Good day, and welcome to the NextEra Energy Inc. and NextEra Energy Partners LP Third Quarter 2024 Earnings Call. All participants will be in a 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 Mark Edelman, Director of Investor Relations. Please go ahead.

Thank you, Dave. Good morning, everyone, and thank you for joining our third quarter 2024 combined financial results conference call for NextEra Energy and NextEra Energy Partners. With me this morning are John Ketchum, Chairman, President and Chief Executive Officer of NextEra Energy; Brian Bolster, 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 Armando Pimentel, President and Chief Executive Officer of Florida Power & Light Company. John will start with opening remarks and then Brian will provide an overview of our results. 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 and the Risk Factors section of the accompanying presentation or in our latest report and filings with the Securities and Exchange Commission, each of which can be found on our website, www.nexteraenergy.com and www.nexteraenergypartners.com. 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. With that, I'll turn the call over to John.

Thank you, Mark, and good morning, everyone. NextEra Energy delivered strong third quarter results and remains well positioned to meet its overall objectives for the year. Adjusted earnings per share for the third quarter increased approximately 10% year-over-year, reflecting continued solid financial and operational performance at both FPL and Energy Resources. As a sign of the robust underlying demand for new renewables generation and storage, we are pleased to announce that for the second quarter in a row, we have added approximately 3 gigawatts to our backlog, bringing our running four quarter total to approximately 11 gigawatts. We are also pleased to announce incremental framework agreements with two Fortune 50 customers for the potential development of renewables and storage projects, totaling up to 10.5 gigawatts between now and 2030, none of which is in our backlog today. When combined with our Entergy joint development agreement from last quarter, our recently announced framework agreements now total up to a potential 15 gigawatts, demonstrating our unique position in the market and our customers' confidence in our ability to help meet the nation's need for power. Before I turn it over to Brian to take you through the detailed results, I want to spend a moment on FPL and Hurricanes Helene and Milton. I would like to extend our deepest sympathies to all those who have been affected by the widespread destruction caused by these two hurricanes over the last month. Hurricane Helene was one of the most destructive hurricanes to ever make landfall in the continental United States. The powerful and destructive storm hit Florida as a high end Category 4 hurricane, with devastating storm surges and sustained winds of approximately 140 miles per hour, causing approximately 680,000 FPL customers to lose power. Hurricane Milton made landfall in Florida as a high end Category 3 hurricane with sustained winds of approximately 120 miles per hour, producing numerous tornadoes, widespread flooding, and causing approximately 2 million FPL customers to lose power. Hurricane Milton made landfall on the West Coast of Florida in FPL service territory in Sarasota County and exited on the East Coast of Florida in FPL service territory in Brevard County. In preparation for the hurricanes, FPL assembled a combined restoration workforce of more than 30,000 workers across these two storms. This preparation and coordinated response enabled FPL to restore service to roughly 95% of affected customers after the second full day of restoration following Hurricane Helene's landfall and 95% of affected customers after the fourth full day of restoration following Hurricane Milton's landfall. I would like to thank all of our employees who made personal sacrifices leaving their own homes to serve our customers, our communities and our state. It was because of their training, their preparation, their dedication, and their commitment that we were able to restore power to our customers so quickly. I would also like to thank other members of the restoration team, including the contractors, vendors, and first responders that supported our efforts for their dedicated assistance during this critical time. Finally, I would like to express our sincere gratitude to Governor DeSantis for his unwavering leadership and support during these devastating hurricanes. We're also deeply grateful for the resources provided by our industry partners, who came from 41 different states in Canada to help support our customers during Hurricane Helene and Milton. Mutual aid in times of disaster was one of the hallmarks of our industry and we were proud to be able to assist other utilities to help rebuild some of the damaged southeastern power grid that saw significant impacts from Hurricane Helene in Georgia and the Carolinas. For nearly two decades, FPL has invested significantly in building a stronger, smarter, and more storm resilient grid. The performance of our system demonstrates that FPL's hardening, undergrounding, automation, and smart grid investments are providing significant benefits to our customers. During sustained winds of approximately 140 miles per hour during Hurricane Helene and 120 miles per hour during Hurricane Milton, our smart grid technology investments avoided 185,000 outages during Hurricane Helene and avoided 554,000 outages during Hurricane Milton. Additionally, initial performance data shows that FPL's underground distribution power lines perform more than six times better in terms of outage rates than existing overhead distribution power lines in Florida. We are proud to report that our generation fleet, including our solar sites, sustained no significant damage. Despite 66 of FPL's 88 existing solar sites or approximately 16 million panels being exposed to storm conditions during Hurricanes Helene and Milton, less than 0.05% of our solar panels were affected. We believe these investments, together with our preparation and coordinated response have improved FPL's overall reliability and resiliency, providing significant value to our customers. The recent storms underscore the importance of a reliable and resilient power grid, and this need will only intensify, as we face a period of unprecedented growth in power demand. Over the last 80 years, our sector has experienced many demand cycles from growth emerging out of World War II and the Industrial Revolution to multiple decades of essentially little to flat demand. That's all changed. Today, there are forecasts for approximately a sixfold increase in power demand growth in the next 20 years versus the prior 20. That significant projected shift in fundamental demand is across industries, driven in large part by nonstop loads from data centers, reshoring manufacturing, and electrification of industry, including oil, gas, and chemicals, to name a few. U.S. data center power demand alone is expected to increase substantially, adding approximately 460 terawatt-hours of new electricity demand at a compound annual growth rate of 22% from 2023 to 2030, which could potentially enable 150 gigawatts of new renewables and storage demand over the same period. With all of that power demand, it's important to consider what it will take to meet that demand, what type of generation will be required over the next decade or so, and importantly, when can it practically be brought to market? If that demand is not met in a smart, prudent way, power prices could escalate over time and affordability could become an increasing concern, driving inflation and making U.S. industry uncompetitive on a global scale. Fortunately, at FPL, we have a playbook in place. We have been addressing the benefits and challenges of fundamental growth for years now, while continuing to deliver on our strong customer value proposition, which is anchored in bills that are nearly 40% below the national average and maintaining top decile reliability. We are making smart capital investments in low-cost solar generation and battery storage, which are continuing to reduce our overall fuel cost, and when combined with generation modernizations, have saved customers nearly $16 billion since 2001. We are delivering best-in-class non-fuel O&M, where we're 70% better than the national average, saving our customers $3 billion every year compared to the average utility. Our experience at FPL puts Energy Resources in a unique position to help our customers meet their power demands. We know what it is going to take to successfully meet the challenges that are in front of our industry. We need low-cost reliable energy that can also deliver the capacity needed to support the grid, and we need it now. Cost, capacity, and speed are the three big issues that need to be addressed in meeting power demand. And as we have demonstrated in Florida, a mix of new renewable storage and gas generation is the solution. When it comes to economics, renewables and storage are the lowest cost generation and capacity resources for customers in many parts of the U.S. We believe new wind is up to 60% cheaper and new solar up to 40% cheaper than new gas power generation, and that's on a nearly firm basis when paired with a four-hour battery. Incentives for wind, solar, and storage flow directly to customers in the form of lower bills. Over the past several years, we have seen the customer benefits of low-cost solar and storage at FPL, where the two combined resources are currently the lowest cost option for customers, beating out new build gas and combined cycle units in our ten-year site plan. As a result, FPL now has the largest utility-owned solar portfolio in the country. What FPL is seeing in Florida is also playing out across the rest of the country, whether with investor-owned utilities, municipalities, cooperatives, or commercial and industrial customers. And when it comes to speed to market, no technology is quicker to deploy than renewables and storage. Wind, solar, and storage not only can be built quicker, but they are already in the interconnection queue. But don't just take our word for it. Look at our backlog. We've added another approximately 3 gigawatts of renewables and storage this quarter, our second quarter in a row. As a top operator of all forms of power generation, we often get asked about nuclear and gas. Let me start with nuclear. Nuclear will play a role, but there are some practical limitations. Remember, on a national level, we expect we are going to need to add 900 gigawatts of new generation to the grid by 2040. There are only a few nuclear plants that can be recommissioned in an economic way. We are currently evaluating the recommissioning of our Duane Arnold nuclear plant in Iowa as one example. But even with a 100% success rate on those recommissionings, we would still only meet less than 1% of that demand. Existing merchant nuclear generation is also limited in its ability to meet that demand, given there are only approximately 20 merchant nuclear plants in this country. That nuclear capacity is also not evenly spread across the U.S. and is not in many places. We know hyperscalers are looking to develop data centers or manufacturers are looking to expand their footprint. For example, there are only two merchant nuclear plants west of the Mississippi. Nuclear plants across the country are already serving existing demand. So even if they are contracted by specific customers, new resources need to be built to meet new demand. And alternatives such as new utility-scale nuclear and small modular reactors are unproven, expensive, and not expected to be commercially viable at scale until the latter part of the next decade. Turning to gas, when it comes to gas power generation, nobody has built more over the last two decades in NextEra Energy. We understand the benefits and the challenges and we know what it all costs and how long it takes to build. The power sector is going to need to build more gas power generation and battery storage to meet growing capacity needs over the next decade. And as we build more, we also enable more renewables to come to market as the lowest cost generation source of energy. Renewables will be built for energy and battery storage and gas for capacity. That being said, while we are going to need both, storage has an advantage because it's ready now as it can be paired with renewables at the same interconnect, and there are no wait times or permitting hurdles for batteries. And renewables and storage will only get cheaper and cheaper over time, and we believe will continue to make up the lion's share of new additions over the long haul. To summarize, we believe power demand is at an inflection point and we expect that much of that demand to be met by renewables and storage because they're low cost, fast to deploy, and in the transmission queue now. The potential opportunity is significant. Forecasts are projecting a tripling in renewables growth over the next seven years compared to what we've seen over the prior seven. No one is better positioned to capitalize on that demand growth than NextEra Energy, and we have the track record to prove it. Since 2021 at Energy Resources, we have originated more than 33 gigawatts of renewables and storage while placing nearly 18 gigawatts into commercial operation. We have advanced from originating on average 8 gigawatts per year from 2021 to 2023 to approximately 11 gigawatts over the last four quarters. If we achieve the midpoint of our development expectations, this pace of development is expected to more than double our combined renewable generation portfolio, growing from 38 gigawatts today to potentially 81 gigawatts by the end of 2027. It's hard to overstate the advantage this would give us as we head into the end of the decade. This potential growth in the portfolio would enable a long-term co-located storage opportunity set of more than 50 gigawatts by the end of 2027, creating a meaningful opportunity for us to win new business and continue to deliver superior returns. Our new framework agreements with Fortune 50 companies, as well as our Entergy joint development agreement announced last quarter, together with our continued origination success are key examples of our leadership in power generation. While these additions clearly demonstrate that some of the most sophisticated customers in the country understand the value proposition of renewables and storage, I want to close with a reminder of the broader economic impact that the build-out of renewables has had and continues to have on the U.S. economy. We have invested tens of billions of dollars in the nation's energy infrastructure, creating tens of thousands of jobs, increased tax revenues, and economic stimulus for the communities we invest in. And we are powering millions of American homes and businesses with low cost, reliable, and clean electricity. The fact is that renewables are a critical part of the energy infrastructure in this country. Wind, solar, and storage are not only ready now and fast to deploy, but also present a cost-effective solution for meeting our country's energy needs. Tens of thousands of good jobs have already been created, with many more yet to come over the next several years, boosting manufacturing and helping to revitalize rural communities across America. With scale, experience, and technology across the energy value chain, and sites ready to develop and interconnect today, NextEra Energy was built for this moment. With that, I will turn the call over to Brian to cover the detailed results.

Thank you, John, and good morning, everyone. For the third quarter of 2024, FPL increased earnings per share by $0.05 year-over-year. The principal driver of this performance was FPL's regulatory capital employed growth of approximately 9.5% year-over-year. We continue to expect FPL to realize roughly 10% average annual growth in regulatory capital employed over our current rate agreements four-year term, which runs through 2025. FPL's capital expenditures were approximately $2 billion for the quarter, and we expect FPL's full year 2024 capital investment to be between $8 billion and $8.8 billion. Over the current four-year settlement agreement, we expect FPL's capital investments to exceed $34 billion. FPL's third quarter retail sales increased by 1% from the prior year comparable period. FPL grew retail sales by roughly 1.6% on a weather-normalized basis, offset by milder weather. During the quarter, FPL reversed approximately $231 million of reserve amortization, and FPL ended the quarter with a balance of roughly $817 million. With regard to costs associated with storm recovery, as a reminder, we have both the storm reserve and a surcharge mechanism to the extent the reserve has been fully utilized. Following Hurricane Debby, we had depleted our storm reserve and have deferred the remaining incremental cost for Hurricanes Debby, Helene, and Milton to the balance sheet. We intend to recover those deferred costs and replenish the storm reserve via storm surcharge on customers' bills over the calendar year 2025. Although FPL has not completed the final accounting, our preliminary estimate of restoration costs that we plan to recover from customers through a surcharge is approximately $1.2 billion, inclusive of $150 million, which will be utilized to replenish the storm reserve. Of course, the restoration cost will be subject to a final review and prudence determination by the Florida Public Service Commission. For the 12 months ending September 2024, FPL's reported ROE for regulatory purposes will be approximately 11.8%. We still expect the regulatory ROE for the 12 months ending December 2024 and 2025 to be 11.4%. Now let's turn to Energy Resources, which reported adjusted earnings growth of approximately 11% year-over-year. At Energy Resources, adjusted earnings per share increased by $0.04 year-over-year. Contributions from new investments increased $0.15 per share year-over-year, primarily driven by continued growth in our renewables portfolio. Comparative contribution from our customer supply and trading business, which you'll recall had strong earnings last year, decreased by $0.10 per share driven by normalization of origination activity and margins, which is consistent with our expectations. Contributions from both NextEra Energy transmission and gas infrastructure businesses increased by $0.01 per share year-over-year. All other impacts reduced earnings by $0.03 per share. Energy Resources had another strong quarter of new renewables and storage origination, adding approximately 3 gigawatts to the backlog. With these additions, our backlog now totals over 24 gigawatts after taking into account roughly 1 gigawatt of new projects placed into service since our last earnings call, providing great visibility into Energy Resources' ability to deliver on our development program expectations. We expect the backlog additions will go into service over the next several years. Turning now to our third quarter 2024 consolidated results, adjusted EPS was $1.03 per share. Adjusted earnings from corporate and other were flat to last year's comparable quarter. At NextEra Energy, our long-term financial expectations remain unchanged. We will be disappointed if we are not able to deliver financial results at or near the top end of our adjusted EPS expectation ranges in 2024, 2025, 2026, and 2027. In 2023 to 2027, we 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. And we also continue to expect to grow our dividends per share at roughly 10% per year through at least 2026 off a 2024 base. As a reminder, our expectations are subject to our caveats.

Yesterday, NextEra Energy Partners' board declared a quarterly distribution of $0.9175 per common unit or $3.67 per common unit on an annualized basis, up nearly 6% from a year earlier. Today, NextEra Energy Partners is pleased to announce the expected wind repowering of another approximately 225 megawatts of wind facilities, bringing its total backlog of wind repowering to approximately 1.6 gigawatts through 2026. The partnership's organic growth opportunities have expanded and we are increasing our wind repowering target to approximately 1.9 gigawatts of wind projects owned by NextEra Energy Partners through 2026, which is up from the previous target of 1.3 gigawatts. NextEra Energy Partners owns a large portfolio of high-quality long-term contracted clean energy assets and has attractive organic growth from the repowering of its existing portfolio. NextEra Energy Partners remains focused on executing additional wind repowering opportunities in the future, which we believe would provide improved operating performance and higher generation. Let me now turn to the detailed results. Third quarter adjusted EBITDA was $453 million and cash available for distribution was $155 million. Third quarter adjusted EBITDA and cash available for distribution declined by approximately $35 million and $92 million respectively from the same period last year. Third quarter adjusted EBITDA and cash available for distribution reflect the year-over-year impact of the divestiture of the Texas Pipeline portfolio. In addition, third quarter cash available for distribution in 2024 was negatively impacted by the first interest payment on the partnership's December 2023 HoldCo debt issuance, as well as $23 million of higher project level debt service relating in large part to the 2023 acquisition financing. NextEra Energy Partners continues to expect the run rate contribution for adjusted EBITDA from its forecasted portfolio at December 31, 2024, to be in the range of $1.9 billion to $2.1 billion. The year-end 2024 run rate projections reflect expected calendar year 2025 contributions from the forecasted portfolio at year-end 2024. The partnership also continues to evaluate alternatives to address its remaining convertible equity portfolio financing obligations and its cost of capital, focusing on its capital structure and the potential for redeployment of more cash flow toward driving organic cash flow growth. Given the demand for power, NextEra Energy Partners has many ways in which it can seek to grow, which could include not only acquiring assets but also wind repowerings and potential other organic growth opportunities. NextEra Energy Partners plans to complete its review by no later than the fourth quarter 2024 call and intends to provide its distribution and run rate cash available for distribution expectations at that time. As a reminder, our expectations are subject to our caveats. That concludes our prepared remarks. And with that, we will open the line for questions.

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

Maybe if it's possible, I would love to get more color on the framework agreements. And I think when Brookfield announced one of these with Microsoft, you downplayed wanting to do things in a framework fashion just due to the fact that you wanted to maximize the value of each site. So, could you maybe talk to the change in kind of now having framework agreements?

Yes, sure, Steve. This is John. First of all, the framework agreements that we have been able to strike with Entergy and with the two Fortune 50 companies that we mentioned that total over 10.5 gigawatts and 4.5 on the Entergy side, give us an enormous amount of flexibility in terms of which assets that we allocate towards those programs. And so, we're not restricted to tying up inventory. It creates a close partnership arrangement with each of these three counterparties that gives us a huge leg up in being able to secure incremental business. And what we would look for on the Entergy side, for example, is kind of a 50-50 on build-operate-transfer contracts and power purchase agreements, but I would think what we're doing with the framework agreements with the Fortune 50 customers would be more in the line of power purchase agreements. I'll turn it over to Rebecca to see if she has anything to add.

Sure, Steve. I think if you take a step back and you think about what's happening in our industry, and you know as well as many of us on the call, the change in demand is significant. And it has changed rapidly over the last couple of years. The customers that we're referencing today as well as quite a number of others with whom we're in discussions have big, important, and urgent energy needs that they need visibility on how those are going to be met. They want to make sure that we and they are aligned, so that they have access to our substantial pipeline of projects. You know very well there is no one else out there that has a pipeline of 100 gigawatts of projects in various stages of development. There's no one out there that has 150 gigawatts interconnect queue positions ready to go. These customers want to make sure we're focused on their business. And how do we do that? We get visibility to what their needs are so that we're working with them collaboratively so that ultimately we can work to put these projects into the backlog. I think the biggest takeaway is that this is a sign of how we are differentiated from others, and how we're getting incremental visibility to the significant demand that's related to the characteristics that we all know well. I think it's also a great sign of what John and Brian just went through about specifically the demand for renewables. Low cost, ready to deploy, and aligned with the goals and objectives of the customers with which we're working. I think it's just one more sign of the great environment in which we're operating.

Is there a time when you'll be able to reveal who these agreements are with? You can't do that right now, but can you say if these are hyperscale tech customers or from other industries?

So, I'll take the first one, Steve. Is there a point of time where we can give names? Probably. I think the preference of the counterparties and our preference is to go ahead and make an announcement of who they are side by side with the transaction, once we bring a deal to the table with them. And Rebecca, you want to handle the second question?

Yes. I think the second part of it, and we were careful to write Fortune 50 companies. These are not technology companies. And I think that's another great point is, yes, we are aware of the significant demand from hyperscalers and colocation data center developers, and that demand is real and significant, and we're having many conversations with all of them. But these agreements are actually with customers that are outside of the technology industry. They are folks that are building facilities that they need to power. They are folks that are concerned with ensuring that they are low cost, ready to deploy, and ideally low carbon forms of energy and capacity. So I think this is again a robust sign of significant broad-based demand.

I want to emphasize, Steve, that it's important for investors to consider the value proposition we have moving forward. Given the strong demand from data centers, there is a compression of supply and a scarcity of available sites ready for development. This situation is creating increased competition for industries outside of data centers to secure low-cost renewable energy generation. As the demand from data centers rises, prices are increasing, leading to higher returns. Simultaneously, other industries are seeking to manage their power exposure, anticipating that power prices may rise in the future. This trend is being observed across various sectors, which is encouraging and aligns with our view that this is not solely a data center trend. It's part of a broader shift in the industry towards electrification and manufacturing diversification away from China, with many looking to keep energy costs as low as possible moving forward.

Last quick question. Just on the Duane Arnold. Is there any milestones or key steps that we should be watching out for on that opportunity?

Yes. So we are very busy looking at Duane Arnold. We're very interested in recommissioning the plant. We're doing all the assessments right now that you would expect us to do. We're doing engineering assessments, and we're working with the NRC. It includes working with local stakeholders. So we are continuing to advance that project. And there is obviously strong interest from customers, particularly data center customers, around that site. But we will keep all of you posted as our evaluation progresses.

Just on Steve's question on Duane Arnold. I guess, John, any sort of sense on the cost to restart that plant and other structural items we should be thinking about as you approach a decision? And ultimately, if you strike a contract with a counterparty, is this an asset you'd want to own over the long term? Or could that be a monetization opportunity as we're thinking about your ongoing balance sheet needs?

Yes. Sure. I'll start with the first one and then go to the second. So I'm not going to give you a cost number yet because that's part of the evaluation that we're going through currently. Remember, this is a boiling water reactor. They are a lot less complex to bring back and to recommission. It's a simpler design because they don't have a steam generator like pressurized water reactors do. And so that gives us optimism at being able to do this at an attractive price and be able to execute it without as much risk that might be associated with recommissioning a plant that does not have a boiling water reactor, but is a PWR design. On the second question, our desire is to own versus monetize. For us, look, I mean, this would be a very attractive asset to own. We would hope to be able to get an attractive PPA. This would be a long-term asset that I think would fit nicely in our portfolio.

And then, John, just on the NEP side, I mean, obviously, there's been a subtle change in language around timing, obviously concluding the financial review by the year-end call. I guess, what's given the confidence this quarter to put that timeline out there? Is there a range of preferred outcomes that you can at least highlight to investors, especially as you've kind of removed the language around the distribution growth targets? I guess what should we read into that? I mean, obviously, the market is a little bit jittery around that language change. And can you at least confirm if you see yourself as remaining the owner of this entity into the future?

So as we have said to investors over the last several months, we're completing our review regarding how to address NextEra Energy Partners' cost of capital. We've been exploring a number of options as part of that. And as we said today, we're also reflecting on the YieldCo model itself and contemplating the strategic shift in how we allocate capital. One of the things that we are evaluating is should we deploy more of our capital towards really growing the underlying cash flow of the business and maybe less towards distributions. So that's one of the things that we're thinking about. Obviously, we have to also address the back-end convertible equity portfolio financings. But what we wanted to do is just be upfront with investors that this review is coming to a conclusion, and we'll be prepared to provide updated feedback on our distribution policy going forward on the fourth quarter call.

So just reflecting on sort of the YieldCo model, it sounds like even NextEra remaining the ultimate owner of NEP is something that's a question mark as well too, right?

Yes. Moving forward, our preference is to continue owning NextEra Energy Partners. We have explored various options and alternatives, but our primary plan is to retain ownership of NEP. I want to emphasize that we've discussed the underlying dynamics in the industry. We are experiencing significant power demand, and NextEra Energy holds a strong position in the market. There are several growth opportunities ahead that could benefit both NextEra Energy and NextEra Energy Partners, particularly driven by the rise of data centers.

John, I know you are always ahead of the curve. I wanted to ask how you approach the discussion on securing assets in light of the election results, whatever they may be. How are you evaluating ways to minimize risks in your plans through 2027, as you have discussed, or even beyond that in terms of actively securing your outlook, whether that involves storage, solar, or wind?

We have fully mitigated risks related to our safe harbor program, and we are secured through 2029. Those who are familiar with the program will recognize that our strategic moves and investments have safeguarded our development initiatives during the four-year safe harbor period. Additionally, we maintain a forward-looking approach regarding our supply chain. We have also secured an ample supply of transformers, switchgears, and other electrical equipment, which have presented challenges for others in the industry. We have proactively managed our safe harbor needs and ensured that we have secured critical electrical infrastructure, addressing issues that have delayed projects for smaller developers. Given the circumstances, our utility and commercial customers have become less tolerant of delays, making them more inclined to partner with established developers like NextEra, who have a reliable track record of completing projects on schedule and planning effectively.

You guys are always a step ahead as you say. Quick nuance here at Seabrook. I'm just curious, we talk about Duane here, but what's the situation there with the thoughts about New England on any further, should we say colocation or long-term off-take arrangements there with potential counterparties?

Yes. For us, I mean, we look at our entire nuclear fleet as part of our data center strategy. We're sort of technology agnostic as we approach it. Most of the conversations that we have with data center customers are around renewables. But obviously, we have comprehensive expertise across the energy value chain, whether it's wind, solar, battery storage, transmission, gas, coupled with renewable solution, and whether it's nuclear. I think we're uniquely positioned in that regard because we do it all. We know what it all costs. We have the data to support it all. What we try to do is have educated discussions with our customer base to provide them with the low-cost, most comprehensive clean energy solution that addresses the demands they see going forward to satisfy their business needs.

Wondering if you could expand a little bit on your thoughts on SMRs as an asset. And in particular, if you might consider that at FPL over time within your resource mix?

Yes. On SMRs, we have a small SMR team inside the company. We have been following SMRs for a very long time. We actually advised a couple of Fortune 100 companies on SMRs today. But here's what we see. We're very close to the SMR market. There are really 9, 11, depending on your count, of how many original equipment manufacturers are in the SMR area. We look at them all. We do technology reviews around them. We do financial reviews around them. A lot of them are very strained financially. There are only a handful that really have the capitalization that could actually carry them through the next several years. The second piece is, you're looking at first-of-a-kind technologies that are unproven, that come with a ton of risks associated with that. They're still very expensive. I don't see that changing, especially with renewables getting cheaper. Renewables used for energy and storage and gas for capacity is economically tougher for SMRs to compete. The other thing that doesn't get enough attention is nuclear fuel. The nuclear fuel supply chain has a lot of repair and work that has to occur. I think most of you know we passed sanctions against Russia on enrichment and conversion. We essentially have to start a nuclear fuel enrichment and conversion industry here in the U.S. it's going to take a lot of time to get that up and running. Some SMRs, they don't run off low-enriched uranium; they run off HALEU, which remains a bit unproven as well. When we stack all that together, that's why we're not bullish on SMRs. We think it's kind of an end-of-the-next-decade alternative. But it is also something that we stay close to. We have capacity at our existing generation facilities to be able to add SMRs. It's something that FPL will continue to keep a close eye on as we move forward. Again, it's so far out in the future from a viability standpoint at scale. We're prioritizing other generation resources at this time, and I think renewables are, as I said in my prepared remarks, are here for the long haul.

And then you had mentioned renewable returns earlier, just given the strong demand backdrop. Wondering if you could just give a little bit more color on what you're seeing in terms of the trend of renewable returns for incremental projects right now?

Sure. I'm going to turn that over to Rebecca.

As you might expect from our comments on not only the second quarter in a row of 3 gigawatts signings and the real excitement for us on these framework agreements, not just the ones we announced, but also ones that we haven't gotten to the point of announcing. It is clearly a changing dynamic in terms of need for what we have to offer. It's safe to say that there are opportunities for us to improve margins, and where that makes sense, we certainly are taking advantage of that. So I would say it's much more of an upward trajectory than staying the same and certainly not going down. You should also expect that we will continue to be very disciplined in both capital allocation as well as being aware of where costs of capital are. So as we've seen changes in rates, you should also expect us to respond appropriately to that. But the market dynamic for us and our unique position in this industry is a very positive tailwind for us.

The next question comes from Jeremy Tonet with JPMorgan.

Just want to turn to the near backlog additions. It looks like 3 gigawatts has been added in the past few quarters here, and it looks like about 11 over the past year. Just wondering, I guess, your expectation for run rate backlog additions over an extended period of time. Should we be thinking kind of like 12 a year roughly? Or do you see that increasing over time? And then on Slide 5, you lay out significant demand growth there for renewables. And just wondering how you think about NextEra market share going forward?

I'll take the first stab at both of those. In terms of the run rate, just in lower gigawatt signings, I'll say the similar comments in higher quarterly signings, which is we shouldn't expect these to be perfectly linear. There will be changes quarter-to-quarter. So I'd be hesitant to say that 3 gigawatts is the new normal for now and forever more. But it is clear, and we made the comments for a reason, that we have seen the change in demand that we've been talking about. We've been expecting given both the commentary in the marketplace as well as what's actually happening on the ground for real demand of new electrons, both in the form of energy and capacity. I'm really proud of our team. We've invested a lot in our greenfield development program over years and developed a lot of technology and capability to ensure that we can scale that effectively, and that is proving out to bring high-quality projects to market with teams that are working closely with our customers. That's what we'll continue to stay focused on. In terms of I forgot the second part of your question, actually, Jeremy, did that cover the checking part too?

Just market share going forward.

Listen, over a long period of time, we've had ranges in the market share, across the technologies; roughly a 20% market share has been a rough consistent performance over time. I think that is certainly achievable and potentially higher. And as you know, we will continue to balance both higher market share and higher margin. They are interrelated to an extent. We're going to make sure that we continue to optimize that. I don't want to build every single project that we could possibly sell to somebody. I want to build the projects that have great returns that create value for our shareholders and build incremental value for our platform over time. And that's what we are going to continue staying focused on. And just quickly, I guess, on the origination opportunity set, how do you see solar versus wind stacking up at this point and also big addition in batteries there? So just wondering what you're seeing currently on that front? I would say the trends are consistent with what we've talked about for the last couple of quarters and specifically in more detail at the investor conference. There's clearly a tailwind for solar and even more so for storage, relatively speaking, over the last couple of years. For solar, I think it's a couple of things. It's relatively attractive compared to the other generation technologies and specifically attractive with the addition of the PTC relative to what it had before, which is ITC and therefore made it more economic in more regions. On storage, it's really about capacity value, as John outlined in our prepared remarks. It's clear that we need both energy and capacity to meet the incremental demand that utilities are seeing for the first time in decades. Storage is ready to deploy and in the places where it is needed most. Our customers are really interested in seeing those storage projects come to market. Wind has continued to be a little bit weaker relatively speaking to how strong it was for the first couple of decades of our renewables development program. There's still quite a number of customers that are interested in it. We have a good pipeline of projects and discussions with a variety of customers across the United States. We see a mix of those resources being a good complement to one another to meet these 7/24 solutions. So having a pipeline of all three technologies has served us well, and we'll continue to pursue that path.

The next question comes from Andrew Weisel with Scotiabank.

Just a quick couple of follow-ups actually. So first on Duane Arnold, I don't want to get too bogged down on the details, but one question I had is about transmission constraints. I know when the nuclear unit shut down, you agreed with Alliant to build a lot of solar and battery storage. Given that the new capacity addition will take up some of the preexisting transmission capacity, will you need to expand transmission opportunity there if you were to restart the nuclear unit? And if so, would that add a lot of time in addition to the cost?

Yes. Andrew, this is one of the benefits of having a very large pipeline. We have the ability to convert queue positions over to different types of technologies. So, we're not concerned about the transmission.

Regarding the framework agreement between Entergy and the two new projects, it involves about 15 gigawatts. I realize this pertains to the later years. My question is whether any of this will contribute to the approximately 40 gigawatts you aim to add by 2027, or should we consider it as primarily supporting growth beyond the planning period?

Yes. I think for now, we look at these opportunities as contributing to the midpoint of our expectations. Obviously, we always hope to do better, and these framework agreements put us in a position to do better.

You don't use the word midpoint very often. Okay, fair enough. One, sorry, go ahead.

I was just going to say, midpoint is just a reference to our current development expectations. Obviously, we're pushing the team to do far better than the midpoint. And again, the framework agreement gives us opportunities that we otherwise would not have had.

Then one subtle question about the quarterly results. Customer supply was a negative $0.10 year-over-year drag. And I know last quarter, it was minus $0.03 as well, although it was positive in the first quarter. I know it's a bit of a more volatile business, but can you just talk a little bit about the dynamics for customer supply at near and maybe some thoughts on the outlook?

Yes. I think what you're seeing at our customer supply business is, number one, remember, coming off 2022, we had very high gas prices, which created a lot of volatility and high margins in that business, not only for us, but for others that participate in that business. Obviously, as gas prices have subsided, we've seen less volatility in that market. Some of the margins have come in a bit and more normalized. I think we've seen that carry over to the origination activity as well. So look, that business has done great and we expect it to continue to be a solid contributor going forward, but some of what we saw coming off 2022 has subsided and that's really the commentary that we were trying to get across in our prepared remarks today.

And congratulations on the swift storm restoration efforts.

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