Good morning and welcome to the NextEra Energy and NextEra Energy Partners First Quarter Earnings call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Jessica Jeffery, Director of Investor Relations. Please go ahead.

Thank you. Good morning everyone and thank you for joining our first quarter 2022 combined earnings conference call for NextEra Energy and NextEra Energy Partners. With me this morning are John Ketchum, President and Chief Executive Officer of NextEra Energy; Kirk Crews, Executive Vice President and Chief Financial Officer of NextEra Energy; Rebecca Kujawa, 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 Silagy, Chairman, President and Chief Executive Officer of Florida Power and Light Company. Kirk will provide an overview of our results and 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 factor section of the accompanying presentation or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found on our websites. 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. As a reminder, Florida Power and Light completed the regulatory integration of Gulf Power under its 2021 base rate settlement agreement and began serving customers under unified rates on January 1, 2022.

Thank you, Jessica, and good morning everyone. NextEra Energy delivered strong first quarter results and is off to a solid start to meet its overall objectives for the year. Adjusted earnings per share increased by 10.4% year-over-year, reflecting successful performance across all of our underlying businesses. During the quarter, we were honored that NextEra Energy was again ranked number one in its sector of Fortune Magazine's world's most admired companies list for the 15th time in 16 years. Our culture of commitment to excellence in everything we do and our core values are what allow our team of approximately 15,000 employees to continue delivering best-in-class value to our customers and shareholders while helping build a sustainable energy era that is affordable and clean. FPL increased net income by approximately $98 million from the prior year comparable period, which was driven by continued investment in the business for the benefit of our customers. During the quarter, FPL successfully placed in-service approximately 450 megawatts of additional cost-effective solar projects that are recovered through base rates as part of its new four-year settlement agreement, which as a reminder became effective on January 1st of this year. As a result, FPL has now completed on time and within budget all of its planned solar build with 2022 in service dates. FPL now owns and operates more than 3,600 megawatts of solar, which is the largest solar portfolio of any utility in the country. FPL's modernization investments since 2001 have saved customers more than $12 billion in fuel costs, and its customers have benefited from a 45% improvement in reliability over the last decade. FPL's other major capital investments are progressing well, including the North Florida Resiliency Connection and the highly efficient approximately 1,200 megawatts Dania Beach Clean Energy Center, both of which are scheduled for completion later this year. By executing on smart capital investments such as these and running the business efficiently, FPL continues to deliver its best-in-class customer value proposition of clean energy, low bills, high reliability, and outstanding customer service. At Energy Resources, adjusted earnings per share increased by nearly 7% year-over-year, primarily driven by favorable performance in our existing wind portfolio. In terms of new origination, Energy Resources had another strong quarter of renewables and storage origination, adding approximately 1,770 net megawatts to our backlog since the last call bringing our backlog total to approximately 17,700 megawatts. Included in the additions this quarter is approximately 1,200 net megawatts of wind projects, which is the second largest quarter of wind origination in our history. In the midst of inflationary pressures and uncertainty in the solar supply chain, our continued origination success in this environment is a testament to the strength of Energy Resources' competitive advantages and the ongoing demand from our customers for low-cost renewables and storage. At this early point in the year, we are very pleased with our team's execution and progress at both FPL and Energy Resources. For the first quarter of 2022, FPL reported net income of $875 million, or $0.44 per share, an increase of $0.05 year-over-year. Regulatory capital employed growth of approximately 11.3% was a significant driver of FPL's EPS growth versus the prior year comparable quarter. FPL's capital expenditures were approximately $2.2 billion for the quarter. We expect our full year 2022 capital investments at FPL to be between $7.9 billion and $8.3 billion. FPL's reported ROE for regulatory purposes will be approximately 11.6% for the 12 months ending March 2022. Under our rate agreement, we record reserve amortization entries to achieve a predetermined regulatory ROE for each trailing 12-month period. In this case, the 11.6% that I previously mentioned. While we initially expected to earn below our targeted ROE in the early part of 2022, a combination of warm weather, operational efficiencies, and outstanding execution by the team resulted in us achieving our targeted 11.6% ROE while using $124 million of reserve amortization available under our current settlement agreement during the first quarter. Turning to our development and planning efforts, FPL recently filed its Annual Ten-Year Site Plan that presents our recommended generation resource plan through 2031. The recommended Ten-Year Site Plan includes roughly 9,500 megawatts of new solar capacity across our service territory over the next ten years, which would result in nearly 20% of FPL's forecasted energy delivery in 2031 coming from solar generation. This planned solar build-out includes nearly 1,200 megawatts of base rate solar projects inclusive of the approximately 450 megawatts placed in service during the first quarter that we plan to build over the next two years. In addition, it includes approximately 1,800 megawatts under the SoBRA mechanism of our settlement agreement, approximately 1,800 megawatts of SolarTogether community solar projects that we expect to construct over the next four years, as well as roughly 4,700 megawatts of additional solar after 2025, that is subject to approval by the Florida Public Service Commission. FPL continues to deliver what is one of the largest-ever solar expansions in the U.S. Compared to current levels, the recommended plan projects an approximately 65% increase in zero-carbon-emissions electricity produced by the FPL system over the next decade, largely as a result of FPL’s continued rapid expansion of solar energy through the execution of its 30-by-30 plan, which we now expect to complete by 2025. This projected increase in zero carbon-emissions generation is significant for a utility system of our size, especially when considering that our total amount of energy delivered in 2031 is expected to be nearly 10 percentage points higher through customer growth and increased adoption of electric vehicles. Our green hydrogen pilot program plans are also reiterated in the site plan. We intend to build an approximately 25-megawatt electrolysis system at our Okeechobee Clean Energy Center that will be powered entirely by solar energy from a nearby site. The pilot is designed to test, in practice, the concept of replacing natural gas with green hydrogen as fuel for combined cycle units, thus lowering or eliminating carbon emissions from FPL’s fleet in the future. This pilot project is projected to go into service in late 2023. Notably, our as-filed 10-year site plan recommends a total expected deployment of approximately 3,200 megawatts of new battery storage capacity by 2031. Included in this total is approximately 1,400 megawatts of incremental battery storage to enhance readiness and reliability for our customers during potential extreme weather events. We also plan to make other smart capital investments for winterization efforts designed to support potential increased customer load during extreme winter temperature conditions, while also providing additional day-to-day reliability benefits for customers. A hallmark of our culture is taking every opportunity to learn from events that happen in our industry, not just those that directly affect FPL, to ensure we continue to deliver the best possible value to our customers. The Florida economy remains healthy and Florida’s population continues to grow at one of the fastest rates in the U.S. Florida’s job market continues to show healthy results, with more than 700,000 new private sector jobs added over the last year. Other positive economic data across the state include the continued strength of Florida’s real estate market, with the three-month moving average for new housing permits up nearly 20% year-over-year. FPL’s average number of customers increased by more than 91,000, or 1.6%, versus the comparable prior-year quarter, driven by continued solid underlying population growth. FPL’s first quarter retail sales increased 2.6% from the prior-year comparable period, and we estimate that approximately 0.7% of this increase can be attributed to weather-related usage per customer. On a weather-normalized basis, first quarter retail sales increased 1.9%, with strong customer growth contributing favorably. Energy Resources reported a first quarter 2022 GAAP loss of approximately $1.5 billion, or $0.76 per share. Adjusted earnings for the first quarter were $628 million, or $0.32 per share, up $0.02 versus the prior-year comparable period. The effect of the mark-to-market on non-qualifying hedges, which is excluded from adjusted earnings, was the primary driver of the difference between Energy Resources’ first quarter GAAP and adjusted earnings results. As a reminder, this quarter’s GAAP results were also impacted by the write-off of our remaining investment in Mountain Valley Pipeline, which we have excluded from adjusted earnings. Contributions from new investments were roughly flat year-over-year, while our existing generation and storage assets added $0.05 per share due to favorable wind resource and the absence of Winter Storm Uri impacts. The contribution from our customer supply and trading business decreased by $0.02 per share while NextEra Energy Transmission increased results by $0.01 per share year-over-year. The comparative contribution from our gas infrastructure business decreased results by $0.02 per share following favorable performance in the first quarter of last year during Winter Storm Uri. All other impacts were roughly flat versus 2021. As I mentioned earlier, Energy Resources had another strong quarter of origination, which is reflective of our ability to continue leveraging our competitive advantages to deliver clean energy solutions to meet the ongoing market demand for renewables. Since the last call, we added approximately 1,200 net megawatts of new wind projects for 2022, 2023, and 2024 commercial operations dates to our backlog. Our backlog additions also include approximately 440 megawatts of solar projects and approximately 130 megawatts of battery storage projects. With more than 2.5 years remaining before the end of 2024, we have now signed more than 85% of the megawatts needed to realize the midpoint of our 2021 to 2024 development expectations range. Earlier this month, the U.S. Department of Commerce initiated a review of an anti-dumping and countervailing duties circumvention claim on solar cells and panels supplied from four Southeast Asian countries, which in recent years sourced over 80% of all solar panel imports into the United States. As we recently highlighted, we are disappointed by the Commerce Department’s decision to conduct this investigation. We believe the Commerce Department already settled this issue when it concluded in 2012 that the process of converting solar wafers into electricity-producing solar cells is technologically sophisticated and the most capital-intensive part of the solar panel manufacturing process, and when that occurs outside of China, the cells are not subject to the 2012 anti-dumping and countervailing duties applicable to Chinese solar cell imports. The Commerce Department’s later rulings in 2014, 2020, and 2021 are consistent with this and have been relied upon by the solar industry as it continued to invest billions of dollars in new solar generating facilities in the United States over this period. In light of these four prior rulings, the reliance on them by the industry and the substantial, technologically sophisticated processing that occurs in the Southeast Asian countries, we believe it will be difficult for the Commerce Department to conclude under its circumvention standards that circumvention of the 2012 tariffs is actually occurring. If the Commerce Department were to find circumvention in the current investigation, we believe it would be unwinding a decade of consistent trade practice across the past three administrations, including the current administration just last year. We believe such a decision would create significant price uncertainty as additional tariffs on panels from the four Southeast Asian countries would likely remain unknown until close to 2025, as final tariff amounts are not determined for about two years after the year of importation. This price uncertainty would likely result in the unintended consequence of U.S. solar panel supply once again being sourced significantly from China, because the tariffs applicable to imports from China are more certain based on 10 years of assessed duty history. U.S. solar panel assemblers are, for the most part, sold out of solar panels through 2024 and, even at full capacity, are only capable of serving 10% to 20% of the U.S. solar panel demand in the first place. It should also be noted that nearly all of the large domestic solar panel assemblers in the U.S. do not support the efforts behind the circumvention claim or the Commerce Department’s decision to investigate, as they also primarily rely on imported cells from Southeast Asia to produce their panels in the United States. And all of the uncertainty from the investigation is occurring at a time when natural gas, coal, and oil prices have increased dramatically, leaving solar and storage as one of the few ways to alleviate inflationary pressures on electricity prices. For these reasons, among others, we are optimistic that the investigation will ultimately be resolved favorably and the Commerce Department will conclude not to impose additional anti-dumping and countervailing duties on cells and panels sourced from these Southeast Asian countries. We believe that NextEra Energy is as well-positioned as any company in the industry to manage these issues. However, given that a number of suppliers are not expected to ship panels to the U.S. until the Commerce Department makes a preliminary determination as late as August, we continue to expect some of our solar and storage projects may be adversely impacted by this delay. We are working closely with our suppliers and customers to assess the potential impacts of this investigation and are optimistic about our ability to arrive at acceptable mitigation measures. Based on what we know today, we believe that approximately 2.1 gigawatts to 2.8 gigawatts of our expected 2022 solar and storage build may shift from 2022 to 2023. Despite the delay, given our competitive advantages, including the strength of our supplier relationships and contracts, we remain comfortable with our current development expectations for wind, solar, and storage, which are to build roughly 23 gigawatts to 30 gigawatts over the four-year period from 2021 through the end of 2024. We run a diversified business at Energy Resources that includes multiple renewable energy technologies and provides a natural hedge against temporary disruptions, like the one our industry is currently experiencing. In fact, in light of the uncertainty in the solar supply chain, we believe renewable demand will likely temporarily shift in part from solar to wind, and we believe Energy Resources has terrific competitive advantages in wind development. Finally, during the quarter, NextEra Energy Transmission, along with its partners, completed the construction of the East-West Tie Transmission Line Project. The 450-kilometer, 230-kilovolt transmission line runs from Wawa to Thunder Bay, Ontario and is expected to address long-standing regional transmission constraints, thereby increasing much-needed access to energy to support new economic growth in the region for years to come. Turning now to the consolidated results for NextEra Energy, for the first quarter of 2022, GAAP net losses attributable to NextEra Energy were $415 million, or $0.23 per share. NextEra Energy’s 2022 first quarter adjusted earnings and adjusted EPS were approximately $1.46 billion and $0.74 per share, respectively. Adjusted earnings from the Corporate & Other segment were roughly flat year-over-year. Our long-term financial expectations, which we increased and extended earlier this year through 2025, remain unchanged. For 2022, NextEra Energy expects adjusted earnings per share to be in a range of $2.75 to $2.85. For 2023 through 2025, NextEra Energy expects to grow roughly 6% to 8% off the expected 2022 adjusted earnings per share range. NextEra Energy is in a strong position to meet its financial expectations through 2025, and we will be disappointed if we are not able to deliver financial results at or near the top end of our adjusted earnings expectations ranges in each of 2022, 2023, 2024, and 2025, while at the same time maintaining our strong balance sheet and credit ratings. A big part of NextEra Energy’s culture is a focus on continuous improvement and productivity. To that end, we are currently wrapping up our company-wide productivity initiative to reimagine everything that we do, which we call Project Velocity. Project Velocity built upon the success of Project Momentum and Project Accelerate, which were launched in 2013 and 2017, respectively. The employee-generated ideas implemented through Project Momentum and Project Accelerate are projected to deliver more than $1.8 billion in average annual run-rate savings versus our cost projections just 10 years ago. In fact, the ideas generated this year in Project Velocity alone are expected to reach roughly $400 million in additional run-rate efficiencies in the next few years, representing the largest identified O&M cost savings in the history of these programs. This result is another example of the strength of our culture and team and highlights our continued focus on productivity and our team’s willingness to embrace innovation and leverage technology. From 2021 to 2025, we also continue to expect that our average annual growth in operating cash flow will be at or above our adjusted EPS compound annual growth rate range. We also continue to expect to grow our dividends per share at roughly 10% per year through at least 2024, off a 2022 base. As always, our expectations assume normal weather and operating conditions. Let me now turn to NextEra Energy Partners, which delivered solid first quarter results, with year-over-year growth in adjusted EBITDA of more than 16% driven primarily by contributions from the approximately 2,400 net megawatts of renewables and storage added during 2021. Yesterday, the NEP Board declared a quarterly distribution of $0.7325 per common unit, or $2.93 per common unit on an annualized basis, up approximately 15% from a year earlier. Inclusive of this increase, NextEra Energy Partners has grown its LP distributions per unit by more than 290% since the IPO. Further building upon that strength, NextEra Energy Partners today is announcing that it has entered into an agreement with Energy Resources to acquire an approximately 67% interest in a 230-megawatt, four-hour battery storage facility in California that is fully contracted with an investment-grade counterparty for 15 years. The acquisition will further diversify NextEra Energy Partners’ existing portfolio with the addition of another battery storage project and is an excellent complement to NextEra Energy Partners’ existing operations. NextEra Energy Partners expects to acquire the project interest for approximately $191 million, subject to closing adjustments, which is expected to be funded with existing debt capacity. NextEra Energy Partners’ share of the asset’s tax equity financing is estimated to be approximately $80 million at the time of closing. The acquisition is expected to contribute adjusted EBITDA of approximately $30 million to $35 million and cash available for distribution of approximately $13 million to $18 million, each on a five-year average annual run-rate basis beginning December 31, 2022. The transaction is expected to close later this year, upon the project reaching its commercial operations date, and supports NextEra Energy Partners’ projected adjusted EBITDA and cash available for distribution growth in 2022. Finally, NextEra Energy Partners recently closed on a transaction to sell an approximately 156-mile gas pipeline from its existing portfolio for a total consideration of approximately $203 million to a third party. The sale price of the pipeline represents an attractive and accretive EBITDA multiple and further enhances the renewable energy profile of NextEra Energy Partners. We are pleased with this transaction and look forward to redeploying the proceeds into accretive renewable energy assets, like the battery storage acquisition from Energy Resources that I just mentioned, to support NextEra Energy Partners’ long-term distribution growth expectations. Turning to the detailed results, NextEra Energy Partners’ first-quarter adjusted EBITDA was $412 million and cash available for distribution was $169 million. New projects, which primarily reflect the asset acquisitions that closed in the second half of 2021, contributed approximately $75 million of adjusted EBITDA and $25 million of cash available for distribution. The adjusted EBITDA and cash available for distribution contribution from existing projects declined by $9 million and $29 million respectively, versus the prior year comparable quarter. Favorable performance at existing projects drove an increase in adjusted EBITDA contributions of approximately $46 million year-over-year, which was more than offset by the absence of approximately $55 million in benefits realized during last February's Winter Storm Uri. Excluding the positive impact of Winter Storm Uri from last year's first-quarter results, this quarter's adjusted EBITDA and cash available for distribution were up nearly 38% and 31%, respectively, year-over-year. Cash available for distribution was also impacted by the timing of PAYGO payments. Wind resource for the first quarter of 2022 was 108% of the long-term average versus 98% in the first quarter of 2021. Additional details are shown on the accompanying slide. NextEra Energy Partners continues to expect run rate contributions for adjusted EBITDA and cash available for distribution from its forecasted portfolio at December 31, 2022, to be in the ranges of $1.775 billion to $1.975 billion and $675 million to $765 million, respectively. As a reminder, year-end 2022 run rate projections reflect calendar year 2023 contributions from the forecasted portfolio at year-end 2022 and include the impact of IDR fees, which we treat as an operating expense. As always, our expectations are subject to our usual caveats, including normal weather and operating conditions. From a base of our fourth quarter 2021 distribution per common unit at an annualized rate of $2.83, 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 do not expect the recent solar supply chain disruption to impact our ability to deliver on these expectations. We expect the annualized rate of the fourth quarter 2022 distribution that is payable in February of 2023 to be in a range of $3.17 to $3.25 per common unit. We also continue to expect to achieve our 2022 distribution growth of 12% to 15% while maintaining a trailing 12-month payout ratio in the low-80% range. In summary, both NextEra Energy and NextEra Energy Partners are benefiting from our history of strong execution that has positioned us well to capitalize on the terrific growth opportunities available to us across our businesses. We look forward to sharing more detail with you on our growth plans for both NextEra Energy and NextEra Energy Partners at our investor conference in New York on June 14. Before taking your questions, I'd like to turn the call over to John Ketchum.

Thank you, Kirk, and good morning everyone. I am excited for the opportunity to talk to you in my new role. Since we announced our planned leadership succession in January, we have heard from many of our shareholders and industry analysts. Several of you have asked whether you should expect any changes in strategy under a new CEO. The short answer is that I expect our strategy to be consistent with how we have grown the company over the past several decades, but that we will continue to adapt and evolve our strategy to meet increasing customer expectations, to leverage new technologies, and to lead the decarbonization of the U.S. economy. Now is the time for our company, our industry, and our country to embrace low-cost renewable energy like never before. We need to create more jobs, not less, and combat the impacts of higher inflation, higher oil and natural gas prices, and rising electricity demand by supporting, not stymying, solar and storage development. Our strategy going forward is to build down on our core businesses. At FPL, we expect one of the highest population growth rates of any state in the nation to continue. In fact, at our current rate of organic customer growth, FPL would add a customer base the size of Gulf Power roughly every five years. FPL's undergrounding program is just getting started, and we have visibility to billions of dollars in capital investment for the next several decades to continue hardening and strengthening the grid as we deliver industry-leading reliability to our customers. And we are also just getting started at decarbonizing the generation fleet at FPL, as only about 5% of our generation in FPL is currently produced by renewable energy. I believe that FPL already is the best utility in the nation. And yet we see significant cost reduction and incremental capital investment opportunities at FPL over the next several decades that can further improve our industry-leading customer value proposition by delivering clean, low-cost energy solutions for Florida customers. Our strategy also entails doubling down on our core at Energy Resources. We intend to build more wind, more solar, and more battery storage than anybody else in this country year in and year out, regardless of the headwinds or tailwinds in any given year. We believe that we have the competitive advantages to win under any market conditions. And with recent technological advancements in green hydrogen and other forms of long-term storage, we see a total addressable market in this country for renewables, storage, and transmission of around $8 trillion through 2050. We have said this before, and we believe it is never more true than it is today: the opportunity set for renewable energy in this country continues to expand rapidly, and we believe Energy Resources is in a terrific position for continued industry leadership and long-term growth for shareholders. Both FPL and Energy Resources have multiple ways to grow, and each business continues to push the other to be even better. As FPL grows, both businesses learn what drives customer value in Florida. As Energy Resources grows, both businesses learn what drives customer value in other markets across the country. Operational excellence is a competitive advantage for us across both businesses, as is development and construction expertise, as is supply chain management, as is financial discipline. Both businesses are constantly implementing new technologies. Both businesses are constantly finding ways to do things more efficiently and to improve our cost position. As Kirk mentioned, this year, our employees generated about 900 individual ideas translating into roughly $400 million in additional run-rate O&M savings across the enterprise through Project Velocity, our best performance ever after 10 years of pursuing O&M improvement in this employee-driven annual exercise. Our strategy at NextEra Energy is to continue to do what we have done well, only better and bigger as new market opportunities present themselves. Our strategy at NextEra Energy Partners is much the same. The partnership will double down on what we have done well since our IPO in 2014. We expect to continue delivering LP distribution growth that is already best-in-class. We plan to continue to pursue growth in three ways: by acquiring assets from Energy Resources, by acquiring assets from third parties, and by additional organic capital investments in the assets we own as the portfolio grows over time. Yet at NextEra Energy, it is the future of the partnership and its long-term growth visibility that is most exciting to us. Simply put, we believe that what is good for NextEra Energy tends to be good for NextEra Energy Partners, and what is good for the decarbonization of the U.S. economy is going to be terrific for shareholders of NextEra Energy as well as for unitholders of NextEra Energy Partners. We will have more to share about our long-term growth prospects at both companies at our investor conference in June. I'd like to close by once again thanking our team. In addition to the 900 Project Velocity ideas I mentioned earlier, last week, we held our annual team competition for the Highest Quality and Innovation Award at our company, followed by our Employee Expo in which 56 teams were featured. I can tell you that, as impressive as our track record has been over the last 30-plus years, our future is even brighter. Our team continues to impress with their creativity, analytical abilities, innovation, customer focus, and the will to win. I truly believe that we have the best team in the industry. I believe this team can extend our long-term track record of outperformance, and I believe this is the team that can and will lead the decarbonization of the entire U.S. economy.

We will now begin the question-and-answer session. Our first question will come from Steve Fleishman with Wolfe Research.

Yes. Hi. Good morning. Thank you, and John, Kirk, congrats on your new roles.

Thank you.

Thank you, Steve.

So, Kirk, just the AD CVD is obviously an important issue and you made some really interesting comments here. So my questions are going to focus on that. The comment about the tariffs not being known if they decided to go that route till 2025, that would seem to be incredibly disruptive to the sector. So just – could you just talk about how that process works and why to actually set the tariffs to better understand why it would be that long?

Yes, Steve, let me go ahead and take that. That's one of the things that we're pointing out to the Commerce Department is that when they established tariffs, say they come up with a final determination of January of 2023, their practice has always been to impose the tariffs and calculate the actual amounts and release those two years later. So those tariffs would not be known until the first quarter of 2025. And so, what the industry would be forced to do perverse is actually go back and buy panels from China because the tariffs in China are known. And China is the only country in the world that would have panels available to sell because, as we said in our remarks, the U.S. panel manufacturing industry, which is incredibly small, again, even at full capacity it only has the ability to satisfy 10% to 20% of the entire U.S. demand. The U.S. industry is sold out until 2025. And if you don't know what the tariff rates are in Southeast Asia, it forces you back to China where the tariffs are known and have been known for the last 10 years, which is an absolutely perverse outcome, an outrageous outcome, quite frankly, and one we intend to make sure that the Commerce Department clearly understands because that's an unintended consequence that I don't think anybody wants. And the other point that goes along with it is if we're trying to be tough on trade, we're not. China is not the one that pays the price. Who pays the price here are American companies, American workers, the American consumer that pays higher electricity costs than they ever have before in a rapidly increasing natural gas price environment, oil prices, coal prices. Solar is actually deflationary. And you actually reward the Chinese, who then get to sell panels at an inflated rate. So that makes absolutely no sense at all. When you look at our company and our business, we are in, I think, a different position than the rest of the industry is. While all those things are not good for the industry, I think our company is in a position to be able to manage these risks fortunately. We have strong contracts in place. We do have a global supply chain and sourcing capability that gives us options that others don't. But back to the strength of our contracts, I think that gives us the ability that others might not have to continue sourcing from our existing supply base even in Southeast Asia without those tariff amounts being fully known. But the problem that this creates with that two-year delay into 2025, if build back better doesn't get passed or some form of reconciliation, you're also on the ITC clock that is expiring over that same period of time. So you have to have an ability to go source those panels, find them someplace else to get your projects built. Again, we're confident in our ability to be able to do that just given the strength of our contracts. That's why – and we're also optimistic that the outcome here is so outrageous and so ludicrous that the Commerce Department won't possibly, based on their four prior rulings over the last decade, how can you possibly pull the rug out from under the industry? It makes absolutely no sense to force business back to China, which is what you were trying to prevent in the first place.

That's super helpful. Just a couple quick follow-ups on the same issue, which is, first, given everything you said, why did they initiate this in the first place? Did they not understand the implications?

So, first of all, why did they take the investigation? You saw what happened in October. They had a similar filing that was made around circumvention; the same Department of Commerce decided not to take that up in the same year that the rule that making cells and panels outside of China was okay. Here in 2022, I think, they looked at it and said okay, well, this is the second one in a row. Let's take on the investigation. We don’t think the investigation itself if we just do a little bit more fact-finding will actually have an impact on the industry. They were wrong. It does. We told them it would. And you can see it in our own portfolio at 2.1 to 2.8 gigawatts potentially being moved into 2023. Luckily, we have enough cushion and enough other things that we can do, so that doesn't impact our financial expectations. Other companies in the industry are not that fortunate. And so our hope is that they look at the information. We don’t think the information has changed. And they rely on the prior four decisions to follow a consistent trade practice rather than retroactively changing the rules for an industry that has been playing by the rules for the last decade. That would make absolutely no sense in an environment where you have inflation, increasing commodity prices, and the only deflationary product and source of generation that also achieves clean energy goals and creates a ton of American jobs. You’re stymieing rather than helping.

Thank you very much.

Our next question will come from Julien Dumoulin-Smith with Bank of America. You may now go ahead.

Hey, good morning team. Thanks for the time and congrats again on the promotions here guys.

Good morning, Julian.

Good morning. So I just want to come back to the earnings impact on you guys. I certainly appreciate the macro that you guys have described here. But can you speak more specifically to the earnings offsets, not just in 2022, but especially 2023 and 2024, given that the timing of these renewable and services tends to impact the subsequent year more so?

Julien, thank you for the question. In terms of the way we’re thinking about being able to manage this and continue to still have the confidence to reaffirm our adjusted earnings expectations and reiterate that we would be disappointed if we were not able to deliver financial results at near the high end of the range. Look, we are a very large company with a diverse set of growth drivers. FPL is performing really well. We have great visibility into the next four years with the settlement agreement. We run the business with a lot of financial discipline and build a conservative financial plan. As we discussed today, we continue to find ways to run the business more efficiently and have identified through the project velocity over $400 million of run-rate savings that we expect to be able to receive over the next few years. When we add all that up and particularly think about how conservatively we are with the way we structure our plan, we feel very comfortable being able to continue to deliver on our financial expectations. Yes. And then Julien, I’ll take the last piece on the – I think what I understood your question to be on the supply chain. So that’s the other reason why we don’t think any action is required by the department of commerce today because the supply chain is already changing for the entire industry. Polysilicon is now being sourced out to Germany. It’s being sourced out to the United States. Suppliers are quickly becoming more vertically integrated and moving their ingot and wafer producing capabilities outside of China, where cells and modules are already made. And that will be a sourcing strategy that will be followed by us and much of the industry going forward. Including, I think, by the U.S., the so-called U.S. panel manufacturers, because one thing I want to make sure people understand. As I said before, at full capacity, the U.S. panel manufacturers can satisfy only 10% to 20% of U.S. demand, but when they make panels in the U.S., they’re not really making panels in the U.S. They’re importing all of the products that go into a panel from outside the U.S., mainly from the Southeast Asian countries. And they have these small assembly shops in the U.S. that employ a few hundred people that go ahead and just put it together. And then they stamp the panel made in the USA when it really isn’t. And that’s one of the frustrating things that we’re tackling here, but we are – again, as I said, moving the supply chain outside of China and the U.S. panel manufacturers I assume will be looking at some more things for their continued reliance on imports as they think about their strategy going forward as well.

Got it. But just on your earnings impact, it sounds like this is about accelerating velocity, basically accelerating cost savings into the near term to offset some of the impacts as well as maybe some FPL drivers, rather than saying we’re going to do more wind versus what the plan is kind of a near-term sense. And actually, if you can speak to the FPL piece, just on CapEx changes versus the 10-K. It seems like the range is a little bit lower. But again, I’ll let you respond holistically.

Yes. So on the first piece of your question, cost savings is one piece of it. We have cushion in our plan. We run the business very conservatively. We have cushion in the plan. We expect to be okay. Kirk, I’ll let you take the FPL question.

Sure. Julien, as we’ve thought about the CapEx plan at FPL, as we discussed on the call today, the expectation for this year is roughly $7.9 billion to $8.3 billion of capital that we plan to deploy. We also laid out in the discussion around the 10-year site plan what we’re thinking in terms of solar that we’re going to add to the system. We feel very good about the capital program that we have at FPL over the next four years in not just generation, but as well as T&D infrastructure, hardening and undergrounding. We have a very good plan there at FPL. Also, I think it’s important to keep in mind with respect to FPL, as we discussed on – in the prepared remarks as well, we are continuing to see just significant growth at FPL, organic growth, in terms of people coming to Florida. At 91,000 additional customers added in roughly four or five years, we’re going to add the size of Gulf to the system, and that’s going to continue to provide us with CapEx opportunities as well.

Excellent guys. Thank you.

Our next question will come from Shar Pourreza with Guggenheim Partners.

Hey good morning guys. Just on the near – the 2023-2024 signed contracts. I mean, obviously they’re up 11 gigs, so you’re getting close to the target range for those years, which could allude obviously you guys delivering within your plan. But I just want to get a little bit of a sense here. If the tail risks are longer dated, right, could we see more projects shift than what you kind of disclosed in the footnote maybe into 2024 and beyond? And if so, is there a point in time, John, you start shifting into more wind from solar and storage? I mean, obviously, wind is very competitive. The returns aren’t great, but I would think several players are going to follow in similar footsteps there. So, I guess, how to think about the profile of the backlog if this is more longer-dated and we don’t get visibility?

Sure. Shar, I’ll take that. So the first point that I would make is that this is good for the wind business. I think you could see that from the results of our origination activity this quarter. So even to the extent we might see some shifting solar from 2022 to 2023 or 2023 to 2024, wind is coming online even faster. And remember, the development cycle for wind and the origination activity for wind is much shorter. We can originate a wind project and have it built in 10 months. And so to the extent you might see some solar activity drop off, and really, again, I view this as a 2022 and 2023 issue. The beauty of it is, you have wind to step in and gets placed. And that’s an area where we have significant competitive advantages. And being able to sell 23 wind at a 80% PTC, we can be extremely competitive in the pricing there and in the offering. And it provides us with, I think, a mitigation measure on top of the strong supplier contracts that we already have on the solar side that others in the industry don’t have. It’s great to have a diversified business to be able to fall back on, and that’s why we feel good about our financial expectations.

Got it. And then, John, just maybe just shifting to FPL. I mean you guys put out plans for additional winterization resiliency, 3,200 megawatts of new storage through to 2031. The solar programs are kind of well defined. And I know we talked about potential delays on the NEER side. But do you see opportunities conversely to maybe accelerate some of that solar CapEx on the regulated side, especially as gas costs have put a lot of pressure on affordability and certainly help from an LCOE comparability? So could we see faster maybe solar deployment on the regulated side to reduce what you’re seeing in the commodity curves?

Yes. I think, first of all, the CapEx is actually up at FPL, just back to – I think it was Julien’s earlier question. Undergrounding is a piece of that. It’s really important we get our undergrounding in service on time and on budget. We continue to look for ways to shift that to the left. And look, as we are in an increasing natural gas price environment, the right answer for Florida customers certainly is to evaluate and look at trying to get more renewables online in Florida faster. It’s a hedge against rising natural gas prices in the state. And it’s a hedge for the country, which is another reason why, as I’ve said a couple of times already, what’s happening is quite silly.

The only thing I would add is the 10-year site plan we just filed, it provides a pretty good road map of the future opportunities. We are going to be adding a lot more solar into the system, pending the PSC’s approval. And demand for solar together remains very, very strong. So we’re going to be continuing to look at the next round for SolarTogether after the current one we just filed for. So there will be additional opportunities. But again, this is about smartly deploying capital and doing the right thing for customers for the long term.

Got it. And then just really lastly, and it's unrelated to what we're talking about. But John, just on the JA case again, the federal case against a couple of executives. I know NextEra and FPL were subpoenaed. Is there any details you can provide there? Because we do get some questions on that from time-to-time.

Yes. Let me just give a little bit of background there. We were asked a while back to provide some documentation in connection with that matter, which we did. We cooperated in full. We were told and have been told we are not a target of the investigation. And I think the article you're referring to, the reporter just got it flat out wrong. We have not been subpoenaed as a witness in that matter.

Okay. Great. That's what I wanted to clarify. Congrats, John and Kirk on the promotions.

Thank you.

Thanks, Shar.

Our next question will come from Durgesh Chopra with Evercore ISI. You may now go ahead.

Good morning team and thank you for squeezing me in and taking my question here. Just maybe...

Good morning.

Just maybe can I just a little bit more granular on the – as you get towards the sort of the preliminary ruling here in late August on the solar panel investigation? What are the key steps that we should be watching for? And what is your and other industry players' involvement going to be in that process?

So the way to think about the process is right now, the DoC has provided questionnaires to different groups. Those questionnaires are being completed. I believe they're due this week for some. I believe others had requested some excisions and maybe have been granted. Once they have all that information, then the groups that are that have standing are also allowed to weigh in on the matter. We do have standing in the case. So we will be weighing in on this as well. And then the DoC has all that information and reviews essentially reviews the data and then reaches their preliminary determination, which is expected to happen by late August.

All right thank you, Kirk and then maybe just one quick one and see if you'll give this information. If not, that's okay because it's small. But can you maybe talk about the gas transaction – the gas pipeline sale? And what kind of multiple and EBITDA contribution? I know it's small. So I don't know if you can share that information. I'll just follow up with IR.

Yes. We're not going to share that information at this time. I understand the reason for the question. I would just say, as we included in the press release and in the script, it was a very attractive and accretive EBITDA multiple. We're very happy with it.

Perfect. Thank you so much guys. Appreciate the time.

Thank you.

Our next question will come from Stephen Byrd with Morgan Stanley.

Hi. It's Dave Arcaro on for Stephen. Thanks for taking my question. I was wondering if you could just talk a little bit to PPA pricing that you're seeing for new contracts, I guess, across wind, solar and storage. Is there an approximate level that you would expect PPA prices to have to rise to absorb some of the inflationary pressures that we've seen? And at the end of the day, do you expect that to happen? Do you think they'll rise enough that you can protect your returns on incrementally new signed renewables contracts?

Sure. This is Rebecca and I'll take that question. It's a matter of practice what we do with our customers and as we're approaching the market is factor in whatever the current latest pricing is, which is certainly what we're doing now in terms of where we think the market is in terms of our cost as well as what the alternatives are for our customers. So keep in mind that, as we've talked about, some pricing pressure, whether it's consistent with the comments that Kirk and John have talked about on the solar side or on the wind side that it's against the backdrop of costs that have gone up, other alternative costs that have also gone up, whether it's oil or natural gas, overall power prices in the marketplace. And so there is still a significant incentive for our customers to procure renewable energy. And of course, as you've seen from our signed contracts for this quarter, the demand for wind has been really strong, both in terms of signed contracts and I'll also tell you in terms of our ongoing conversations with customers. Customers are also still very interested in pursuing solar projects. A lot of folks were caught off guard by this decision, surprised for all the reasons that John and Kirk highlighted that the Department of Commerce would have taken this step. And all of us would like to see the uncertainty resolved as quickly as possible and as favorably as possible, so that our customers can move forward with deploying solar. We'll talk more about where we see the market in terms of pricing and specifically pricing versus the alternatives at the investor conference. But again, the key takeaway from my perspective is they remain very attractive for customers.

Great. Thanks. That's helpful color. And I was just wondering, just on the pace of new signings, has that slowed down significantly since this investigation started? And would the preliminary determination potentially be a bit of a relief valve? Or could it take longer than that to start to maybe kick start the project signings again?

Yes. I'm always cautious to say anything about a given quarter's signings because I think sometimes there's too much weight put on them, sometimes too little. But as of kind of an obvious point, contract signings were terrific this quarter. And I'm really proud of the execution of the team, and it very much reflects a lot of interest from customers that has not waned at all. So we're very excited about the opportunities. Nothing has changed in terms of long-term view about excitement for renewables. They remain very attractive. And as John highlighted, they should be deflationary. Absent this uncertainty and relative to the alternatives, this is a great option for customers, and we couldn't be more excited about the future.

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