Houston—The Biden administration's infrastructure and clean energy plans offer significant opportunities for NextEra Energy, but it is too early to determine how Biden's tax plans might affect the company, Chairman and CEO Jim Robo said April 21.
"There's obviously a lot in [Biden's] plan that's very positive from a renewable standpoint," Robo said in a first-quarter earnings call. "We are excited to work with the administration on the plan that I think is really going to accelerate the decarbonization of the US economy ... over the next several years."
NextEra Energy already has a large renewable portfolio. Its NextEra Energy Resources merchant subsidiary has 15.6 GW of wind generation scattered across the US, primarily in Texas, the Midwest and the West. It also has about 3 GW of solar scattered mainly through the central and Southwest US.
NextEra Energy Partners unit has 4.7 GW, primarily in the Midwest, West and the South, and it recently announced plans to acquire 391 MW of wind generation, mainly on the West Coast. NextEra Energy Partners also has 1.3 GW of solar, mainly in the West.
NextEra Energy's Florida Power & Light subsidiary has about 2.6 GW of solar, which the company said is more than any other utility in the country.
According to a presentation April 21 by a Husch Blackwell attorney who monitors federal policy issues, President Joe Biden's infrastructure plan includes the following:
In effect, a national renewable portfolio standard with a goal of net-zero carbon dioxide emissions by 203510-year extension and phase down of renewable power investment and production tax creditsInstallation of 500,000 electric vehicle charging stations by 2030Tax credits for new transmission$100 billion for new transmissionSpending more on clean energy development, including green hydrogen and carbon captureTax plan uncertaintyBiden's Made In America Tax Plan would increase the corporate tax rate from 21% to 28%, which Robo conceded would be a "headwind."
"On the tax front, I think, obviously, that there are a lot of puts and takes with taxes, particularly in a company that has both utility assets as well as renewable assets, and we're working through it," Robo said, adding that he is "not particularly worried" about the increased corporate tax rate "in the context of all the other things that would be positive for our company if the infrastructure bill gets passed."
Robo acknowledged that the narrow Democratic majority in both houses implies that "none of this is going to be easy to get done."
Quarterly earningsNextEra Energy reported first-quarter net income of $1.666 billion, or 84 cents a share, compared with $421 million, or 21 cents a share for Q1 2020, on a GAAP basis. On an adjusted basis, NextEra Energy reported Q1 earnings of $1.33 billion, or 67 cents a share, compared with $1.17 billion, or 59 cents a share in Q1 2020.
Adjustments exclude the effects of non-qualifying hedges, NextEra Energy Partners limited partnership net investment gains, the gain on disposal of a business, and changes on unrealized gains and losses on equity securities.
The adjusted earnings growth reflected strong performance by FPL, which earned $720 million, or 37 cents/share, in the first quarter, compared with $642 million or 33 cents a share for Q1 2020. This growth was mainly driven by a 10.8% increase in regulatory capital deployed in the region, and the average number of customers increased by about 71,400 compared with Q1 2020, the company said.
NextEra Energy Resources reported a Q1 2021 contribution to net income of $491 million or 25 cents/share, compared with $318 million, or 16 cents/share for Q1 2020.
NextEra Energy's outlook remained unchanged, with adjusted earnings per share ranging from $2.40 to $2.54 in 2021, raising to $2.55 to $2.75 for 2022 and $2.77 to $2.97 in 2023.
