NextEra Energy, Inc.

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

Thank you, Grant. Good morning, everyone, and thank you for joining our first quarter 2020 Combined Earnings Conference call for NextEra Energy and NextEra Energy partners. With me this morning are Jim Robo, Chairman and Chief Executive Officer of NextEra Energy, Rebecca Chiava, Executive Vice President and Chief Financial Officer of NextEra Energy, John Ketchum, President and Chief Executive Officer of NextEra Energy Resources, and Mark Hickson, Executive Vice President of NextEra Energy, all of whom are also officers of NextEra Energy Partners, as well as Eric Szilagyi, President and Chief Executive Officer of Florida Power & Light Company. Jim will provide some opening remarks and we'll then turn the call over to Rebecca for a review of our first quarter results. Our executive team will then be available to answer your questions. We will be making forward-looking statements during this call based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect or because of other factors discussed in today's earnings news release and the comments made during this conference call. In the risk factors section of the accompanying presentation are our latest reports and filings with the Securities and Exchange Commission, each of which can be found on our websites, NextEraEnergy.com and NextEraEnergyPartners.com. We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. With that, I will turn the call over to Jim.

Thanks, Matt, and good morning, everyone. Before I begin, I want to take a moment to extend our deepest sympathies to all those who've been personally affected by the COVID-19 pandemic. The country and the world are facing devastating impacts from the spread of the virus, and we remain resolutely focused on doing our part by continuing to deliver affordable and reliable power. Never before has it been more clear how critical electricity is to the world, and our team is laser-focused on ensuring its uninterrupted delivery so first responders can help those in need, businesses can continue to operate where possible, Governments can continue to function and our customers can go about their daily lives to the greatest extent possible during these challenging times. As part of NextEra Energy's core commitment to do the right thing, at both FPL and Gulf Power, we have taken steps to help customers face the challenges that the pandemic has created. Both utilities have suspended electric disconnections during the state of emergency to ensure our customers have continued access to power regardless of their economic circumstances. Additionally, next month, the typical FPL and Gulf Power residential customers will receive a one-time bill decrease of approximately 25% and 40% respectively as an accelerated flowback of lower fuel costs. The NextEra Energy companies and employees have also committed more than $4 million in emergency assistance funds to provide critical support to the most vulnerable members of the community. Our hope is that these steps will help customers navigate this difficult and unsettling time and support a more rapid recovery for them and the Florida economy generally. We remain deeply engaged in helping Florida return from this pandemic stronger than ever, and we'll continue to do our part to support that outcome. It is during challenging times like these that the culture of NextEra Energy shines through. A culture focused on leadership, accountability, a passion to be the best, and a focus on flawless execution. NextEra Energy's employees have exemplified these characteristics over the past several weeks. I am very proud of how they've stepped up, once again confirming my belief that we have the best team in the industry and that our culture and our people are our most important assets. Despite their daily lives being disrupted by the ongoing effects of the pandemic, our employees' focus on continuing to do their jobs and deliver an essential resource for customers in our economy has been unwavering. I'd like to take a moment to thank all NextEra Energy employees for their continued focus, hard work, and execution during these challenging times. It is because of them that I've never been more confident in our ability to deliver on all our expectations to our customers, shareholders, and other stakeholders. As we focus on execution, the safety of our employees in the community is always our number one priority. To ensure that our critical operations, including the grid within Florida and our generating facilities, particularly our nuclear sites, continue to operate safely and remain available to serve our customers, we have instituted our pandemic plan, which was most recently updated last year, and have taken aggressive measures to protect our employees. We understand the critical role that electricity plays in the economy and the daily lives of Floridians, and FPL and Gulf Power remain steadfastly focused on meeting their commitments. As we face the challenges created by the pandemic, we are fortunate that preparedness and crisis planning are in our DNA. For nearly 70 years, we've had annual drills to prepare for disruptions to our business. And while the circumstances of this situation are unique, It is that preparation to deal with the unexpected that is allowing our company to continue to deliver for our customers through this challenging time. Over the past several months, NextEra Energy has continued to execute across the board. Our transmission and distribution systems continue to perform in line with the typical high reliability standards. The more than $5 billion that FPL has invested since 2006 to build a stronger and smarter grid allow us to leverage automation and manage the T&D system remotely. That automation and its ability to limit human intervention has never been more important than today. Operations at all our generating facilities at FPL, Gulf Power, and Energy Resources have been modified to protect the health and safety of our employees, and the pandemic has not caused any meaningful impacts at this time. In addition to ensuring continued safety In addition to ensuring continued safe and reliable operations at our plants, our nuclear team also delivered outstanding performance during the recent refueling outages at St. Lucie and Point Beach. In fact, the Point Beach refueling outage was one of the shortest outages in our entire nuclear fleet in the past 20 years. The ongoing outages at Turkey Point and Seabrook also continue to progress well. One of our most important core values is our commitment to excellence in all that we do. Over a long period of time, we've invested significant time and effort in developing key strategic partnerships, particularly related to our supply chain, to help support our ability to execute during challenging times like these. Over the past several months, our key strategic partners have continued to deliver, highlighting the value of deep, long-lasting relationships with best-in-class companies. These deep relationships and our position as the industry leader give us confidence that our equipment deliveries should remain on track, even if others face supply issues over the coming months. Our engineering and construction team also continues to perform exceptionally well, keeping the largest construction program in NextEra Energy's history on schedule and on budget. NextEra Energy's financial performance for the first quarter reflects this strong operating performance across all our businesses, with adjusted EPS increasing more than 8% year-over-year. Let me now turn to our strategic focus, which remains unchanged. At FPL and Gulf Power, our focus has been and will continue to be on delivering an outstanding value proposition of low bills, high reliability, outstanding customer service, and clean energy solutions for our customers. The value of FPL's smart capital investments that we've made over the past several decades has never been more clear. These investments, including FPL's highly efficient generation portfolio, and a stronger and smarter grid are allowing FPL to continue efficiently delivering affordable, reliable, and clean energy to our customers. While we continue to monitor the situation, our capital investment program remains on track at FPL and Gulf Power. The investments that we are making today, including one of the world's largest solar expansions, are expected to provide meaningful customer benefits over the coming years. As we move toward the current challenges, it will be important that we continue to provide low-cost, reliable service to our customers to support their recovery. The flexibility provided by FPL's reserve immunization mechanism, combined with our best-in-class operational cost effectiveness, help position FPL to meet its financial commitments while making smart, long-term investments during this uncertain time. At Gulf Power, we remain committed to delivering on the objectives that we have previously outlined and continue to expect to generate significant customer and shareholder value over the coming years. Similar to FPL and Gulf Power, our strategic vision at Energy Resources remains unchanged, and we believe the market opportunity for low-cost renewables has never been greater. In times when consumers and businesses are dealing with the challenges of economic uncertainty, we expect our customers will help ease these impacts by lowering the cost of power for their customers through new renewable generation. Reflecting this strong customer demand for renewables, the Energy Resources team had another terrific quarter of origination, adding approximately 1,600 megawatts to our backlog since the last earnings call, including our first 600 megawatts of wind projects for 2022 and beyond. Most of this quarter's backlog additions were negotiated remotely, while employees operated under stay-at-home orders. The ability to add nearly 1600 megawatts despite these conditions is a testament to our strong customer relationships, pipeline, and development skills. Also included in these backlog additions are approximately 460 megawatts of battery storage projects, almost all of which will be added to existing solar sites to take advantage of the ITC and enhance the value of our existing projects for customers. With the significant recent growth in our battery storage backlog, we increasingly see storage as an important standalone business in its own right. NextEra Energy's battery storage investments in 2021 are now expected to exceed $1 billion, which we believe would be the largest ever annual battery storage investment by any power company in the world, and have a total gigawatt-hour capacity that discharges enough electricity to power the entire state of Rhode Island for four hours. This highlights the rapid transition to the next phase of renewables development that pairs low-cost wind and solar energy with a low-cost battery storage solution. We continue to expect that by the middle of this decade, without incentives, new near-firm wind and new near-firm solar will be cheaper than the operating costs of most existing coal, nuclear, and less efficient oil and gas fire generation units. As a result, we expect that the long-term projections for wind and solar that we have previously shared will be achieved or exceeded over the coming decade, representing a tremendous growth opportunity for energy resources. As we celebrate the 50th anniversary of Earth Day today, we are proud of our track record of improving the environment, particularly through the CO2 reductions that we've delivered as a result of our clean energy efforts across the country. We are at the vanguard of building a sustainable energy era that is both clean and affordable, and we are driving very hard to continue to be at the forefront of disruption that is occurring within the energy sector. To capitalize on this significant growth opportunity, Energy Resources expects to extend its long track record of excellence and execution. By leveraging our strong relationships with our equipment suppliers and contractors that I previously mentioned, and using the significant experience that we've developed over our more than 20 years in the renewable business. We've been able to keep our construction program on track despite the significant disruptions that are occurring both globally and locally. Energy Resources 2020 wind turbine deliveries remain ahead of schedule, and we're not currently experiencing any significant equipment or labor issues at any of the more than 5,000 megawatts of wind and solar projects that we expect to complete this year. While we continue to monitor this situation closely, we expect that all of our planned 2020 renewable construction projects will achieve their in-service dates this year and believe that we will extend our track record of having never missed a PTC deadline on one of our wind projects. Energy Resources' track record of execution has been a key competitive advantage over time. In periods of uncertainty like we are currently experiencing, we expect customers will increasingly want confidence in a company's ability to deliver on its commitments. Energy Resources' extensive experience, combined with our customer, supplier, contractor, and financing relationships, all separate us from other developers during these challenging times. In addition, we expect that some of our competitors may falter as a result of these challenges, and we will look to leverage any opportunities that this may present. To support the execution of FPL, Gulf Power, and Energy Resources' strategic objectives, Over the past several months, we've focused on ensuring NextEra Energy's continued strong access to capital. The strength of NextEra Energy's balance sheet and access to ample liquidity have always been and will always continue to be a core strategic focus for us. In times of financial market disruption like we've recently experienced, the value of balance sheet strength and access to liquidity have become even more apparent. We entered the year with meaningful cushion against our credit metrics and access to significant liquidity through the largest and most diversified bank group in our sector and maintenance of the industry's largest credit facilities. In the middle of February, we issued $2.5 billion in equity units to add additional cushion against our credit metrics and further supplement our liquidity. Additionally, since the market disruption began, we further improved our liquidity position with an additional roughly $4 billion in longer-term financings including 1.1 billion FPL first mortgage bonds, 1.25 billion of capital holdings debentures, and an additional 1.8 billion in capital holdings term loans. Following these issuances, NextEra Energy now has approximately $12 billion in liquidity to help support the largest capital investment program in our history, and we plan to continue to be prudent in our financing plan going forward. In summary, NextEra Energy remains well-positioned to continue to execute over both the near and long-term horizons. Over a long period of time, we have focused on building a business that is resilient and able to deliver for our customers and shareholders, regardless of the economic and market conditions, and we remain laser-focused on extending that track record today. Even throughout the greatest market dislocations last month, NextEra Energy maintained ongoing access to capital, which is a reflection of the strength of its balance sheet, as well as the overall resilience of NextEra Energy's underlying businesses. FPL and GulfPower operate in what we believe is one of the most constructive regulatory environments in the country. The strength of FPL and GulfPower's balance sheets and capital structures, combined with the constructive, stable, and forward-thinking approach of Florida's regulatory environment and our long track record of execution should provide investors confidence that both companies will continue to be able to deliver for customers and perform well in a variety of economic environments. At Energy Resources, the portfolio is focused on long-term contracted clean energy projects with high credit quality customers, which we expect will be largely insulated from changes in the underlying economy. Despite the current economic challenges and as a result of the strength and diversity of NextEra Energy's underlying businesses, I will be disappointed if we are not able to deliver financial results at or near the top end of our adjusted earnings per share expectation ranges in 2020, 2021, and 2022, while at the same time maintaining our strong credit ratings and, most importantly, continuing to reliably deliver for our customers. While our expectations always assume normal weather and operating conditions, I have confidence in our ability to meet these expectations, even when accounting for a reasonable range of impacts and outcomes that may result from the current pandemic. Let me now turn to NextEra Energy Partners. While the COVID-19 pandemic has created significant uncertainty throughout the economy, NextEra Energy Partners remains well positioned to continue to deliver on its objectives and its commitments. We do not currently expect any material, financial, or operational impacts as a result of the pandemic. Additionally, as a result of the actions that we took last year, including two significant acquisitions, the organic growth investments that are being executed, and the steps taken to reduce its overall cost of capital, NextEra Energy Partners entered 2020 particularly well positioned. This favorable positioning is even more valuable during times of uncertainty like we are experiencing today. The benefit of last year's execution is apparent in our first quarter results, with adjusted EBITDA and cash available for distribution increasing roughly 30% and 200% respectively year-over-year. We expect to achieve NextEra Energy Partners' 2020 distribution growth objectives while maintaining a trailing 12-month payout ratio in the mid-70% range even after excluding cash distributions from our desert sunlight projects, highlighting the significant flexibility NEP has going forward. While we will continue to be opportunistic, the favorable position with which NextEra Energy Partners entered the year gives it the flexibility to achieve its long-term distribution growth objectives without the need to make any acquisitions until 2022, one year later than we have previously disclosed. NextEra Energy Partners' liquidity position also supports its flexibility in achieving its long-term growth objectives. At the end of the first quarter, NextEra Energy Partners maintain a net liquidity position, including cash on hand, of approximately $650 million. NextEra Energy Partners' only near-term debt maturity is a $300 million convertible debt issuance that matures in September of this year, which may be converted to NEP units if the conversion price is achieved. Without any near-term acquisition needs and no other corporate-level debt maturities until 2024, NextEra Energy Partners maintains significant liquidity to help achieve its objectives. The steps that NextEra Energy Partners has executed in the past year, such as the upsize and extension of its revolving credit facility, as well as the project recapitalizations that create significant project finance debt capacity within the NEP portfolio, give us confidence that sufficient liquidity will be maintained. We also expect that the diversification of financing alternatives that NEP has pursued since its IPO will provide flexibility and continued access to capital regardless of potential disruption in the capital markets. By leveraging the significant private infrastructure capital that has a strong demand for high-quality long-term contracted clean energy assets, NextEra Energy Partners maintains an attractive additional financing source. In summary, we believe NEP is well positioned to execute on accretive acquisitions for LP unit holders going forward. With the tremendous expected long-term renewables growth, combined with the strength of NextEra Energy Partners' existing portfolio and continued access to low-cost sources of capital, we believe NEP is uniquely positioned to take advantage of the disruptive factors reshaping the energy industry. With access to energy resources unparalleled portfolio of renewables projects that now totals roughly 25 gigawatts, including the signed backlog, as well as the ability to execute on third-party acquisitions and organic growth opportunities, we have as much confidence in NextEra Energy Partners' long-term future as we ever have had. We look forward to delivering on that potential over the coming years. In closing, while the COVID-19 pandemic has created significant uncertainty throughout the economy, it has not changed the fundamental value proposition of NextEra Energy or NextEra Energy Partners. Over a long period of time, we've focused on building resilient companies that are able to deliver on all their commitments throughout market and economic cycles. And we entered the current period of disruption uniquely well positioned. Despite the ongoing challenges, the core strategic focus across all of our businesses remains unchanged. And we believe we are well positioned to deliver on our objectives going forward. I'll now turn the call over to Rebecca to review the first quarter results.

Thank you, Jim, and good morning, everyone. Let's now turn to the detailed results, beginning with FPL. For the first quarter of 2020, FPL reported net income of $642 million, or $1.31 per share. Earnings per share increased 9 cents year over year. Regulatory capital employed increased by approximately 9% over the same quarter last year and was the principal driver of FPL's net income growth of roughly 9%. FPL's capital expenditures were approximately $1.4 billion for the quarter, and we expect our full-year capital investments to be between $5.8 billion and $6.3 billion. FPL's reported ROE for regulatory purposes will be approximately 11.6% for the 12 months ending March 2020, which is at the upper end of the allowed band of 9.6% to 11.6% under our current rate agreement. During the quarter, we utilized $149 million of reserve amortization to achieve our target regulatory ROE, leaving FPL with a balance of $744 million. The amount of reserve amortization that FPL utilized this quarter was below that which was utilized in the first quarter of 2019. As we've previously discussed, FPL historically utilizes more reserve amortization in the first half of the year, given the pattern of its underlying revenues and expenses. and we expect this year to be no different. We continue to expect that FPL will end 2020 with a sufficient amount of reserve amortization to continue operating under the base rate settlement agreement through 2021, creating further customer benefits by avoiding a base rate increase during this time. Turning to our development efforts, we recently filed an updated 10-year site plan for FPL and Gulf Power that highlights the next phase of smart capital investment opportunities across Florida systems. The filing reflects an expectation that FPL and Gulf Power will begin to operate as an integrated electric system in 2022. As we've previously discussed, since the acquisition closed in 2019, FPL and Gulf Power have been reviewing the potential benefits of merging into a single, larger Florida utility company. Based on this review, the companies expect that a merger will create both operational and financial benefits for its customers. As a result, FPL and Gulf Power plan to take additional steps to merge over the coming months and continue to expect to file a combined rate case in the first quarter of 2021 for new rates effective in January of 2022. The combined 10-year site plan projects an approximately 70% increase in the amount of zero-emission electricity that is generated in 2029 relative to 2019 as a result of FPL's continued rapid expansion of solar energy through the execution of its 30 by 30 plan. By the end of this decade, FPL projects that we'll have more than 10,000 megawatts of installed solar capacity, including nearly 1,600 megawatts within the current Gulf Power Service Territory. Of this total capacity, approximately 1,500 megawatts are expected to be constructed under FPL's recently approved Solar Together Program, which is the nation's largest community solar program. Since the official launch of the program last month, customer demand across all rate classes has been substantial, with demand from residential customers in one week surpassing the total residential private solar capacity that has been installed over the past 10 years. This strong demand is a reflection of increasing customer interest in cost-effective clean energy solutions. The innovative program is expected to generate $249 million of total net cost savings for participating and non-participating customers over its life. Beyond the significant solar expansion, the 10-year site plan also highlights FPL's other efforts to supply its customers with energy that is both clean and affordable. Relative to last year's site plan, there is a dramatic increase in the battery storage deployment. with a total of approximately 1,200 megawatts of storage capacity now expected by 2029. Additionally, the site plan reflects FPL eliminating essentially all of the coal from its integrated system, including the phase-out of its last operating coal plant within Florida later this year. Finally, this year's site plan reflects FPL further diversifying its generation portfolio with the elimination of the combined cyclone natural gas plants at FPL and Gulf Power that were previously expected to be constructed in the middle of this decade. This plan reflects our belief that renewable generation, and particularly solar paired with battery storage in Florida, is an increasingly cost-effective form of generation in most parts of the U.S. As FPL and Gulf Power execute on these opportunities to further modernize their combined generation fleet, we expect to enhance our customer value proposition while also reducing our CO2 emissions rate. which is already among the lowest in the nation and is targeted to be 67% below the 2005 U.S. electric industry average by 2030. Despite the challenges presented by the COVID-19 pandemic, all of FPL's major capital projects remain on track and on budget. In late January, the first six Solar Together projects, totaling approximately 450 megawatts, entered service. An additional 450 megawatts of Solar Together sites as well as the final 300 megawatts of solar being built under the solar base rate adjustment, or SOBR mechanism, of FPL's base rate settlement agreement, remain on track to be placed in service this year. Beyond solar, construction of the highly efficient, roughly 1,200 megawatt Dania Beach Clean Energy Center remains on schedule and on budget as it continues to advance towards its projected commercial operations date in 2022. We continue to expect that FPL's ongoing smart investment opportunities will support a compound annual growth rate in regulatory capital employed of approximately 9% from 2018 through 2022, while further enhancing our best-in-class value proposition. Let me now turn to Gulf Power, which reported first quarter 2020 net income of $40 million, or $0.08 per share. Gulf capital expenditures were $340 million for the quarter, as it continues to execute on smart capital investments for the benefit of customers, and we continue to expect its full-year capital investments to be between $800 and $900 million. As a result of these ongoing investments, regulatory capital employed increased by approximately 25% year-over-year. Gulf Power's reported ROE for regulatory purposes will be approximately 11.2% for the 12 months ending March 2020. THE OVERALL EXECUTION OF GULF POWER'S CAPITAL PROGRAM CONTINUES TO PROGRESS WELL. GULF POWER'S FIRST SOLAR PROJECT, THE ROUGHLY 75 MEGAWATT BLUE INDIGO SOLAR ENERGY CENTER, WAS PLACED IN SERVICE EARLIER THIS MONTH. ALL OF ITS OTHER MAJOR CAPITAL INVESTMENTS, INCLUDING THE NORTH FLORIDA RESILIENCY CONNECTION AND THE PLANT CRISP COAL TO NATURAL GAS CONVERSION CONTINUE TO REMAIN ON TRACK. SIMILAR TO S&P'S ONE-NOTCH UPGRADE OF BOTH FPL AND GULF POWER IN LATE DECEMBER, Fitch recently upgraded Gulf's credit ratings by one notch as well, citing its strong financial position resulting from the reduction in operating costs and ongoing modernization efforts. We are pleased with these upgrades, which we believe are a reflection of successful execution since the Gulf Power acquisition closed and which further strengthen Nexter Energy's overall credit position. Similar to other parts of the country, the Florida economy is being impacted by the ongoing COVID-19 pandemic. Recent economic data reflects Florida unemployment rate beginning to increase and a significant decline in consumer confidence. As Florida continues to deal with the impacts of the pandemic, we are encouraged that the trailing seven-day average of new COVID-19 cases has modestly declined in the past two weeks. While it is unclear at this point how severely the economy will be impacted, we believe the strength with which Florida entered this crisis, combined with the continued attraction, of its low-tax, pro-business policies positioned Florida well for a rebound once the worst of the pandemic is behind us. During the quarter, FPL's average number of customers continued its recent trend of strong underlying growth, increasing by approximately 72,000 from the comparable prior year quarter. FPL's first quarter retail sales increased 3.3% year-over-year, driven primarily by a favorable weather comparison. On a weather normalized basis, FPL's retail sales declined by 0.7%, as customer growth was more than offset by a reduction in underlying usage for customers. We continue to evaluate the effects of the pandemic on FPL's retail sales, which are heavily weighted to residential customers, at more than 50%, and we have a very limited exposure to industrial load, at less than 3%. Additionally, since approximately 40% of FPL's load is cooling-related, and therefore important for both comfort and building maintenance, we expect this demand driver to remain relatively stable, especially as we head into the warmer months of the year. Weather normalized retail sales for the past four weeks are down approximately 2% relative to the prior two years, with increased residential sales partially offsetting declines in other classes. However, this underlying usage decline has been more than offset by strong weather. with overall usage in the past four weeks increasing nearly 10% relative to the prior two-year average. While the ultimate impacts of the pandemic on underlying usage cannot be known at this time, we continue to expect that flexibility provided by a reserve amortization mechanism to offset any fluctuation in retail sales or bad debt expense and support a regulatory ROE at the upper end of the allowed band of 9.6% to 11.6% under our current rate agreement. For Gulf Power, the average number of customers increased approximately 1.1% versus the comparable prior year quarter. Gulf Power's first quarter retail sales increased roughly 0.6% year-over-year, as customer growth and an increase in underlying usage per customer were largely offset by an unfavorable weather comparison relative to 2019. Over the last four weeks, Gulf Power's weather normalized retail sales have declined approximately 9% versus the prior two-year average. Similar to FPL, over this period, strong weather offset the decline in underlying usage, and overall retail sales increased nearly 4% versus the prior two-year average. As a reminder, unlike FPL, Gulf Power does not have a reserve amortization mechanism under its settlement agreement to offset the fluctuations in revenues or costs. So any variability will therefore have more impact to Gulf's earnings and ROE than on FPL. As we have often discussed, whether normalization is imprecise and is particularly so when evaluating short periods of time. We are providing our assessment of the changes in load in an effort to be transparent, but caution that these should be considered as indicative and assessed together with the overall changes in usage. Additional details on retail sales at FPL and Gulf Power are included in the appendix of today's presentation. Let me now turn to Energy Resources, which reported first quarter 2020 GAAP earnings of $318 million, or $0.65 per share, and adjusted earnings of $529 million, or $1.08 per share. This is an increase in adjusted earnings per share of $0.11, or approximately 11% from last year's comparable quarter results. As a reminder, last year's first quarter results have been restated to reflect the results of our next-year energy transmission projects, formerly reported in the Corporate and Other segment. New investments, including more than 1,500 megawatts of new contracted wind and solar projects that were commissioned during 2019, added $0.08 per share. Contributions from existing generation assets also increased by $0.09 per share due to an improvement in wind resource and increased PTC volume from our repowered wind projects. Fleet-wide wind resource was at 96% of the long-term average, versus 91% during the first quarter of 2019. Also contributing favorably were Nexter Energy Transmission, where contributions increased by 4 cents versus 2019, and our gas infrastructure business, including our existing pipelines, which increased results by 2 cents year over year. These favorable contributions were partially offset by lower contributions from our customer supply and trading business, which declined 2 cents versus the particularly strong first quarter of last year. All other impacts reduced results by 10 cents per share, primarily as a result of increased interest expense reflecting continued growth in the business and share dilution. As mentioned earlier, Energy Resources Development Team had another strong quarter of origination. Since the last call, we've added 1,590 megawatts of renewable projects to our backlog, including 600 megawatts of wind, 420 megawatts of solar, 457 megawatts of battery storage and 113 megawatts of wind repowering projects. With this quarter's backlog additions and with two and a half years remaining in the period, we are now well within the 2019 to 2022 renewables development ranges that we introduced in the middle of last year. At this early stage, we are tracking extremely well against the total development forecast for this period and our backlog continues to track against the assumptions supporting our previously announced financial expectations. For the post-2022 period, our backlog now includes wind, solar, and storage projects totaling approximately 3,200 megawatts, placing us far ahead of our historical origination at this stage and further supporting energy resources' long-term growth visibility. Beyond renewables, we continue to work with our partners on Mountain Valley Pipeline and with the relevant agencies to resolve the issues related to MVP's biological opinion. We are encouraged by the tone of the oral arguments at the Supreme Court on the Atlantic Coast Pipeline's case related to its Appalachian Trail crossing authorization and remain hopeful that the Fourth Circuit Court's original decision will be overturned, resolving similar issues for MVP. We are also evaluating the recent Montana federal court decision purporting to enjoin the Army Corps of Engineers from issuing permits under the nationwide 12 program. We believe the ruling out of the court is incorrect and anticipate that the federal government will seek to fix the situation rapidly. Assuming a successful resolution along the currently expected timeline of all of these issues, we continue to target a full in-service date for the pipeline during 2020 and expect an overall project estimate of approximately $5.4 billion. Turning now to the consolidated results for NextEra Energy, for the first quarter of 2020, GAAP and income attributable to NextEra Energy was $421 million, or $0.86 per share. NextEra Energy's 2020 first quarter adjusted earnings and adjusted EPS were $1.17 billion and $2.38 per share, respectively. Adjusted earnings from the corporate and other segments were roughly flat year over year. As Jim mentioned, NextEra Energy's current liquidity position is approximately $12 billion, ensuring that we are well positioned to execute on our strategic plans regardless of potential market disruptions. The financing that we have executed year-to-date represent a significant portion of our expected 2020 financing plan, and we remain confident about our ability to execute the financing plan for the balance of the year and beyond. In the near term, we have the positive cash balances helping to ensure ample liquidity as we execute on our current investment programs. Energy Resources currently has commitments for substantially all of its expected 2020 tax equity financings, which we expect to close as the renewable projects are placed in service later this year. The financial expectations, which we extended last year through 2022, remain unchanged. We continue to expect the NextEra Energy's adjusted EPS compound annual growth rate to be in a range of 6% to 8% through 2021, off of the 2018 adjusted EPS of $7.70, plus the accretion of 15 cents and 20 cents in 2020 and 2021, respectively, from the Florida acquisitions. For 2020, we continue to expect that our adjusted EPS to be in the range of $8.70 to $9.20, And as Jim highlighted, we will be disappointed if we are not able to deliver financial results at or near the top end of this range. For 2022, we expect to grow adjusted EPS in a range of 6% to 8% off of the 2021 adjusted EPS, translating to a range of $10 to $10.75 per share. From 2018 to 2022, we continue to expect that operating cash flow will will grow roughly in line with our adjusted EPS compound annual growth rate range. As Jim noted, while our expectations always assume normal weather and operating conditions, as we consider a reasonable range of impacts related to the current pandemic, we feel comfortable with the expectations that we have outlined. As we announced in February, the Board of Nextdoor Energy approved an updated dividend policy for beyond 2020, which is expected to translate to a growth rate in dividends per share of roughly 10% per year through at least 2022 off of a 2020 base. The Board's approval to continue to grow our dividends per share in excess of our expected adjusted earnings per share growth rate is a reflection of the continued strength in earnings and operating cash flow growth at Nexstar Energy, and we remain well positioned to support the dividend policy going forward. Let me now turn to Nexstar Energy partners. which delivered outstanding operational and financial performance for the quarter. First quarter adjusted EBITDA was $294 million, and cash available for distribution, including all distributions from our Desert Sunlight projects in both periods, was $130 million, up 31% and more than 200%, respectively, against the prior year comparable quarter. Including full contributions from the Desert Sunlight projects, Next Energy partners would have achieved CAFTI growth of 187% versus 2019. Contributions from portfolio acquisitions and an improvement in wind resource were the principal drivers of growth. New projects added $54 million of adjusted EBITDA and $44 million of cash available for distribution. For the NEP portfolio, wind resource was 98% of the long-term average versus 89% in the first quarter of 2019. Cash available for distribution also benefited from a reduction in project-level debt service, primarily as a result of the retirement of the outstanding notes at our Genesis project and the receipt of higher year-over-year PAYGO payments. The reduction in project-level debt service was partially offset by higher corporate-level interest expense. As a reminder, these results are net of IDR fees since we considered these as an operating expense. Additional details are shown on the accompanying slide. Yesterday, the Next Energy Partners Board declared a quarterly distribution of 55.5 cents per common unit or $2.22 per common unit on an annualized basis, continuing our track record of growing distributions at the top end of our 12 to 15 percent per year growth rate range. As Jim mentioned earlier, the transactions that Next Energy Partners executed in 2019 allowed it to enter 2020 well-positioned to withstand the recent market turmoil. During 2019, NextEnergy partners raised approximately $1.8 billion through three convertible equity portfolio financings. With low initial coupons, the convertible equity portfolio financings provide more cash to LP unit holders, which we expect will allow NextEnergy partners to acquire fewer assets to achieve the same level of future distribution growth. and therefore also reduce future financing needs. The benefits of these financings are a large reason that Next Energy Partners now has the flexibility to execute on its long-term distribution growth objectives without the need for additional asset acquisitions until 2022. At times of market stress, reduced future asset and financing needs are a tremendous advantage and help further improve Next Energy Partners' ability to execute on its long-term growth objectives. As Next Energy Partners advanced towards its organic growth investments in 2019, it took steps to support the financing for these investment opportunities as well. Through the recapitalization of the Texas pipelines, a project finance facility related to the Mead Pipeline Expansion Project, and its advanced discussions for tax equity financing related to the two wind repowerings, Next Energy Partners expects to finance these accretive investments through attractive sources of long-term capital. Last year, Next Energy Partners also purchased all of the outstanding holding company and operating company notes at our Genesis project. Assuming favorable resolution for our PG&E-related assets, about which we continue to remain confident, the cash flows from the Genesis project can support significant long-term financing capacity. Additionally, following PG&E's emergence from bankruptcy, we expect cash that is currently trapped under Desert Sunlight 250 and 300 projects to be distributed. AS OF THE END OF THE FIRST QUARTER, APPROXIMATELY 48 MILLION OF DISTRIBUTIONS HAVE BEEN RESTRICTED OR WISHELD AT THE PROJECTS. THE GENESIS FINANCING CAPACITY AND THE RELEASE OF THE DESERT SUNLIGHT TRAPPED CASH ARE ADDITIONAL POTENTIAL SOURCES OF CAPITAL AND LIQUIDITY FOR NEXTER ENERGY PARTNERS. FINALLY, OVER THE LAST YEAR, NEXTER ENERGY PARTNERS REVOLVING CREDIT FACILITY WAS UPSIZED BY $500 MILLION TO $1.25 BILLION AND THE TERM WAS EXTENDED OUT TO 2025. This incremental liquidity further supports Next Energy Partners' financing position and provides flexibility in how NEP executes on its long-term growth objectives. Prudent capital management is a hallmark of our approach to how we manage all of our businesses. As a result of the actions taken over the past year, we believe Next Energy Partners is particularly well positioned to achieve its long-term growth expectations. Let me now turn to Next Energy Partners' expectations, which remain unchanged. including full contributions, PG&E-related projects, year-end 2020 run rate cash available for distribution is expected to be in a range of $560 million to $640 million, reflecting calendar year 2021 expectations for the forecasted portfolio at the end of 2020. Excluding all contributions from the Desert Sunlight projects, Next Energy Partners continues to expect year-end 2020 run rate for CAFTI to be in the range of $505 million to $585 million. Year-end 2020 run rate adjusted EBITDA is expected to be in a range of $1.225 billion to $1.4 billion, which assumes full contributions from the projects related to PG&E as revenue is expected to continue to be recognized. Similar to NextEra Energy, while our expectations always assume normal weather and operating conditions, As we consider a reasonable range of impacts related to the current pandemic, we continue to feel comfortable with these expectations. As a reminder, all of our expectations include the impact of anticipated IDR fees as we treat these as an operating expense. From a base of our fourth quarter 2019 distribution per common unit at an annualized rate of $2.14, we continue to see 12% to 15% growth per year in LP distributions AS BEING A REASONABLE RANGE OF EXPECTATIONS THROUGH AT LEAST 2024. WE EXPECT THE ANNUALIZED RATE OF FOURTH QUARTER 2020 DISTRIBUTION THAT IS PAYABLE IN FEBRUARY 2021 TO BE IN A RANGE OF $2.40 TO $2.46 PER COMMON UNIT. AS I PREVIOUSLY NOTED, EXTERNITY PARTNERS NOW EXPECT TO BE ABLE TO ACHIEVE ITS LONG-TERM DISTRIBUTION GROWTH EXPECTATIONS WITHOUT THE NEED FOR ADDITIONAL ASSET ACQUISITIONS UNTIL 2022. In summary, and as Jim highlighted, we continue to believe that despite the ongoing challenges in the market and the economy, both NextEra Energy and NextEra Energy Partners continue to execute and maintain their excellent prospects for growth. We continue to remain enthusiastic about our future and are focused on delivering shareholder value going forward. That concludes our prepared remarks, and with that, we will open up the line for questions.

We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Julian Doolborn Smith with Bank of America. Please go ahead. Oh, it looks like we're going to go with Char Prezzo with Guggenheim Partners. Please go ahead.

Hey, guys. Good morning.

Good morning.

So a couple of questions here. You know, first on the regulatory side, you know, we've seen commissions get a bit challenged in 2020 proceedings. They're delaying schedules. In some states, the process to reengage is kind of open-ended. I know you have one of your peers is looking to file in Florida later this year, and you guys aren't planning to file a GRC until early next year, combining the two entities. That said, you know, you guys are in the process of preparing, you're fact-finding, you're meeting with various stakeholders within and outside of NextEra. Are you seeing any sort of COVID-related delays, especially as you're currently setting up to file a rate case in early next year?

Char, I appreciate the question, and, of course, regulatory, any sort of procedures and questions that we have in front of the regulators are top of mind to us. But as we've highlighted over the last couple of months and very typical with prior preparation, our focus for this year ahead of our potential filing at the beginning of next year is really preparation and laying a lot of groundwork. So at this stage in April, we've got a lot of time between now and year end and really into the beginning of next year to evaluate how things have changed and, you know, adapt accordingly. But at this point, our team's focus is very much on the preparation, and we continue to progress well on that.

Got it. And then just on NEAR, obviously a very solid addition to the backlog, and certainly you and Jim gave a pretty good, you know, development landscape in the prepared remarks. But are you sort of seeing any hesitation on the part of counterparties? Does the current economic backdrop kind of deteriorate some of these counterparties? And you still have about four and a half to five gigawatts that are waiting for PPAs over the next couple of years. So I'm just curious if you're seeing any kind of counterparties bulk up.

So we're very pleased with where we are. Obviously highlighted in the prepared remarks that we are now well within the range for the development expectations that we laid out last year, which at this stage in progression towards the end of 2022, we are very well positioned to execute on everything that we've laid out. More specifically in the last couple of weeks, as we also highlighted in the prepared remarks, John and the energy resources team have executed terrifically well, and many, if not most, of those contracts that we highlighted have been signed since the pandemic was starting to emerge and ultimately on the top of mind of our customers. So if you think about the backdrop of why that might be, renewables are the least cost form of generation and in many cases are far cheaper than the alternative form of generation of continuing to operate very inexpensive, or excuse me, very expensive and inefficient coal and some nuclear facilities. And our customers will save their customers money when they turn those plants off and replace them with renewables. So we would expect that as our customers focus on what's best for their customers, they will continue to continue to want to build renewables into their portfolio. And we're very well positioned to execute.

Got it.

And maybe I just want to share, this is John, I may just add on to that. We are seeing just a terrific development environment in front of us, you know, for all the reasons that Rebecca mentioned. And the fact that we buy cheaper, we build cheaper, we operate cheaper, we have the best development skills in the industry. Customers, more than anything right now, want confidence and certainty. that a project is going to get built so we're actually seeing more opportunities come our way and given that we compete against a lot of small players in both solar and wind access to capital and a balance sheet which we have are extremely important and are something that we plan to leverage to create even more opportunities going forward so actually the current environment has created a better environment for us.

Perfect. And then just maybe, Jim, just one strategy question for you. I know you love to address these. There's obviously been a lot of valuation dispersions in this space. You know, Jacksonville and Santee Cooper looks like they're done. I mean, you've been highlighted in media with potential interest in Kansas and Missouri. Do you have any sort of refreshed thoughts, especially given the recent lost opportunities I kind of just mentioned? as you sort of think about consolidation?

First of all, just to address Sandy Cooper for a moment, Sandy Cooper is by no means done. I think you all saw the Speaker of the House sent a letter to Sandy Cooper calling them a rogue agency. The governor wants to sell them. It's not done. The disagreements in the Senate around what to do with Sandy Cooper led to a bit of a standoff around the budget in the middle of the pandemic. Obviously, it's a topic that is quite hotly debated in South Carolina, but I would say by no means is Sandy Cooper done. There remains a lot of lot of energy still behind wanting to sell Santee Cooper so just strategically overall from an M&A standpoint I always like to just remind remind remind everyone always what are what are you know kind of gating dating elements of anything that we would do you know it has to make sense strategically has to be significantly a creative You all know how we finance these things historically. It's been with very little risk. I'm not a big believer in financing these things in a way that either takes risk or puts the balance sheet at risk. A strong credit rating is really critical to us and critical to our strategy. You know, all those things remain the same. I think what you're going to see in terms of the environment, obviously, is with the uncertainty in the financial markets and the uncertainty with the economy that's been driven by the pandemic, that I think you're going to see counterparties, you know, take a pause, right? I mean, that's a natural reaction to the environment that we're in. But, you know, our Our strategic thinking around it remains unchanged, and our approach to it remains unchanged in that it will be – has to be strategic, has to be accretive, has to be consistent with a very strong balance sheet. Got it. Congrats, guys, on these results. Congrats again.

Thank you.

My next question will come from Steve Fleischman with Wolf Research. Please go ahead.

Yeah, good morning. Just a couple questions on NEP. Initially, the extension of not needing any new assets through 20, I guess, through the end of 21 to meet your dividend growth targets, is that also true for any equity financing through then?

Yes, essentially, Steve. There wouldn't be any need. Obviously, we have the existing convertible equity portfolio financings and the convertible debt that would potentially convert into equity units later this year. But there's no new issuances required. And we highlighted in the prepared remarks that we have significant liquidity far in excess of what we would need, particularly since we don't need acquisitions to meet those distribution growth targets. until 2022.

And then secondly, I think there was a comment, and I guess it was Jim's slide, that the private infrastructure capital demand for high quality, you know, clean energy assets provides attractive financing source even in this environment, regardless of market conditions. Maybe you give a little more color on your thought process there.

Yes, Steve, as you well know, one of the things that we've been particularly attuned to over the last, I'll call it 18 months, is that there is a lot of private infrastructure capital. And the evidence of that is apparent with the convertible equity portfolio financings that we've executed since that time. And since the, you know, I'll just call it the pandemic timeframe. So in the last couple of months, there's continued to be a significant amount of inbound interest and continuing conversations with a number of of those parties to provide capital to NEP in various forms. So we have not seen any changes in interest of moving forward and continue to be very confident in our ability to leverage those type of capital resources as we move forward. Now, we're fortunate in a position that we don't need to do anything, as we highlighted, until 2022. But we, of course, will continue to be opportunistic. And to the extent that there are good opportunities for NEP that are attractive and accretive to NEP unit holders, we may well take advantage of that.

Okay. And then a last question just on renewables overall. So I think if I understood right, you're seeing the same amount of demand for growth. So no change there. John, you mentioned the fact that people maybe want a stronger counterparty these days. But then the other thing I think I heard someone say was, or it might have been Jim, say the opportunities might be there more for acquisitions or projects that people struggle to get done in time. Could you maybe talk on that last point and how meaningful that opportunity could be?

Yeah, Steve, I think it could be quite meaningful. If you look back at 08 and 09, we had a lot of opportunities in that in that time where you had developers who didn't have great access to capital, and we were a source of capital for them. I just want to reiterate something that John said. If anything, the renewable market is better right now than I ever expected it to be. I just got through with – a review of our entire portfolio of projects and activity last week. And honestly, I was really struck by the acceleration of activity that we're seeing. And so it is full speed ahead on that front. And I was very encouraged to see that. And it was really, as we said in the prepared remarks, a real testament to the strength of our development team and the strength of our pipeline and the strength of our people and our relationships. Okay, thank you.

Our next question will come from Julian Jones Smith with Bank of America. Please go ahead.

Hey guys, thanks for the question. Just coming back to the first part with the Florida utilities quickly. When you think about the reserve amortization, the available balance here, the trajectory for load as you see it, and again, I understand numerous caveats. I think I heard it in the commentary, but just want to clarify confidence that the balance that you have for this year will suffice. And then perhaps more importantly and critically, as you look towards whatever that normalization is in subsequent years and array case cycle, How do you think about implementing something like a reserve amortization subsequently again as you look at the post-rate case periods here to minimize some of the earnings at all?

Okay. Let me start with the reserve amortization. We highlighted in the remarks that the balance is now at $744 million, and we continue to have confidence that cost containment and all of the factors that are pluses and minuses to that reserve amortization balance will continue to be sufficient for us to operate under the settlement agreement through the end of 2021. So really no change to our expectations that we, again, would file a rate case in 21 for new rates effective in 2022. You know, reserve amortization has been, we think, a very constructive concept in Florida regulation, particularly FPL over a number of different settlement agreements and ultimately rate case outcomes. But it has come about from settlements, and so it's not something you would assume that we will have going forward, but we think it has been very good for customers because it's been able to provide long-term rate stability for them through a variety of conditions, including the one that we find ourselves in today. So we are very pleased with the constructive nature of regulations that we've been operating on, and again, particularly so for the benefit of customers.

Got it. Excellent. And then coming back to the renewable side of the business, obviously you guys have an incredible amount of confidence given the backdrop here. You're not seeing even any slippage in timeline, especially as you think about the C&I customers here. I know the gross amount of backlog that you guys are talking about seems pretty confident, but even just execution and prospective backlog that you would conceivably add in 22, that is even staying relatively firm. And I'll leave it there.

Yeah, no, no, no, no drop off, no slow down. And one of the things that we were able to add this year or this quarter was 600 megawatts to 2022 and beyond of wind, which, you know, is just a terrific head start that we're only in the, you know, here in the first quarter of 2020. So just tons of time to continue to be able to work You know, the wind development pipeline over the next four years with the PTC being essentially at 60% through 2024, just a lot of demand, a lot of folks that own peakers, a lot of folks that own coal, very aggressively looking at renewable as an option with ESG as a tailwind. Knowing that even if we are in a recessionary environment, being able to pivot to renewables not only brings a clean energy story, but it also makes their economies more competitive and lowers bills for customers at a time they need it most. And so that's what's really driving demand.

I was just going to add to that something about the, you know, one of the important reasons why we continue to be confident about our ability to reach our CODs, keep our projects on track and on budget, is really something we've highlighted for years now, our focus on our supply chain and developing relationships with our vendors, strategic partners in many cases. As we went into this year knowing that it was a significant construction development year at all of our businesses, we had intense focus on our supply chain. We always do, but even more so this year with how complex and intertwined it may be with how many priorities and deliverables we have. and entering into that posture and facing the circumstances we find ourselves in now positioned us well to manage through these. We pick top quality suppliers where we are a significant customer to them, and we've had many instances over the last couple of weeks where we've worked closely with them to ensure that our projects stay on track and on budget. And I don't think that should be underestimated. Focusing on long-term total cost of ownership and ability for our suppliers to deliver is really paying off well for us in this type of environment.

Excellent. Super last quick clarification. On the NWP-12 permit you guys alluded to, it seems like you've got pretty good confidence that they're going to narrow that back to just Montana. But process-wise, make sure I've got it right there on your confidence level.

So, Julian, I think it's premature to say what's going to happen with that. I think it's obviously a condition to – it being dealt with quickly is a condition to us being able to deliver the pipeline this year. We think the ruling was incorrect, and we think government is going to aggressively try to try to correct it. That said, it's still early on. We haven't really gotten a lot of feedback yet from the government about what their approach is going to be. And we are continuing to evaluate it. And I think it's early days, honestly, Julian, is what I would say to you right now on that. And if our prepared remarks led you to believe that we had confidence that it's going to be done, that it's going to get resolved quickly. You know, that was not what we were trying to say. We were trying to say that for us to build the pipeline this year, it needs to be resolved quickly. And it remains to be seen whether it will be. And it's something that we as a team, along with our partners, are very focused on working with the government to get it resolved and get it resolved quickly.

Excellent. Thank you, guys. Best of luck.

Stay safe.

Our next question will come from Steven Berg with Morgan Stanley. Please go ahead.

Hi, good morning.

Morning, Steven.

I wanted to see if you had a strong view on the potential for further federal support for clean energy. I'm thinking just more broadly as part of the stimulus efforts that are underway. Do you see anything that might translate into concrete additional support?

So, Steven, it's Jim. I think it's too early to tell. I think there's certainly some interest from the Democrats to include additional clean energy support in another stimulus bill, potentially around, you know, with a focus on infrastructure. But as you've seen over the last several weeks, things are extraordinarily fluid. Washington, and I would just say it's too soon to tell. I think it is something as an industry that we need to be very thoughtful about in terms of how we approach it and have it be truly focused on stimulus and focused on the impacts of the pandemic and make sure that that that's the focus of any of the efforts that go on in the industry. So, you know, we're staying obviously very close to it, and, you know, time will tell. But as I said, I think it's a little early and things are quite fluid.

Understood. Very fair. And then just one last one. You've given some good info on power demand impacts from COVID-19. I wondered if you could just speak to the customer class impacts. There's a lot of questions about the magnitude of uplift in terms of residential demand versus the downward movement for commercial industrial. I'm curious sort of what you're seeing on the residential side, if you're able to share that.

Yeah, Stephen, one of the things that we did, we put it in the appendix, slide 25, if you have a chance to take a look at it. is to give you some sensitivities for the revenue impacts for a percentage, you know, 1% change in sales. Also, the breakdown of our composition of mix between residential, C&I, commercial, and then separately industrial. Obviously, our load mix at FPL, which is the significant majority of the regulated load that we have in our business, is heavily weighted towards residential and small and medium commercial businesses. We have seen pickup in residential, as we highlighted, and a slight downtick in commercial. But as I also highlighted in the prepared remarks and very consistent with what we've said to you over a long period of time, our ability to dissect the impacts from weather versus underlying usage are pretty good over a long period of time, but in short, discrete periods of time are more challenging particularly when weather has a significant impact on load. And in these last couple of weeks, since you would say that there have been significant impacts from pandemic and officially the stay-at-home orders here in Florida were in effect, we've had very favorable weather. So it's hard for us to dissect it. So we erred on the side of providing you some sensitivities. so that you can make an assessment on your own as to what you think might happen and what that impact would be in terms of cash revenues at FPL. And again, to put a finer point to it, remember with reserve amortization, that results in negligible or no impact to the extent that we have reserve amortization available to us on an earnings basis. This would be just a cash impact. So to give context for what happened in the last major disruption to load, which is the 2008-2009 recession, obviously everywhere, but including here, of course, in Florida, that was about a 4% to 6.5% effect to overall load demand, and that was over a course of a year, and obviously we're mid-year this year. So that gives you some guideposts for how to think about it from the way that we've approached it so far.

Understood. Yeah, and you've got a lot of insulation to the bottom line from the impact from COVID, so I'll leave it there. Thank you very much.

Thank you, Stephen.

Our next question comes from Michael Weinstein with Credit Suisse. Please go ahead.

Hi, guys. Good morning. Hey, good morning. To what extent is wind repowering at NEP responsible for contributing to the ability to avoid drop-downs over the next year and a half or two years?

Michael, it's certainly a positive. I think we announced these repowering opportunities at or near the investor conference last year and have planned for it in terms of how we would finance it and have the tax equity lined up to be able to finance that going forward. So it's certainly a positive that will impact results for this year. It's about $25 million worth of CAFTI or so, as we've previously highlighted. So certainly a contributor. Also a contributor were the other acquisitions that NEP made last year, as well as the recapitalizations that we executed on. So it's the confluence of acquisitions both from energy resources as well as third parties, as well as the organic opportunities. So it's a threefer in this case.

And I think last quarter you also talked about the possibility of additional in 2024 due to the PTC extension. Have you ever quantified any of that, what that opportunity may be?

We haven't talked about additional repowering opportunities with respect to Next Energy partners. As we previously highlighted, From a repowering opportunity, we thought the opportunity was particularly strong through the end of 2020 to take advantage of the full 100% PTC re-upping. But actually, this quarter, we're announcing some repowering opportunities in 2021 that will take advantage of the 80% PTC. So it's a very positive opportunity for us.

Right. Gotcha. One last question about natural gas versus renewables. I mean, you know, natural gas has gotten a lot cheaper. I'm just wondering how do renewables stack up on an LCOE basis these days against fossil fuels?

I'm sorry, Michael. How does the LCOEs for renewables stack up against?

Yeah, against fossil fuels, right? Fossil fuel prices have really come down, right?

They definitely have come down, but you would hope that someone making a long-term planning decision will think about prices over a long period of time. And as we highlighted for FPL's 10-year site plan, and we looked at what the costs are that we're anticipating at Florida Power and Light and Gulf Power together, solar paired with battery storage are the least cost form of generation. And we've kind of put our put all that to pen to paper and included that in our 10-year site plan and have now removed the two combined cyclone natural gas plants that we had previously in the forecast in the mid-2020s as a reflection of where we think costs are. From our customer standpoint, again, they operate in many different jurisdictions. In some cases, wind will be particularly attractive. In some cases, it's solar. But if you keep in context the dollar per megawatt hour cost that we've continued to provide, which with incentives are for wind anywhere in the teens to very low 20s for wind, even in low wind resource areas, and then for solar in the $30-plus megawatt hour with incentives, and then post-incentives continue to be very attractive in that $20 to $30 and $30 to $40 megawatt hour range. So very cost competitive, even with where we think the fuel complex pricing is. But also remember that coal and some nuclear facilities are our primary comparisons, and that hasn't changed dramatically.

Yeah, and Michael, this is John. One thing I would add to that is remember as oil prices have come down, rig counts have come down in the Permian, which means there's a lot less associated gas, which has really actually helped natural gas prices. and we've seen a bit of an uptick in natural gas prices, particularly recently. And so when we are out originating new renewables, we really have not seen competition from gas-fired units for that reason. They still remain kind of in that $30 to $40 a megawatt-hour range versus wind, which is still in the teens in most parts of the country, and then solar kind of in that mid-20 range. So very, very competitive when you look at renewables versus gas-fired generation. And then the last thing I'd add is just peakers. Remember, gas-fired peakers not only are targets for new renewables, but also for battery storage. Battery storage costs have come down such that, you know, we mentioned the large standalone storage build that we have, the billion dollars going in in 21. there is a significant opportunity in almost every part of the country where batteries are now more economic than gas-fired peakers, even at today's natural gas prices.

Good news. Thank you.

Our last question will come from Michael Lapides with Goldman Sachs. Please go ahead.

Thank you guys for taking my question. I don't know if this one's for Jim or John. And I know you commented that your own renewable development plans remain on track, on schedule, and finance. You have a great lens into the industry overall, obviously. Can you talk about where you think for the industry, maybe not for NextEra, where the biggest challenges are occurring? Are they in financing of projects, meaning tax equity markets? Are they in the supply chain? Is it more wind versus solar supply chain issues? Is it more kind of keeping sites or potentially missing safe harbor dates? Can you just talk about the industry perspective, what you're seeing in the competitive landscape, even if these aren't things that aren't necessarily impacting next era?

Sure. I think the first one would be supply chain, and Rebecca talked about that for a minute. But Given the size of our spend, you know, across the complex, being right around, you know, north of $13 billion, we are almost always our supplier's, you know, largest customer if we're not their second largest in the world. So if there are minor disruptions that come up, we're able to pivot to other manufacturing facilities that that particular vendor may own. And so we don't see the same impact. that perhaps a smaller player, whether it's in wind and solar, would see. And so while they may see supply chain disruptions, we don't just given the size and the sophistication and the buying power that we have. So that's the first one. Supply chain is something that I would look at for other smaller players. The second one is access to capital. You know, again, you know, we always get first dibs and first allocations on tax equity financing. In the script remarks, I think we already said we have all of our tax equity needs for 2020 fully allocated. That is not the case necessarily for smaller developers. Smaller developers might struggle, particularly to the extent that banks have less amount of taxable income, notwithstanding the five-year net operating loss carryback that was passed, I think, in the first or second federal restructuring. So we're very well positioned from a tax equity standpoint, whereas maybe smaller developers might not be. And so I think for those two reasons, it could create Project M&A opportunities for us where some of these smaller developers need a rescue plan because they're going to be running up against issues at the end of the year. I think they also... It's not only on execution in terms of meeting year-end CODs where we don't see issues and we have the ability to navigate around them, but as customers now are looking for who to select to build renewables for them going forward, knowing that there's a PTC declining clock, there's an ITC declining clock, they want certainty. They want confidence that that developer is going to be around to be able to actually deliver. And so in RFPs and just in customer interactions, we're starting to see that theme play out more and more. And so we feel really good about our ability to execute, and we feel very bullish about our origination activities going forward for those reasons, which might not be the case of what you would hear from a smaller developer for those reasons.

John, thank you for that one quick follow-up. In the supply chain, when you're seeing it kind of across the industry, obviously not impacting you guys, are the issues greater for smaller wind developers or smaller solar? Like where are you seeing the bottlenecks within the industry more on the supply chain side?

I think probably a little bit of both. You know, it depends on where they're sourcing from and which OEM, you know, that they're using. Some OEMs have – more alternatives to parts of the country that are less, parts of the world that are less affected, but I think you're going to see disruptions on both wind and solar for smaller developers. You know, we have always made selections around our OEM providers and around our panel providers, which are pretty diverse. Inverters, things of that nature that give us a lot of flexibility, but a smaller developer may be beholden to one particular OEM that might not have the same amount of flexibility or one supplier, given how small their build is, that might have a disruption without the ability to pivot to somebody else. Got it. Thank you, John. Much appreciated. You're welcome, Michael. Thank you.

This concludes our question and answer session. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.