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NextEra Energy to buy 2 utilities, 1.4GW power plants from Southern Company for $6.4bn

Staff Writer |
NextEra Energy announced it has entered into definitive agreements with Southern Company to acquire Gulf Power, Florida City Gas and its ownership interests in the Oleander and Stanton natural-gas generating plants located in Florida in transactions valued at approximately $6.475 billion, including the assumption of approximately $1.4 billion of Gulf Power debt.

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As one of the nation's largest and cleanest electric companies, Florida Power & Light Company (FPL) serves nearly five million customer accounts or an estimated 10 million people across nearly half of the state of Florida.

FPL's typical residential customer bill is approximately 20 percent below the other Florida investor-owned utilities and nearly 30 percent below the national average.

In 2017, FPL delivered its best-ever full-year period of service reliability and was recognized as being the most reliable electric utility in the Southeast.

FPL also has a proven track record of making smart investments in modernizing its power generation fleet and strengthening its energy grid.

NextEra Energy's culture of continuous improvement and focus on smart investments that reduce operations and maintenance (O&M) expenses has helped drive significant productivity enhancements, which has resulted in FPL's industry-leading cost position.

For the past four years, FPL has had the lowest non-fuel O&M cost per kilowatt-hour in the country.

NextEra Energy expects the transactions to be immediately accretive to earnings upon closing and $0.15 and $0.20 accretive to its 2020 and 2021 adjusted earnings per share (EPS) expectations, respectively.

As a result, upon closing of the transactions, NextEra Energy expects its 2020 adjusted EPS expectations to be in a range of $8.70 to $9.20 and its 2021 adjusted EPS expectations to be in a range of $9.40 to $9.95.

NextEra Energy intends to finance the approximately $5.1 billion purchase price through the issuance of new debt.

NextEra Energy has reviewed the transactions with the credit rating agencies and, based upon these discussions, following the financing of the transactions and as a result of the expansion of the company's regulated operations, NextEra Energy is expected to continue to maintain $5 billion to $7 billion of excess balance sheet capacity, while maintaining its current strong credit ratings.

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