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What changed in NextEra Energy's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of NextEra Energy's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+291 added−315 removedSource: 10-K (2024-02-16) vs 10-K (2023-02-17)

Top changes in NextEra Energy's 2023 10-K

291 paragraphs added · 315 removed · 269 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

89 edited+4 added−14 removed89 unchanged
Biggest changeMiles Substations Kilovolt Location Rate Regulator Ownership In-Service Dates Lone Star 352 10 345 Texas PUCT 100% 2013 Trans Bay Cable 53 2 200 DC (a) California FERC 100% 2010 GridLiance (b) 685 26 69 – 230 Illinois, Kansas, Kentucky, Missouri, Nevada and Oklahoma FERC 100% (b) 1960 – 2021 NextBridge Infrastructure 280 - 230 Ontario, Canada OEB 50% March 2022 NEET New York 20 2 345 New York FERC 100% December 2021 – July-2022 ______________________ (a) Direct current (b) Comprised of three FERC-regulated transmission utilities; the assets of which are owned 100% except for a 26-mile transmission line and 5 substations, of which NEET owns a 65% interest.
Biggest changeJurisdiction Miles Substations Kilovolt Location Rate Regulator Ownership Actual/Expected In-Service Dates Operational: Southwest Power Pool (SPP) 466 18 69 – 115 Kansas and Oklahoma FERC 100% (a) 1960 – 2021 ERCOT 354 11 345 Texas PUCT 100% 2013 Independent Electricity System Operator (IESO) 280 – 230 Ontario, Canada OEB 48% 2022 CAISO 223 9 200 (b) – 230 California and Nevada FERC 100% 1960 – 2021 Other 90 5 161 – 345 Illinois, Indiana, Kentucky, New Hampshire and New York FERC 100% (c) 1953 - 2022 Under Construction: CAISO 60 6 230 Nevada FERC 100% 2027 PJM 135 1 500 Maryland, Pennsylvania, Virginia and West Virginia FERC 100% 2028 SPP 274 – 345 Kansas, Missouri, New Mexico and Oklahoma FERC 100% 2024 - 2026 ______________________ (a) Includes a 26-mile transmission line and 5 substations, in which NEET owns a 65% interest.
The IRA expanded the PTC to include solar generation facilities and extended the 100% PTC and the 30% ITC to wind and solar generation facilities that start construction before the later of 2034 or the end of the calendar year following the year in which greenhouse gas emissions from U.S. electric generation are reduced by 75% from 2022 levels.
The IRA expanded the PTC to include solar generation facilities and extended the 100% PTC and the 30% ITC to wind and solar generation facilities that start construction before the later of 2034 or the end of the calendar year following the year in which greenhouse gas emissions from U.S. electric generation are reduced by 75% from 2022 levels (phaseout).
The NEER segment currently owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets in the U.S. a nd Canada and also includes assets and investments in other businesses with a clean energy focus, such as battery storage and renewable fuels.
The NEER segment owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets in the U.S. a nd Canada and also includes assets and investments in other businesses with a clean energy focus, such as battery storage and renewable fuels.
(b) Includes 262 MW sold under a long-term contract. (c) NEER sells all of the output of Point Beach Units Nos. 1 and 2 under long-term contracts through their current operating license expiration dates. (d) In 2020, NEER filed an application with the NRC to renew both Point Beach operating licenses for an additional 20 years. License renewals are pending.
(b) Includes 297 MW sold under a long-term contract. (c) NEER sells all of the output of Point Beach Units Nos. 1 and 2 under long-term contracts through their current operating license expiration dates. (d) In 2020, NEER filed an application with the NRC to renew both Point Beach operating licenses for an additional 20 years. License renewals are pending.
At December 31, 2022 , essentially all of NEER's generation facilities located in the U.S. have received exempt wholesale generator status as defined under the Public Utility Holding Company Act of 2005. Exempt wholesale generators own or operate a facility exclusively to sell electricity to wholesale customers. They are barred from selling electricity directly to retail customers.
At December 31, 2023 , essentially all of NEER's generation facilities located in the U.S. have received exempt wholesale generator status as defined under the Public Utility Holding Company Act of 2005. Exempt wholesale generators own or operate a facility exclusively to sell electricity to wholesale customers. They are barred from selling electricity directly to retail customers.
As a result of the enactment of the IRA (see NEER – Clean Energy and Other Operations – Clean Energy – Policy Incentives for Renewable Energy Projects and Note 5), FPL's customers are expected to save approximately $400 million over the remaining term of the 2021 rate agreement which includes a $36 million one-time refund made in January 2023.
As a result of the enactment of the IRA (see NEER – Clean Energy and Other Operations – Clean Energy – Policy Incentives for Renewable Energy Projects), FPL's customers are expected to save approximately $400 million over the remaining term of the 2021 rate agreement which includes a $36 million one-time refund made in January 2023.
The EPA also works with industries and all levels of government, including federal and state governments, in a wide variety of voluntary pollution prevention programs and energy conservation efforts. 8 Table of Contents FPL Electric Rate Regulation The FPSC sets rates at a level that is intended to allow the utility the opportunity to collect from retail customers total revenues (revenue requirements) equal to its cost of providing service, including a reasonable rate of return on invested capital.
The EPA also works with industries and all levels of government, including federal and state governments, in a wide variety of voluntary pollution prevention programs and energy conservation efforts. 8 Table of Content s FPL Electric Rate Regulation The FPSC sets rates at a level that is intended to allow the utility the opportunity to collect from retail customers total revenues (revenue requirements) equal to its cost of providing service, including a reasonable rate of return on invested capital.
FPL also develops and constructs battery storage projects, which when combined with its solar projects, serve to enhance its ability to meet customer needs for a nearly firm generation source. At December 31, 2022, FPL had 469 MW of battery storage capacity that delivers energy to the transmission system.
FPL also develops and constructs battery storage projects, which when combined with its solar projects, serve to enhance its ability to meet customer needs for a nearly firm generation source. At December 31, 2023, FPL had 469 MW of battery storage capacity that delivers energy to the transmission system.
In addition to self-generation by residential, commercial and industrial customers, FPL also faces competition from other suppliers of electrical energy to wholesale and industrial customers and from alternative energy sources. In 2022, 2021 and 2020, operating revenues from wholesale and ind ustrial electric customers combined represented approximately 7%, 6% and 5%, respectively, of FPL's total operating revenues.
In addition to self-generation by residential, commercial and industrial customers, FPL also faces competition from other suppliers of electrical energy to wholesale and industrial customers and from alternative energy sources. In 2023, 2022 and 2021, operating revenues from wholesale and ind ustrial electric customers combined represented approximately 5%, 7% and 6%, respectively, of FPL's total operating revenues.
NEER is the world's largest generator of renewable energy from the wind and sun based on 2022 MWh produced on a net generation basis, as well as a world leader in battery storage. The NEER segment also owns, develops, constructs and operates rate-regulated transmission facilities in North America.
NEER is the world's largest generator of renewable energy from the wind and sun based on 2023 MWh produced on a net generation basis, as well as a world leader in battery storage. The NEER segment also owns, develops, constructs and operates rate-regulated transmission facilities in North America.
Base Rates Effective January 2017 through December 2021 – From January 2017 to December 2021, FPL operated under a base rate agreement (2016 rate agreement) that provided for, among other things, a regulatory ROE of 10.55%, with a range of 9.60% to 11.60% and, subject to certain conditions, the right to reduce depreciation expense up to $1.25 billion (reserve), 9 Table of Contents provided that in any year of the 2016 rate agreement FPL was required to amortize enough reserve to maintain an earned regulatory ROE within the range of 9.60% to 11.60%.
Base Rates Effective January 2017 through December 2021 – From January 2017 to December 2021, FPL operated under a base rate agreement (2016 rate agreement) that provided for, among other things, a regulatory ROE of 10.55%, with a range of 9.60% to 11.60% and, subject to certain conditions, the right to reduce depreciation expense up to $1.25 billion (reserve), 9 Table of Content s provided that in any year of the 2016 rate agreement FPL was required to amortize enough reserve to maintain an earned regulatory ROE within the range of 9.60% to 11.60%.
Other Operations Gas Infrastructure Business – At December 31, 2022, NextEra Energy Resources had ownership interests in natural gas pipelines, the most significant of which are discussed below, and in oil and gas shale formations located primarily in the Midwest and South regions of the U.S.
Other Operations Gas Infrastructure Business – At December 31, 2023, NextEra Energy Resources had ownership interests in natural gas pipelines, the most significant of which are discussed below, and in oil and gas shale formations located primarily in the Midwest and South regions of the U.S.
FPL’s strategic focus is centered on investing in generation, transmission and distribution facilities to deliver on its value proposition of low customer bills, high reliability, outstanding customer service and clean energy for the benefit of its approximately 5.8 million customer accounts.
FPL’s strategic focus is centered on investing in generation, transmission and distribution facilities to deliver on its value proposition of low customer bills, high reliability, outstanding customer service and clean energy for the benefit of its approximately 5.9 million customer accounts.
The following diagram depicts NEE's simplified ownership structure: 4 Table of Contents FPL FPL is a rate-regulated electric utility engaged primarily in the generation, transmission, distribution and sale of electric energy in Florida. FPL is the largest electric utility in the state of Florida and one of the largest electric utilities in the U.S.
The following diagram depicts NEE's simplified ownership structure: 4 Table of Content s FPL FPL is a rate-regulated electric utility engaged primarily in the generation, transmission, distribution and sale of electric energy in Florida. FPL is the largest electric utility in the state of Florida and one of the largest electric utilities in the U.S.
NEER seeks to reduce its market risk by having a diversified portfolio by fuel type and location, as well as by contracting for the future sale of a significant amount of the electricity output of its facilities. 18 Table of Contents NEER REGULATION The energy markets in which NEER operates are subject to domestic and foreign regulation, as the case may be, including local, state and federal regulation, and other specific rules.
NEER seeks to reduce its market risk by having a diversified portfolio by fuel type and location, as well as by contracting for the future sale of a significant amount of the electricity output of its facilities. 18 Table of Content s NEER REGULATION The energy markets in which NEER operates are subject to domestic and foreign regulation, as the case may be, including local, state and federal regulation, and other specific rules.
Nuclear Facilities At December 31, 2022, NextEra Energy Resources was the sole owner of the two Point Beach nuclear units shown in the table below and was the largest joint owner of the Seabrook nuclear facility shown in the table below.
Nuclear Facilities At December 31, 2023, NextEra Energy Resources was the sole owner of the two Point Beach nuclear units shown in the table below and was the largest joint owner of the Seabrook nuclear facility shown in the table below.
Through NextEra Energy Resources subsidiary PMI, NEER: • manages risk associated with fluctuating commodity prices and optimizes the value of NEER's power generation and gas infrastructure production assets through the use of swaps, options, futures and forwards; • sells output from NEER's plants that is not sold under long-term contracts and procures fuel for use by NEER's generation fleet; • provides full energy and capacity requirements to customers; and • markets and trades energy-related commodity products, including power, fuel, renewable attributes and carbon offsets, as well as marketing and trading services to customers. 16 Table of Contents MARKETS AND COMPETITION Electricity markets in the U.S. and Canada are regional and diverse in character.
Through NextEra Energy Resources subsidiary PMI, NEER: • manages risk associated with fluctuating commodity prices and optimizes the value of NEER's power generation and gas infrastructure production assets through the use of swaps, options, futures and forwards; • sells output from NEER's plants that is not sold under long-term contracts and procures fuel for use by NEER's generation fleet; • provides full energy and capacity requirements to customers; and • markets and trades energy-related commodity products, including power and fuel, as well as marketing and trading services to customers. 16 Table of Content s MARKETS AND COMPETITION Electricity markets in the U.S. and Canada are regional and diverse in character.
As a practical matter, few customers provide their own service at the present time since FPL's cost of service is lower than the cost of self-generation for the vast majority of customers.
As a practical matter, few customers provide their own service at the present time since FPL's cost of service is lower than the cost of self-generation for a significant majority of customers.
Through 2025, FPL plans to add new solar generation with cost recovery mechanisms through base rates, a Solar Base Rate Adjustment (SoBRA) and SolarTogether TM (a voluntary community solar program that gives FPL electric customers an opportunity to participate directly in the expansion of solar energy where participants pay a fixed monthly subscription charge and receive credits on their related monthly customer bill).
Through 2025, FPL plans to add new solar generation with cost recovery through base rates, either through a Solar Base Rate Adjustment (SoBRA) or SolarTogether ® (a voluntary community solar program that gives FPL electric customers an opportunity to participate directly in the expansion of solar energy where participants pay a fixed monthly subscription charge and receive credits on their related monthly customer bill).
Kujawa 47 President and Chief Executive Officer of NextEra Energy Resources March 1, 2022 Mark Lemasney 47 Executive Vice President, Power Generation Division of NEE Executive Vice President, Power Generation Division of FPL January 1, 2023 James M.
Kujawa 48 President and Chief Executive Officer of NextEra Energy Resources March 1, 2022 Mark Lemasney 48 Executive Vice President, Power Generation Division of NEE Executive Vice President, Power Generation Division of FPL January 1, 2023 James M.
He previously served as President and Chief Executive Officer of NextEra Energy Resources from March 2019 to February 2022 and Executive Vice President, Finance and Chief Financial Officer of NEE and FPL from March 2016 to February 2019. Ms.
He previously served as President and Chief Executive Officer of NextEra Energy Resources from March 2019 to February 2022 and Executive Vice President, Finance and Chief Financial Officer of NEE and FPL from March 2016 to February 2019. Mrs.
The percentage of FPL's operating revenues and customer accounts (as of December 31, 2022) by customer class were as follows: For both retail and wholesale customers, the prices (or rates) that FPL may charge are approved by regulatory bodies, by the FPSC in the case of retail customers and by the FERC in the case of wholesale customers.
The percentage of FPL's operating revenues and customer accounts by customer class were as follows: For both retail and wholesale customers, the prices (or rates) that FPL may charge are approved by regulatory bodies, by the FPSC in the case of retail customers and by the FERC in the case of wholesale customers.
NextEra Energy Resources operates essentially all of the energy projects in NEP's portfolio and its ownership interest in the portfolio's capacity was approximately 4,289 MW at December 31, 2022. CLEAN ENERGY AND OTHER OPERATIONS NEER sells products associated with its generation facilities (energy, capacity, RECs and ancillary services) in competitive markets in regions where those facilities are located.
NextEra Energy Resources operates essentially all of the energy projects in NEP's portfolio and its ownership interest in the portfolio's capacity was approximately 4,786 MW at December 31, 2023. CLEAN ENERGY AND OTHER OPERATIONS NEER sells products associated with its generation facilities (energy, capacity, RECs and ancillary services) in competitive markets in regions where those facilities are located.
Complying with these environmental laws and regulations could result in, among other things, changes in the design and operation of existing facilities and changes or delays in the location, design, construction and operation of new facilities. Failure to comply could result in fines, penalties, criminal sanctions or injunctions.
Complying with these environmental laws and regulations could result in, among other things, changes in the design and operation of, and additional costs associated with, existing facilities and changes or delays in the location, design, construction and operation of new facilities. Failure to comply could result in fines, penalties, criminal sanctions or injunctions.
In addition, the IRA expanded the 30% ITC to include storage projects placed in service after 2022 (previously, such projects qualified only if they were connected to and charged by a renewable generation facility that claimed the ITC) as well as renewable natural gas facilities that are placed in service after 2022 and begin construction before 2025.
In addition, the IRA expanded the 30% ITC to include storage projects placed in service after 2022 (previously, such projects qualified only if they were connected to and charged by a renewable generation facility that claimed the ITC) as well as certain property with respect to renewable natural gas facilities that are placed in service after 2022 and begin construction before 2025.
The environmental laws in the U.S., including, among others, the Endangered Species Act, the Migratory Bird Treaty Act, and the Bald and Golden Eagle Protection Act (BGEPA), provide for the protection of numerous species, including endangered species and/or their habitats, migratory birds, bats and eagles. In 2022, the U.S.
The environmental laws in the U.S., including, among others, the Endangered Species Act (ESA), the Migratory Bird Treaty Act, and the Bald and Golden Eagle Protection Act (BGEPA), provide for the protection of numerous species, including endangered species and/or their habitats, migratory birds, bats and eagles. In 2023, the U.S.
These franchise agreements cover the vast majority of FPL's retail customer base in Florida. At December 31, 2022, FPL also provided service to customers in 11 other municipalities and to 27 unincorporated areas within its service area without franchise agreements pursuant to the general obligation to serve as a public utility.
These franchise agreements cover the vast majority of FPL's retail customer base in Florida. At December 31, 2023, FPL also provided service to customers in 10 other municipalities and to 27 unincorporated areas within its service area without franchise agreements pursuant to the general obligation to serve as a public utility.
See Markets and Competition below. 11 Table of Contents NEER's generation and battery storage projects, natural gas pipelines and transmission facilities (including noncontrolling or joint venture interests) at December 31, 2022 are as follows: 12 Table of Contents Clean Energy *Primarily natural gas Generation Assets NEER's portfolio of generation assets primarily consists of generation facilities with long-term power sales agreements for substantially all of their capacity and/or energy output.
See Markets and Competition below. 11 Table of Content s NEER's generation and battery storage projects, natural gas pipelines and transmission facilities (including noncontrolling or joint venture interests) at December 31, 2023 are as follows: 12 Table of Content s Clean Energy *Primarily natural gas Generation Assets NEER's portfolio of generation assets primarily consists of generation facilities with long-term power sales agreements for substantially all of their capacity and/or energy output.
Scheduled nuclear refueling outages require the unit to be removed from service for variable lengths of time. 14 Table of Contents Facility Location Net Generating Capacity (MW) Portfolio Category Beginning of Next Scheduled Refueling Outage Operating License Expiration Date Seabrook New Hampshire 1,102 (a) Merchant (b) April 2023 2050 Point Beach Unit No. 1 Wisconsin 595 Contracted (c) October 2023 2030 (d) Point Beach Unit No. 2 Wisconsin 595 Contracted (c) March 2023 2033 (d) ______________________ (a) Excludes 147 MW operated by NEER but owned by non-affiliates.
Scheduled nuclear refueling outages require the unit to be removed from service for variable lengths of time. 14 Table of Content s Facility Location Net Generating Capacity (MW) Portfolio Category Beginning of Next Scheduled Refueling Outage Operating License Expiration Date Seabrook New Hampshire 1,102 (a) Merchant (b) October 2024 2050 Point Beach Unit No. 1 Wisconsin 595 Contracted (c) March 2025 2030 (d) Point Beach Unit No. 2 Wisconsin 595 Contracted (c) October 2024 2033 (d) ______________________ (a) Excludes 147 MW operated by NEER but owned by non-affiliates.
FPL expects to seek recovery through the environmental clause for compliance costs associated with any new environmental laws and regulations. FPL HUMAN CAPITAL FPL had approximately 9,300 employees at December 31, 2022, with approximately 31% of these employees represented by the International Brotherhood of Electrical Workers (IBEW).
FPL expects to seek recovery through the environmental clause for compliance costs associated with any new environmental laws and regulations. FPL HUMAN CAPITAL FPL had approximately 9,500 employees at December 31, 2023, with approximately 31% of these employees represented by the International Brotherhood of Electrical Workers (IBEW).
Lucie operating licenses for an additional 20 years. License renewals are pending. (b) Excludes 147 MW operated by FPL but owned by non-affiliates. (c) In 2022, FPL filed a site-specific environmental impact statement with the NRC related to the previously approved 20-year renewal application for both Turkey Point operating licenses. Approval of the additional 20 years of operations is pending.
(b) Excludes 147 MW operated by FPL but owned by non-affiliates. (c) In 2022, FPL filed a site-specific environmental impact statement with the NRC related to the previously approved 20-year renewal application for both Turkey Point operating licenses. Approval of the additional 20 years of operations is pending.
The collective bargaining agreements have approximately two- to three-year terms and expire between April 2024 and January 2025. 10 Table of Contents NEER NEER, comprised of NEE's competitive energy and rate-regulated transmission businesses, is a diversified clean energy business with a strategy that emphasizes the development, construction and operation of long-term contracted assets with a focus on clean energy.
The collective bargaining agreements have approximate ly two- to three-year terms and expire between April 2024 and January 2025. 10 Table of Content s NEER NEER, comprised of NEE's competitive energy and rate-regulated transmission businesses, is a diversified clean energy business with a strategy that emphasizes the development, construction and operation of long-term contracted assets with a focus on clean energy.
NEP's projects include energy projects contributed by or acquired from NextEra Energy Resources, or acquired from third parties, as well as ownership interests in contracted natural gas pipelines acquired from third parties. NEP from time to time also invests to repower or expand certain of its assets.
NEP's assets include energy projects contributed by or acquired from NextEra Energy Resources, or acquired from third parties, as well as ownership interests in a contracted natural gas pipeline acquired from third parties. NEP also invests to repower or expand certain of its assets.
During the term of a franchise agreement, which is typically 30 years, the municipality or county agrees not to form its own utility, and FPL has the right to offer electric service to residents. At December 31, 2022, FPL held 225 franchise agreements with various municipalities and counties in Florida with varying expiration dates through 2052.
During the term of a franchise agreement, which is typically 30 years, the municipality or county agrees not to form its own utility, and FPL has the right to offer electric service to residents. At December 31, 2023, FPL held 226 franchise agreements with various municipalities and counties in Florida with varying expiration dates through 2053.
At December 31, 2022, NEER's rate-regulated transmission facilities and the transmission lines that connect its electric generation facilities to the electric grid are comprised of approximately 290 substations and 3,420 circuit miles of transmission lines. NEER also engages in energy-related commodity marketing and trading activities, including entering into financial and physical contracts.
At December 31, 2023, NEER's rate-regulated transmission facilities and the transmission lines that connect its electric generation facilities to the electric grid are comprised of approximately 330 substations and 3,585 circuit miles of transmission lines. NEER also engages in energy-related commodity marketing and trading activities, including entering into financial and physical contracts.
Dunne 47 Treasurer of NEE Treasurer of FPL Assistant Secretary of NEE January 1, 2023 John W. Ketchum 52 Chairman, President and Chief Executive Officer of NEE Chairman of FPL July 29, 2022 February 15, 2023 Rebecca J.
Dunne 48 Treasurer of NEE Treasurer of FPL Assistant Secretary of NEE January 1, 2023 John W. Ketchum 53 Chairman, President and Chief Executive Officer of NEE Chairman of FPL July 29, 2022 February 15, 2023 Rebecca J.
Pimentel serves as a member of the Board of Directors of Ameriprise Financial, Inc. since September 2022 and previously served as President and Chief Executive Officer of NextEra Energy Resources from October 2011 to March 2019. Mr.
May served as Controller of NextEra Energy Resources from April 2015 to February 2019. Mr. Pimentel serves as a member of the Board of Directors of Ameriprise Financial, Inc. since September 2022 and previously served as President and Chief Executive Officer of NextEra Energy Resources from October 2011 to March 2019. Mr.
He was previously Managing Director, Global Energy & Power Investment Banking for Bank of America from January 2012 to March 2022. Mr. Ketchum served as President and Chief Executive Officer of NEE from March 2022 to July 2022.
Dunne served as Vice President Finance of NEE from April 2022 to December 2022. He was previously Managing Director, Global Energy & Power Investment Banking for Bank of America from January 2012 to March 2022. Mr. Ketchum served as President and Chief Executive Officer of NEE from March 2022 to July 2022.
NextEra Energy Resources accounts for its ownership interest in NEP as an equity method investment with its earnings/losses from NEP as equity in earnings (losses) of equity method investees and accounts for its project sales to NEP as third-party sales in its consolidated financial statements. See Note 1 – Basis of Presentation.
NextEra Energy Resources accounts for its ownership interest in NEP as an equity method investment with its earnings/losses from NEP as equity in earnings (losses) of equity method investees and accounts for its project sales to NEP as third-party sales in its consolidated financial statements.
The following map shows FPL's service areas and plant locations as of February 17, 2023, which cover most of the east and lower west coasts of Florida and are in nine counties throughout northwest Florida (see FPL Sources of Generation below). 5 Table of Contents CUSTOMERS AND REVENUE FPL's primary source of operating revenues is from its retail customer base; it also serves a limited number of wholesale customers within Florida.
The following map shows FPL's service areas and plant locations as of February 16, 2024, which cover most of the east and lower west coasts of Florida and are in ten counties throughout northwest Florida (see FPL Sources of Generation below). 5 Table of Content s CUSTOMERS AND REVENUE FPL's primary source of operating revenues is from its retail customer base; it also serves a limited number of wholesale customers within Florida.
May 46 Vice President, Controller and Chief Accounting Officer of NEE March 1, 2019 Armando Pimentel, Jr. 60 President and Chief Executive Officer of FPL February 15, 2023 Ronald R. Reagan 54 Executive Vice President, Engineering, Construction and Integrated Supply Chain of NEE Vice President, Engineering and Construction of FPL January 1, 2020 March 1, 2019 Charles E.
May 47 Vice President, Controller and Chief Accounting Officer of NEE March 1, 2019 Armando Pimentel, Jr. 61 President and Chief Executive Officer of FPL February 15, 2023 Ronald R. Reagan 55 Executive Vice President, Engineering, Construction and Integrated Supply Chain of NEE Vice President, Engineering and Construction of FPL January 1, 2020 March 1, 2019 Charles E.
Merchant generation assets at December 31, 2022 represented approximately 1,878 MW of total net generating capacity, including 840 MW from nuclear generation and 1,032 MW from other peak generation facilities, and are primarily located in the Northeast region of the U.S.
Merchant generation assets at December 31, 2023 represented approximately 1,842 MW of total net generating capacity, including 805 MW from nuclear generation and 1,032 MW from other peak generation facilities, and are primarily located in the Northeast region of the U.S.
NEER also hedges the expected output from its gas infrastructure production assets to protect against price movements. NEP – NEP acquires, manages and owns contracted clean energy projects with stable long-term cash flows through a limited partner interest in NEP OpCo.
NEER also hedges the expected output from its gas infrastructure production assets to protect against price movements. NEP – Through NEP OpCo, NEP acquires, manages and owns contracted clean energy assets with stable long-term cash flows with a focus on renewable energy projects.
FPL placed 745 MW of solar generating capacity in service in January 2023 and is currently in the process of constructing an additional 447 MW and 1,639 MW of solar generating capacity, which is expected to be placed in service by mid-2023 and in 2024, respectively (see FPL Regulation – FPL Electric Rate Regulation – Base Rates – Base Rates Effective January 2022 through December 2025 below).
FPL placed 894 MW of solar generating capacity in service in January 2024 and is currently in the process of constructing an additional 1,341 MW and 894 MW of solar generating capacity, which is expected to be placed in service in 2024 and in 2025, respectively (see FPL Regulation – FPL Electric Rate Regulation – Base Rates – Base Rates Effective January 2022 through December 2025 below).
FPL and NEER share a common platform with the objective of lowering costs and creating efficiencies for their businesses. NEE and its subsidiaries, with employees totaling approximately 15,300 as of December 31, 2022, continue to develop and implement enterprise-wide initiatives focused on improving productivity, process effectiveness and quality.
FPL and NEER share a common platform with the objective of lowering costs, creating efficiencies and encouraging innovative ideas for their businesses. NEE and its subsidiaries, with employees totaling approximately 16,800 as of December 31, 2023, continue to develop and implement enterprise-wide initiatives focused on improving productivity, process effectiveness and quality.
In addition, storage projects and hydrogen facilities claiming an ITC are eligible for a 10 percentage point increase in the ITC rate if the facilities satisfy certain tax credit enhancement requirements.
These credits are also subject to certain other requirements. In addition, storage projects and hydrogen facilities claiming an ITC are eligible for a 10 percentage point increase in the ITC rate if the facilities satisfy certain tax credit enhancement requirements.
NEER HUMAN CAPITAL NEER had approximately 5,900 employees at December 31, 2022. NEER has collective bargaining agreements with the IBEW, the Utility Workers Union of Amer ica and the Security Police and Fire Professionals of America, which collectively repr esent approximately 8% of NEER's employees.
NEER HUMAN CAPITAL NEER had approximately 7,300 employees at December 31, 2023. NEER has collective bargaining agreements with the IBEW, the Utility Workers Union of Amer ica and the Security Police and Fire Professionals of America, which collectively repr esent approximately 6% of NEER's employees.
NextEra Energy Resources' indirect limited partnership interest in NEP OpCo based on the number of outstanding NEP OpCo common units was approximately 53.8% at December 31, 2022.
NextEra Energy Resources' indirect limited partnership interest in NEP OpCo based on the number of outstanding NEP OpCo common units was approximately 51.4% at December 31, 2023.
On August 16, 2022, the Inflation Reduction Act (IRA) was signed into law which, among other things, extends the period for wind and solar tax credits and expands the tax credits to support a broader range of renewable technologies. See NEER – Clean Energy and Other Operations – Clean Energy – Policy Incentives for Renewable Energy Projects.
On August 16, 2022, the Inflation Reduction Act (IRA) was signed into law which, among other things, extends the period for wind and solar tax credits, expands the tax credits to support a broader range of renewable technologies and allows renewable energy tax credits to be transferred.
At December 31, 2022, NEP owned, or had a partial ownership interest in, a portfolio of wind, solar and solar plus battery storage projects with energy project capacity totaling approximately 9,345 MW and contracted natural gas pipelines, all located in the U.S. as further discussed in Clean Energy and Other Operations.
At December 31, 2023, NEP owned, or had a partial ownership interest in, a portfolio of contracted renewable energy assets consisting of wind, solar and battery storage projects with energy project capacity totaling approximately 10,118 MW and a contracted natural gas pipeline all located in the U.S. as further discussed in Clean Energy and Other Operations.
At December 31, 2022, NEER also had generation facilities with a total net generating capacity of approximately 6,581 MW that fall within reliability regions that are not under the jurisdiction of an established RTO or ISO, including 4,430 MW within the Western Electricity Coordinating Council and 2,109 MW within the SERC Reliability Corporation.
At December 31, 2023, NEER also had generation facilities with a total net generating capacity of approximately 7,944 MW that fall within reliability regions that are not under the jurisdiction of an established RTO or ISO, including 5,743 MW within the Western Electricity Coordinating Council and 2,119 MW within the SERC Reliability Corporation.
The IRA created a PTC of $3/kilogram of green (low emission) hydrogen produced at a facility after 2022 and during the first ten years of commercial operation (or a 30% ITC in lieu of the PTC), provided that construction of the facility begins before 2033. These credits are also subject to certain other requirements.
The 30% ITC to storage projects is subject to the phaseout. The IRA created a PTC of $3/kilogram of green (low emission) hydrogen produced at a facility after 2022 and during the first ten years of commercial operation (or a 30% ITC in lieu of the PTC), provided that construction of the facility begins before 2033.
Crews served as Vice President, Business Management of NextEra Energy Resources from March 2019 to February 2022 and was Vice President, Controller and Chief Accounting Officer of NEE from September 2016 until March 2019. Mr. Dunne served as Vice President Finance of NEE from April 2022 to December 2022.
Crews served as Vice President, Business Management of NextEra Energy Resources from March 2019 to February 2022 and was Vice President, Controller and Chief Accounting Officer of NEE from September 2016 until March 2019 . Mrs. Daggs served as Vice President, Human Resources for FPL from April 2018 to December 2023. Mr.
At December 31, 2022, FPL had the following significant fuel and transportation contracts in place: • firm transportation contracts with nine different transportation suppliers for natural gas pipeline capacity for an aggregate maximum delivery quantity of 2,966,000 MMBtu/day with expiration dates through 2042 (see Note 15 – Contracts); • several contracts for the supply of uranium and the conversion, enrichment and fabrication of nuclear fuel with expiration dates through 2037; and • short- and medium-term natural gas supply contracts to provide a portion of FPL's anticipated needs for natural gas, with the remainder of FPL's natural gas requirements being purchased in the spot market. 7 Table of Contents Nuclear Operations At December 31, 2022, FPL owned, or had undivided interests in, and operated the four nuclear units in Florida discussed below.
At December 31, 2023, FPL had the following significant fuel and transportation contracts in place: • firm transportation contracts with ten different transportation suppliers for natural gas pipeline capacity for an aggregate maximum delivery quantity of 2,836,000 MMBtu/day with expiration dates through 2042 (see Note 15 – Contracts); • several contracts for the supply of uranium and the conversion, enrichment and fabrication of nuclear fuel with expiration dates through 2037; and • short- and medium-term natural gas supply contracts to provide a portion of FPL's anticipated needs for natural gas, 7 Table of Content s with the remainder of FPL's natural gas requirements being purchased in the spot market.
NEER estimates that the cost of decommissioning Duane Arnold is fully funded and expects completion by approximately 2080. Other Clean Energy NEER's portfolio also includes assets and investments in other businesses with a clean energy focus, such as battery storage and renewable fuels. At December 31, 2022, NEER had net ownership interests in approximately 1,208 MW of battery storage capacity.
NEER estimates that the cost of decommissioning Duane Arnold is fully funded and expects completion by approximately 2080. Other Clean Energy NEER's portfolio also includes assets and investments in other businesses with a clean energy focus, such as battery storage and renewable fuels.
Solar Facilities • located in 30 states in the U.S.; • operated photovoltaic and solar thermal facilities with a total generating capacity of 5,407 MW at December 31, 2022; • ownership interests in solar facilities with a total net generating capacity of 3,924 MW at December 31, 2022; ◦ essentially all MW are from contracted solar facilities located primarily throughout the West and South regions of the U.S.; ◦ added approximately 887 MW of generating capacity in the U.S. in 2022 and sold assets to NEP and third parties totaling approximately 338 MW (see Note 1 – Disposal of Businesses/Assets and Sale of Noncontrolling Ownership Interests ).
Solar Facilities • located in 31 states in the U.S.; • operated photovoltaic and solar thermal facilities with a total generating capacity of approximately 7,650 MW at December 31, 2023; • ownership interests in solar facilities with a total net generating capacity of approximately 5,856 MW at December 31, 2023; ◦ essentially all MW are from contracted solar facilities located primarily throughout the West and South regions of the U.S.; ◦ added approximately 2,073 MW of generating capacity in the U.S. in 2023 and sold assets to NEP totaling approximately 122 MW (see Note 1 – Disposal of Businesses/Assets and Sale of Noncontrolling Ownership Interests ).
NEER’s strategic focus is centered on the development, construction and operation of long-term contracted assets throughout the U.S. and Canada, primarily consisting of clean energy assets such as renewable generation facilities and battery storage projects, and electric transmission facilities.
NEER’s strategic focus is centered on the development, construction and operation of long-term contracted assets throughout the U.S. and Canada, primarily consisting of clean energy assets, such as renewable generation facilities, and electric transmission facilities, as well as providing other clean energy solutions to its customers.
Where long-term contracts are not in effect, NEER sells the output of its facilities into daily spot markets. In such cases, NEER will frequently enter into shorter term bilateral contracts, typically of less than three years duration, to hedge the price risk associated with selling into a daily spot market.
In such cases, NEER will frequently enter into shorter term bilateral contracts, typically of less than three years duration, to hedge the price risk associated with selling into a daily spot market.
NEER, with appr oximately 27,400 MW of total net generating capacity at December 31, 2022, is one of the largest wholesale generators of electric power in the U.S., including approximately 26,890 MW of net generating capacity across 40 states and 520 MW of net generating capacity in 4 Canadian provinces.
NEER, with appr oximately 30,600 MW of total net generating capacity at December 31, 2023, is one of the largest wholesale generators of electric power in the U.S., including approximately 30,080 MW of net generating capacity across 41 states and 520 MW of net generating capacity in 4 Canadian provinces .
FPL owned and operated 44 units with generating capacity of 24,236 MW that primarily use natural gas and 50 solar generation facilities with generating capacity totaling 3,611 MW.
FPL owned and operated 44 units with generating capacity of 24,254 MW that primarily use natural gas and 66 solar generation facilities with generating capacity totaling 4,803 MW.
Kujawa served as Executive Vice President, Finance and Chief Financial Officer of NEE and FPL from February 2019 to February 2022 and Vice President, Business Management of NextEra Energy Resources from March 2012 to February 2019. Mr.
Kujawa served as Executive Vice President, Finance and Chief Financial Officer of NEE and FPL from February 2019 to February 2022 and Vice President, Business Management of NextEra Energy Resources from March 2012 to February 2019. Mr. Lemasney served as Vice President of Power Generation Division Engineering and Operations Support Services of NEE from November 2018 to December 2022. Mr.
On February 8, 2023, the Florida Supreme Court heard oral argument on the appeal of the FPSC's final order regarding the 2021 rate agreement by Floridians Against Increased Rates, Inc. and, as a group, Florida Rising, Inc., Environmental Confederation of Southwest Florida, Inc. and League of United Latin American Citizens of Florida.
On September 28, 2023, the Florida Supreme Court ruled on the appeal of the FPSC’s final order regarding FPL’s 2021 rate agreement by Floridians Against Increased Rates, Inc. and, as a group, Florida Rising, Inc., Environmental Confederation of Southwest Florida, Inc. and League of United Latin American Citizens of Florida. The ruling remands the FPSC's order back to the FPSC.
Information related to contracted generation assets at December 31, 2022 was as follows: • represented approximately 25,534 MW of total net generating capacity; • weighted-average remaining contract term of the power sales agreements, including the remaining life of the PTCs associated with repowered wind facilities, of approximately 15 years, based on forecasted contributions to earnings and forecasted amounts of electricity produced by the repowered wind facilities; and • several contracts for the supply of uranium and the conversion, enrichment and fabrication of nuclear fuel for all nuclear units with expiration dates through 2033 (see Note 15 – Contracts). 13 Table of Contents NEER's merchant generation assets primarily consist of generation facilities that do not have long-term power sales agreements to sell their capacity and/or energy output and therefore require active marketing and hedging.
Information related to contracted generation assets at December 31, 2023 was as follows: • represented approximately 28,759 MW of total net generating capacity; • weighted-average remaining contract term of the power sales agreements, including the remaining life of the PTCs associated with repowered wind facilities, of approximately 15 years, based on forecasted contributions to earnings and forecasted amounts of electricity produced by the repowered wind facilities; and • several contracts for the supply of uranium and the conversion, enrichment and fabrication of nuclear fuel for all nuclear units with expiration dates through 2033 (see Note 15 – Contracts).
A wind or solar 15 Table of Contents project that provides electricity to a green hydrogen facility may qualify for the PTC or ITC and the hydrogen facility may separately qualify for its own PTC or ITC. For taxable years beginning after 2022, renewable energy tax credits generated during the taxable year can be transferred to an unrelated transferee.
A wind or solar project that provides electricity to a green hydrogen facility may qualify for the PTC or ITC and the hydrogen facility may separately qualify for its own PTC or ITC. 15 Table of Content s For taxable years beginning after 2022, renewable energy tax credits generated during the year can be transferred to an unrelated purchaser for cash, providing an additional path, along with sales of differential membership interests, for developers to monetize the value of renewable energy tax credits.
The information and materials available on NEE's website (or any of its subsidiaries' or affiliates' websites) are not incorporated by reference into this combined Form 10-K. INFORMATION ABOUT OUR EXECUTIVE OFFICERS (a) Name Age Position Effective Date Deborah H.
The information and materials available on NEE's website (or any of its subsidiaries' or affiliates' websites) are not incorporated by reference into this combined Form 10-K.
WEBSITE ACCESS TO SEC FILINGS NEE and FPL make their SEC filings, including the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, available free of charge on NEE's internet website, www.nexteraenergy.com, as soon as reasonably practicable after those documents are electronically filed with or furnished to the SEC.
NEE's rate-regulated subsidiaries expect to seek recovery for compliance costs associated with any new environmental laws and regulations, which recovery for FPL would be through the environmental clause. 19 Table of Content s WEBSITE ACCESS TO SEC FILINGS NEE and FPL make their SEC filings, including the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, available free of charge on NEE's internet website, www.nexteraenergy.com, as soon as reasonably practicable after those documents are electronically filed with or furnished to the SEC.
If a bidder has the most cost-effective alternative, meets other criteria such as financial viability and demonstrates adequate expertise and experience in building and/or operating generating capacity of the type proposed, the investor-owned electric utility would seek to negotiate a PPA with the selected bidder and request that the FPSC approve the 6 Table of Contents terms of the PPA and, if appropriate, provide the required authorization for the construction of the bidder's generating capacity.
If a bidder has the most cost-effective alternative, meets other criteria such as financial viability and demonstrates adequate expertise and experience in building and/or operating generating capacity of the type proposed, the investor-owned electric utility would seek to negotiate a PPA with the selected bidder and request that the FPSC approve the terms of the PPA and, if appropriate, provide the required authorization for the construction of the bidder's generating capacity. 6 Table of Content s FPL SOURCES OF GENERATION At December 31, 2023, FPL's resources for serving load consisted of approximately 33,520 MW of net generating capacity, of which 33,276 MW were from FPL-owned facilities and 244 MW were available through PPAs.
Customer Supply and Proprietary Power and Gas Trading – NEER provides commodities-related products to customers, engages in energy-related commodity marketing and trading activities and includes the operations of a retail electricity provider.
(b) Direct current (c) Includes a substation, in which NEET owns an 88.3% interest. Customer Supply – NEER provides commodities-related products to customers, engages in energy-related commodity marketing and trading activities and includes the operations of a retail electricity provider.
Sieving 50 Executive Vice President & General Counsel of NEE Executive Vice President of FPL December 1, 2008 January 1, 2009 ______________________ (a) Information is as of February 17, 2023. Executive officers are elected annually by, and serve at the pleasure of, their respective boards of directors.
Sieving 51 Executive Vice President, Chief Legal, Environmental and Federal Regulatory Affairs Officer of NEE Executive Vice President of FPL May 18, 2023 January 1, 2009 ______________________ (a) Information is as of February 16, 2024. Executive officers are elected annually by, and serve at the pleasure of, their respective boards of directors.
At December 31, 2022, FPL had approximately 32,100 MW of net generating capacity, approximately 88,000 circuit miles of transmission and distribution lines and 871 substations. FPL provides service to its electric customers through an integrated transmission and distribution system that links its generation facilities to its customers.
At December 31, 2023, FPL had 33,276 MW of net generating capacity, approximately 90,000 circuit miles of transmission and distribution lines and 883 substations. FPL provides service to its electric customers through an integrated transmission and distribution system that links its generation facilities to its customers. FPL serves more than 12 million people through approximately 5.9 million customer accounts.
The environmental laws in Canada, including, among others, the Species at Risk Act, provide for the recovery of wildlife species that are endangered or threatened and the management of species of special concern.
Fish and Wildlife Service listed the northern long-eared bat as endangered, with two more species expected to be listed in 2024 and 2025. The environmental laws in Canada, including, among others, the Species at Risk Act, provide for the recovery of wildlife species that are endangered or threatened and the management of species of special concern.
Lucie Unit No. 1 981 March 2024 2036 (a) St. Lucie Unit No. 2 840 (b) February 2023 2043 (a) Turkey Point Unit No. 3 837 April 2023 2032 (c) Turkey Point Unit No. 4 844 September 2023 2033 (c) ______________________ (a) In 2021, FPL filed an application with the NRC to renew both St.
Lucie Unit No. 2 840 (b) August 2024 2043 (a) Turkey Point Unit No. 3 837 October 2024 2032 (c) Turkey Point Unit No. 4 844 March 2025 2033 (c) ______________________ (a) In 2021, FPL filed an application with the NRC to renew both St. Lucie operating licenses for an additional 20 years. License renewals are pending.
NEER Generation Assets Fuel/Technology Mix NextEra Energy Resources utilized the following mix of fuel sources for generation facilities in which it has an ownership interest: *Primarily natural gas Wind Facilities • located in 22 states in the U.S. and 4 provinces in Canada; • operated a total generating capacity of 23,380 MW at December 31, 2022; • ownership interests in a total net generating capacity of 18,891 MW at December 31, 2022; ◦ essentially all MW are from contracted wind assets located primarily throughout Texas and the West and Midwest regions of the U.S. and Canada; ◦ added approximately 2,850 MW of new generating capacity and r epowered wind generating capacity totaling 239 MW in the U.S. in 2022 and sold assets to NEP totaling approximately 431 MW (see Note 1 – Disposal of Businesses/Assets and Sale of Noncontrolling Ownership Interests ).
NEER utilizes swaps, options, futures and forwards to lock in pricing and manage the commodity price risk inherent in power sales and fuel purchases. 13 Table of Content s NEER Generation Assets Fuel/Technology Mix During 2023, NextEra Energy Resources generated approximately 96 million megawatt hours utilizing the following mix of fuel sources for generation facilities in which it has an ownership interest: *Primarily natural gas Wind Facilities • located in 23 states in the U.S. and 4 provinces in Canada; • operated a total generating capacity of approximately 24,970 MW at December 31, 2023; • ownership interests in a total net generating capacity of approximately 20,147 MW at December 31, 2023; ◦ essentially all MW are from contracted wind assets located primarily throughout Texas and the West and Midwest regions of the U.S. and Canada; ◦ added approximately 1,651 MW of new generating capacity in the U.S. in 2023 and sold assets to NEP totaling approximately 292 MW (see Note 1 – Disposal of Businesses/Assets and Sale of Noncontrolling Ownership Interests ).
Caplan 60 Executive Vice President, Human Resources and Corporate Services of NEE Executive Vice President, Human Resources and Corporate Services of FPL April 15, 2013 Robert Coffey 59 Executive Vice President, Nuclear Division and Chief Nuclear Officer of NEE Vice President and Chief Nuclear Officer of FPL June 14, 2021 June 15, 2021 Terrell Kirk Crews II 44 Executive Vice President, Finance and Chief Financial Officer of NEE Executive Vice President, Finance and Chief Financial Officer of FPL March 1, 2022 Michael H.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS (a) Name Age Position Effective Date Robert Coffey 60 Executive Vice President, Nuclear Division and Chief Nuclear Officer of NEE Vice President and Chief Nuclear Officer of FPL June 14, 2021 June 15, 2021 Terrell Kirk Crews II 45 Executive Vice President, Finance and Chief Financial Officer of NEE Executive Vice President, Finance and Chief Financial Officer of FPL March 1, 2022 Nicole Daggs 49 Executive Vice President, Human Resources and Corporate Services of NEE Executive Vice President, Human Resources and Corporate Services of FPL January 1, 2024 Michael H.
NEP, an affiliate of NextEra Energy Resources, acquires, manages and owns contracted clean energy projects with stable, long-term cash flows. See NEER section below for further discussion of NEP.
NEECH, a wholly owned subsidiary of NEE, owns and provides funding for NEE's operating subsidiaries, other than FPL and its subsidiaries. NEP, an affiliate of NextEra Energy Resources, acquires, manages and owns contracted clean energy assets with stable, long-term cash flows. See NEER section below for further discussion of NEP.
The revised authorized regulatory ROE will have only a minimal impact to base rates. If FPL's earned regulatory ROE falls below 9.80%, FPL may seek retail base rate relief.
If FPL's earned regulatory ROE falls below 9.80%, FPL may seek retail base rate relief.
FPL's nuclear units are periodically removed from service to accommodate planned refueling and maintenance outages, including inspections, repairs and certain other modifications. Scheduled nuclear refueling outages require the unit to be removed from service for variable lengths of time. Facility Net Generating Capacity (MW) Beginning of Next Scheduled Refueling Outage Operating License Expiration Date St.
Scheduled nuclear refueling outages require the unit to be removed from service for variable lengths of time. Facility Net Generating Capacity (MW) Beginning of Next Scheduled Refueling Outage Operating License Expiration Date St. Lucie Unit No. 1 981 March 2024 2036 (a) St.
In addition, NEER develops and constructs battery storage projects, which when combined with its renewable projects, serve to enhance its ability to meet customer needs for a nearly firm generation source, or as standalone facilities.
NEER produces the majority of its electricity from clean and renewable sources as described more fully below. In addition, NEER develops and constructs battery storage projects, which when combined with its renewable projects, serve to enhance its ability to meet customers' firm capacity needs, or as standalone facilities.
FPL intends to retire its share of 2 of these coal units in 2024 and together with a joint owner retire the remaining unit in 2028. See Note 7 – Jointly-Owned Electric Plants regarding the retirement of these plants.
FPL retired its share of two coal units in Mississippi in January 2024 and the remaining one in Georgia is expected to be retired in 2028. See Note 7 – Jointly-Owned Electric Plants regarding the retirement of these plants.
NEE believes the IRA provides long-term visibility and supports the growth of its businesses. As of January 1, 2022, NEE's segments for financial reporting purposes are FPL and NEER (see Note 16). NEECH, a wholly owned subsidiary of NEE, owns and provides funding for NEE's operating subsidiaries, other than FPL and its subsidiaries.
See NEER – Clean Energy and Other Operations – Clean Energy – Policy Incentives for Renewable Energy Projects. NEE believes the IRA provides long-term visibility and supports the growth of its businesses. NEE's reportable segments for financial reporting purposes are FPL and NEER (see Note 16).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeChanges in tax laws, guidance or policies, including but not limited to changes in corporate income tax rates, as well as judgments and estimates used in the determination of tax-related asset and liability amounts, could materially adversely affect NEE's and FPL's business, financial condition, results of operations and prospects. 23 Table of Contents NEE's and FPL's provision for income taxes and reporting of tax-related assets and liabilities require significant judgments and the use of estimates.
Biggest changeBoth the costs of regulatory compliance and the costs that may be imposed as a result of any actual or alleged compliance failures could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects. 23 Table of Content s Changes in tax laws, guidance or policies, including but not limited to changes in corporate income tax rates, as well as judgments and estimates used in the determination of tax-related asset and liability amounts, could materially adversely affect NEE's and FPL's business, financial condition, results of operations and prospects.
NEE's and FPL's ability to proceed with projects under development and to complete construction of, and capital improvement projects for, their electric generation, transmission and distribution facilities, gas infrastructure facilities and other facilities on schedule and within budget have been, in limited instances, and in the future may be, adversely affected by escalating costs for materials and labor and regulatory compliance, inability to obtain or renew necessary licenses, rights-of-way, permits or other approvals on acceptable terms or on schedule, disputes involving contractors, labor organizations, land owners, governmental entities, environmental groups, Native American and aboriginal groups, lessors, joint venture partners and other third parties, negative publicity, transmission interconnection issues, geopolitical factors, supply chain disruptions, inflation, rising interest rates and other factors.
NEE's and FPL's ability to proceed with projects under development and to complete construction of, and capital improvement projects for, their electric generation, transmission and distribution facilities, gas infrastructure facilities and other facilities on schedule and within budget have been, in limited instances, and in the future may be, adversely affected by escalating costs for materials and labor and regulatory compliance, inability to obtain or renew necessary licenses, rights-of-way, permits or other approvals on acceptable terms or on schedule, disputes involving contractors, labor organizations, land owners, governmental entities, environmental groups, Native American and aboriginal groups, lessors, joint venture partners, suppliers and other third parties, negative publicity, transmission interconnection issues, geopolitical factors, supply chain disruptions, inflation, rising interest rates and other factors.
Any reductions or modifications to, or the elimination of, governmental incentives or policies that support renewable energy or the imposition of additional taxes, tariffs, duties or other assessments on renewable energy or the equipment necessary to generate or deliver it, such as policies in place to limit certain imports from China and other Southeast Asian countries, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new renewable energy projects, NEE and FPL abandoning the development of renewable energy projects, a loss of investments in the projects and reduced project returns, any of which could have a material adverse effect on NEE and FPL's business, financial condition, results of operations and prospects.
Any reductions or modifications to, or the elimination of, governmental incentives or policies that support renewable energy, such as the IRA, or the imposition of additional taxes, tariffs, duties or other assessments on renewable energy or the equipment necessary to generate or deliver it, such as policies in place that limit certain imports from China and other Southeast Asian countries, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new renewable energy projects, NEE and FPL abandoning the development of renewable energy projects, a loss of investments in the projects and reduced project returns, any of which could have a material adverse effect on NEE and FPL's business, financial condition, results of operations and prospects.
If NEE or FPL is unable to access regularly the capital and credit markets on terms that are reasonable, it may have to delay raising capital, issue shorter-term securities and incur an unfavorable cost of capital, which, in turn, could adversely affect its ability to grow its business, could contribute to lower earnings and reduced financial flexibility, and could have a material adverse effect on its business, financial condition, liquidity, results of operations and prospects.
If NEE or FPL is unable to access regularly the capital and credit markets on terms that are reasonable, it may have to delay raising capital, issue shorter-term securities and incur an unfavorable cost of capital, which, in turn, could adversely affect its ability to maintain and grow its business, could contribute to lower earnings and reduced financial flexibility, and could have a material adverse effect on its business, financial condition, liquidity, results of operations and prospects.
NEE's and FPL's business, financial condition, results of operations and prospects may be negatively affected by a lack of growth or slower growth in the number of customers or in customer usage.
NEE's and FPL's business, financial condition, results of operations and prospects may be negatively affected by a lack of growth, slower growth or a decline in the number of customers or in customer usage.
NEE's and FPL's generation, transmission and distribution facilities, fuel storage facilities, information technology systems and other infrastructure facilities and systems could be direct targets of, or otherwise be materially adversely affected by, such activities.
NEE's and FPL's generation, transmission, storage and distribution facilities, information technology systems and other infrastructure facilities and systems could be direct targets of, or otherwise be materially adversely affected by, such activities.
Uncertainties and risks inherent in operating and maintaining NEE's and FPL's facilities include, but are not limited to: • risks associated with facility start-up operations, such as whether the facility will achieve projected operating performance on schedule and otherwise as planned; • failures in the availability, acquisition or transportation of fuel or other necessary supplies; • the impact of unusual or adverse weather conditions and natural disasters, including, but not limited to, hurricanes, tornadoes, extreme temperatures, icing events, floods, earthquakes and droughts; • performance below expected or contracted levels of output or efficiency; • breakdown or failure, including, but not limited to, explosions, fires, leaks or other major events, of equipment, transmission or distribution systems or pipelines; • availability of replacement equipment; • risks of property damage, human injury or loss of life from energized equipment, hazardous substances or explosions, fires, leaks or other events, especially where facilities are located near populated areas; • potential environmental impacts of gas infrastructure operations; • availability of adequate water resources and ability to satisfy water intake and discharge requirements; • inability to identify, manage properly or mitigate equipment defects in NEE's and FPL's facilities; • use of new or unproven technology; • risks associated with dependence on a specific type of fuel or fuel source, such as commodity price risk, availability of adequate fuel supply and transportation, and lack of available alternative fuel sources; • increased competition due to, among other factors, new facilities, excess supply, shifting demand and regulatory changes (such as the passage of the IRA); and • insufficient insurance, warranties or performance guarantees to cover any or all lost revenues or increased expenses from the foregoing.
Uncertainties and risks inherent in operating and maintaining NEE's and FPL's facilities include, but are not limited to: • risks associated with facility start-up operations, such as whether the facility will achieve projected operating performance on schedule and otherwise as planned; • failures in the availability, acquisition or transportation of fuel or other necessary supplies; • the impact of unusual or adverse weather conditions and natural disasters, including, but not limited to, hurricanes, tornadoes, extreme temperatures, icing events, wildfires, floods, severe convective storms, earthquakes and droughts; • performance below expected or contracted levels of output or efficiency; • breakdown or failure, including, but not limited to, explosions, fires, leaks or other major events, of equipment, transmission or distribution systems or pipelines; • availability of replacement equipment; • risks of property damage, human injury or loss of life from energized equipment, hazardous substances or explosions, fires, leaks or other events, especially where facilities are located near populated areas; • potential environmental impacts of gas infrastructure operations; • risks associated with potential harm to wildlife; • availability of adequate water resources and ability to satisfy water intake and discharge requirements; • inability to identify, manage properly or mitigate equipment defects in NEE's and FPL's facilities; • use of new or unproven technology; • risks associated with dependence on a specific type of fuel or fuel source, such as commodity price risk, availability of adequate fuel supply and transportation, and lack of available alternative fuel sources; • increased competition due to, among other factors, new facilities, excess supply, shifting demand and regulatory changes (such as the passage of the IRA); and • insufficient insurance, warranties or performance guarantees to cover any or all lost revenues or increased expenses from the foregoing.
NEE and FPL are subject to domestic environmental laws, regulations and other standards, including, but not limited to, extensive federal, state and local environmental statutes, rules and regulations relating to air quality, water quality and usage, soil quality, climate change, emissions of greenhouse gases, waste management, hazardous wastes, marine, avian and other wildlife mortality and habitat protection, historical artifact preservation, natural resources, health (including, but not limited to, electric and magnetic fields from power lines and substations), safety and RPS, that could, among other things, prevent or delay 22 Table of Contents the development of power generation, power or natural gas transmission, or other infrastructure projects, restrict or enjoin the output of some existing facilities, limit the availability and use of some fuels required for the production of electricity, require additional pollution control equipment, and otherwise increase costs, increase capital expenditures and limit or eliminate certain operations.
NEE and FPL are subject to domestic environmental laws, regulations and other standards, including, but not limited to, extensive federal, state and local environmental statutes, rules and regulations relating to air quality, water quality and usage, soil quality, climate change, emissions of greenhouse gases, waste management, hazardous wastes, marine, avian, bat and other wildlife mortality and habitat protection, historical artifact preservation, natural resources, health (including, but not limited to, electric and magnetic fields from power lines and substations), safety and RPS, that could, among other things, prevent or delay the development of power generation, power or natural gas transmission, or other infrastructure projects, restrict or enjoin the output of some existing facilities, limit the availability and use of some fuels required for the production of electricity, require additional pollution control equipment, and otherwise increase costs, increase capital expenditures and limit or eliminate certain 22 Table of Content s operations.
Any of these events could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects. 24 Table of Contents NEE and FPL face risks related to project siting, financing, construction, permitting, governmental approvals and the negotiation of project development agreements that may impede their development and operating activities.
Any of these events could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects. 24 Table of Content s NEE and FPL face risks related to project siting, financing, construction, permitting, governmental approvals and the negotiation of project development agreements that may impede their development and operating activities.
Geopolitical factors, terrorist acts, cyberattacks or other similar events affecting NEE's and FPL's systems and facilities, or those of third parties on which NEE and FPL rely, could harm NEE's and FPL's business, for example, by limiting their ability to generate, purchase or transmit power, natural gas or other energy-related commodities, by limiting their ability to bill customers and collect and process payments, and by delaying their development and construction of new generation, distribution or transmission facilities or capital improvements to existing facilities.
Geopolitical factors, terrorist acts, cyberattacks or other similar events affecting NEE's and FPL's systems and facilities, or those of third parties on which NEE and FPL rely, could harm NEE's and FPL's businesses by, for example, limiting their ability to generate, purchase, store or transmit power, natural gas or other energy-related commodities, limiting their ability to bill customers and collect and process payments, and delaying their development and construction of new generation, distribution, storage or transmission facilities or capital improvements to existing facilities.
There are significant capital, operating and other costs associated with compliance with these environmental statutes, rules and regulations, and those costs could be even more significant in the future as a result of new requirements, stricter or more expansive application of existing environmental laws and regulations, and the addition of species to the endangered species list.
There are significant capital, operating and other costs associated with compliance with these environmental statutes, rules and regulations, and those costs could be even more significant in the future as a result of new requirements, stricter or more expansive application of existing environmental laws and regulations, and the addition of species, such as additional bat species, to the endangered species list.
The inability of NEE, NEECH and FPL to maintain their current credit ratings could materially adversely affect their ability to raise capital or obtain credit on favorable terms, which, in turn, could impact NEE's and FPL's ability to grow their business and service indebtedness and repay borrowings, and would likely increase their interest costs.
The inability of NEE, NEECH and FPL to maintain their current credit ratings could materially adversely affect their ability to raise capital or obtain credit on favorable terms, which, in turn, could impact NEE's and FPL's ability to grow their businesses and service indebtedness and refinance or repay borrowings, and would likely increase their interest costs.
A lack of growth, or a decline, in the number of customers or in customer demand for electricity or natural gas and other fuels may cause NEE and FPL to fail to fully realize the anticipated benefits from significant investments and expenditures and could have a material adverse effect on NEE's and FPL's growth, business, financial condition, results of operations and prospects. 25 Table of Contents NEE's and FPL's business, financial condition, results of operations and prospects can be materially adversely affected by weather conditions, including, but not limited to, the impact of severe weather.
A lack of growth, or a decline, in the number of customers or in customer demand for electricity or natural gas and other fuels may cause NEE and FPL to fail to fully realize the anticipated benefits from significant investments and expenditures and could have a material adverse effect on NEE's and FPL's growth, business, financial condition, results of operations and prospects. 25 Table of Content s NEE's and FPL's business, financial condition, results of operations and prospects can be materially adversely affected by weather conditions and related impacts, including, but not limited to, the impact of severe weather.
The market price and trading volume of NEE's common stock are subject to fluctuations as a result of, among other factors, general credit and capital market conditions and changes in market sentiment regarding the operations, business and financing strategies of NEE and its subsidiaries.
The market price and trading volume of NEE's common stock are subject to fluctuations as a result of, among other factors, general credit and capital market conditions and changes in market sentiment regarding the operations, business and financing strategies of NEE, its subsidiaries and its affiliates, including NEP.
NEE and FPL are unable to assure that such procedures and tools will be effective against all potential risks, including, without limitation, employee misconduct or severe weather or operating conditions. If such procedures and tools are not effective, this could have a material adverse effect on NEE's business, financial condition, results of operations and prospects.
NEE and FPL are unable to assure that such procedures and tools will be effective against all potential risks, including, without limitation, employee misconduct or severe weather or operating conditions. If such procedures 27 Table of Content s and tools are not effective, this could have a material adverse effect on NEE's business, financial condition, results of operations and prospects.
Customer growth and customer usage are affected by a number of factors outside the control of NEE and FPL, such as mandated energy efficiency measures, demand side management requirements, and economic and demographic conditions, such as population changes, job and income growth, housing starts, new business formation, inflation and the overall level of economic activity.
Customer growth and customer usage are affected by a number of factors outside the control of NEE and FPL, such as mandated energy efficiency measures, demand side management requirements, installation of distributed generation technologies and economic and demographic conditions, such as population changes, job and income growth, housing starts, new business formation, inflation and the overall level of economic activity.
NEE guarantees many of the obligations of its consolidated subsidiaries, other than FPL, through guarantee agreements with NEECH. These guarantees may require NEE to provide substantial funds to its subsidiaries or their creditors or counterparties at a time when NEE is in need of liquidity to meet its own financial obligations.
NEE guarantees many of the obligations of its consolidated subsidiaries, other than FPL, through guarantee agreements with NEECH. These guarantees may require NEE to provide substantial funds to its subsidiaries or their creditors or counterparties at 32 Table of Content s a time when NEE is in need of liquidity to meet its own financial obligations.
FPL has limited competition in the Florida market for retail electricity customers and is not subject to a RPS.
FPL has limited, but growing, competition in the Florida market for retail electricity customers and is not subject to a RPS.
The ability of NEE and FPL to obtain insurance and the terms of any available insurance coverage could be materially adversely affected by international, national, state or local events and company-specific events, including impacts of actual or perceived climate-related events, as well as the financial condition of insurers.
The ability of NEE and FPL to obtain insurance and the terms of any available insurance coverage could be materially adversely affected by international, national, state or local events and company-specific events, including 26 Table of Content s impacts of actual or perceived climate-related events, as well as the financial condition of insurers.
NEE's and FPL's operating systems and facilities may fail to operate properly or become disabled as a result of events that are either within, or wholly or partially outside of, their control, such as operator error, severe weather, geopolitical activities, terrorist activities or cyber incidents.
NEE's and FPL's operating systems and facilities may fail to operate properly or become disabled as a result of events that are either within, or wholly or partially outside 28 Table of Content s of, their control, such as operator error, severe weather, geopolitical activities, terrorist activities or cyber incidents.
The supply costs for these transactions may be affected by a number of factors, including, but not limited to, events that may occur after such utilities have committed to supply power, such as weather conditions, fluctuating prices for energy and ancillary services, and the ability of the distribution utilities' customers to elect to receive service from competing suppliers.
The supply costs for these transactions may be affected by a number of factors, including, but not limited to, events that may occur after such utilities have committed to supply power, such as weather conditions, transmission constraints, fluctuating prices for, and locational disconnects in, energy and ancillary services, and the ability of the distribution utilities' customers to elect to receive service from competing suppliers.
The operation and maintenance of NEE's and FPL's electric generation, transmission and distribution facilities, gas infrastructure facilities, retail gas distribution system in Florida and other facilities are subject to many operational risks, the consequences of which could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.
The operation and maintenance of NEE's and FPL's electric generation, transmission and distribution facilities, gas infrastructure facilities and other facilities are subject to many operational risks, the consequences of which could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.
Modifying existing information systems or implementing new or replacement information systems is costly and involves risks, including, but not limited to, integrating the 28 Table of Contents modified, new or replacement system with existing systems and processes, implementing associated changes in accounting procedures and controls, and ensuring that data conversion is accurate and consistent.
Modifying existing information systems or implementing new or replacement information systems is costly and involves risks, including, but not limited to, integrating the modified, new or replacement system with existing systems and processes, implementing associated changes in accounting procedures and controls, and ensuring that data conversion is accurate and consistent.
Reductions in the liquidity of energy markets may restrict the ability of NEE to manage its operational risks, which, in turn, could negatively affect NEE's business, financial condition, results of operations and prospects. NEE is an active participant in energy markets. The liquidity of regional energy markets is an important factor in NEE's ability to manage risks in these operations.
Reductions in the liquidity of energy markets may restrict the ability of NEE to manage its operational risks, which, in turn, could negatively affect NEE's business, financial condition, results of operations and prospects. NEE is an active participant in energy markets.
NEE and FPL also face the risks of operational failure or capacity constraints of third parties, including, but not limited to, those who provide power transmission and natural gas transportation services.
NEE and FPL also face the risks of operational failure or capacity constraints associated with the information systems of third parties, including, but not limited to, those who provide power transmission and natural gas transportation services.
NEE's and FPL's business is highly dependent on their ability to process and monitor, on a daily basis, a very large number of transactions, many of which are highly complex and cross numerous and diverse markets.
NEE's and FPL's businesses are highly dependent on NEE's and FPL's ability to process and monitor, on a daily basis, a very large number of transactions, many of which are highly complex and cross numerous and diverse markets.
This extensive regulatory framework, portions of which are more specifically identified in the following risk factors, regulates, among other things and to varying degrees, NEE's and FPL's industry, businesses, rates and cost structures, operation and licensing of nuclear power facilities, planning, construction and operation of electric generation, transmission and distribution facilities and natural gas and oil production, natural gas, oil and other fuel transportation, processing and storage facilities, acquisition, disposal, depreciation and amortization of facilities and other assets, decommissioning costs and funding, service reliability, wholesale and retail competition, and commodities trading and derivatives transactions.
This extensive regulatory framework, portions of which are more specifically identified in the following risk factors, regulates, among other things and to varying degrees, NEE's and FPL's industry, businesses, operations, and rates and cost structures, including: permitting, planning, construction and operation of electric generation, storage, transmission and distribution facilities and natural gas, oil and other fuel production, transportation, processing and storage facilities; acquisitions, disposals, depreciation and amortization of facilities and other assets; decommissioning costs and funding; service reliability; wholesale and retail competition; and commodities trading and derivatives transactions.
Actual income taxes could vary significantly from estimated amounts due to the future impacts of, among other things, changes in tax laws, guidance or policies, including changes in corporate income tax rates, the financial condition and results of operations of NEE and FPL, and the resolution of audit issues raised by taxing authorities.
Actual income taxes could vary significantly from estimated amounts due to the future impacts of, among other things, changes in tax laws, guidance or policies, including changes in corporate income tax rates, the issuance of guidance related to the qualification for renewable energy tax credits, the financial condition and results of operations of NEE and FPL, and the resolution of audit issues raised by taxing authorities.
Although NEE's competitive energy and certain other subsidiaries have used non-recourse or limited-recourse, project-specific or other financing in the past, market conditions and other factors could adversely affect the future availability of such financing.
Although NEE's competitive energy and certain other subsidiaries have used non-recourse or limited-recourse, project-specific or other financing in the past, market conditions, changes to regulatory capital requirements and other factors could adversely affect the future availability of such financing.
Any changes in Florida law or regulation, whether through new or modified legislation or regulation or through citizen-approved state constitutional ballot initiatives, which introduce competition in the Florida retail electricity market, such as government incentives that facilitate the installation of solar generation facilities on residential or other rooftops at below cost or that are otherwise subsidized by non-participants, would permit third-party sales of electricity or would mandate the transition to renewable energy at FPL, could have a material adverse effect on FPL's business, financial condition, results of operations and prospects.
Any changes in Florida law or regulation, whether through new or modified legislation or regulation or through citizen-approved state constitutional ballot initiatives, which increase competition in the Florida retail electricity market, such as government incentives that would further facilitate the installation of solar generation facilities on residential or other rooftops, would permit third-party sales of electricity or would mandate the transition to renewable energy at FPL, could have a material adverse effect on FPL's business, financial condition, results of operations and prospects.
These risks, as well as additional risks and uncertainties either not presently known or that are currently believed to not be material to the business, may materially adversely affect the business, financial condition, results of operations and prospects of NEE and FPL and may cause actual results of NEE and FPL to differ substantially from those that NEE or FPL currently expects or seeks.
These risks, whether or not expressly stated with respect to any particular risk factor, as well as additional risks and uncertainties either not presently known or that are currently believed to not be material to the business, may materially adversely affect the business, financial condition, results of operations and prospects of NEE and FPL and may cause actual results of NEE and FPL to differ substantially from those that NEE or FPL currently expects or seeks.
NEE's and FPL's electric generation, transmission and distribution facilities, gas infrastructure facilities, retail gas distribution system in Florida and other facilities are subject to many operational risks.
NEE's and FPL's electric generation, transmission and distribution facilities, gas infrastructure facilities and other facilities are subject to many operational risks.
The inability of NEE's subsidiaries, including, without limitation, NEECH and its subsidiaries, to access the capital and credit markets to provide project-specific or other financing for electric generation or other facilities or acquisitions on favorable terms, whether because of disruptions or volatility in those markets or otherwise, could necessitate additional capital raising or borrowings by NEE and/or NEECH in the future.
The inability of NEE's subsidiaries, including, without limitation, NEECH and its subsidiaries, to access the capital and credit markets to provide project-specific or other financing for electric generation or other facilities or acquisitions on favorable terms, whether because of disruptions or volatility in those markets or otherwise, could necessitate additional capital raising or borrowings by NEE and/or NEECH in the future and there can be no assurance that NEE or NEECH will have the ability to complete such borrowings.
If NextEra Energy Resources' subsidiary violates the terms of the probation, or fails to obtain eagle “take” permits under the BGEPA for certain of its wind facilities and additional eagles perish in collisions with facility turbines, NextEra Energy Resources or its subsidiaries may face criminal prosecution under these laws.
If NextEra Energy Resources' subsidiary violates the terms of the probation, or fails to obtain eagle “take” permits under the BGEPA or incidental take permits under the ESA for certain of its wind facilities and additional eagles or listed species, like cave bats, perish in collisions with facility turbines, NextEra Energy Resources or its subsidiaries could face criminal prosecution under these laws.
There can be significant volatility in market prices for fuel, electricity and renewable and other energy commodities.
There can be significant volatility in market prices for fuel, electricity and renewable and other energy commodities, both in general and across geographies.
NEE and FPL rely on access to capital and credit markets as significant sources of liquidity for capital requirements and other operations requirements that are not satisfied by operating cash flows.
NEE and FPL rely on access to capital and credit markets as significant sources of liquidity for capital requirements, refinancing activities to support existing debt maturities and other requirements that are not satisfied by operating cash flows.
In addition, severe weather and natural disasters, such as hurricanes, floods, tornadoes, droughts, extreme temperatures, icing events and earthquakes, can be destructive and cause power outages and property damage, reduce revenue, affect the availability of fuel and water, and require NEE and FPL to incur additional costs, for example, to restore service and repair damaged facilities, to obtain replacement power, to access available financing sources and to obtain insurance.
In addition, severe weather and natural disasters, such as hurricanes, floods, tornadoes, droughts, extreme temperatures, icing events, wildfires, severe convective storms and earthquakes, can be destructive and cause power outages, personal injury and property damage, reduce revenue, affect the availability of fuel and water, and require NEE and FPL to incur additional costs, for example, to restore service and repair damaged facilities, to obtain replacement power, to access available financing sources, to obtain insurance, to pay for any associated injuries and damages and to fund any associated legal matters and compliance penalties.
Such an outcome could have a material adverse effect on FPL's business, financial condition, results of operations and prospects. 21 Table of Contents Any reductions or modifications to, or the elimination of, governmental incentives or policies that support utility scale renewable energy, including, but not limited to, tax laws, policies and incentives, RPS and feed-in-tariffs, or the imposition of additional taxes, tariffs, duties or other assessments on renewable energy or the equipment necessary to generate or deliver it, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new renewable energy projects, NEE and FPL abandoning the development of renewable energy projects, a loss of investments in renewable energy projects and reduced project returns, any of which could have a material adverse effect on NEE and FPL's business, financial condition, results of operations and prospects.
Any reductions or modifications to, or the elimination of, governmental incentives or policies that support utility scale renewable energy, including, but not limited to, tax laws, policies and incentives, RPS and feed-in-tariffs, or the imposition of additional taxes, tariffs, duties or other assessments on renewable energy or the equipment necessary to generate or deliver it, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new renewable energy projects, NEE and FPL abandoning the development of renewable energy projects, a loss of investments in renewable energy projects and reduced project returns, any of which could have a material adverse effect on NEE and FPL's business, financial condition, results of operations and prospects. 21 Table of Content s NEE depends heavily on government policies that support utility scale renewable energy and enhance the economic feasibility of developing and operating wind and solar energy projects in regions in which NEER and FPL operate or plan to develop and operate renewable energy facilities.
In addition, NEP's issuance of additional common units, securities convertible into NEP common units or 32 Table of Contents other securities in connection with acquisitions could cause significant common unitholder dilution and reduce cash distributions to its common unitholders, including NEE, if the acquisitions are not sufficiently accretive.
In addition, NEP's issuance of additional common units or other securities in connection with acquisitions or the conversion of outstanding securities convertible into NEP common units could cause significant common unitholder dilution and reduce cash distributions to its common unitholders, including NEE.
If FPL is unable to maintain, negotiate or renegotiate such franchise agreements on acceptable terms, it could contribute to lower earnings and FPL may not fully realize the anticipated benefits from significant investments and expenditures, which could adversely affect NEE's and FPL's business, financial condition, results of operations and prospects.
If FPL is unable to maintain, negotiate or renegotiate such franchise agreements on acceptable terms, it could contribute to lower earnings and FPL may not fully realize the anticipated benefits from significant investments and expenditures, which could adversely affect NEE's and FPL's business, financial condition, results of operations and prospects. 29 Table of Content s NEE's and FPL's business, financial condition, results of operations and prospects could be materially adversely affected by work strikes or stoppages and increasing personnel costs.
If any of NEE's or FPL's nuclear generation facilities are not operated for any reason through the life of their respective operating licenses, NEE or FPL may be required to increase depreciation rates, incur impairment charges and accelerate future decommissioning expenditures, any of which could materially adversely affect their business, financial condition, results of operations and prospects. 30 Table of Contents NEE's and FPL's nuclear units are periodically removed from service to accommodate planned refueling and maintenance outages, and for other purposes.
If any of NEE's or FPL's nuclear generation facilities are not operated for any reason through the life of their respective operating licenses or planned license extensions, NEE or FPL may be required to increase depreciation rates, incur impairment charges and accelerate future decommissioning expenditures, any of which could materially adversely affect their business, financial condition, results of operations and prospects.
NEP's inability to access capital on commercially reasonable terms and effectively consummate future acquisitions could have a material adverse effect on NEP's ability to grow its cash distributions to its common unitholders, including NEE, and on the value of NEE’s limited partnership interest in NEP OpCo.
NEP's inability to access capital on commercially reasonable terms when acquisitions, other growth opportunities or capital needs arise could have a material adverse effect on NEP's ability to deliver its cash distributions to its common unitholders, including NEE, and on the value of NEE’s limited partnership interest in NEP OpCo.
The gas infrastructure business is exposed to fluctuating market prices of natural gas, natural gas liquids, oil and other energy commodities.
NEE invests in gas and oil producing and transmission assets through NEER’s gas infrastructure business. The gas infrastructure business is exposed to fluctuating market prices of natural gas, natural gas liquids, oil and other energy commodities.
There can be no assurance that NEER will be able to respond adequately or sufficiently quickly to such rules and developments, or to any changes that reverse or restrict the competitive restructuring of the energy industry in those jurisdictions in which such restructuring has occurred.
There can be no assurance that NEER will be able to respond adequately or sufficiently quickly to such rules and developments, which may impact the ability, timeline and cost of interconnecting new or repowered energy projects to the transmission system and the availability of transmission system capacity to deliver energy products to market, or to any changes that reverse or restrict the competitive restructuring of the energy industry in those jurisdictions in which such restructuring has occurred.
If insurance coverage is not available or obtainable on acceptable terms, NEE or FPL may be required to pay costs associated with adverse future events. 26 Table of Contents NEE and FPL generally are not fully insured against all significant losses.
If NEE or FPL cannot or does not obtain insurance coverage, NEE or FPL may be required to pay costs associated with adverse future events. NEE and FPL generally are not fully insured against all significant losses.
If planned outages last longer than anticipated or if there are unplanned outages, NEE's and FPL's business, financial condition, results of operations and prospects could be materially adversely affected.
NEE's and FPL's nuclear units are periodically removed from service to accommodate planned refueling and maintenance outages, and for other purposes. If planned outages last longer than anticipated or if there are unplanned outages, NEE's and FPL's business, financial condition, results of operations and prospects could be materially adversely affected.
Disruptions, uncertainty or volatility in those capital and credit markets, related to, among others, inflation, rising interest rates, geopolitical events, and the planned phase out of the London Inter-Bank Offered Rate or the reform or replacement of other benchmark rates, could increase NEE's and FPL's cost of capital and affect their ability to fund their liquidity and capital needs and to meet their growth objectives.
Disruptions, uncertainty or volatility in those capital and credit markets, related to, among others, inflation, rising or sustained higher interest rates and geopolitical events, could increase NEE's and FPL's cost of capital and affect their ability to fund their liquidity and capital needs, to refinance existing indebtedness and to meet their growth objectives.
The inability of NEE's, NEECH's and FPL's credit providers to fund their credit commitments or to maintain their current credit ratings could require NEE, NEECH or FPL, among other things, to renegotiate requirements in agreements, find an alternative credit provider with acceptable credit ratings to meet funding requirements, or post cash collateral and could have a material adverse effect on NEE's and FPL's liquidity. 31 Table of Contents Poor market performance and other economic factors could affect NEE's defined benefit pension plan's funded status, which may materially adversely affect NEE's and FPL's business, financial condition, liquidity, results of operations and prospects.
The inability of NEE's, NEECH's and FPL's credit providers to fund their credit commitments or to maintain their current credit ratings could require NEE, NEECH or FPL, among other things, to renegotiate requirements in agreements, find an alternative credit provider with acceptable credit ratings to meet funding requirements, or post cash collateral and could have a material adverse effect on NEE's and FPL's liquidity.
NEE cannot predict the impact of changing FERC rules or the effect of changes in levels of wholesale supply and demand, which are typically driven by factors beyond NEE's control.
NEE cannot predict the impact of changing FERC rules or policies of the RTOs and ISOs, such as rules governing generator interconnection procedures and transmission planning requirements and cost allocation methodologies, or the effect of changes in levels of wholesale supply and demand, which are typically driven by factors beyond NEE's control.
If price movements significantly or persistently deviate from historical behavior, NEE's and FPL's risk management tools associated with their hedging and trading procedures may not protect against significant losses. 27 Table of Contents NEE's and FPL's risk management tools and metrics associated with their hedging and trading procedures, such as daily value at risk, earnings at risk, stop loss limits and liquidity guidelines, are based on historical price movements.
NEE's and FPL's risk management tools and metrics associated with their hedging and trading procedures, such as daily value at risk, earnings at risk, stop loss limits and liquidity guidelines, are based on historical price movements.
There have been cyberattacks and other physical attacks within the energy industry on energy infrastructure such as substations, gas pipelines and related assets in the past and there may be such attacks in the future.
There have been cyberattacks and other physical attacks within the energy industry on energy infrastructure such as substations, gas pipelines and related assets in the past and there may be such attacks in the future. In addition, the advancement of artificial intelligence has given rise to added vulnerabilities and potential entry points for cyberattacks.
A loss for which NEE or FPL is not fully insured could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects. NEE invests in gas and oil producing and transmission assets through NEER’s gas infrastructure business.
For example, NEE, including FPL, does not have property insurance coverage for a substantial portion of its transmission and distribution property and natural gas pipeline assets. A loss for which NEE or FPL is not fully insured could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.
There can be no assurance that FPL will be able to respond adequately to such regulatory changes, which could have a material adverse effect on FPL's business, financial condition, results of operations and prospects.
There can be no assurance that FPL would be able to respond adequately to such regulatory changes, which could have a material adverse effect on FPL's business, financial condition, results of operations and prospects. NEER is subject to FERC rules related to transmission that are designed to facilitate competition in the wholesale market on practically a nationwide basis.
NEE's defined benefit pension plan is sensitive to changes in interest rates, since as interest rates decrease, the funding liabilities increase, potentially increasing benefits costs and funding requirements. Any increase in benefits costs or funding requirements may have a material adverse effect on NEE's and FPL's business, financial condition, liquidity, results of operations and prospects.
Any increase in benefits costs or funding requirements may have a material adverse effect on NEE's and FPL's business, financial condition, liquidity, results of operations and prospects.
In addition, certain agreements and guarantee arrangements would require posting of additional collateral in the event of a ratings downgrade. Some of the factors that can affect credit ratings are cash flows, liquidity, the amount of debt as a component of total capitalization, NEE's overall business mix and political, legislative and regulatory actions.
Some of the factors that can affect credit ratings are cash flows, liquidity, the amount of debt as a component of total capitalization including rating agencies' treatment of certain indebtedness, NEE's overall business mix and political, legislative 31 Table of Content s and regulatory actions.
In addition, NEE may be unable to identify attractive acquisition opportunities at favorable prices and to complete and integrate them successfully and in a timely manner.
NEE is likely to encounter significant competition for acquisition opportunities that may become available as a result of the consolidation of the energy industry. In addition, NEE may be unable to identify attractive acquisition opportunities at favorable prices and to complete and integrate them successfully and in a timely manner.
An incident at a nuclear facility anywhere in the world also could cause the NRC to impose additional conditions or other requirements on the industry, or on certain types of nuclear generation units, which could increase costs, reduce revenues and result in additional capital expenditures.
An incident at a nuclear facility anywhere in the world also could cause the NRC to impose additional conditions or other requirements on the industry, or on certain types of nuclear generation units, which could increase costs, reduce revenues and result in additional capital expenditures. 30 Table of Content s The inability to operate any of NEE's or FPL's nuclear generation units through the end of their respective operating licenses or planned license extensions could have a mater ial adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.
NEE sponsors a qualified noncontributory defined benefit pension plan for substantially all employees of NEE and its subsidiaries. A decline in the market value of the assets held in the defined benefit pension plan due to poor investment performance or other factors may increase the funding requirements for this obligation.
A decline in the market value of the assets held in the defined benefit pension plan due to poor investment performance or other factors may increase the funding requirements for this obligation. NEE's defined benefit pension plan is sensitive to changes in interest rates, since as interest rates decrease, the funding liabilities increase, potentially increasing benefits costs and funding requirements.
Personnel costs may also increase due to inflationary or competitive pressures on payroll and benefits costs and revised terms of collective bargaining 29 Table of Contents agreements with union employees. These consequences could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.
Employee strikes or work stoppages could disrupt operations and lead to a loss of revenue and customers. Personnel costs may also increase due to inflationary or competitive pressures on payroll and benefits costs and revised terms of collective bargaining agreements with union employees.
NEE's ability to successfully identify, complete and integrate acquisitions is subject to significant risks, including, but not limited to, the effect of increased competition for acquisitions resulting from the consolidation of the energy industry. NEE is likely to encounter significant competition for acquisition opportunities that may become available as a result of the consolidation of the energy industry in general.
These consequences could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects. NEE's ability to successfully identify, complete and integrate acquisitions is subject to significant risks, including, but not limited to, the effect of increased competition for acquisitions resulting from the consolidation of the energy industry.
Market liquidity is driven in part by the number of active market participants.
It can be driven in part by the number of active market participants and is an important factor in NEE's ability to manage risks in its participation in these markets.
Removed
FPL's use of derivative instruments could be subject to prudence challenges and, if found imprudent, could result in disallowances of cost recovery for such use by the FPSC.
Added
NEE's and FPL's provision for income taxes and reporting of tax-related assets and liabilities require significant judgments and the use of estimates.
Removed
The FPSC engages in an annual prudence review of FPL's use of derivative instruments in its risk management fuel procurement program and should it find any such use to be imprudent, the FPSC could deny cost recovery for such use by FPL.
Added
Liquidity in energy markets can be described as the degree to which a product, such as electricity, gas or transmission rights, can be quickly bought or sold without significantly affecting its price and without incurring significant transaction costs.
Removed
NEE depends heavily on government policies that support utility scale renewable energy and enhance the economic feasibility of developing and operating wind and solar energy projects in regions in which NEER and FPL operate or plan to develop and operate renewable energy facilities.
Added
If price movements significantly or persistently deviate from historical behavior, NEE's and FPL's risk management tools associated with their hedging and trading procedures may not protect against significant losses.
Removed
NEER is subject to FERC rules related to transmission that are designed to facilitate competition in the wholesale market on practically a nationwide basis by providing greater certainty, flexibility and more choices to wholesale power customers.
Added
In addition, certain agreements and guarantee arrangements would require posting of additional collateral in the event of a ratings downgrade.
Removed
Both the costs of regulatory compliance and the costs that may be imposed as a result of any actual or alleged compliance failures could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.
Added
Poor market performance and other economic factors could affect NEE's defined benefit pension plan's funded status, which may materially adversely affect NEE's and FPL's business, financial condition, liquidity, results of operations and prospects. NEE sponsors a qualified noncontributory defined benefit pension plan for substantially all employees of NEE and its subsidiaries.
Removed
For example, FPL is not fully insured against hurricane-related losses, but could instead seek recovery of such uninsured losses from customers subject to approval by the FPSC, to the extent losses exceed restricted funds set aside to cover the cost of storm damage.
Removed
NEE's and FPL's business, financial condition, results of operations and prospects could be materially adversely affected by work strikes or stoppages and increasing personnel costs. Employee strikes or work stoppages could disrupt operations and lead to a loss of revenue and customers.
Removed
The inability to operate any of NEE's or FPL's nuclear generation units through the end of their respective operating licenses could have a mater ial adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAdditionally, the majority of NEER's generation facilities, pipeline facilities and transmission lines are located on land under easement, rights-of-way or leased from owners of private property or governmental entities. Se e Note 7 – FPL and – NEER.
Biggest changeAdditionally, the majority of NEER's generation facilities, pipeline facilities and transmission lines are located on land under easement, rights-of-way or leased from owners of private property or governmental entities. Se e Note 7 – FPL and – NEER. 34 Table of Content s
Item 2. Properties See Item 1. Business – FPL and Item 1. Business – NEER for a description of principal properties. Character of Ownership Substantially all of FPL's properties are subject to the lien of FPL's mortgage, which secures most debt securities issued by FPL.
Item 2. Properties See Item 1. Business – FPL and Item 1. Business – NEER for a description of principal properties. Character of Ownership Substantially all of FPL's properties are subject to the lien of FPL's mortgage, which secures most long-term debt securities issued by FPL.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings None. With regard to environmental proceedings to which a governmental authority is a party, NEE's and FPL's policy is to disclose any such proceeding if it is reasonably expected to result in monetary sanctions of greater than or equal to $1 million. Item 4. Mine Safety Disclosures Not applicable 33 Table of Contents PART II
Biggest changeItem 3. Legal Proceedings See Note 15 – Legal Proceedings. With regard to environmental proceedings to which a governmental authority is a party, NEE's and FPL's policy is to disclose any such proceeding if it is reasonably expected to result in monetary sanctions of greater than or equal to $1 million. Item 4. Mine Safety Disclosures Not applicable PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAmended and Restated Long-Term Incentive Plan to a former executive officer of deferred retirement share awards. (b) In May 2017, NEE's Board of Directors authorized repurchases of up to 45 million shares of common stock (180 million shares after giving effect to the four-for-one stock split of NEE common stock effective October 26, 2020) over an unspecified period. Item 6.
Biggest changeAmended and Restated 2011 Long Term Incentive Plan. (b) In May 2017, NEE's Board of Directors authorized repurchases of up to 45 million shares of common stock (180 million shares after giving effect to the four-for-one stock split of NEE common stock effective October 26, 2020) over an unspecified period. Item 6. Reserved 35 Table of Content s
Item 5. Market for Registrants' Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Data. All of FPL's common stock is owned by NEE. NEE's common stock is traded on the New York Stock Exchange under the symbol "NEE." As of January 31, 2023, there were 14,619 holders of record of NEE's common stock.
Item 5. Market for Registrants' Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Data. All of FPL's common stock is owned by NEE. NEE's common stock is traded on the New York Stock Exchange under the symbol "NEE." As of January 31, 2024, there were 13,891 holders of record of NEE's common stock.
In February 2023, NEE announced that it would increase its quarterly dividend on its common stock from $0.425 per share to $0.4675 per share. Issuer Purchases of Equity Securities.
In February 2024, NEE announced that it would increase its quarterly dividend on its common stock from $0.4675 per share to $0.515 per share. Issuer Purchases of Equity Securities.
Information regarding purchases made by NEE of its common stock during the three months ended December 31, 2022 is as follows: Period Total Number of Shares Purchased (a) Average Price Paid Per Share Total Number of Shares Purchased as Part of a Publicly Announced Program Maximum Number of Shares that May Yet be Purchased Under the Program (b) 10/1/22 – 10/31/22 — — — 180,000,000 11/1/22 – 11/30/22 6,819 $ 82.91 — 180,000,000 12/1/22 – 12/31/22 1,549 $ 86.21 — 180,000,000 Total 8,368 $ 83.52 — ______________________ (a) Includes: (1) in November 2022, shares of common stock withheld from employees to pay certain withholding taxes upon the vesting of stock awards granted to such employees under the NextEra Energy, Inc. 2021 Long Term Incentive Plan and the NextEra Energy, Inc.
Information regarding purchases made by NEE of its common stock during the three months ended December 31, 2023 is as follows: Period Total Number of Shares Purchased (a) Average Price Paid Per Share Total Number of Shares Purchased as Part of a Publicly Announced Program Maximum Number of Shares that May Yet be Purchased Under the Program (b) 10/1/23 – 10/31/23 — — — 180,000,000 11/1/23 – 11/30/23 12,561 $ 57.00 — 180,000,000 12/1/23 – 12/31/23 — $ — — 180,000,000 Total 12,561 $ 57.00 — ______________________ (a) Includes shares of common stock withheld from employees to pay certain withholding taxes upon the vesting of stock awards granted to such employees under the NextEra Energy, Inc. 2021 Long Term Incentive Plan and the NextEra Energy, Inc.
Removed
Amended and Restated 2011 Long Term Incentive Plan; and (2) in December 2022, shares of common stock purchased by the trustee of a grantor trust to fund a reinvestment of dividends in connection with NEE's obligation under a February 2006 grant under the NextEra Energy, Inc.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

112 edited+13 added−23 removed115 unchanged
Biggest changeDuring 2021 and 2022, the changes in the fair value of NEE’s consolidated subsidiaries’ energy contract derivative instruments were as follows: Hedges on Owned Assets Trading Non- Qualifying FPL Cost Recovery Clauses NEE Total (millions) Fair value of contracts outstanding at December 31, 2020 $ 706 $ 996 $ — $ 1,702 Reclassification to realized at settlement of contracts 179 293 (7) 465 Value of contracts acquired 80 9 — 89 Net option premium purchases (issuances) 23 11 — 34 Changes in fair value excluding reclassification to realized (10) (2,701) 8 (2,703) Fair value of contracts outstanding at December 31, 2021 978 (1,392) 1 (413) Reclassification to realized at settlement of contracts (355) 1,094 (197) 542 Value of contracts acquired 16 54 — 70 Net option premium purchases (issuances) 146 12 — 158 Changes in fair value excluding reclassification to realized 392 (3,689) 212 (3,085) Fair value of contracts outstanding at December 31, 2022 1,177 (3,921) 16 (2,728) Net margin cash collateral paid (received) 980 Total mark-to-market energy contract net assets (liabilities) at December 31, 2022 $ 1,177 $ (3,921) $ 16 $ (1,748) NEE’s total mark-to-market energy contract net assets (liabilities) at December 31, 2022 shown above are included on the consolidated balance sheets as follows: December 31, 2022 (millions) Current derivative assets $ 1,413 Noncurrent derivative assets 1,582 Current derivative liabilities (2,014) Noncurrent derivative liabilities (2,729) NEE's total mark-to-market energy contract net liabilities $ (1,748) 52 Table of Contents The sources of fair value estimates and maturity of energy contract derivative instruments at December 31, 2022 were as follows: Maturity 2023 2024 2025 2026 2027 Thereafter Total (millions) Trading: Quoted prices in active markets for identical assets $ (463) $ (435) $ (342) $ (163) $ (109) $ 38 $ (1,474) Significant other observable inputs 885 769 583 360 248 236 3,081 Significant unobservable inputs (154) (132) (34) (23) (21) (66) (430) Total 268 202 207 174 118 208 1,177 Owned Assets – Non-Qualifying: Quoted prices in active markets for identical assets (57) (74) (86) (61) (25) (36) (339) Significant other observable inputs (897) (712) (482) (350) (273) (435) (3,149) Significant unobservable inputs 97 (18) (11) (10) (12) (479) (433) Total (857) (804) (579) (421) (310) (950) (3,921) Owned Assets – FPL Cost Recovery Clauses: Quoted prices in active markets for identical assets — — — — — — — Significant other observable inputs 2 — 2 2 1 — 7 Significant unobservable inputs 7 2 — — — — 9 Total 9 2 2 2 1 — 16 Total sources of fair value $ (580) $ (600) $ (370) $ (245) $ (191) $ (742) $ (2,728) With respect to commodities, NEE’s Exposure Management Committee (EMC), which is comprised of certain members of senior management, and NEE's chief executive officer are responsible for the overall approval of market risk management policies and the delegation of approval and authorization levels.
Biggest changeDuring 2022 and 2023, the changes in the fair value of NEE’s consolidated subsidiaries’ energy contract derivative instruments were as follows: Hedges on Owned Assets Trading Non- Qualifying FPL Cost Recovery Clauses NEE Total (millions) Fair value of contracts outstanding at December 31, 2021 $ 978 $ (1,392) $ 1 $ (413) Reclassification to realized at settlement of contracts (355) 1,094 (197) 542 Value of contracts acquired 16 54 — 70 Net option premium purchases (issuances) 146 12 — 158 Changes in fair value excluding reclassification to realized 392 (3,689) 212 (3,085) Fair value of contracts outstanding at December 31, 2022 1,177 (3,921) 16 (2,728) Reclassification to realized at settlement of contracts (369) 154 (9) (224) Value of contracts acquired 6 95 — 101 Net option premium purchases (issuances) 183 17 — 200 Changes in fair value excluding reclassification to realized 340 2,178 5 2,523 Fair value of contracts outstanding at December 31, 2023 1,337 (1,477) 12 (128) Net margin cash collateral paid (received) 360 Total mark-to-market energy contract net assets (liabilities) at December 31, 2023 $ 1,337 $ (1,477) $ 12 $ 232 NEE’s total mark-to-market energy contract net assets (liabilities) at December 31, 2023 shown above are included on the consolidated balance sheets as follows: December 31, 2023 (millions) Current derivative assets $ 1,541 Noncurrent derivative assets 1,594 Current derivative liabilities (802) Noncurrent derivative liabilities (2,101) NEE's total mark-to-market energy contract net liabilities $ 232 52 Table of Content s The sources of fair value estimates and maturity of energy contract derivative instruments at December 31, 2023 were as follows: Maturity 2024 2025 2026 2027 2028 Thereafter Total (millions) Trading: Quoted prices in active markets for identical assets $ (780) $ (248) $ (22) $ (15) $ 34 $ 45 $ (986) Significant other observable inputs 611 379 194 121 37 15 1,357 Significant unobservable inputs 537 101 44 32 12 240 966 Total 368 232 216 138 83 300 1,337 Owned Assets – Non-Qualifying: Quoted prices in active markets for identical assets (21) (87) (38) (15) (14) 5 (170) Significant other observable inputs (224) (278) (239) (186) (99) (242) (1,268) Significant unobservable inputs 46 (34) (39) (38) (4) 30 (39) Total (199) (399) (316) (239) (117) (207) (1,477) Owned Assets – FPL Cost Recovery Clauses: Quoted prices in active markets for identical assets — — — — — — — Significant other observable inputs (8) (2) (1) (1) — — (12) Significant unobservable inputs 13 11 (1) 1 — — 24 Total 5 9 (2) — — — 12 Total sources of fair value $ 174 $ (158) $ (102) $ (101) $ (34) $ 93 $ (128) With respect to commodities, NEE’s Exposure Management Committee (EMC), which is comprised of certain members of senior management, and NEE's chief executive officer are responsible for the overall approval of market risk management policies and the delegation of approval and authorization levels.
In NEE’s non-rate regulated operations, predominantly NextEra Energy Resources, essentially all changes in the derivatives’ fair value for power purchases and sales, fuel sales and trading activities are recognized on a net basis in operating revenues and the equity method investees’ related activity is recognized in equity in earnings of equity method investees in NEE’s consolidated statements of income.
In NEE’s non-rate regulated operations, predominantly NextEra Energy Resources, essentially all changes in the derivatives’ fair value for power purchases and sales, fuel sales and trading activities are recognized on a net basis in operating revenues and the equity method investees’ related activity is recognized in equity in earnings (losses) of equity method investees in NEE’s consolidated statements of income.
The rating is subject to revision or withdrawal at any time by the assigning rating organization. (b) The outlook indicated by each of Moody's, S&P and Fitch is stable. (c) Short-term ratings are presented as substantially all bonds outstanding are currently paying a short-term interest rate.
The rating is subject to revision or withdrawal at any time by the assigning rating organization. (b) The outlook indicated by each of Moody's, S&P and Fitch is stable. (c) Short-term ratings are presented as all bonds outstanding are currently paying a short-term interest rate.
NEE is unable to estimate the maximum potential amount of future payments by its subsidiaries under some of these contracts because events that would obligate them to make payments have not yet occurred or, if any such event has occurred, they have not been notified of its occurrence.
NEE is unable to estimate the maximum potential amount of future payments by its subsidiaries under some of these contracts because events that would obligate them to make payments have not occurred or, if any such event has occurred, they have not been notified of its occurrence.
Nature of Accounting Estimates Indicators of a potential impairment include, but are not limited to, a series of operating losses of an investee, the absence of an ability to recover the carrying amount of the investment, the inability of the investee to sustain an earnings capacity and a current fair value of an investment that may be less than its carrying value.
Nature of Accounting Estimates Indicators of impairment may include, but are not limited to, a series of operating losses of an investee, the absence of an ability to recover the carrying amount of the investment, the inability of the investee to sustain an earnings capacity and a current fair value of an investment that may be less than its carrying value.
For interest rate and foreign currency derivative instruments, all changes in the derivatives' fair value are recognized in interest expense and the equity method investees' related activity is recognized in equity in earnings of equity method investees in NEE's consolidated statements of income.
For interest rate and foreign currency derivative instruments, all changes in the derivatives' fair value are recognized in interest expense and the equity method investees' related activity is recognized in equity in earnings (losses) of equity method investees in NEE's consolidated statements of income.
At December 31, 2022, FPL’s portion of the ultimate cost to dismantle its other generation units is approximately $2.4 billion, or $1.2 billion expressed in 2022 dollars. The majority of the dismantlement costs are not reported as AROs. FPL accrues for interim removal costs over the life of the related assets based on depreciation studies approved by the FPSC.
At December 31, 2023, FPL’s portion of the ultimate cost to dismantle its other generation units is approximately $2.4 billion, or $1.2 billion expressed in 2023 dollars. The majority of the dismantlement costs are not reported as AROs. FPL accrues for interim removal costs over the life of the related assets based on depreciation studies approved by the FPSC.
At December 31, 2022, each of NEE and FPL was in compliance with its required ratio. Capital Support Guarantees, Letters of Credit, Surety Bonds and Indemnifications (Guarantee Arrangements) Certain subsidiaries of NEE issue guarantees and obtain letters of credit and surety bonds, as well as provide indemnities, to facilitate commercial transactions with third parties and financings.
At December 31, 2023, each of NEE and FPL was in compliance with its required ratio. Capital Support Guarantees, Letters of Credit, Surety Bonds and Indemnifications (Guarantee Arrangements) Certain subsidiaries of NEE issue guarantees and obtain letters of credit and surety bonds, as well as provide indemnities, to facilitate commercial transactions with third parties and financings.
If indicators of impairment exist, an estimate of the investment’s fair value will be calculated. Approaches for estimating fair value include, among others, an income approach using a probability-weighted discounted cash flows model and a market approach using an earnings before interest, taxes, depreciation and amortization (EBITDA) multiple model.
If indicators of impairment exist, an estimate of the investment’s fair value will be calculated. Approaches for estimating fair value include, among others, an income approach using a probability-weighted discounted cash flows model, a market approach using an earnings before interest, taxes, depreciation and amortization (EBITDA) multiple model, and a market observable transaction.
The purpose of the program is not to cause NEP’s common units to be delisted from the New York Stock Exchange or to cause the common units to be deregistered with the SEC. As of December 31, 2022, the dollar value of units that may yet be purchased by NEE under this program was $114 million.
The purpose of the program is not to cause NEP’s common units to be delisted from the New York Stock Exchange or to cause the common units to be deregistered with the SEC. As of December 31, 2023, the dollar value of units that may yet be purchased by NEE under this program was $114 million.
Securities that may be issued under the registration statement include, depending on the registrant, senior debt securities, subordinated debt securities, junior subordinated debentures, first mortgage bonds, common stock, preferred stock, depositary shares, stock purchase contracts, stock purchase units, warrants and guarantees related to certain of those securities. 45 Table of Contents Credit Ratings NEE’s liquidity, ability to access credit and capital markets, cost of borrowings and collateral posting requirements under certain agreements is dependent on its and its subsidiaries credit ratings.
Securities that may be issued under the registration statement include, depending on the registrant, senior debt securities, subordinated debt securities, junior subordinated debentures, first mortgage bonds, common stock, preferred stock, depositary shares, stock purchase contracts, stock purchase units, warrants and guarantees related to certain of those securities. 45 Table of Content s Credit Ratings NEE’s liquidity, ability to access credit and capital markets, cost of borrowings and collateral posting requirements under certain agreements is dependent on its and its subsidiaries credit ratings.
At December 31, 2022, no retained earnings were restricted by these provisions of the mortgage and, in light of FPL's current financial condition and level of earnings, management does not expect that planned financing activities or dividends would be affected by these limitations.
At December 31, 2023, no retained earnings were restricted by these provisions of the mortgage and, in light of FPL's current financial condition and level of earnings, management does not expect that planned financing activities or dividends would be affected by these limitations.
Lucie Units Nos. 1 and 2 licenses for an additional 20 years. 50 Table of Contents FPL accrues the cost of dismantling its other generation plants over the expected service life of each unit based on studies filed with the FPSC. Unlike nuclear decommissioning, dismantlement costs are not funded. The most recent studies became effective January 1, 2022.
Lucie Units Nos. 1 and 2 licenses for an additional 20 years. 50 Table of Content s FPL accrues the cost of dismantling its other generation plants over the expected service life of each unit based on studies filed with the FPSC. Unlike nuclear decommissioning, dismantlement costs are not funded. The most recent studies became effective January 1, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations OVERVIEW NEE’s operating performance is driven primarily by the operations of its two principal businesses, FPL, which serves approximately 5.8 million customer accounts in Florida and is one of the largest electric utilities in the U.S., and NEER, which together with affiliated entities is the world's largest generator of renewable energy from the wind and sun based on 2022 MWh produced on a net generation basis, as well as a world leader in battery storage .
Management’s Discussion and Analysis of Financial Condition and Results of Operations OVERVIEW NEE’s operating performance is driven primarily by the operations of its two principal businesses, FPL, which serves approximately 5.9 million customer accounts in Florida and is one of the largest electric utilities in the U.S., and NEER, which together with affiliated entities is the world's largest generator of renewable energy from the wind and sun based on 2023 MWh produced on a net generation basis, as well as a world leader in battery storage .
In order to earn a targeted regulatory ROE, subject to limitations associated with the 2021 and 2016 rate agreements, reserve amortization is calculated using a trailing thirteen-month average of retail rate base and capital structure in conjunction with the trailing twelve months regulatory retail base net operating income, which primarily includes the retail base portion of base and other revenues, net of O&M, depreciation and amortization, interest and tax expenses.
In order to earn a targeted regulatory ROE, subject to limitations associated with the 2021 rate agreement, reserve amortization is calculated using a trailing thirteen-month average of retail rate base and capital structure in conjunction with the trailing twelve months regulatory retail base net operating income, which primarily includes the retail base portion of base and other revenues, net of O&M, depreciation and amortization, interest and tax expenses.
Because each assessment is based on the facts and circumstances associated with each long-lived asset, the effects of changes in assumptions cannot be generalized. 49 Table of Contents Assumptions and Accounting Approach An impairment loss is required to be recognized if the carrying value of the asset exceeds the undiscounted future net cash flows associated with that asset.
Because each assessment is based on the facts and circumstances associated with each long-lived asset, the effects of changes in assumptions cannot be generalized. 49 Table of Content s Assumptions and Accounting Approach An impairment loss is required to be recognized if the carrying value of the asset exceeds the undiscounted future net cash flows associated with that asset.
Such investments grew FPL's average rate base by approximately $5.6 billion in 2022 and reflect, among other things, the addition of the 1,246 MW Dania Beach Clean Energy Center which was placed in service on May 31, 2022, solar generation additions and ongoing transmission and distribution additions.
Such investments grew FPL's average rate base by approximately $6.9 billion in 2023 and reflect, among other things, solar generation additions, ongoing transmission and distribution additions, and the addition of the 1,246 MW Dania Beach Clean Energy Center which was placed in service on May 31, 2022.
Reserve amortization, or reversal of such amortization, reflects adjustments to accrued asset removal costs provided under the 2021 and 2016 rate agreements in order to achieve the targeted regulatory ROE. Reserve amortization is recorded as either an increase or decrease to accrued asset removal costs which is reflected in noncurrent regulatory assets on NEE's and FPL's consolidated balance sheets.
Reserve amortization, or reversal of such amortization, reflects adjustments to accrued asset removal costs provided under the 2021 rate agreement in order to achieve the targeted regulatory ROE. Reserve amortization is recorded as either an increase or decrease to accrued asset removal costs which is reflected in noncurrent regulatory assets on NEE's and FPL's consolidated balance sheets.
However, in the later years, the market is much less liquid and forward price curves must be developed using factors including the forward prices for the commodities used as fuel to generate electricity, the expected system heat rate (which measures the efficiency of power plants in converting fuel to electricity) in the region where the purchase or sale takes place, and a fundamental forecast of expected spot prices based on modeled supply and demand in the region.
However, in the later years, the market is much less liquid and forward price curves must be developed using factors including the forward prices for the commodities used as fuel to generate electricity, the expected system heat rate (which measures the efficiency of power plants in converting fuel to electricity) in the region where the 47 Table of Content s purchase or sale takes place, and a fundamental forecast of expected spot prices based on modeled supply and demand in the region.
NEE manages counterparty credit risk for its subsidiaries with energy marketing and trading operations through established policies, including counterparty credit limits, and in some cases credit enhancements, such as cash prepayments, letters of credit, cash and other collateral and guarantees. 54 Table of Contents Credit risk is also managed through the use of master netting agreements.
NEE manages counterparty credit risk for its subsidiaries with energy marketing and trading operations through established policies, including counterparty credit limits, and in some cases credit enhancements, such as cash prepayments, letters of credit, cash and other collateral and guarantees. 54 Table of Content s Credit risk is also managed through the use of master netting agreements.
The comparison of the results of operations for the years ended December 31, 2021 and 2020 are included in Management's Discussion in NEE's and FPL's Annual Report on Form 10-K for the year ended December 31, 2021 .
The comparison of the results of operations for the years ended December 31, 2022 and 2021 are included in Management's Discussion in NEE's and FPL's Annual Report on Form 10-K for the year ended December 31, 2022 .
The continued applicability of regulatory accounting is assessed at each reporting period. 51 Table of Contents ENERGY MARKETING AND TRADING AND MARKET RISK SENSITIVITY NEE and FPL are exposed to risks associated with adverse changes in commodity prices, interest rates and equity prices.
The continued applicability of regulatory accounting is assessed at each reporting period. 51 Table of Content s ENERGY MARKETING AND TRADING AND MARKET RISK SENSITIVITY NEE and FPL are exposed to risks associated with adverse changes in commodity prices, interest rates and equity prices.
FPL’s syndicated revolving credit facilities are also available to support the purchase of $1,334 million of pollution control, solid waste disposal and industrial development revenue bonds in the event they are tendered by individual bondholders and not remarketed prior to maturity as well as the repayment of approximately $1,327 million of floating rate notes in the event an individual noteholder requires repayment at specified dates prior to maturity.
FPL’s syndicated revolving credit facilities are also available to support the purchase of $1,319 million of pollution control, solid waste disposal and industrial development revenue bonds in the event they are tendered by individual bondholders and not remarketed prior to maturity as well as the repayment of approximately $1,812 million of floating rate notes in the event an individual noteholder requires repayment at specified dates prior to maturity.
Periodically, NEE is required to update these estimates and projections which can affect the annual expense amounts recognized, the liabilities recorded and the annual funding requirements for nuclear decommissioning costs. For example, an increase of 0.25% in the assumed escalation rates for nuclear decommissioning costs would increase NEE’s AROs at December 31, 2022 by approximately $284 million.
Periodically, NEE is required to update these estimates and projections which can affect the annual expense amounts recognized, the liabilities recorded and the annual funding requirements for nuclear decommissioning costs. For example, an increase of 0.25% in the assumed escalation rates for nuclear decommissioning costs would increase NEE’s AROs at December 31, 2023 by approximately $93 million.
Taking into consideration offsetting unmarked non-derivative positions, such as physical inventory, the trading VaR figures were approximately $18 million and $9 million at December 31, 2022 and 2021, respectively. (b) Non-qualifying hedges are employed to reduce the market risk exposure to physical assets or contracts which are not marked to market.
Taking into consideration offsetting unmarked non-derivative positions, such as physical inventory, the trading VaR figures were approximately $1 million and $18 million at December 31, 2023 and 2022, respectively. (b) Non-qualifying hedges are employed to reduce the market risk exposure to physical assets or contracts which are not marked to market.
(c) Included in noncurrent regulatory liabilities on NEE's and FPL's consolidated balance sheets, except for $38 million and $118 million which are related to other generation plant dismantlement and are included in noncurrent regulatory assets as of December 31, 2022 and 2021, respectively. (d) Represents total amount accrued for ratemaking purposes.
(c) Included in noncurrent regulatory liabilities on NEE's and FPL's consolidated balance sheets, except for $14 million and $38 million which are related to other generation plant dismantlement and are included in noncurrent regulatory assets as of December 31, 2023 and 2022, respectively. (d) Represents total amount accrued for ratemaking purposes.
NEE's primary capital requirements are for expanding and enhancing FPL's electric system and generation facilities to continue to provide reliable service to meet customer electricity demands and for funding NEER's investments in independent power and other projects. See Note 15 – Commitments for estimated capital expenditures in 2023 through 2027.
NEE's primary capital requirements are for expanding and enhancing FPL's electric system and generation facilities to continue to provide reliable service to meet customer electricity demands and for funding NEER's investments in independent power and other projects. See Note 15 – Commitments for estimated capital expenditures in 2024 through 2028.
FPL’s portion of the future cost of decommissioning its four nuclear units, including spent fuel storage above what is expected to be refunded by the DOE under a spent fuel settlement agreement, is estimated to be approximately $9.6 billion, or $2.5 billion expressed in 2022 dollars.
FPL’s portion of the future cost of decommissioning its four nuclear units, including spent fuel storage above what is expected to be refunded by the DOE under a spent fuel settlement agreement, is estimated to be approximately $9.4 billion, or $2.5 billion expressed in 2023 dollars.
At December 31, 2022, no cash was deposited with the mortgage trustee for these purposes. 46 Table of Contents In September 2006, NEE and NEECH executed a Replacement Capital Covenant (as amended, September 2006 RCC) in connection with NEECH's offering of $350 million principal amount of Series B Enhanced Junior Subordinated Debentures due 2066 (Series B junior subordinated debentures).
At December 31, 2023, no cash was deposited with the mortgage trustee for these purposes. 46 Table of Content s In September 2006, NEE and NEECH executed a Replacement Capital Covenant (as amended, September 2006 RCC) in connection with NEECH's offering of $350 million principal amount of Series B Enhanced Junior Subordinated Debentures due 2066 (Series B junior subordinated debentures).
It is anticipated that these requirements will be satisfied through a combination of cash flows from operations, short- and long-term borrowings, the issuance of short- and long-term debt and, from time to time, equity securities, proceeds from differential membership investors and sales of assets to NEP or third parties (see Note 1 – Disposal of Businesses/Assets and Sale of Noncontrolling Ownership Interests) , consistent with NEE’s and FPL’s objective of maintaining, on a long-term basis, a capital structure that will support a strong investment grade credit rating.
It is anticipated that these requirements will be satisfied through a combination of cash flows from operations, short- and long-term borrowings, the issuance of short- and long-term debt (see Note 13) and, from time to time, equity securities, proceeds from differential membership investors, the sale of renewable energy tax credits (see Note 1 - Income Taxes) and sales of assets to NEP or third parties (see Note 1 – Disposal of Businesses/Assets and Sale of Noncontrolling Ownership Interests) , consistent with NEE’s and FPL’s objective of maintaining, on a long-term basis, a capital structure that will support a strong investment grade credit rating.
These funds are primarily provided by cash flows from operations, borrowings or issuances of short- and long-term debt, proceeds from differential membership investors, sales of assets to NEP or third parties and, from time to time, issuances of equity securities. See Liquidity and Capital Resources – Liquidity.
These funds are primarily provided by cash flows from operations, borrowings or issuances of short- and long-term debt and, from time to time, issuances of equity securities, proceeds from differential membership investors, the sale of tax credits and sales of assets to NEP or third parties. See Liquidity and Capital Resources.
Change in Unrealized Gains (Losses) on Equity Securities Held in NEER's Nuclear Decommissioning Funds – net In 2022, the changes in the fair value of equity securities in NEER's nuclear decommissioning funds related to unfavorable market conditions in 2022 compared to the prior year.
Change in Unrealized Gains (Losses) on Equity Securities Held in NEER's Nuclear Decommissioning Funds – net In 2023, the changes in the fair value of equity securities in NEER's nuclear decommissioning funds related to favorable market conditions in 2023 compared to unfavorable market conditions in the prior year.
Approximately 75 banks, located globally, participate in FPL’s and NEECH’s revolving credit facilities, with no one bank providing more than 5% o f the combined revolving credit facilities. Pursuant to a 1998 guarantee agreement, NEE guarantees the payment of NEECH’s debt obligations under its revolving credit facilities.
Approximately 71 banks, located globally, participate in FPL’s and NEECH’s revolving credit facilities, with no one bank providing more than 5% of the combined revolving credit facilities. Pursuant to a 1998 guarantee agreement, NEE guarantees the payment of NEECH’s debt obligations under its revolving credit facilities.
(b) Included in noncurrent regulatory liabilities on NEE’s and FPL’s consolidated balance sheets, except for $532 million and $263 million which are related to interim removal costs and are included in noncurrent regulatory assets as of December 31, 2022 and 2021, respectively. See Note 1 – Rate Regulation.
(b) Included in noncurrent regulatory liabilities on NEE’s and FPL’s consolidated balance sheets, except for $1,021 million and $532 million which are related to interim removal costs and are included in noncurrent regulatory assets as of December 31, 2023 and 2022, respectively. See Note 1 – Rate Regulation.
At December 31, 2022, subsidiaries of NEE also had approximately $5.4 billion of standby letters of credit and approximately $1.1 billion of surety bonds to support certain of the commercial activities discussed above. FPL's and NEECH's credit facilities are available to support substantially all of the standby letters of credit.
At December 31, 2023, subsidiaries of NEE also had approximately $5.1 billion of standby letters of credit and approximately $1.6 billion of surety bonds to support certain of the commercial activities discussed above. FPL's and NEECH's credit facilities are available to support substantially all of the standby letters of credit.
Tax Credits, Benefits and Expenses PTCs from wind and solar projects and ITCs from solar, battery storage and certain wind projects are included in NEER’s earnings. PTCs are recognized as wind and solar energy is generated and sold based on a per kWh rate prescribed in applicable federal and state statutes.
PTCs from wind and solar projects and ITCs from solar, battery storage and certain wind projects are included in NEER’s earnings. PTCs are recognized as wind and solar energy is generated and sold based on a per kWh rate prescribed in applicable federal and state statutes.
The table below provides the components of FPL's and NEECH's net available liquidity at December 31, 2022.
The table below provides the components of FPL's and NEECH's net available liquidity at December 31, 2023.
Those assumptions for the years ended December 31, 2022, 2021 and 2020 include: 2022 2021 2020 Discount rate 2.87 % 2.53 % 3.22 % Salary increase 4.90 % 4.40 % 4.40 % Expected long-term rate of return, net of investment management fees 7.35 % 7.35 % 7.35 % Weighted-average interest crediting rate 3.79 % 3.82 % 3.83 % In developing these assumptions, NEE evaluated input, including other qualitative and quantitative factors, from its actuaries and consultants, as well as information available in the marketplace.
Those assumptions for the years ended December 31, 2023, 2022 and 2021 include: 2023 2022 2021 Discount rate 5.05 % 2.87 % 2.53 % Salary increase 4.90 % 4.90 % 4.40 % Expected long-term rate of return, net of investment management fees 8.00 % 7.35 % 7.35 % Weighted-average interest crediting rate 3.82 % 3.79 % 3.82 % In developing these assumptions, NEE evaluated input, including other qualitative and quantitative factors, from its actuaries and consultants, as well as information available in the marketplace.
Gains on Disposal of Businesses/Assets – net In 2022, gains on disposal of businesses/assets – net primarily relate to the sale of ownership interests in wind, solar and battery storage projects to NEP and the resolution of a contingency related to the December 2021 sale of ownership interests in wind and solar projects.
Gains on Disposal of Businesses/Assets – net In 2022, gains on disposal of businesses/assets – net primarily relate to the sale of ownership interests in wind, solar and battery 40 Table of Content s storage projects to NEP and the resolution of a contingency related to the December 2021 sale of ownership interests in wind and solar projects.
The following table illustrates the effect on net periodic pension income of changing the critical actuarial assumptions discussed above, while holding all other assumptions constant: Increase (Decrease) in 2022 Net Periodic Pension Income Change in Assumption NEE FPL (millions) Expected long-term rate of return 0.5% $ 25 $ 17 Discount rate 0.5% $ (4) $ (3) Salary increase 0.5% $ (3) $ (2) NEE also utilizes actuarial assumptions about mortality to help estimate obligations of the pension plan.
The following table illustrates the effect on net periodic pension income of changing the critical actuarial assumptions discussed above, while holding all other assumptions constant: Increase (Decrease) in 2023 Net Periodic Pension Income Change in Assumption NEE FPL (millions) Expected long-term rate of return 0.5% $ 25 $ 16 Discount rate (0.5)% $ 1 $ 1 Salary increase 0.5% $ (2) $ (1) NEE also utilizes actuarial assumptions about mortality to help estimate obligations of the pension plan.
For example, NEE’s nuclear decommissioning reserve funds include marketable equity securities carried at their market value of approximately $4,437 million and $5,511 million ($2,905 million and $3,552 million for FPL) at December 31, 2022 and 2021, respectively. NEE's and FPL’s investment strategy for equity securities in their nuclear decommissioning reserve funds emphasizes marketable securities which are broadly diversified.
For example, NEE’s nuclear decommissioning reserve funds include marketable equity securities carried at their market value of approximately $5,290 million and $4,437 million ($3,536 million and $2,905 million for FPL) at December 31, 2023 and 2022, respectively. NEE's and FPL’s investment strategy for equity securities in their nuclear decommissioning reserve funds emphasizes marketable securities which are broadly diversified.
Corporate and Other is primarily comprised of the operating results of other business activities, as well as other income and expense items, including interest expense, and eliminating entries, and may include the net effect of rounding. See Note 16 for additional segment information, including a discussion of a change in segment reporting.
Corporate and Other is primarily comprised of the operating results of other business activities, as well as other income and expense items, including interest expense, and eliminating entries, and may include the net effect of rounding. See Note 16 for additional segment information.
The following table provides a summary of capital investments for 2022 , 2021 and 2020 .
The following table provides a summary of capital investments for 2023 , 2022 and 2021 .
At December 31, 2022, the estimated mark-to-market exposure (the total amount that these subsidiaries of NEE could be required to fund based on energy commodity market prices at December 31, 2022) plus contract settlement net payables, net of collateral posted for obligations under these guarantees totaled approximately $3.4 billion.
At December 31, 2023, the estimated mark-to-market exposure (the total amount that these subsidiaries of NEE could be required to fund based on energy commodity market prices at December 31, 2023) plus contract settlement net payables, net of collateral posted for obligations under these guarantees totaled approximately $1.8 billion.
In September 2022, subsidiaries of NextEra Energy Resources completed the sale to a NEP subsidiary of a 67% controlling ownership interest in a battery storage facility with storage capacity of 230 MW.
In September 2022, subsidiaries of NextEra Energy Resources sold to a NEP subsidiary a 67% controlling ownership interest in a battery storage facility with storage capacity of 230 MW.
See Note 1 – Reference Rate Reform. CRITICAL ACCOUNTING POLICIES AND ESTIMATES NEE’s significant accounting policies are described in Note 1 to the consolidated financial statements, which were prepared under GAAP.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES NEE’s significant accounting policies are described in Note 1 to the consolidated financial statements, which were prepared under GAAP.
The historical stock performance of NEE's common stock shown in the performance graph below is not necessarily indicative of future stock price performance. 35 Table of Contents Adjusted Earnings NEE prepares its financial statements under GAAP.
The historical stock performance of NEE's common stock shown in the performance graph below is not necessarily indicative of future stock price performance. 36 Table of Content s Adjusted Earnings NEE prepares its financial statements under GAAP.
In December 2022, subsidiaries of NextEra Energy Resources sold (i) a 49% controlling ownership interest in three wind generation facilities and one solar plus battery facility with a total generating capacity of 1,437 MW and 65 MW of battery storage capacity, two of which facilities are currently under construction with expected in service dates in 2023, and (ii) their 100% ownership interest in three wind generation facilities with a total generating capacity of 347 MW to a NEP subsidiary.
In December 2022, subsidiaries of NextEra Energy Resources sold (i) a 49% controlling ownership interest in three wind generation facilities and one solar plus battery facility with a total generating capacity of 1,437 MW and 65 MW of battery storage capacity, two of which facilities were under construction and achieved commercial operations in 2023, and (ii) their 100% ownership interest in three wind generation facilities with a total generating capacity of 347 MW to a NEP subsidiary.
RESULTS OF OPERATIONS Net income attributable to NEE for 2022 was $4.15 billion compared to $3.57 billion in 2021. In 2022, net income attributable to NEE increased primarily due to higher results at FPL and Corporate and Other, partly offset by lower results at NEER.
RESULTS OF OPERATIONS Net income attributable to NEE for 2023 was $7.31 billion compared to $4.15 billion in 2022. In 2023, net income attributable to NEE increased primarily due to higher results at NEER and FPL, partly offset by lower results at Corporate and Other.
These funds are used for, among other things, working capital (see Note 1 – Rate Regulation regarding FPL's under-recovered fuel costs in 2022 and Note 1 – Storm Funds, Storm Reserves and Storm Cost Recovery ), capital expenditures (see Note 15 – Commitments), investments in or acquisitions of assets and businesses (see Note 6), payment of maturing debt and related derivative obligations (see Note 13 and Note 3) and, from time to time, redemption or repurchase of outstanding debt or equity securities.
These funds are used for, among other things, working capital (see Note 1 – Storm Funds, Storm Reserves and Storm Cost Recovery ), capital expenditures (see Note 15 – Commitments), investments in or acquisitions of assets and businesses (see Note 6), payment of maturing debt and related derivative obligations (see Note 13 and Note 3) and, from time to time, redemption or repurchase of outstanding debt or equity securities.
FPL may issue first mortgage bonds under its mortgage subject to its meeting an adjusted net earnings test set forth in the mortgage, wh ich generally requires adjusted net earnings to be at least twice the annual interest requirements on, or at least 10% of the aggregate principal amount of, FPL’s first mortgage bonds including those to be issued and any other non-junior FPL indebtedness.
FPL may issue first mortgage bonds under its mortgage subject to its meeting an adjusted net earnings test set forth in the mortgage, wh ich generally requires adjusted net earnings to be at least twice the annual interest requirements on, or at least 10% of the aggregate principal amount of, FPL’s first mortgage bonds including those to be issued and all indebtedness of FPL that ranks prior or equal to the first mortgage bonds.
Cost Recovery Clauses Revenues from fuel and other cost recovery clauses and pass-through costs, such as franchise fees, revenue taxes and storm-related surcharges, are largely a pass-through of costs.
See Note 1 – Rate Regulation. Cost Recovery Clauses Revenues from fuel and other cost recovery clauses and pass-through costs, such as franchise fees, revenue taxes and storm-related surcharges, are largely a pass-through of costs.
At December 31, 2022, FPL could have issued in excess of $33.6 billion of additional first mortgage bonds based on the unfunded property additions and retired first mortgage bonds.
At December 31, 2023, FPL could have issued in excess of $34 billion of additional first mortgage bonds based on the unfunded property additions and retired first mortgage bonds.
Years Ended December 31, 2022 2021 2020 (millions) Net losses associated with non-qualifying hedge activity (a) $ (696) $ (1,576) $ (649) Differential membership interests-related – NEER $ (87) $ (98) $ (87) NEP investment gains, net – NEER $ 186 $ 27 $ (94) Gain on disposal of a business – NEER (b) $ — $ — $ 274 Change in unrealized gains (losses) on equity securities held in NEER's nuclear decommissioning funds and OTTI, net – NEER $ (324) $ 199 $ 131 Impairment charges related to investment in Mountain Valley Pipeline – NEER (c) $ (674) $ — $ (1,208) ______________________ (a) For 2022, 2021 and 2020, approximately $1,257 million, $1,735 million and $438 million of losses, respectively, are included in NEER's net income; the balance is included in Corporate and Other.
Years Ended December 31, 2023 2022 2021 (millions) Net gains (losses) associated with non-qualifying hedge activity (a) $ 1,497 $ (696) $ (1,576) Differential membership interests-related – NEER $ (49) $ (87) $ (98) NEP investment gains, net – NEER (b) $ (963) $ 186 $ 27 Gain on disposal of a business (c) $ 306 $ — $ — Change in unrealized gains (losses) on equity securities held in NEER's nuclear decommissioning funds and OTTI, net – NEER $ 116 $ (324) $ 199 Impairment charges related to investment in Mountain Valley Pipeline – NEER (d) $ (38) $ (674) $ — ______________________ (a) For 2023, 2022 and 2021, approximately $1,729 million of gains, $1,257 million of losses and $1,735 million of losses, respectively, are included in NEER's net income; the balance is included in Corporate and Other.
At December 31, 2022, coverage for the 12 months ended December 31, 2022 would have been approximately 9.4 times the annual interest requirements and approximately 3.9 times the aggregate principal requirements.
At December 31, 2023, coverage for the 12 months ended December 31, 2023 would have been approximately 9.6 times the annual interest requirements and approximately 4.1 times the aggregate principal requirements.
Based upon a hypothetical 10% decrease in interest rates, the fair value of NEE’s net liabilities would increase by approxim ately $2,041 million ($777 million f or FPL) at December 31, 2022. Equity Price Risk NEE and FPL are exposed to risk resulting from changes in prices for equity securities.
See Note 3. Based upon a hypothetical 10% decrease in interest rates, the fair value of NEE’s net liabilities would increase by approxim ately $2,705 million ($1,093 million f or FPL) at December 31, 2023. Equity Price Risk NEE and FPL are exposed to risk resulting from changes in prices for equity securities.
At December 31, 2022, these guarantees totaled approximately $636 million and support, among other things, cash management activities, including those related to debt service and operations and maintenance service agreements, as well as other specific project financing requirements.
At December 31, 2023, these guarantees totaled approximately $1.2 billion and support, among other things, cash management activities, including those related to debt service and operations and maintenance service agreements, as well as other specific project financing requirements.
The liabilities are being accreted using the interest method through the date decommissioning activities are expected to be complete. At December 31, 2022 and 2021 , the AROs for decommissioning of NEER’s nuclear plants approximated $604 million and $ 599 million, respectively.
The liabilities are being accreted using the interest method through the date decommissioning activities are expected to be complete. At December 31, 2023 and 2022 , the AROs for decommissioning of NEER’s nuclear plants approximate d $607 million and $ 604 million, respectively.
Equity in Earnings (Losses) of Equity Method Investees NEER recognized $202 million of equity in earnings of equity method investees in 2022 compared to $666 million of equity in earnings of equity method investees for the prior year.
Equity in Earnings (Losses) of Equity Method Investees NEER recognized $649 million of equity in losses of equity method investees in 2023 compared to $202 million of equity in earnings of equity method investees for the prior year.
At December 31, 2022, NEE's credit risk exposure associated with its energy marketing and trading counterparties, taking into account collateral and contractual netting rights, totaled approximately $3.6 billion ($95 million for FPL), of which approximately 84% (100% for FPL) was with companies that have investment grade credit ratings. See Notes 1 – Credit Losses and 3.
At December 31, 2023, NEE's credit risk exposure associated with its energy marketing and trading counterparties, taking into account collateral and contractual netting rights, totaled approximately $3.5 billion ($83 million for FPL), of which approximately 93% (100% for FPL) was with companies that have investment grade credit ratings. See Note 1 – Credit Losses and Note 3.
See Note 3. 2022 Summary Net income attributable to NEE for 2022 was higher than 2021 by $574 million, or $0.29 per share, assuming dilution, due to higher results at FPL and Corporate and Other, partly offset by lower results at NEER.
See Note 3. 2023 Summary Net income attributable to NEE for 2023 was higher than 2022 by $3,163 million, or $1.50 per share, assuming dilution, due to higher results at NEER and FPL, partly offset by lower results at Corporate and Other.
The portion of previously unrecognized actuarial gains and losses and prior service costs or credits that are estimated to be allocable to FPL as net periodic (income) cost in future periods and that otherwise would be recorded in accumulated other comprehensive income are classified as regulatory assets and liabilities at NEE in accordance with regulatory treatment.
The portion of previously unrecognized actuarial gains and losses and prior service costs or credits that are estimated to be allocable to FPL as net periodic (income) cost in future periods and that otherwise would be recorded in accumulated other comprehensive income are classified as regulatory assets and liabilities at NEE in accordance with regulatory treatment. 48 Table of Content s Net periodic pension income is calculated using a number of actuarial assumptions.
At December 31, 2022, a hypothetical 10% decrease in the prices quoted on stock exchanges would result in an approximately $427 million ($280 million for FPL) reduction in fair value.
At December 31, 2023, a hypothetical 10% decrease in the prices quoted on stock exchanges would result in an approximately $494 million ($322 million for FPL) reduction in fair value.
Interest expense is allocated based on a deemed capital structure of 70% debt and differential membership interests sold by NextEra Energy Resources' subsidiaries.
Corporate and Other allocates a portion of NEECH's corporate interest expense to NextEra Energy Resources. Interest expense is allocated based on a deemed capital structure of 70% debt and differential membership interests sold by NextEra Energy Resources' subsidiaries.
At December 31, 2022, NEE owned a noncontrolling general partner interest in NEP and beneficially owned approximately 54.4% of NEP’s voting power. 41 Table of Contents Cash Flows NEE's sources and uses of cash for 2022, 2021 and 2020 were as follows: Years Ended December 31, 2022 2021 2020 (millions) Sources of cash: Cash flows from operating activities $ 8,262 $ 7,553 $ 7,983 Issuances of long-term debt, including premiums and discounts 13,856 16,683 12,404 Proceeds from differential membership investors 4,158 2,779 3,522 Sale of independent power and other investments of NEER 1,564 2,761 1,012 Issuances of common stock/equity units – net 1,460 14 — Net increase in commercial paper and other short-term debt 957 — — Payments from related parties under a cash sweep and credit support agreement – net 240 47 — Proceeds from sale of noncontrolling interests — 65 501 Other sources – net 89 40 83 Total sources of cash 30,586 29,942 25,505 Uses of cash: Capital expenditures, independent power and other investments and nuclear fuel purchases (19,283) (16,077) (14,610) Retirements of long-term debt (4,525) (9,594) (6,103) Net decrease in commercial paper and other short-term debt — (426) (907) Payments to related parties under a cash sweep and credit support agreement – net — — (2) Issuances of common stock/equity units – net — — (92) Dividends (3,352) (3,024) (2,743) Other uses – net (1,294) (1,052) (590) Total uses of cash (28,454) (30,173) (25,047) Effects of currency translation on cash, cash equivalents and restricted cash (7) 1 (20) Net increase (decrease) in cash, cash equivalents and restricted cash $ 2,125 $ (230) $ 438 For significant financing activity that occurred in February 2023, see Note 13.
At December 31, 2023, NEE owned a noncontrolling general partner interest in NEP and beneficially owned approximately 52.6% of NEP’s voting power. 41 Table of Content s Cash Flows NEE's sources and uses of cash for 2023, 2022 and 2021 were as follows: Years Ended December 31, 2023 2022 2021 (millions) Sources of cash: Cash flows from operating activities $ 11,301 $ 8,262 $ 7,553 Issuances of long-term debt, including premiums and discounts 13,857 13,856 16,683 Proceeds from differential membership investors 2,745 4,158 2,779 Proceeds from the sale of Florida City Gas business 924 — — Sale of independent power and other investments of NEER 1,883 1,564 2,761 Issuances of common stock/equity units – net 4,514 1,460 14 Net increase in commercial paper and other short-term debt 2,308 957 — Payments from related parties under a cash sweep and credit support agreement – net 1,213 240 47 Proceeds from sale of noncontrolling interests — — 65 Other sources – net — 89 40 Total sources of cash 38,745 30,586 29,942 Uses of cash: Capital expenditures, independent power and other investments and nuclear fuel purchases (25,113) (19,283) (16,077) Retirements of long-term debt (7,978) (4,525) (9,594) Net decrease in commercial paper and other short-term debt — — (426) Dividends on common stock (3,782) (3,352) (3,024) Other uses – net (1,889) (1,294) (1,052) Total uses of cash (38,762) (28,454) (30,173) Effects of currency translation on cash, cash equivalents and restricted cash (4) (7) 1 Net increase (decrease) in cash, cash equivalents and restricted cash $ (21) $ 2,125 $ (230) For significant financing activity that occurred subsequent to December 31, 2023, see Note 13.
NEER’s portion of the ultimate cost of decommissioning its nuclear plants, including costs associated with spent fuel storage above what is expected to be refunded by the DOE under a spent fuel settlement agreement, is estimated to be approximatel y $9.5 billion, or $2.0 billion expressed in 2022 dollars.
NEER’s portion of the ultimate cost of decommissioning its nuclear plants, including costs associated with spent fuel storage above what is expected to be refunded by the DOE under a spent fuel settlement agreement, is estimated to be approxima tely $9.8 billion, or $2.2 billion ex pressed in 2023 dollars.
At February 17, 2023, Moody’s Investors Service, Inc. (Moody’s), S&P Global Ratings (S&P) and Fitch Ratings, Inc.
At February 16, 2024, Moody’s Investors Service, Inc. (Moody’s), S&P Global Ratings (S&P) and Fitch Ratings, Inc.
In 2022 and 2021, FPL recorded a one-time reserve amortization adjustment of approximately $114 million, discussed under Depreciation and Amortization Expense below, and reserve amortization of $429 million, respectively. FPL's regulatory ROE for 2022 and for 2021 was approximately 11.74% and 11.60%, respectively.
FPL recorded reserve amortization of approximately $227 million in 2023 and a one-time reserve amortization adjustment of $114 million in 2022. See Depreciation and Amortization Expense below. FPL's regulatory ROE for 2023 and 2022 was approximately 11.80% and 11.74%, respectively.
NEER’s net income less net loss attributable to noncontrolling interests for 2022 and 2021 was $285 million and $599 million, respectively, resulting in a de crease in 2022 of $314 million. The primary drivers, on an after-tax basis, of the change are in the following table.
NEER’s net income less net loss attributable to noncontrolling interests for 2023 and 2022 was $3,558 million and $285 million, respectively, resulting in an increase in 2023 of $3,273 million. The primary drivers, on an after-tax basis, of the change are in the following table.
The decrease in 2022 primarily reflects an impairment charge related to the investment in Mountain Valley Pipeline of approximately $0.8 billion recorded in the first quarter of 2022 (see Note 4 – Nonrecurring Fair Value Measurements), partly offset by an increase in equity in earnings of NEP recorded in 2022 primarily due to changes in the fair value of interest rate derivative instruments.
The decrease in 2023 primarily reflects an impairment charge of approximately $1.2 billion ($0.9 billion after tax) related to the investment in NEP and a decrease in equity in earnings (losses) of NEP recorded in 2023 primarily due to unfavorable impacts related to changes in the fair value of interest rate derivative instruments, partly offset by the absence of impairment charges of approximately $0.8 billion ($0.6 billion after tax) related to the investment in Mountain Valley Pipeline recorded in the first quarter of 2022 (see Note 4 – Nonrecurring Fair Value Measurements).
Interest rate contracts are used to mitigate and adjust interest rate exposure when deemed appropriate based upon market conditions or when required by financing agreements. 53 Table of Contents The following are estimates of the fair value of NEE's and FPL's financial instruments that are exposed to interest rate risk: December 31, 2022 December 31, 2021 Carrying Amount Estimated Fair Value (a) Carrying Amount Estimated Fair Value (a) (millions) NEE: Fixed income securities: Special use funds $ 2,061 $ 2,061 $ 2,505 $ 2,505 Other investments, primarily debt securities $ 756 $ 756 $ 311 $ 311 Long-term debt, including current portion $ 61,889 $ 57,892 $ 52,745 $ 57,290 Interest rate contracts – net unrealized gains (losses) $ 392 $ 392 $ (633) $ (633) FPL: Fixed income securities: Special use funds $ 1,572 $ 1,572 $ 1,934 $ 1,934 Other investments – debt securities $ 114 $ 114 $ — $ — Long-term debt, including current portion $ 21,002 $ 19,364 $ 18,510 $ 21,379 ______________________ (a) See Notes 3 and 4.
Interest rate contracts are used to mitigate and adjust interest rate exposure when deemed appropriate based upon market conditions or when required by financing agreements. 53 Table of Content s The following are estimates of the fair value of NEE's and FPL's financial instruments that are exposed to interest rate risk: December 31, 2023 December 31, 2022 Carrying Amount Estimated Fair Value (a) Carrying Amount Estimated Fair Value (a) (millions) NEE: Fixed income securities: Special use funds $ 2,222 $ 2,222 $ 2,061 $ 2,061 Other investments, primarily debt securities $ 1,802 $ 1,802 $ 781 $ 781 Long-term debt, including current portion $ 68,306 $ 64,103 $ 61,889 $ 57,892 Interest rate contracts – net unrealized gains (losses) $ (249) $ (249) $ 392 $ 392 FPL: Fixed income securities: Special use funds $ 1,658 $ 1,658 $ 1,572 $ 1,572 Other investments – debt securities $ — $ — $ 114 $ 114 Long-term debt, including current portion $ 25,274 $ 23,430 $ 21,002 $ 19,364 ______________________ (a) See Note 3 and Note 4.
Years Ended December 31, 2022 2021 2020 (millions) FPL: Generation: New $ 2,079 $ 1,046 $ 1,681 Existing 1,804 1,531 1,266 Transmission and distribution 4,553 4,495 3,536 Nuclear fuel 118 159 203 General and other 581 878 737 Other, primarily change in accrued property additions and exclusion of AFUDC – equity 50 (539) 256 Total 9,185 7,570 7,679 NEER: Wind 3,481 3,777 3,359 Solar (includes solar plus battery storage projects) 2,869 2,011 1,920 Other clean energy 827 332 168 Nuclear, including nuclear fuel 214 241 125 Natural gas pipelines 236 229 269 Other gas infrastructure 1,215 669 572 Rate-regulated transmission (2021 includes the acquisition of Gridliance, see Note 6 – Gridliance) 431 980 360 Other 372 124 120 Total 9,645 8,363 6,893 Corporate and Other 453 144 38 Total capital expenditures, independent power and other investments and nuclear fuel purchases $ 19,283 $ 16,077 $ 14,610 42 Table of Contents Liquidity At December 31, 2022, NEE's total net available liquidity was approximately $12.5 billion.
Years Ended December 31, 2023 2022 2021 (millions) FPL: Generation: New $ 3,163 $ 2,079 $ 1,046 Existing 1,441 1,804 1,531 Transmission and distribution 4,292 4,553 4,495 Nuclear fuel 98 118 159 General and other 688 581 878 Other, primarily change in accrued property additions and exclusion of AFUDC – equity (282) 50 (539) Total 9,400 9,185 7,570 NEER: Wind 4,793 3,481 3,777 Solar (includes solar plus battery storage projects) 4,980 2,869 2,011 Other clean energy 2,781 827 332 Nuclear (includes nuclear fuel) 228 214 241 Natural gas pipelines 524 236 229 Other gas infrastructure 1,575 1,215 669 Rate-regulated transmission (2021 includes an acquisition, see Note 6 – Gridliance) 317 431 980 Other 454 372 124 Total 15,652 9,645 8,363 Corporate and Other 61 453 144 Total capital expenditures, independent power and other investments and nuclear fuel purchases $ 25,113 $ 19,283 $ 16,077 42 Table of Content s Liquidity At December 31, 2023, NEE's total net available liquidity was approximately $12.2 billion.
Carrying Value of Equity Method Investments NEE evaluates its equity method investments for impairment when events or changes in circumstances indicate that the fair value of the investment is less than the carrying value an d the investment may be other-than-temporarily impaired.
Carrying Value of Equity Method Investments NEE tests its equity method investments for impairment whenever events or changes in circumstances indicate that the fair value of the investment is less than the carrying value .
Increase (Decrease) From Prior Period Year Ended December 31, 2022 (millions) New investments (a) $ 85 Existing clean energy (a) 45 Gas infrastructure (a) (32) Customer supply and proprietary power and gas trading (b) 241 NEET (a) 13 Other, including interest expense, corporate general and administrative expenses and other investment income (106) Change in non-qualifying hedge activity (c) 478 Change in unrealized gains/losses on equity securities held in nuclear decommissioning funds and OTTI, net (c) (523) NEP investment gains, net (c) 159 Impairment charges related to investment in Mountain Valley Pipeline (c)(d) (674) Change in net income less net loss attributable to noncontrolling interests $ (314) ______________________ (a) Reflects after-tax project contributions, including the net effect of deferred income taxes and other benefits associated with PTCs and ITCs for wind, solar and storage projects, as applicable (see Note 1 – Income Taxes and – Sales of Differential Membership Interests and Note 5), but excludes allocation of interest expense and corporate general and administrative expenses.
Increase (Decrease) From Prior Period Year Ended December 31, 2023 (millions) New investments (a) $ 714 Existing clean energy (a) (214) Gas infrastructure (a) (21) Customer supply (b) 334 NEET (a) (2) Other, including interest expense, corporate general and administrative expenses and other investment income (451) Change in non-qualifying hedge activity (c) 2,986 Change in unrealized gains/losses on equity securities held in nuclear decommissioning funds and OTTI, net (c) 440 NEP investment gains, net (c) (1,149) Impairment charges related to investment in Mountain Valley Pipeline (c)(d) 636 Change in net income less net loss attributable to noncontrolling interests $ 3,273 ______________________ (a) Reflects after-tax project contributions, including the net effect of deferred income taxes and other benefits associated with renewable energy tax credits for wind, solar and storage projects, as applicable (see Note 1 – Income Taxes and – Noncontrolling Interests and Note 5), but excludes allocation of interest expense and corporate general and administrative expenses except for an allocated credit support charge related to guarantees issued to conduct business activities.
FPL’s net income for 2022 and 2021 was $3,701 million and $3,206 million, respectively, representing an increase of $495 million. The increase was primarily driven by higher earnings from investments in plant in service and other property.
FPL’s net income for 2023 and 2022 was $4,552 million and $3,701 million, respectively, representing an increase of $851 million. The increase was primarily driven by higher earnings from investments in plant in service and other property and the gain on sale of FPL's ownership interest in the FCG business.
The VaR figures are as follows: Trading (a) Non-Qualifying Hedges and Hedges in FPL Cost Recovery Clauses (b) Total FPL NEER NEE FPL NEER NEE FPL NEER NEE (millions) December 31, 2021 $ — $ 17 $ 17 $ 1 $ 148 $ 148 $ 1 $ 149 $ 149 December 31, 2022 $ — $ 41 $ 41 $ 3 $ 148 $ 145 $ 3 $ 125 $ 120 Average for the year ended December 31, 2022 $ — $ 26 $ 26 $ 9 $ 268 $ 269 $ 9 $ 248 $ 249 ______________________ (a) The VaR figures for the trading portfolio include positions that are marked to market.
The VaR figures are as follows: Trading (a) Non-Qualifying Hedges and Hedges in FPL Cost Recovery Clauses (b) Total FPL NEER NEE FPL NEER NEE FPL NEER NEE (millions) December 31, 2022 $ — $ 41 $ 41 $ 3 $ 148 $ 145 $ 3 $ 125 $ 120 December 31, 2023 $ — $ 4 $ 4 $ 2 $ 114 $ 116 $ 2 $ 113 $ 111 Average for the year ended December 31, 2023 $ — $ 12 $ 12 $ 3 $ 135 $ 134 $ 3 $ 134 $ 133 ______________________ (a) The VaR figures for the trading portfolio include positions that are marked to market.
The components of FPL’s decommissioning of nuclear plants, dismantlement of plants and other accrued asset removal costs are as follows: Nuclear Decommissioning Other Generation Plant Dismantlement Interim Removal Costs and Other Total December 31, December 31, December 31, December 31, 2022 2021 2022 2021 2022 2021 2022 2021 (millions) AROs (a) $ 1,807 $ 1,736 $ 362 $ 364 $ 7 $ 7 $ 2,176 $ 2,107 Less capitalized ARO asset net of accumulated depreciation 61 63 40 56 1 1 102 120 Accrued asset removal costs (b) 406 447 179 198 (494) (156) 91 489 Asset retirement obligation regulatory expense difference (c) 3,515 4,399 (212) (218) (18) (9) 3,285 4,172 Accrued decommissioning, dismantlement and other accrued asset removal costs (d) $ 5,667 $ 6,519 $ 289 $ 288 $ (506) $ (159) $ 5,450 $ 6,648 ______________________ (a) See Note 11.
The components of FPL’s decommissioning of nuclear plants, dismantlement of plants and other accrued asset removal costs are as follows: Nuclear Decommissioning Other Generation Plant Dismantlement Interim Removal Costs and Other Total December 31, December 31, December 31, December 31, 2023 2022 2023 2022 2023 2022 2023 2022 (millions) AROs (a) $ 1,882 $ 1,807 $ 283 $ 362 $ 5 $ 7 $ 2,170 $ 2,176 Less capitalized ARO asset net of accumulated depreciation 59 61 28 40 — 1 87 102 Accrued asset removal costs (b) 480 406 182 179 (1,023) (494) (361) 91 Asset retirement obligation regulatory expense difference (c) 4,202 3,515 (150) (212) — (18) 4,052 3,285 Accrued decommissioning, dismantlement and other accrued asset removal costs (d) $ 6,505 $ 5,667 $ 287 $ 289 $ (1,018) $ (506) $ 5,774 $ 5,450 ______________________ (a) See Note 11.
Project results, including repowered wind projects, are included in existing clean energy, pipeline results are included in gas infrastructure and rate-regulated transmission facilities and transmission lines are included in NEET beginning with the thirteenth month of operation or ownership. (b) Excludes allocation of interest expense and corporate general and administrative expenses. (c) See Overview – Adjusted Earnings for additional information.
Project results, including repowered wind projects, are included in existing clean energy, pipeline results are included in gas infrastructure and rate-regulated transmission facilities and transmission lines are included in NEET beginning with the thirteenth month of operation or ownership.
For the five years ended December 31, 2022, NEE delivered a total shareholder return of approximately 139.3%, above the S&P 500’s 56.9% return, the S&P 500 Utilities' 58.0% return and the Dow Jones U.S. Electricity's 56.9% return.
For the five years ended December 31, 2023, NEE delivered a total shareholder return of approximately 56.4%, compared to the S&P 500’s 107.2% return, the S&P 500 Utilities' 41.0% return and the Dow Jones U.S. Electricity's 39.6% return.
Investment gains or losses for this purpose are the difference between the expected return calculated using the market-related value of plan assets and the actual return realized on those plan assets.
This market-related valuation reduces year-to-year volatility and recognizes investment gains or losses over a five-year period following the year in which they occur. Investment gains or losses for this purpose are the difference between the expected return calculated using the market-related value of plan assets and the actual return realized on those plan assets.

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