NextEra Energy reports 4Q drop in earnings

NextEra Energy, the wind-farm company with operations throughout western Oklahoma reported a drop in fourth quarter 2019 earnings. Adjusted earnings for the quarter totaled $706 million, down from $718 million reported in the fourth quarter of 2018.

The company has more than $5 billion in wind farm investments in Oklahoma and last year canceled two more projects because of conflicts with military flight training.

While adjusted earnings dropped, annual earnings rose 8.7 % from 2018 with $4 billion or $8.37 a share. The company’s developer subsidiary, NextEra Energy Resources reported a stronger 2019 fourth quarter compared to 2018 but also suffered a drop in annual net income—from $4.7 billion in 2018 to $1.31 billion in 2019.

The parent company announced its developer arm will take advantage of the production tax credit extension to repower its wind fleet. In a year-end legislative push, Congress extended the 60% PTC by one year to 2021, which is prompting industry-wide investments, according to analysts.

“We expect that [the PTC extension] will support incremental wind demand in 2023 and 2024,” NextEra CEO Jim Robo said during a quarterly call.

For NextEra, this will involve repowering its wind fleet. More than 60% of the subsidiary’s operating wind projects by the end of 2020 “will have been originally recommissioned or repowered within the last five years, highlighting the young age of [its] fleet and the expected long date future value creation of the portfolio,” NextEra Chief Financial Officer Rebecca Kujawa said on the quarterly call.

In 2019, NextEra Energy Partners, the subsidiary which acquires and manages a clean energy portfolio, also announced 275 MW of its wind portfolio will be repowered. NextEra and its developer arm are planning a slew of clean energy investments. Its utility, Florida Power & Light, also has ambitious clean energy investment goals, including a 10 GW solar expansion plan.

The company’s Q4 quarterly earnings missed estimates due to several factors that offset growth from new investments, Kujawa said. One factor was a large contribution to fund the company’ charitable foundation for several years, she added.

Wind projects also qualify for the investment tax credit (ITC), an incentive that is phasing down until it will remain at 10% for commercial and utility-scale projects in 2022. The ITC is widely used by solar and solar-plus-storage projects, and advocates led extensive lobbying efforts in 2019 to ensure the credit is also extended.


Source: Utility Dive