NextEra Energy, Inc. (NYSE:NEE) Q2 2016 Earnings Conference Call - Final Transcript
Jul 27, 2016 • 09:00 am ET
Earlier this month, FPL was honored to receive the J.D. Power award for ranking highest in residential customer satisfaction among large utilities in the South.
We work hard to continue to improve service for our customers, and are proud that FPL's 2016 score is our highest ever in the study's history. As a reminder, FPL filed its formal request on March 15 for rate relief, beginning in January 2017, following the expiration of our current settlement agreement. And I will provide an update on the proceedings thus far in just a moment.
Energy Resources continued to benefit from strong contributions from new investments, and this was the principal driver of second-quarter growth. We remain poised for another big installation year at Energy Resources, and our major activities remain on track to support delivery of approximately 2,500 megawatts of new contracted renewables projects in 2016.
If our development program goes as expected, Energy Resources and NEP's combined renewables portfolio will reach approximately 16,000 megawatts by the end of this year.
During the quarter, the IRS provided start-of-construction guidance for the wind PTC. The guidance provides for a start of construction Safe Harbor of up to four years, increased from the two-year Safe Harbor formerly put in place for the 2014 PTC.
While there is some uncertainty on the impact of timing of customer demand as a result of this increased tenure, we believe that the longer-term impact further strengthens what we already consider to be one of the best environments for renewables development in our history.
In addition, the IRS also provided guidance for the repowering of wind projects. And we are pleased to announce that we are currently pursuing repowering opportunities at two of our existing Texas wind projects for roughly 327 megawatts to be completed by the end of 2017.
We continue to believe that the longer-term fundamentals for North American renewables growth have never been stronger and that the capabilities of our development organization, together with our purchasing power, scale in operations, strong access to capital, and cost of capital advantage, place us in an excellent strategic position to capture even more opportunities going forward.
NextEra Energy Partners' portfolio additions over the last year drove substantial growth in cash available for distribution. In turn, the NEP Board declared a quarterly distribution of $0.33 per common unit, or $1.32 per common unit on an annualized basis.
NEP's strong performance was underscored by an approximately 285 megawatt acquisition from Energy Resources earlier this month. Included in the acquisition are the Cedar Bluff and Golden Hills wind energy centers, each commissioned in 2015 with GE technology. These high-quality wind projects are expected to provide an attractive yield to investors.
At the same time, the utilization of debt and cash on hand to fund the purchase price reflects the Partnership's flexible approach to financing and allows NEP to be opportunistic as to future growth in 2016.
Overall, we are very pleased with the results for the quarter. We believe that both NextEra