We have maintained our emphasis on operational excellence over time SAIDI: System Average Interruption Duration Index (1) 2012 Operational Highlights • Minutes Best-ever reliability 150 Good FL Industry Average performance at FPL for 125 both distribution and 100 FPL transmission 75 50 25 • NEER posted best-ever '06 '07 '08 '09 '10 '11 '12 Fossil Reliability – EFOR (2) fossil EFOR performance 10% Industry Average 8% • Successfully resolved 6% Seabrook generator 4% NextEra Energy Good cooling issue 2% 0% '06 '07 '08 '09 '10 '11 '12 (1) SAIDI represents the number of minutes the average customer is without power during that time period Source: FPL as reported to FL PSC; FL Industry Average consists of data from TECO, PEF, and Gulf as reported to FL PSC (2) Equivalent Forced Outage Rate; NextEra EFOR represents FPL Fossil and NEER TH&S; Industry Source: 16 NERC (Large Fossil Generating Peer Companies).
FPL’s cost performance continues to be outstanding among industry peers 2011 Total Non-Fuel O&M per Retail MWh (1) $100 Top Quartile Top Decile ($15.67) O&M $ per Retail MWh $10 1 10 100 1,000 Retail MWh (MM) (1) FERC Form 1, 2011. Note: Holding companies with >100,000 customers. Excludes companies with no utility owned generation. 17
A strong balance sheet supports our strategies at both FPL and Energy Resources Credit Ratings Utility S&P Credit Ratings (1) NextEra Energy Ratings (2) 30% 28% Moody’s S&P Fitch NextEra Energy 25% NextEra Energy 23% Issuer’s Credit Rating A- Baa1 A- 21% 20% Outlook Stable Stable Stable FPL 16% 15% First Mortgage Bonds A Aa3 AA- Commercial Paper A-2 P-1 F1 10% Outlook Stable Stable Stable 7% NextEra Energy 5% Capital Holdings 5% Sr. Unsecured BBB+ Baa1 A- Commercial Paper A-2 P-2 F1 0% A or A- BBB+ BBB BBB- Non- Outlook Stable Stable Stable higher Investment Grade (1) From EEI: S&P Utility Credit Ratings Distribution – Financial Update Q2 2012 18 (2) NextEra Energy Ratings reflect the latest information as of March 1, 2013
We have maintained our focus on financial discipline 2002 – 2012 Portfolio Optimization • Conservative approach to MW hedging 14,000 – Energy Resources’ existing 12,000 assets are hedged 97%, 10,000 95%, 89%, 86% for 2013-16 8,000 respectively 6,000 12,161 – FPL earnings are protected 4,000 against commodity price 4,475 2,000 fluctuations 0 -3,577 • “Toe in the water” approach -2,000 -4,000 to new business -6,000 development Acquired Developed Sold NextEra Energy has grown significantly, but we pursue profitable growth, not growth for growth’s sake 19
Through the difficult economic period of 2007-2012, NextEra Energy ranked first in adjusted EPS growth among the top 10 power companies 2007-2012 Adjusted EPS CAGR – Top 10 Power Companies by Market Cap 10.0% 5.5% (1) 5.0% 3.8% 3.6% 3.2% 3.0% Adjusted 1.4% EPS 0.6% 0.4% CAGR 0.0% (%) (1.4%) (5.0%) (8.0%) (10.0%) (1) See Appendix for reconciliation of adjusted amounts to GAAP amounts 20 Source: FactSet Market Cap Ranking as of 2/28/2013, company filings for adjusted EPS
NextEra Energy also ranked first among the top 10 power companies in adjusted EPS growth over the last decade 2002-2012 Adjusted EPS CAGR – Top 10 Power Companies by Market Cap 10.0% 6.6% (1) 5.0% 4.5% 4.3% 3.8% Adjusted 3.2% EPS 2.4% 1.8% 1.7% CAGR 0.8% (%) 0.0% (2.6%) (5.0%) (1) See Appendix for reconciliation of adjusted amounts to GAAP amounts 21 Source: FactSet Market Cap Ranking as of 2/28/2013, company filings for adjusted EPS
Agenda • 2012 review • Keys to our business strategy • FPL update • Energy Resources update • Closing summary 22
Our strategy at FPL is founded on the “virtuous circle” Customer Satisfaction Superior Constructive Virtuous Circle Customer Value Regulatory Delivery Environment Strong Financial Position 23
We deliver excellent value to our customers FPL’s Customer Value Proposition Competitive, Award-Winning Clean + + + Superior Affordable Customer Environmental Reliability Bills Service Profile Florida Electric Utility Residential Bill Comparison of Average Typical Monthly Bills from February 2012 – January 2013 (1) Residential 1,000 kWh Bill $170 $150 U.S. Average (2) $130 $128.29 Florida $110 Average $124.42 $90 FPL $70 $94.25 $50 The lowest bill in the state and 27% below the national average (1) Average of typical 1,000 kWh February 2012 through January 2013 monthly bill data compiled from the Florida Public Service Commission, Florida Municipal Electric Association, Reedy Creek Improvement District, Florida Electric Cooperatives Association and Jacksonville Electric Authority. Figures include state gross receipts tax of about 2.5 percent. Florida Average is the average of all bills depicted. Florida Public Utilities Company operates as one utility; however, they have separate bills for Marianna and Fernandina Beach 24 (2) U.S. Average, as reported by EEI Typical Bills and Average Rates Report Summer 2012
The settlement approved in December provides a four-year window for productivity improvements FPL Efficiency Opportunities • Identified several initiatives with significant O&M cost savings in the following areas: – Nuclear operations – Transmission and distribution – Staff functions • Focused on identifying additional productivity improvements to be achieved through 2016 Every dollar of O&M savings creates opportunities to invest capital in projects that benefit customers 25
FPL has identified potential incremental capital expenditures over the next four years in addition to its “baseline” case Incremental Capital Expenditures Through 2016 • Incremental storm hardening • Infrastructure / reliability investment • Generation upgrades ~ $4 B to $5 B in addition to ~$9 B • Natural gas pipeline in baseline case • Vero Beach acquisition and other Florida wholesale opportunities • Solar investment All investments must represent a win-win for shareholders and customers 26
Agenda • 2012 review • Keys to our business strategy • FPL update • Energy Resources update • Closing summary 27
Energy Resources is an industry-leading competitive wholesale generator with a diverse portfolio of assets Clean Energy Industry Leader • Largest renewables developer in North America – $3.6 B backlog of renewables projects (2013-16 expected cap ex) – Terrific pipeline of new renewables projects Energy Resources 2012 Generation (1) • Diversified by fuel, geography and (MW) market • A strong and profitable nuclear Natural Gas 22.4% portfolio Nuclear 30% • Strong position in TX with upside Nuclear 15.3% Wind to spark spreads 56.6% Oil • Wind Profitable, focused position in gas 4.5% 39% infrastructure Coal 0.1% Solar 1.1% 28 (1) As of 12/31/2012, excludes Maine Hydro assets of 351 MW sold on 3/1/2013
We will spend ~$3.6 B building out our backlog of attractive renewables projects Wind and Solar Project Backlog Estimated Cap Ex (1) for Wind • ~$1.5 B for backlog of wind and Solar Projects in Backlog projects through 2016 $MM 2,000 – ~600 MW of Canadian wind, $1.7-1.9 B 1,800 primarily in 2014 1,600 1,400 – 175 MW U.S. wind for 2013 $1.2-1.4 B 1,200 1,000 • ~$2.1 B solar program 800 through 2016 is concentrated 600 $250- Solar $150- 350 MM 400 250 MM in 2013 and 2014 $2.0 - $2.2 B 200 0 2013 2014 2015 2016 Wind Solar (1) Includes Energy Resources’ capital expenditures from consolidated investments as well as its share of capital expenditures from equity method investments. Capital expenditure dollars are categorized by the year in which the cash is expected to be spent and not when projects are expected to be placed in service. The figures exclude the capital investments spent prior to 2013. The figures exclude the estimated spend 29 for projects placed in service prior to 2013.
A pipeline of new renewables projects provides the opportunity to deploy $1.5 to $3.0 B in incremental capital through 2016 New Wind and Solar Development Projected Cap Ex (1) including • 500 to 1,500 MW of additional growth opportunities wind through 2014 $MM 3,000 – $1 B to 3 B in cap ex $2.6-2.8B 2,500 $2.1-2.3B • Up to 300 MW of additional 2,000 solar through 2016 1,500 $650- $600- 1,000 850MM 800MM – Up to $1 B in cap ex Solar 500 $2.0 - $2.2 B 0 2013 2014 2015 2016 Wind Solar Incremental Wind Incremental Solar (1) Includes Energy Resources’ capital expenditures from consolidated investments as well as its share of capital expenditures from equity method investments. Capital expenditure dollars are categorized by the year in which the cash is expected to be spent and not when projects are expected to be placed in service. The figures exclude the capital investments spent prior to 2013. The figures exclude the estimated spend 30 for projects placed in service prior to 2013.
We continue to evaluate our portfolio for opportunities to reduce our merchant exposure Energy Resources’ Merchant MW (1) 10,000 9,000 8,780 8,000 7,536 7,000 6,960 6,732 6,000 5,000 4,000 3,000 2,000 1,000 0 2009 2010 2011 2012 (1) Includes hedged wind. 2012 reflects the sale of the Maine Hydro assets (351 MW) which closed March 1, 2013 31
Long-term contracted assets are expected to be two-thirds of Energy Resources’ adjusted EBITDA Energy Resources’ Adjusted EBITDA (1) 120% 100% 11% 14% 15% 80% 19% 22% 40% 60% 40% 66% 64% 49% 20% 0% 2009 2014 2016 Long-Term Contracted Merchant Peripheral Businesses (1) See Appendix for definition of adjusted EBITDA 32
Agenda • 2012 review • Keys to our business strategy • FPL update • Energy Resources update • Closing summary 33
We have the potential to deploy an additional $6 B - $8 B of growth capital through 2016 NextEra Projected Capital Expenditures through 2016 (1) $B • Strong visibility into incremental capital 4 Year Total $8.0 investment opportunities of ~$23 B $4.5-7.0 B $7.0 – 60%+ at FPL $5.4-6.1 B $6.0 – Remainder primarily $2.9-4.9 B $2.8-4.9 B contracted renewable projects $5.0 • $4.0 Balance sheet strength is paramount $3.0 – $2.0 If this capital deployment program is successful, we will $1.0 be issuing incremental equity $0.0 in 2014 2013 2014 2015 2016 Backlog Incremental opportunities (1) Includes Energy Resources’ capital expenditures from consolidated investments as well as its share of capital expenditures from equity method investments. Capital expenditure dollars are categorized by the year in which the cash is expected to be spent and not when projects are expected to be placed in service. 34 The figures exclude the capital investments spent prior to 2013.
We expect our credit metrics to return to historical levels by 2014 NextEra Energy’s Credit Metrics (1) Adjusted FFO to Debt Adjusted Debt to Total Capital 53.0% 30.0% 52.0% 25.2% 25.0% 51.8% 52.0% 25.0% 20.3% 51.0% 17.0% 20.0% 49.4% 50.0% 15.0% 49.0% 48.3% 10.0% 48.0% 5.0% 47.0% 46.0% 0.0% 2009 2012 2013E 2014 Target 2009 2012 2013E 2014 Target (1) Credit metric methodology is defined by S&P and is included in their Corporate Ratings Criteria on their website, 35 projected by NextEra Energy based on S&P methodology
We expect further capital investment to translate into long-term adjusted EPS growth of 5% to 7% Adjusted Earnings Per Share Expectations $4.70 – $5.00 2013 2014 $5.05 – $5.45 5% to 7% CAGR 2016 off of 2012 base or $5.50 – $6.00 36
We are well-positioned for future growth NextEra Energy – Investment Proposition • Above-average and highly visible growth through 2016 – Four years of regulatory certainty at FPL – Strong backlog at Energy Resources with upside potential • Strong and increasing cash flow from operations • Moderate risk portfolio – Strong bias toward more regulated and long-term contracted assets – Highly hedged against commodity price fluctuations • Underpinned by one of the strongest balance sheets in the industry • Increasing payout ratio On a two-year forward P/E basis, NextEra Energy shares trade at a discount to the industry average 37
In Investo estor Con r Confer eren ence ce 20 2013 13 Florida Power & Light Eric Silagy President March 12, 2013
Agenda • Overview • Customers and Economy • O&M Productivity • Capital Investments • Summary of Financial Outlook 39
Florida Power & Light is one of the best utility franchises in the U.S. Florida Power & Light (1) • One of the largest U.S. electric utilities • Vertically integrated, retail rate-regulated • 4.6 MM customer accounts • 24,057 MW in operation • $10.1 B in operating revenues • $34.9 B in total assets (1) All data as of December 31, 2012 or for the year ended December 31, 2012 40
Under the previous two settlement agreements, FPL’s strategy produced excellent reliability for customers and the lowest residential bill in the state 2006- 2012 FPL’s Strategy – Customer Value SAIDI: System Average • FPL’s reliability is the Interruption Duration Index (1) best in the state among 150 Florida IOU investor-owned utilities Good Average (IOUs) 125 FPL Minutes 100 • Since 2006, the typical 75 residential bill has 50 decreased 13% 2006 2007 2008 2009 2010 2011 2012 FPL’s Typical 1,000 kWh Bill (2) • FPL’s typical residential $130 $125 FPL FL 55 Utilities Avg bill is the lowest in the $120 state among all 55 1,000 $109 $109 $110 $106 kWh $103 electric providers Bill $100 $96 $95 $91 $90 $80 2006 2007 2008 2009 2010 2011 2012 (1) SAIDI represents the number of minutes the average customer is without power during that time period (2) Annual average rates based on a typical 1,000 kWh residential bill 41
Since 2006, FPL has made significant capital investments while managing expense growth and reducing fuel costs 2006-2012 2006-2012 Total Expense Capital Expenditures (1) Base Clause Fuel/Purchase Power $ B $B $5 $10 $4.2 $8.5 $8.2 $8.2 $4 $3.7 $7.7 $8 $6.7 $6.6 $6.0 $2.8 $3 $6 $2.5 $2.4 $2.1 $2 $1.8 $4 $1 $2 $0 $- 2006 2007 2008 2009 2010 2011 2012 2006 2007 2008 2009 2010 2011 2012 This strategy has been the key to growing earnings while keeping customer bills low (1) 2009-2012 excludes nuclear carrying charges related to the uprates 42
Over the last decade, FPL's investments have saved customers over $6 B due to fuel efficiency improvements 2002-2012 Customer Fuel Savings $1,200 $7 Annual Fuel Savings Cumulative Savings $1,008 $6 $1,000 $5 $785 $800 Annual Cumulative $672 $666 $643 $654 $4 Savings Savings ($ MM) $600 ($ B) $485 $3 $441 $357 $400 $2 $243 $200 $1 $88 $- $- If fuel prices rise, the fuel efficiency of our power plants will matter even more for our customers 43
Additionally, FPL’s capital investment program between 2006 and 2012 has produced excellent returns for shareholders 2006-2012 Net Income and Rate Base Net Income Rate Base $1,400 $30 $1,240 $1,200 $25 $1,068 $25.1 $945 $1,000 $20 $836 $21.7 $831 $802 $789 $19.5 $800 $17.7 Net $15 $15.9 Income Rate Base $600 $14.8 ($ MM) $13.8 ($ B) $10 $400 $5 $200 $- $0 2006 2007 2008 2009 2010 2011 2012 12.0% 11.9% 10.8% 10.1% 11.0% 11.0% 11.0% Regulatory ROE From 2006 to 2012, FPL’s investments produced 55% earnings growth for investors while improving the value proposition for customers 44
In December 2012, the Florida Public Service Commission voted unanimously to approve FPL’s settlement agreement Overview of Settlement Agreement • Effective for a four-year term beginning January 1, 2013 through December 31, 2016 • Base rate adjustment increase of $350 MM effective January 2013 and a Generation Base Rate Adjustment (GBRA) upon commercial operation of three modernization projects – Cape Canaveral (June 2013), Riviera Beach (June 2014) and Port Everglades (June 2016) – Roughly $620 MM in total GBRA increases • Regulatory return on equity midpoint of 10.5% (range of 9.5% to 11.5%) • Allows amortization of $400 MM in remaining surplus depreciation and fossil dismantlement reserves during the four-year agreement term • Storm recovery mechanism from the 2010 settlement agreement remains in effect 45
Earnings growth at FPL will come from a variety of sources FPL’s Growth Potential • FPL’s opportunity to grow earnings comes from a variety of sources including: – Base rate increase from settlement agreement – Service territory volume growth – Wholesale / service territory expansion – Productivity-enabled capital deployment – Peaker upgrades – Solar generation – Pipeline investment 46
FPL is now better positioned to improve its customer value proposition and create shareholder value FPL’s Growth Strategy Through 2016 • Drive incremental O&M efficiency and productivity • Strategically invest in incremental capital projects that generate value for both customers and shareholders – Positive long-term customer benefits include: Lower O&M cost Improved fuel efficiency Improved reliability Improved storm resiliency Improved customer service and satisfaction Deploying incremental capital and focusing on O&M savings continues FPL’s strategy of growing earnings while maintaining competitive customer bills 47
Agenda • Overview • Customers and Economy • O&M Productivity • Capital Investments • Summary of Financial Outlook 48
The Florida economy is clearly on the mend, but the recovery has been tepid by historical standards Characteristics of Florida’s Recovery • Almost every metric shows improvement in the housing market • The improvement in construction activity is particularly significant given the role that sector has historically played in Florida’s economy • Florida’s unemployment rate has improved relative to the U.S. average • Consumer confidence and retail activity are on the upswing • Acceleration in customer growth may finally be in the making • Overall, a number of economic indicators tracking Florida are positive but risk factors are lurking • Reflecting moderate improvements in the economy, the forecast suggests positive usage growth in 2013 Customer and sales growth for the next few years are likely to be positive, but well below average levels prior to 2007 49
Although Florida was hit harder by the recession than the US as a whole, the employment position has improved significantly Annual Change in Florida U.S. vs. Florida Non-Farm Employment (1) Unemployment Rate (Absolute Change in 000s) # of (%) Jobs 12 400 U.S. Florida 10 200 8 0 6 -200 4 -400 2 -600 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-04 Nov-05 Sep-07 Jul-09 May-11 Mar-13 Florida has experienced 29 consecutive months of moderate increases in employment (1) Source: Bureau of Labor Statistics and Global Insight (projections) - seasonally adjusted data through 50 December 2012
Florida taxable sales, a broad measure of economic activity, have almost returned to pre-recession levels Florida Florida Consumer Confidence Index (2) Retail Taxable Sales Index (1) (Base year = 1966) (Base Year = 1999) Index Index 140 110 Bear Stearns Announces Earthquake in Subprime Losses Japan & the Arab Spring 130 Horizon 90 Oil Spill 120 70 Lehman 110 Declares Bankruptcy U.S. Debt Downgraded 100 50 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Despite its uneven path, consumer confidence in Florida is well above the low points reached in recent years (1) Source: University of Florida; data through November 2012 (2) Source: University of Florida; data through January 2013 51
Both inactive accounts and low use customers continue to decline % of Inactive Accounts Low Usage Customers 7.0% 10% 6.5% 9% 6.0% 5.5% 8% Long Term Average 5.0% Long Term Average 7% 4.5% 4.0% 6% Jan-05 Jul-06 Jan-08 Jul-09 Jan-11 Jul-12 Jan-05 Jul-06 Jan-08 Jul-09 Jan-11 Jul-12 However, the drop in low use customers is not as strong as that in inactive accounts and has been relatively flat since early 2012 Source: FPL, through January 2013 52
Projections still indicate that Florida’s population growth will surpass the U.S. rate in the long-run Florida Population Growth 5% Actual Projected 4% 3% Annual Change (%) 2% 1% 0% 1976 1982 1988 1994 2000 2006 2012 2018 2024 2030 FL Population % Growth US Population % Growth Florida is not projected to experience the rates of population growth experienced prior to the Great Recession Source: Office of Economic and Demographic Research, Florida State Legislature (February 2013 Forecast) and 53 Global Insight (December 2012 Forecast)
The forecast for 2013 shows an increase in use per customer along with higher customer growth Weather-Normalized Use per Customer Customer Growth Annual MWh/ Growth Customer (000s) 23.0 80 22.7-23.0 65-70 70 60-65 22.8 60 50-55 22.6 50 40-45 22.4 22.4 40 22.3 29 27 30 22.2 22.2 21 20 22.0 10 21.8 0 As a result, the increase in delivered sales experienced in 2012 is expected to continue in 2013 54
Agenda • Overview • Customers and Economy • O&M Productivity • Capital Investments • Summary of Financial Outlook 55
Since 2006, base O&M expenses increased 2.6% on average annually Base O&M Expense $ MM $1,600 $1,500 $1,451 $1,438 $1,327 $1,322 $1,400 $1,299 $1,285 $1,200 $1,000 $800 $600 $400 $200 $- 2006 2007 2008 2009 2010 2011 2012 56
FPL’s cost performance continues to be outstanding 2011 Total Non-Fuel O&M per Retail MWh (1) $100 Top Quartile Top Decile O&M $ per Retail MWh ($15.67) $10 1 10 100 1,000 Retail MWh (MM) (1) FERC Form 1, 2011. Note: Holding companies with >100,000 customers. Excludes companies with no utility owned generation. Duke includes Progress. 57
Keeping nominal O&M expense flat from 2012 could reduce the cost per retail kWh substantially by 2016 Base O&M Cost Per Retail kWh O&M Nominal vs. Real ¢/kWh 1.60 = Nominal Base O&M = Nominal Base O&M Flat From 2012 1.50 1.47 ¢ = Real Base O&M = Real Base O&M Flat From 2012 1.40 1.34 ¢ 1.30 Potential range for 1.20 cost savings opportunity Lowest Achieved 1.10 1.06 ¢ 1.00 0.97 0.90 0.80 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 58
FPL expects all parts of the business to identify opportunities to increase productivity FPL’s Productivity • To date, FPL has already identified several initiatives with potential for $50 MM to $75 MM annual O&M cost savings: – Offering voluntary early retirement option for a limited population of employees – Accelerate deployment of smart grid functionality – Deploy capital in automation to improve O&M productivity – Improve nuclear operational efficiency – Drive incremental distribution contractor savings through improved work planning • FPL is also analyzing opportunities to continue to improve fuel efficiency • The 2013 focus will be developing detailed productivity plans for improvement in each area through 2016 FPL has established a stretch goal to keep base O&M flat through 2016 in nominal terms 59
Agenda • Overview • Customers and Economy • O&M Productivity • Capital Investments • Summary of Financial Outlook 60
Over the last decade, FPL has deployed significant capital in clean power generation and other infrastructure to lower customer fuel bills and drive shareholder value FPL Capital Expenditures (1) $ MM $5,000 $4,000 Total of ~$28 B since 2000 $3,000 $2,000 $1,000 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 T&D Growth & Maintenance Generation Maintenance Other Infrastructure New Generation (1) 2009-2012 excluded nuclear carrying charges related to the uprates Source: FPL 10-K 61
FPL’s baseline capital expenditures are projected to be $9.2 B over the four-year period from 2013 to 2016 FPL’s Projected Baseline Capital Expenditures (1) $ B $3.0 $2.6 $2.6 $2.5 $2.1 $1.9 $2.0 $1.5 $1.0 $0.5 $- 2013E 2014E 2015E 2016E (1) Capital expenditures are categorized by the year in which the cash is expected to be spent and not when projects are expected to be placed in service 62
FPL has identified $4 B to $5 B in incremental capital expenditures over the next four years in addition to its “baseline” case Incremental Capital Expenditures Through 2016 • Incremental storm hardening • Infrastructure / reliability investment • Generation upgrades $4 B - $5 B • Natural gas pipeline • Vero Beach acquisition and other wholesale opportunities • Solar investment These investments must represent win/win for both customers and shareholders 63
The 2012 storm season highlighted and reinforced FPL’s need for maintaining hurricane resistance initiative Incremental Storm Hardening Investment • Between 2006 and 2012, FPL invested almost $500 MM in capital for storm hardening – The investment reflects FPL’s commitment to harden its electric infrastructure and improve performance in future storms • FPL’s review of its infrastructure following the 2012 hurricane season showed: – Hardened feeders experienced half the failure rate of feeders that have not been hardened – No pole damage on hardened feeders • In addition, the on-going reliability of hardened feeders is 37% better than feeders that have not been hardened 64
FPL is identifying incremental storm hardening opportunities Incremental Storm Hardening Investment (continued) • FPL plans to continue investing in strengthening the grid against storms and help keep everyday reliability high – An incremental 400 to 600 feeders may be hardened through this program – Working currently to refine prioritization to maximize customer benefits • Key customer benefits include: – Improvements in FPL’s restoration time after a storm – Lower failure rates after a storm – Better on-going reliability performance Accelerating FPL’s investment in hardening feeders will improve storm resiliency and reduce risk 65
Capital investments in infrastructure and reliability will have significant customer benefits Infrastructure and Reliability Investments Potential Impact • FPL will continue to invest of Deploying AFS in the grid to improve (Service Unavailability) customer reliability Minutes 90 • One example: Automated Good Feeder Switches (AFS) 80 – AFS enables network sectionalization and 70 reduction in outages Actual Projected – Incremental deployment of AFS is estimated to deliver 60 up to 8 minutes of SAIDI benefits over 5 years 50 FPL is taking the next step to deploy the smart grid throughout our service territory 66
Achieving improved environmental standards could require replacement of FPL’s fleet of existing gas turbine peakers Generation Upgrades • Original peakers were placed in- service in the early 1970s with heat rates of 17,000 to over 19,000 Btu/kWh • Achieving improved environmental standards could require replacement of FPL’s fleet of existing gas turbine peakers • Current options being evaluated Peaker Upgrade include replacing FPL’s peakers Sites with more efficient advanced combustion turbines (CTs) at Fort Myers and Lauderdale Discussions with the Florida Department of Environmental Protection will ultimately determine the extent of compliance obligations 67
FPL has an opportunity to invest in a new natural gas pipeline to meet future gas requirements while increasing the reliability and diversity of FPL’s gas transportation portfolio Natural Gas Pipeline Investment • FPL’s current request for proposal includes a two- Butler, AL segment approach for New Third building a new pipeline Pipeline (1 st Segment) – The first segment extends from Alabama to Central Florida Central – The second segment extends Florida Hub from Central Florida to Martin Existing Florida 2 nd Gas Transmission Segment • Pipeline FPL plans to offer a self-build proposal on the downstream Martin segment, likely as a FERC- Existing Gulfstream regulated affiliate Pipeline • NextEra Energy, Inc. may also invest in the upstream portion to ensure timely construction 68
FPL’s low rates, high reliability and excellent customer service have created opportunities to potentially serve others within the state Florida’s Electric Utility Market • Florida’s electric utility market is comprised of three main segments dominated by five investor-owned utilities, representing over 75% of the state’s generation • Florida has 34 electric municipals and 16 electric cooperatives around the state that represent 21% of the market – Rates vary from 11% to 51% above FPL’s rates • Opportunities may exist to serve these customers either through wholesale sales or territory expansion Opportunities include geographic expansion through acquiring municipals and coops and wholesale sales 69
FPL has the opportunity to expand its service territory through a potential acquisition of the Vero Beach municipal electric utility Vero Beach Electric Utility • Serves approximately 34,000 customers, primarily residential • Approximately 61% of customers are outside the city limits, primarily in Indian River County and Indian River Shores Vero Beach FPL Service Territory • Total winter peak demand of FPL Power Facilities 170 MW (1) The City of Vero Beach City Council recently voted to approve a purchase and sale agreement with FPL (1) Source: 2011 Statistics of the Florida Electric Utility Industry by the Florida Public Service Commission 70
FPL’s electric rates have historically been lower than Vero Beach electric utility’s rates and the disparity is growing Vero Beach Utility vs. FPL Typical Bill (1) • With the potential $160 acquisition, Vero Beach (2) $137.89 $140 utility customers could benefit from FPL’s retail $120 (3) rate structure, without $99.91 1,000 harming FPL’s existing $100 kWh Typical retail customers $80 Monthly Bill $60 • Vero Beach customers would save about $23 MM $40 per year from FPL’s lower $20 bills $0 Vero Beach FPL Today Vero Beach residents are voting on the proposed acquisition (1) Based on 1,000 kWh monthly residential bill rates as of January 2013 (2) Calculated using a rate calculator provided by Vero Beach Finance Department for rates effective December 19, 2012 71 (3) Includes a 6% franchise fee paid to Vero Beach
FPL has been successful at contracting with several cooperatives, including Lee County Electric Coop Existing Wholesale Power Sales Full Requirements Partial Requirements MWs MWs 1,200 350 1,000 300 250 800 200 600 150 400 100 200 50 - - 2009 2012 2014 2009 2012 2014 Estimated Net Income Key Customers $ MM $40 • Lee County Electric Coop $30-$40 $35 – 825 MWs over 2014-2033 $30 $25 • Florida Keys Electric Coop $20 $15 – 150 MWs over 2011-2032 $10 • Seminole Electric Coop $5 $0 – 200 MWs over 2014-2021 2009 2012 2014 Wholesale deals can leverage FPL’s efficient generation resources and provide benefits to existing retail customers 72
FPL is exploring opportunities to invest in incremental solar projects to provide additional fuel diversity in Florida Solar Investment DeSoto Solar Expansion • 25-50 MW solar PV project • Potential for additional 275 MW Manatee Solar • Potential for 40 MW Solar Costs for 100 MW (1) Babcock Ranch $/1,000 kWh • Potential for 75 MW Monthly Bill Impact: 1 st Year Levelized (2) FPL Service Territory 2008 $0.85 $0.30 FPL Power Facilities 2013 $0.17 $0.06 FPL will need the Florida Public Service Commission’s determination of prudence on investments that, while not the lowest cost resource option, provide fuel diversity in the state and have minimal bill impact (1) The 2008 project (in-service 2011) is based on 2008 capital costs, performance assumptions, fuel and emissions avoided costs; the 2013 project (in-service 2016) is based on the current capital and performance projections for two 50 MW projects (2) Monthly bill impact levelized over 30 years 73
Agenda • Overview • Customers and Economy • O&M Productivity • Capital Investments • Summary of Financial Outlook 74
FPL is developing plans to deploy additional capital expenditures to improve the long-term customer value proposition Projected Capital Expenditures (1) $ B $4.0 $2.6 - $3.7 $2.1 - $3.6 $1.9 - $3.5 $3.5 $3.0 $2.6 - $2.8 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 2013E 2014E 2015E 2016E Baseline Capital Expenditures Potential Incremental Capital Expenditures (1) Capital expenditures are categorized by the year in which the cash is expected to be spent and not when projects are expected to be placed in service 75
FPL expects to grow net income by an average of 5% to 9% annually through 2016, while keeping customer bills flat in real terms and improving reliability Projected Additional Net Income $ MM $2,000 $1,500 - $1,750 $1,600 $1,240 $1,200 $800 $400 $0 2012 2016E 76
FPL’s typical 1,000 kWh residential bill is expected to continue to be significantly lower than other Florida investor-owned utilities (IOUs) and the national average Projected Typical Customer Bill (1) : 2013-2016 $140 $128.29 $120 $112.51 $99-$101 $94.25 $100 Typical 1,000 kWh $80 Residential Bill $60 $40 $20 $- FPL FPL FL IOUs National (2) 2013 2016 2013 Average FPL’s strategy could potentially result in the typical residential bill being roughly flat in real terms through 2016 (1) Based on a typical 1,000 kWh residential bill (2) EEI National Average as of July 2012 77
Break
In Investo estor Con r Confer eren ence ce 20 2013 13 NextEra Energy Resources & NextEra Energy Transmission Armando Pimentel President and CEO, Energy Resources March 12, 2013
What is Energy Resources? + A Set of Skills A Set of Assets • • Largest greenfield developer in Largest wind and solar renewable North America over the last decade portfolio in North America – • Over 12,000 MW of greenfield Over 11,000 MW of stable long- development term contracted projects • #1 in generation construction over • Clean emissions profile; the last decade diversified by fuel, geography and regional markets – Over $16 B of capital deployed • Strong and profitable nuclear • Excellent operator of diverse fuel portfolio assets; wind, solar, natural gas and nuclear • Large base-load position in NEPOOL • Hedging, optimization and risk management • Attractive position in ERCOT A Set of Opportunities • Strong backlog of wind and solar projects • Strong, near-term pipeline of opportunities in wind and solar • Long-term upside through environmental profile 80
Energy Resources’ generation portfolio consists of a diverse set of technologies positioned in a number of regions… Portfolio by Generation Assets Fuel Type (1) by Region (1) SPP 7% PJM 8% Natural ERCOT NPCC & Gas 30% NEPOOL 3,991 MW Wind 13% 10,057 MW Nuclear WECC 2,721 MW 18% MISO 24% Solar 198 MW Coal Oil 8 MW 796 MW 81 (1) Reflects net capacity of 17,771 MW as of December 31, 2012; excludes 351 MW of hydro assets sold in March 2013
…and has been largely built by the addition of wind assets in North America; Energy Resources has over 75% more MW of wind capacity when compared to the next competitor Energy Resources Cumulative Wind Growth 12,000 10,057 10,000 8,298 8,569 7,544 8,000 6,375 MW 6,000 5,077 4,016 4,000 2,719 2,758 3,192 1,745 2,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Long-term contracted wind assets will provide roughly 40% of Energy Resources’ adjusted EBITDA (1) by 2014 82 (1) See Appendix for definition of Adjusted EBITDA
Our EBITDA mix continues to shift to long-term contracted assets Energy Resources’ Adjusted EBITDA (1) 100% 11% 15% 14% 75% 22% 26% 40% 50% 64% 59% 25% 49% 0% 2009 2012 2014 Long-Term Contracted Merchant Peripheral Businesses In 2014, we expect 64% of Energy Resources’ adjusted EBITDA to come from long-term contracted assets, up from 49% in 2009 83 (1) See Appendix for definition of Adjusted EBITDA
We have been consciously shifting the focus of our portfolio Energy Resources’ Adjusted EBITDA (1) 100% 11% 14% 15% 75% 22% 26% 40% 50% 64% 59% 25% 49% 0% 2009 2012 2014 Long-Term Contracted Merchant Peripheral Businesses 84 (1) See appendix for definition of adjusted EBITDA
Our generation portfolio consists of over 11,000 MW of contracted assets, which are primarily wind and nuclear Energy Resources: Contracted Assets (1) Technology MW Wind 8,213 Nuclear 1,621 Solar 193 Natural Gas 1,004 Total: 11,031 85 (1) As of December 31, 2012
Over 75% of contracted gross margin is concentrated in MISO and WECC Contracted Assets Contracted Assets MW by Region (1) Gross Margin (2) ERCOT NPCC/NEPOOL NPCC/NEPOOL 2% 4% 5% ERCOT 6% South 12% West PJM 25% 7% Northeast PJM 11% Natural 11% SPP Gas 7% ERCOT 10% MISO Wind 6% 38% 74% SPP MISO Midwest 12% 52% 45% WECC 24% WECC 29% (1) As of December 31, 2012 (2) Reflects full year 2012; Adjusted gross margin includes Energy Resources’ consolidated investments as well as its share of earnings from equity method investments. Adjusted gross margin includes revenue, including a pretax allocation of production tax credits, investment tax credits and convertible investment tax credits, less fuel expenses. Adjusted gross margin excludes the impact of non-qualifying hedges. 86
Our current backlog of signed long-term PPAs for wind and solar projects translates into roughly $3.6 B of capital investment through 2016 Estimated Cap Ex (1) for Wind and Solar Projects in Backlog Current Backlog ($MM) • ~600 MW Canadian wind $2,000 program $1.7-1.9 B • 175 MW of new 2013 U.S. $1,500 wind $1.2-1.4 B • ~900 MW of U.S. and $1,000 Spain solar projects • At a 50/50 capital $250- structure, typical equity $500 $150- 350 MM 250 MM returns are in the high- teens over the life of a $0 project 2013 2014 2015 2016 Wind Solar (1) Includes Energy Resources’ capital expenditures from consolidated investments as well as its share of capital expenditures from equity method investments. Capital expenditure dollars are categorized by the year in which the cash is expected to be spent and not when projects are expected to be placed in service. 87 The figures exclude the estimated spend for projects placed in service prior to 2013.
Our Spain project is nearing completion, however the project is facing financial challenges as a result of recent tariff changes Spain Update • The project has been impacted by two recent legislative changes to the tariff: Unit 1 – December 2012: 7% tax on energy sales Limitation on payment for non-renewable generation – February 2013: Elimination of the Pool + Premium payment option Reduction to the fixed tariff CPI adjustment factor • Financing terms limit NextEra’s Unit 2 exposure to ~$300 MM Considering potential options, including debt restructuring or abandonment and legal action 88
Energy Resources has strong renewable energy prospects beyond the current backlog Renewable Energy Development Opportunities Wind Solar • • PTC extension creates an Expect up to 300 MW of opportunity for new U.S. additional opportunities wind development through 2016 • Expect 500-1,500 MW (1) of • Up to $1 B additional additional U.S. wind in solar development 2013-2014 opportunities • $1 to $3 B (1) of capital to support the additional U.S. wind development opportunities 89 (1) Includes 175 MW of additional wind already contracted; included in backlog cap ex on page 86
Renewable Portfolio Standards could support 3-5 GW per year of additional renewables through 2020 Individual State Renewable Portfolio Standards (1) Renewable Portfolio Standard (RPS) Voluntary standards or goals 90 (1) Source: dsireusa.org and internal NEER research
Turbine price reductions and efficiency improvements combined have reduced the average delivered cost of energy from new wind installations by roughly 50% from 2009 to 2012 Delivered Cost of Electricity from Wind (1) $67 $70 $64 ~50% Decrease $60 $55 $51 $50 Levelized $50 PPA Price $39 $/MWh $40 $36 <$35 $30 $20 2005 2006 2007 2008 2009 2010 2011 2012 Wind energy from the best wind regions continues to be competitively priced vs. energy from natural gas and coal (1) Source: 2005-2011 Lawrence Berkeley National Laboratory - March 2013 Report; 2012 NEER estimate based on 91 a typical 100 MW Midwest project
Typical PPA prices for delivered solar energy are also down significantly, primarily as a result of lower solar module pricing Solar PPA Pricing (illustrative California example) $220 $200 $210 ~50% Decrease Since 2008 $180 $160 $160 Levelized $160 $140 PPA $140 Price $120 $120 $/MWh $100 $100 $100 $80 $80 $60 $40 $20 (1) (1) 2008-2009 2010 2011 2012 92 (1) Public PPAs with California utilities
Our near-term wind development pipeline contains roughly 2,000 MW of potential growth opportunities 2013-2014 U.S. Wind Development Pipeline Project Region MW Project A MISO 150 Project B SPP 200 Project C PJM 120 Project D WECC 75 Project E SPP 90 Represents Project F SPP 100 ~$3.2 B - $3.7 B Project G SPP 200 Cap Ex Project H SPP 150 Project I MISO 100 Project J MISO 200 Project K ERCOT 200 Project L ERCOT 250 TOTAL: 1,910 93
Energy Resources’ near-term solar development pipeline represents more than 500 MW of potential growth opportunities 2014-2016 U.S. Solar Development Pipeline Project Region MW Project A WECC 250 Project B WECC 20 Project C WECC 20 Project D WECC 20 Represents Project E WECC 20 ~$1.5 B - $2.0 B Cap Ex Project F WECC 100 Project G SERC 20 Project H Puerto Rico 80 TOTAL 530 94
Roughly 50% of the total solar market is expected to be in distributed solar as costs continue to decline significantly 2012 U.S. Solar Distributed Solar Installed Installed Capacity Cost Projections $/KW DC $5,700 $6,000 CAGR $5,000 (~11%) Commercial Distributed $4,000 Utility Solar $3,200 (1) Scale PV 34% 52% $3,000 $2,000 $1,000 $0 Residential Distributed 2010 2015 Solar 14% The Commercial & Industrial distributed solar market has characteristics similar to our utility-scale solar business (1) Source: Institute for Local Self Reliance's "Commercial Rooftop Revolution" December 2012 95
We have been consciously shifting the focus of our portfolio Energy Resources’ Adjusted EBITDA (1) 100% 11% 14% 15% 75% 22% 26% 40% 50% 64% 59% 25% 49% 0% 2009 2012 2014 Long-Term Contracted Merchant Peripheral Businesses 96 (1) See appendix for definition of Adjusted EBITDA
We continue to evaluate our portfolio for opportunities to reduce merchant exposure Energy Resources’ Merchant MW (1) • Consciously focused on 10,000 reducing merchant exposure by contracting previously merchant assets or selling 8,780 8,000 our asset position 7,536 • Evaluating a potential sale of 6,960 6,732 our 796 MW of Maine Fossil 6,000 assets (MW) • We will continue to evaluate 4,000 our merchant assets to determine whether we should continue to hold the 2,000 asset position, contract future cash flows or divest of the asset 0 2009 2010 2011 2012 97 (1) Includes hedged wind; 2012 reflects the sale of the Maine Hydro assets of 351 MW which were sold in March 2013.
Our 88% ownership share of Seabrook Station remains an important cornerstone of Energy Resources’ merchant operations Seabrook • 2010-2016 Adjusted EBITDA (1)(2) One of newest nuclear units in the United States ($MM) – Large unit provides scale:1,246 Seabrook has not $600 MW pressurized water reactor $524 been immune to (PWR) lower power prices $500 – License renewal process will extend operation from 2030 to $400 2050 $230- $220- $300 • Safe, clean, emissions-free $240 $230 generation source $200 – Potential upside - no carbon $100 emissions – Base load unit provides valuable $0 fuel diversification to region 2010 2014 2016 Seabrook still remains an attractive asset in a $3.50-$4.00 gas price environment (1) Refueling outages: 2010 – 0 days, 2014 – 36 days, 2016 – 0 days (2) Adjusted EBITDA includes (a) revenue, less (b) fuel expense, less (c) operating expenses, plus (d) other income, less (e) other deductions. Adjusted EBITDA excludes the impact of non-qualifying hedges, depreciation expense, 98 interest expense, other than temporary impairments, income taxes and corporate G&A expenses.
Forney and Lamar are well positioned to take advantage of the changing market paradigm in Texas Merchant Fossil: Forney and Lamar ERCOT North On-Peak • Located in the attractive Spark Spread (1) ERCOT market and equipped ($/MWh) with proven technology $25 • Texas economy expected to grow at 3.5% from 2013-2016 (2) $20 • Reserve margins estimated to be at 10.9% in 2014 and 8.5% in 2016 $15 • Current price caps at $4,500/MWh increasing to $10 $9,000/MWh in 2015 • ±$1 change in the North Zone $5 spark spread translates into roughly $10 MM of gross margin in 2016 $0 2005 2010 2012 2013 2016 (1) Spark Spread based on ERCOT North On-Peak Power forwards 99 (2) Based on Moody’s Non -Farm Employment Base Forecast
We have been consciously shifting the focus of our portfolio Energy Resources’ Adjusted EBITDA (1) 100% 11% 15% 14% 75% 22% 26% 40% 50% 64% 59% 25% 49% 0% 2009 2012 2014 Long-Term Contracted Merchant Peripheral Businesses 100 (1) See appendix for definition of Adjusted EBITDA
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