, the in-service dates are out to 2027. So as we invest capital, obviously, that'll start to become more of a material contribution over time.

So could you just talk a bit about what sort of growth you could see at NEER over the next several years and what that EBITDA contribution could be over time?

Rebecca Kujawa: Good morning, Carly. So from the pipeline perspective, as no doubt you appreciate, transmission opportunities take a couple of years to come to fruition. So we're thrilled with the awards that the team has been able to secure in the last year. On one part of it, building on investments that we already have, so expansion opportunities that are significantly enabling new renewables development headed into the California market, and then other parts of the US, competitive opportunities that we run through competitive processes. In terms of timing, as we highlighted in the prepared remarks, the in-service dates are out to 2027. So as we invest capital, obviously, that'll start to become more of a material contribution over time.

Carly Davenport: Good morning, Harley to the from the pipeline perspective is has no doubt you appreciate transmission opportunities take a couple of years to come to fruition. So we're thrilled with the awards.

Carly Davenport: That the team has been able to secure.

Carly Davenport: In the last year.

Carly Davenport: On one part of it building on investments that we already have some expansion opportunities that are significantly, enabling new renewables development headed into the California market.

Carly Davenport: Then and then other parts of the U S competitive opportunity is that.

Carly Davenport: We went through a competitive processes in terms of timing.

Carly Davenport: As we highlighted in the prepared remarks. The in service dates are out to 2027, so as we invest capital obviously that will start to become more of a material contribution over time.

John Ketchum: We'll give more color as we get into the investor conference, as we typically do, to give more of a breakdown by business and what those contributions will look like over time. But the momentum is terrific. As we've highlighted, everybody understands, maybe not to the extent that we think it's going to happen, but in order to unlock the renewables opportunity that we and others see across the United States, transmission needs to be built. We stand ready to be a part of the solution wherever we can be and bring cost-effective solutions to customers. Great. Thank you for that. Then maybe just one more on the financing side for this year.

We'll give more color as we get into the investor conference, as we typically do, to give more of a breakdown by business and what those contributions will look like over time. But the momentum is terrific. As we've highlighted, everybody understands, maybe not to the extent that we think it's going to happen, but in order to unlock the renewables opportunity that we and others see across the United States, transmission needs to be built. We stand ready to be a part of the solution wherever we can be and bring cost-effective solutions to customers.

Carly Davenport: And we will give more more color as we get into the Investor Conference as we typically do that is more of a breakdown.

Carly Davenport: Down by by business and what those contributions will look like over time, but the momentum is terrific and as we've highlighted everybody understands maybe not to the extent.

Carly Davenport: We think it's going to happen, but in order to unlock renewables opportunity that we and others see across the United States transmission needs to be built.

Carly Davenport: And we stand ready to be a part of the solution wherever we can be and being cost effective solutions to customers.

Carly Davenport: Great. Thank you for that. Then maybe just one more on the financing side for this year.

Great. Thank you for that and then maybe just one more on the financing side for this year just based on what you've seen so far.

John Ketchum: Just based on what you've seen so far in the markets, how are you thinking about the mix of the different avenues that you can use to monetize tax credits, whether through tax equity or transferability? How do we think about the sort of magnitude of each of those in your financing plans for 2024? Yeah. Carly, this is Kirk. The financing plan, as we shared in our prepared remarks, is consistent with the information we shared on the third quarter call. And as we approach those options, we will use the historical approaches, project finance and tax equity. But we're also very encouraged by what we're seeing with the transferability market. We are having really good progress. In those conversations, we're seeing really good demand for the NextEra Energy tax credit.

Just based on what you've seen so far in the markets, how are you thinking about the mix of the different avenues that you can use to monetize tax credits, whether through tax equity or transferability? How do we think about the sort of magnitude of each of those in your financing plans for 2024?

And the markets how are you thinking about the mix of the different avenues that you can use to monetize tax credits whether through.

Carly Davenport: Zero tax equity or transferability, how do we think about the sort of magnitude of each of those in your financing plans for 'twenty four.

Kirk Crews: Yeah. Carly, this is Kirk. The financing plan, as we shared in our prepared remarks, is consistent with the information we shared on the third quarter call. And as we approach those options, we will use the historical approaches, project finance and tax equity. But we're also very encouraged by what we're seeing with the transferability market. We are having really good progress. In those conversations, we're seeing really good demand for the NextEra Energy tax credit.

Carla: Yes Carla.

Carla: Carly.

Kirk: This is Kirk.

Kirk: <unk>.

Kirk: The financing plan as we shared in our prepared remarks is it's consistent with the information we shared on the third quarter call and.

Kirk: As we as we approach the those options.

We will use.

Kirk: The historical approaches project finance and tax equity.

Kirk: But we're also very encouraged by what we're seeing with the transferability market.

Kirk: We are.

Kirk: Having really good progress with them.

Kristen Smith: Those conversations we're seeing really good demand for the Nextera energy.

John Ketchum: Ultimately, we look at all those as options and will optimize between project finance, transferability, and tax equity. We'll use those within the ranges that we shared in the 2024 to 2026 funding plan that we provided between the disclosure that we provided. But we are seeing really good demand for the credits and expect to continue to utilize transferability as an option going forward. Great. Appreciate that color. The next question comes from Jeremy Tonet of J.P. Morgan. Please go ahead. Hi. Good morning. Good morning, Jeremy. Just wanted to build off that a little bit as what you're talking about before. How do you balance, I guess, looking forward, the wealth of growth opportunities and associated funding needs relative to dividend growth? Do you look at industry trends for dividend growth at all and how that might change as utility CapEx increases?

Ultimately, we look at all those as options and will optimize between project finance, transferability, and tax equity. We'll use those within the ranges that we shared in the 2024 to 2026 funding plan that we provided between the disclosure that we provided. But we are seeing really good demand for the credits and expect to continue to utilize transferability as an option going forward.

Kristen Smith: <unk> credit and <unk>.

Kristen Smith: Ultimately, we look at all of those as options and we will optimize between.

Kristen Smith: Project Finance and transferability and tax equity and we will we'll use those within.

Kristen Smith: The ranges that we shared and the 24 to 26 <unk>.

Kristen Smith: Funding plan that we provided.

Kristen Smith: Between those between the disclosure that we provided.

Kristen Smith: But we are seeing.

Kristen Smith: Really really good.

Kristen Smith: <unk> for the credits and expect to continue to utilize transferability as an option going forward.

Carly Davenport: Great. Appreciate that color.

Kristen Smith: Great I appreciate that color.

Operator: The next question comes from Jeremy Tonet of J.P. Morgan. Please go ahead.

Speaker Change: The next question comes from Jeremy Toney of Jpmorgan. Please go ahead.

Jeremy Tonet: Hi. Good morning. Good morning, Jeremy. Just wanted to build off that a little bit as what you're talking about before. How do you balance, I guess, looking forward, the wealth of growth opportunities and associated funding needs relative to dividend growth? Do you look at industry trends for dividend growth at all and how that might change as utility CapEx increases?

Speaker Change: Hi, good morning.

Jerry: Good morning, Jerry.

Jeremy Bryan Tonet: Just wanted to build off that a little bit when you were talking about before how do you balance I guess.

Jeremy Bryan Tonet: Looking forward the wealth of growth opportunities in the special funding needs relative to dividend growth do you look at industry trends for dividend growth at all and how that might change as utility capex increases and just a final point there just wondering how the E&P business competes for capital against everything else that you have in a lower gas price environment.

John Ketchum: Just a final point there. Just wondering how the E&P business competes for capital against everything else that you have in a lower gas price environment. Sure. So when we look at capital allocation, and you look at, we shared on the third quarter call, the returns that we see within the renewable business. And as we shared then, at Energy Resources, within, for wind, we see returns in the low 20s on a levered ROE basis. In solar, we see returns in the mid-teens, and then storage is also in the low 20s. And so it's great returns, and we look to get capital allocated to the renewable business. And that, as John discussed in the prepared remarks, we are allocating capital across both businesses and renewables and transmission. And so that is the priority with the way that we allocate capital.

Just a final point there. Just wondering how the E&P business competes for capital against everything else that you have in a lower gas price environment.

Kirk Crews: Sure. So when we look at capital allocation, and you look at, we shared on the third quarter call, the returns that we see within the renewable business. And as we shared then, at Energy Resources, within, for wind, we see returns in the low 20s on a levered ROE basis. In solar, we see returns in the mid-teens, and then storage is also in the low 20s. And so it's great returns, and we look to get capital allocated to the renewable business. And that, as John discussed in the prepared remarks, we are allocating capital across both businesses and renewables and transmission. And so that is the priority with the way that we allocate capital.

Jeremy Bryan Tonet: Sure so.

Jeremy Bryan Tonet: When we look at capital allocation and you look at.

Jeremy Bryan Tonet: We shared on the third quarter call.

Jeremy Bryan Tonet: The returns that we see within the renewable business.

Jeremy Bryan Tonet: And as we shared in at <unk>.

Jeremy Bryan Tonet: Energy resources within.

For when we see returns in the low twenties on on a Levered Roe basis.

Jeremy Bryan Tonet: Solar we see returns in the mid teens and then storage is and also in.

Jeremy Bryan Tonet: The low twenty's and so.

Jeremy Bryan Tonet: It's great returns and we look to get capital allocated to the renewable business.

Jeremy Bryan Tonet: And that.

Jeremy Bryan Tonet: As John discussed in the prepared remarks.

Jeremy Bryan Tonet: We are allocating capital across both businesses in renewables and transmission.

Jeremy Bryan Tonet: And so that is that that is the priority.

With the way that we allocate capital.

John Ketchum: And then in terms of the funding of that, again, it's the way that we've traditionally funded the business. It's tax equity, it's project finance, and then we also use the transferability provisions. Got it. Thank you for that. And then maybe just pivoting a little bit towards the backlog. A lot of additions in the quarter, but there was a little bit that fell out, I think, 350, and there was a little bit more in the post-2026 timeframe that's in the backlog. So just wondering if you could talk a bit more on kind of some of the drivers, the puts and takes within the portfolio addition composition over time. Sure. I'll take that. In terms of the, obviously, the backlog additions are quite strong, and we're thrilled about that. And for this quarter, in terms of the removal that we had, it's really project-specific items.

And then in terms of the funding of that, again, it's the way that we've traditionally funded the business. It's tax equity, it's project finance, and then we also use the transferability provisions.

Jeremy Bryan Tonet: And then in terms of.

Jeremy Bryan Tonet: The funding of that again, it's the way that we've traditionally funded the business it's tax equity as project Finance and then we also use the transferability provisions.

Jeremy Tonet: Got it. Thank you for that. And then maybe just pivoting a little bit towards the backlog. A lot of additions in the quarter, but there was a little bit that fell out, I think, 350, and there was a little bit more in the post-2026 timeframe that's in the backlog. So just wondering if you could talk a bit more on kind of some of the drivers, the puts and takes within the portfolio addition composition over time.

Jeremy Bryan Tonet: Got it. Thank you for that and then maybe just pivoting a little bit towards that.

Jeremy Bryan Tonet: Backlog.

Jeremy Bryan Tonet: A lot of additions in the quarter, but.

Jeremy Bryan Tonet: There was a little bit to fill out I think pre <unk> and it was a little bit more on the post 2026 timeframe. That's in the backlog. So just wondering if you could talk a bit more on kind of some of the drivers the puts and takes within the portfolio addition composition over time.

Rebecca Kujawa: Sure. I'll take that. In terms of the, obviously, the backlog additions are quite strong, and we're thrilled about that. And for this quarter, in terms of the removal that we had, it's really project-specific items.

Jeremy Bryan Tonet: Sure I'll take that in terms of the obviously the backlog additions are quite strong and we're thrilled about that.

For this quarter in terms of.

Jeremy Bryan Tonet: The removal that we had it's really project specific items.

John Ketchum: In one part, it was really related to higher interconnection costs for a particular project where we need to go back and do a little bit more work. Very likely, these project megawatts will come back into the backlog. They're good projects, but in the near term, we're removing them while we work through the issues. I think it's important to keep in mind that as we add something to the backlog, it's tremendous visibility, and we're really excited about moving forward with the projects based on what we know at the time. But this is still a development business, and there are things that you have to work through before you commit significant capital to a project. Occasionally, some of those things that we work through are better.

In one part, it was really related to higher interconnection costs for a particular project where we need to go back and do a little bit more work. Very likely, these project megawatts will come back into the backlog. They're good projects, but in the near term, we're removing them while we work through the issues. I think it's important to keep in mind that as we add something to the backlog, it's tremendous visibility, and we're really excited about moving forward with the projects based on what we know at the time. But this is still a development business, and there are things that you have to work through before you commit significant capital to a project. Occasionally, some of those things that we work through are better.

Kristen Smith: In one in one part is really related to higher interconnection costs for a particular project.

Kristen Smith: We need to go back and do a little bit more work very likely on these project megawatts will come back into the backlog theyre good projects, but the near term we're removing them.

Kristen Smith: While we work through the issues.

Kristen Smith: I think it's important to keep in mind that as we.

Kristen Smith: Add something to that backlog, it's tremendous visibility and.

Kristen Smith: And we're really excited about moving forward with the projects based on what we know at the time, but this is still a development business and there are things that you have to work through before you commit significant capital to a project and occasionally.

Kristen Smith: Some of those things that we worked through or are better sometimes they're a little bit worse, and we need to make the decisions that are they are ultimately right for our shareholders at the time that we need to make them. So.

John Ketchum: Sometimes they're a little bit worse, and we need to make the decisions that are ultimately right for our shareholders at the time that we need to make them. So in context of a 20-plus GW portfolio, I think it's de minimis for what is kind of the normal run rate for development-type issues. And fortunately, we've worked through the issues that we had talked about over the last two years around anti-dumping, countervailing duties, and the significant changes in the marketplace related to the inflationary pressures and changes in the interest rates. So at this point, I think we're in kind of normal development. Every once in a while, there's something that changes our view on a specific project, and we're going to do the right thing from a shareholder perspective and only commit capital where it makes sense. Got it. That's helpful. Thank you for that. Thank you.

Sometimes they're a little bit worse, and we need to make the decisions that are ultimately right for our shareholders at the time that we need to make them. So in context of a 20-plus GW portfolio, I think it's de minimis for what is kind of the normal run rate for development-type issues. And fortunately, we've worked through the issues that we had talked about over the last two years around anti-dumping, countervailing duties, and the significant changes in the marketplace related to the inflationary pressures and changes in the interest rates. So at this point, I think we're in kind of normal development. Every once in a while, there's something that changes our view on a specific project, and we're going to do the right thing from a shareholder perspective and only commit capital where it makes sense.

Kristen Smith: So in context of a 20 plus gigawatt portfolio I think it's de Minimis for what is kind of a normal run rate for.

Kristen Smith: Development type issues and Fortunately, we've worked through the issues that we had talked about over the last two years around antidumping countervailing duties and the significant changes in the marketplace related to inflationary pressures and changes in the interest rates. So at this point I think we are in kind of like normal development every once in a while there.

Kristen Smith: Or something that changes our view on a specific project and we were going to do the right thing from a shareholder perspective, and only commit capital where it makes sense.

Got it. That's helpful. Thank you for that. Thank you.

Kristen Smith: Got it that's helpful. Thank you for that.

Kristen Smith: Thank you.

Kristen Smith: Okay.

John Ketchum: This concludes our question-and-answer session. The conference has now also concluded. Thank you for attending today's presentation, and you may now disconnect.

Kristen Smith: This concludes our question and answer session.

Kristen Smith: France has now also concluded.

Kristen Smith: You for attending today's presentation and you may now disconnect.

Kristen Smith: [music].

Kristen Smith: Okay.

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