NextEra Energy (NEE) and Florida Power & Light (FPL) face risks from extensive regulation, potential inability to recover costs, regulatory decisions, changes in tax laws, litigation, project delays, declining customer usage, weather events, terrorism, insurance limitations, fluctuating energy commodity prices, credit risk from customers and counterparties, IT system failures, customer data breaches, derivative instrument volatility, and limited liquidity in OTC markets. Nuclear generation involves environmental, health, and financial risks, potential incidents, and regulatory requirements. Liquidity and capital needs are also at risk from market disruptions.
Financial Upside
NEE and FPL have significant operating revenues, primarily from electricity sales. Investments in plant and equipment, new generation facilities (wind, solar, battery storage), and gas infrastructure projects are expected to drive future growth. Favorable commodity prices, successful project completions, and regulatory approvals can increase earnings. Gains from asset disposals and favorable non-qualifying hedge activity are also potential sources of upside.
