NEP - Earnings call 2 2021 | NextEra Energy Partners, LP

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Operator

Good morning, everyone, and welcome to the NextEra Energy and NextEra Energy Partners Q2 2021 Earnings Call. [Operator Instructions] Please also note today's event is being recorded. And at this time, I'd like to turn the conference call over to Jessica Aldridge, Director of Investor Relations. Ma'am, please go ahead.

Jessica Aldridge

Thank you, Jamie. thank conference joining and call Partners. and XXXX second NextEra everyone, earnings combined for morning, you our for quarter Energy Good NextEra Energy me President President and and well Financial Executive Officer Energy Robo, of NextEra NextEra Light Mark With Hickson, Energy; Rebecca Executive Chief Florida are John Officer Vice NextEra Officer Eric NextEra Ketchum, as Energy; whom Vice Energy also and Executive NextEra of Chief of Chairman all Executive Kujawa, President of morning this and and Chief Resources; Jim Energy, Company. President of are officers Partners; Officer Chief as Silagy, of of Executive & Power

answer an results of our provide team and will will overview questions. available your executive Rebecca to our then be

conference making forward-looking of call results We of if in and found earnings our risks during with statements. forward-looking this not current do expectations subject this reports in to the discussed our which websites, any Securities and duty Actual filings our update of Commission, in news and our call presentation forward-looking of be assumptions made the latest uncertainties. incorrect statements today's release and from on statements during section Risk assumptions, and materially or based are because the to are Exchange nexteraenergypartners.com. other We any and the which comments factors key can differ accompanying each Factors or nexteraenergy.com on will undertake could be any

non-GAAP includes also to references measures. presentation Today's financial

measures and today's contained reconciliations slides GAAP financial information measure. presentation definitional to to refer You closest the accompanying information the the should of historical non-GAAP for in

within its Company January retail Power serving merged rates. & Gulf and segment & Power Energy XXXX. Power as NextEra existing Light reporting a effective reminder, separate customers Power Gulf into XXXX, Florida a continue will through As Florida on separate X, legally Light under

to I With we Rebecca. otherwise Florida are refer call when combined. Gulf to the to Power & turn FPL, or presentation, excluding referring that, Power, unless will we Light, term noted today's when over Throughout the using

Rebecca Kujawa

Thank you, Jessica, good everyone. and morning,

and per year-over-year, Energy to overall earnings operational more strong well is than share Adjusted objectives quarter of NextEra continued its increased the performance for second strong financial year. the X% delivered meet all reflecting across businesses. and results positioned

FPL increased to be in energy clean major the to benefit solutions year-over-year, investments capital by and the of remain track earnings share capital improve per smart on by $X.XX lower for provide identifying business. and FPL's continued focus initiatives our investments FPL's customers. reliability costs, driven continues on

In June, FPL facilities. demolished plant its more clean emissions-free energy in to Florida, plans with it solar last coal-fired with replace

including During the Center approximately quarter, FPL FPL Discovery new Space Energy of Center. the Kennedy commissioned XXX megawatts also successfully solar, at Solar

of install XX% additions, FPL With XX-by-XX million panels by XXXX. plan XX completion surpassed to these new solar groundbreaking its

of over FPL the completing year. expects than which early components largest system, in Energy XXXX, the solar Manatee plan would XXX-megawatt customers recently panels just put XX-by-XX world's the begin first is to which towards to way a since more have installed more company on by the than XX% X announcement. XX initial the years million FPL began later its Center installing solar-powered FPL support integrated To this expected the serving build-out, battery Storage

primarily also improvements and its by with its operational Power business cost financial further investment the on strong Gulf to quarter the continued during initiatives in in growth execute effectiveness. continued driven performance

relative by of in have O&M now declined expenses, booked to subsequently Power's the comparable which by third approximately regulatory a XXXX. costs year-to-date and prior quarter Gulf and XX% approximately XXXX, year X% versus the were into Excluding declined COVID-XX-related reversed the asset period

respectively, year-to-date reliability performance the Power's generation operate service that first and fleet of the of improving and reliability Gulf with versus we XX%, half operational to improve, continued by metrics XXXX. also XX%

to customer investments capital in generate shareholder that continue previously we've the the value cost outlined significant expect will smart We and and initiatives coming reduction that years.

The At on increased market adjusted Energy for team the Resources year-over-year. Energy since its more earnings storage, backlog last by low-cost earnings approximately terrific continues the Resources, megawatts than to capitalize X% opportunity per adding renewables share and to call. X,XXX

expertise, This power continued pipeline capabilities, and relationships, resource advantages, a Resources' world-class of and capital advantages cost testament best-in-class significant our and is supply customer operations origination queue capability. competitive success chain large strong purchasing including interconnection sites Energy positions, execution, to of construction assessment

nearly billion predictive Moreover, single us modeling, development to Energy our extending and XX best-in-class and capabilities. points fleet data allow Resources' advanced provides our data machine further learning operating utilize every for capabilities analytics the O&M day

company that on Resources to no continue believe period to better history. is Energy positioned our development the in than best We renewables capitalize

the previously We we've are the the positioned made into to full our we expectations financial and headed of at usual second year, NextEra in with XXXX so achieve discussed, pleased caveats. are well progress that we've year Energy far the subject to half

let's Now at results FPL. with detailed the look beginning

quarter X%. of income reported and $X.XX the share, respectively, the approximately year per by XXXX, $XX capital net second FPL's $X.XX XX.X% of quarter and per driver $XXX increase share, was employed than growth million or more For increased of net which million principal over of the income last FPL is of year-over-year. an same Regulatory

quarter, capital we billion. in the FPL's $X.X our and to $X.X and $X.X between capital approximately billion second were billion full investments expenditures total expect year

June be ROE ended for approximately XX.X% reported months purposes for regulatory XX Our the XXXX. will

quarter, the $XXX a $XXX regulatory amortization utilized target of FPL our of with million we leaving million. During to reserve achieve balance ROE,

approximately rather to in the the reserve Dorian nearly of costs, utilized regulatory FPL reminder, amortization to offset million with restoration associated asset the write-off than all XXXX, storm customers the Dorian its cost related of in from Hurricane available a expense of $XXX seek recovery. As recovery

which Public in costs approved of Earlier of in Commission into entered was activities, year, prudence the storm Hurricane Public regarding and Florida and a FPL Dorian the May. the Counsel settlement Office by FPL's restoration Service

of determination FPL's restoration were of its by the FPL and and incurred the pleased costs Dorian settlement Hurricane all we fairly reasonably are prudently customers. interest agreement and that believe the balances We commission's

this Earlier with and X,XXX has grid continue customers by safely Elsa to of more stronger, FPL impacted as since a restored restoration storm-resilient hardening FPL nearly and made customers. a responded who employees month, were approximately the power workforce investments to XXX,XXX XXXX FPL Elsa Tropical quickly and to build smarter and Storm to benefit contractors. that energy automation FPL

is Elsa active was we remain hurricane season the named be to Atlantic formed has of the fifth and storm a in advance in that earliest forecasted another what XXXX. in basin, prepared

to second of income $XX share. $X.XX or reported XXXX quarter turn now me which Power, net million Let Gulf per

Gulf between expect During the million. $XXX Power's million capital quarter, year to approximately be million capital and full $XXX and investments $XXX expenditures we were its

continue All in at expected capital mid-XXXX, service these is a the for approximately in And that regulatory to year-over-year Power investments smart progress of customers. by Gulf Gulf capital the capital of XX% the projects, major Connection grew of Power's capital result be Resiliency well. the including Florida to as North employed benefit

the reported approximately ROE June XX.X% for XXXX. XX for ended Gulf months regulatory will purposes be Power's

allowed bad year COVID-XX-related for XXXX, of band in of between Florida Commission ROE to of we and also pandemic. expenses, cost For the upper the a regulatory as of the Public month, recovery half in the agreement full in incremental this safety XX.XX%. reflected target approved Service Earlier settlement of a X.XX% Gulf $XX a Counsel to million the Power primarily debt and the approximately Office Public result expenses continue

customer environment constructive believe outcome pleased excellent service demonstrates with are work regulatory for proposition we value cost, Florida as customer continued Gulf low this energy it in Power's high and and improve clean the customers. of state of We the our reliability, to

of national second permits the nearly are Rolling building remains of new are COVID-XX X-month by permits rebounded pandemic a the building highest positive last economic we the the is current well below average range unemployment up economic since rate activity indicators. As wide approximately the which year reflected years year-over-year, rate the anticipated, X%, in nation. onset highest XX% is and average. Florida's of Florida's has growth in as which X new

As and over basis. Florida home on Case-Shiller XX% up economy, index the for adjusted year. sales another over seasonally XX% Florida's was versus annual Florida's indicator prices is retail South up of an health prior index The

of residents between new estimates growth Florida destinations top of that and April Florida XXX,XXX population Recent one for XXXX. remains the of April relocating indicate nearly XXXX Americans, adding with

forecast grow customer adding through We almost to XXXX. of expect Power, new this population FPL, trend to continue at with Florida's rate XXX,XXX an annual XXXX Gulf including XXXX; through from accounts and projected average X%

basis, number retail X.X% growth. FPL's by During customers comparable by FPL's increased average continued the of year quarter driven the prior prior usage from growth from with of was the XX,XXX customer X.X%. per approximately offsetting increased sales quarter second increased solid approximately weather-related population underlying X.X%, sales contributing a quarter favorably. year On second quarter, decline comparable Partially underlying strong usage period. weather-normalized a customer in continued

Gulf the For of quarter by more Power's was XXXX. sales retail decreased relative customers strong quarter. grew prior customer roughly average year-over-year versus than the X% second comparable X.X% an growth to number Power, And comparison Gulf year offset unfavorable as weather

keep on investments Light's and plan advanced generation, rate has infrastructure we been reliability which and have customer Power low. in Florida rate we to energy improves support XXXX initiated proceeding. stated, -- clean & bills March XX, to helps continued base As The designed we X-year previously keep proposed long-term base technology,

residential FPL's investor-owned Today, lowest and the the below the average top among well utilities XX remain in bills typical national the nation.

be plan. below proposed average projected the typical other Gulf base Power rate With rate for typical to X% fuel approximately current projected expected FPL's decrease X-year costs, are XX% projections bills residential adjustments and approximately national and the over to residential is and bill the

open fair case are for and of settlement supports pursuing to agreement our As a of resolving objective on strategy core review always, possibility of through remains execution rate focus customers. our a successful we fair and request our continued the that our

losses per more the quarter $XXX share reported X% versus year of share. Energy Adjusted Resources increased GAAP earnings quarter per comparable million were per $X.XX Resources $XXX quarter or prior second Energy share. the than the adjusted XXXX million or for second $X.XX in second period. earnings

versus difference mark-to-market the Resources earnings, renewables contracted per investments and and quarter reflects driver of GAAP adjusted share storage effect hedges, results. is new nonqualifying Contributions adjusted which on primarily second $X.XX The of battery between our added growth excluded in year the prior was the Energy program. from earnings from and primary

existing the resource also contributions Energy adjusted per includes share from earnings generation per quarter. second increased increased share contribution and year-over-year, year-over-year. $X.XX assets wind $X.XX NextEra earnings storage impact And Transmission's unfavorable the of which Adjusted during

the to $X.XX trading $X.XX decreased The impacts versus our is megawatts Our other believe we best renewables business what and team supply approximately Resources All in adding conditions. development market team primarily on the the lower second development and during continues backlog. quarter, XXXX. results unfavorable to renewables contribution was storage capitalize share to year-over-year, customer projects by with due environment history X,XXX our per of Energy

our remaining low to of end the realize X.X battery of repowering, megawatts our we've of signed of Since XX% megawatts the new signed years With call, last XXXX to to before approximately added more XXX backlog we solar the than XXXX, expectations X,XXX have XXXX wind megawatts end nearly and XXX wind range. and already contracts. of of earnings development storage megawatts our of needed

executed have additions. a agreement, included is backlog Since we which build-own-transfer call, not the also our in last XXX-megawatt

able we of the are clean, low-cost renewables project existing intends transition and generation continue generation and to supporting into old to customer the inefficient from use Our be forms to solar-plus-storage excited industry's reliable storage. to replace away and coal

well, Our and in exceptionally perform keeping XXXX on backlog and team to approximately storage and of construction we quarter commissioning megawatts engineering track. the projects to build XXX that wind, during solar the expect and XXXX continues

Resources investment Energy positioned We more capital are XXXX. $XX complete to well for XXXX billion than and our program at

their the safe projects years that started and with credits. eligibility on that achieve X qualify providing IRS dates credits credits, XXXX month, X construction to XXXX investment Last to production began federal tax and in years construction and for extended and complete in-service projects with harbor construction tax tax XXXX between

new XXXX. the the the wind of of reflects more now gigawatts We and equipment, much extension and solar investments support wind believe incremental from of $X.X We our $XX and renewables wind of as to than could and wind, safe may across have strong enable opportunities. solar which Biden administration for of harbor billion to as XXXX support repowering businesses all an battery new X X.X storage billion

to the Turning consolidated NextEra now Energy. results for

or to For the of $XXX net second share. Energy million was GAAP income quarter $X.XX XXXX, attributable per NextEra

adjusted and were Adjusted Other earnings XXXX segment Corporate roughly were per NextEra quarter from year-over-year. flat second Energy's respectively. $X.XX EPS share, $X.X adjusted billion and and earnings

financings storage across is issued online structure. projects a are the Over development the in the Energy green specific and innovative -- NextEra rate renewable energy within nearly the NextEra funds used And under our new raised under if renewable are years, projects $X.X few businesses. bring in NextEra past bonds its there step-up for billion designated with to new months, not interest green debt. X Funds NextEra Energy on bonds

Our inaugural received forward. that NextEra by X.Xx premium set standard issuance and a market was to a was NextEra issuances will moving priced at green for oversubscribed, well believe new investors. green green We the

the for favorable more as than in we Energy terms execute continue raised NextEra has billion our on year-to-date capital plan very to on $X year. financing new

adjustment governance, factors. XX%. for for the FFO debt or as NextEra funds recognition ESG, strength our renewable and metric this well of XX% sectors energy lowered leading position level utility threshold previous of June, Energy's Finally, believe downgrade level ratings and Energy of new all social operation We as from favorable S&P its of and the or reflects its from to the in the environmental, in its on of affirmed NextEra to business

by believe Energy's time the metrics that its also on to I from that benefits-to-business-risk planning ESG profile standards consistently governance the to constructive efforts. that is has its our identifying of management and allowing company's S&P since successful enterprise-wide ESG practice a recognized factors this S&P began of Notably, the views assessment satisfactory comprehensive reflect it position. credit implementing to management NextEra specific financial related strong record first metrics drive track risk our overall revised more strategic formally and

expectations long-term Our financial XXXX through remain unchanged.

Energy range to earnings NextEra of share XXXX, per $X.XX be adjusted in to For expects $X.XX. a

not the off earnings and For our disappointed we to of same near X% if Energy at grow ranges And at financial strong results XXXX, able XXXX while, XXXX XXXX in expected XXXX, maintaining of expects end NextEra deliver share. top credit and are X% be or adjusted per time, the the to to will we ratings. these XXXX

flow From that cash our compound will to XXXX, EPS continue range. XXXX with expect roughly rate we adjusted operating to annual grow line growth in

per off We year a XX% XXXX our through to grow to also base. continue per dividends at least roughly XXXX expect share at of rate

and conditions. As always, operating our expectations assume normal weather

Energy Partners. Let me now turn to NextEra

NextEra Energy line and distribution performed for renewable with XXXX. available XX%, financial well EBITDA in delivered versus our adjusted and and Partners' results basis, by for after generally accounting have resource. expectations portfolio roughly below-average the On X% a increased cash respectively, year-to-date

more per or the of up its earlier. IPO. per operational now unit the per from $X.XX positioned an on highlights performance NextEra has outstanding distribution unit NextEra Energy continue deliver by Partners $X.XXXX Partners Partners financial basis, remains grown of a declared quarterly Inclusive Energy common well that Yesterday, and distribution a its NextEra to strong XXX% than This year Board annualized this common to on approximately unit growth XX% objectives. since Energy increase,

today XXX that details NextEra few Further to acquire that agreement strength, projects transaction NextEra net a and additional diverse minutes. wind on in Resources. announcing of building has Energy will geographically we Partners entered into on solar megawatts are from an Energy I the provide approximately

with funding secure announced flexibility. for raised acquisitions convertible expected financing Partners call notes X to its retaining multiple quarter in NextEra appreciation to from structure. convertible the upside X% NextEra years up further June, result Partners associated financings million XXXX enhance Energy price its in a It and approximately coupon NextEra XX% capped its notes. second Energy the over and to $XXX new concurrently completed the also unit Energy during Partners entered in recently is In the into

and was funds NextEra established of renewables XXXX exposure Energy million portfolio the last convertible was projects continued contracted which demand Partners upsized remaining during also equity from $XXX quarter, year. long-term the by its the underlying to drew the evidencing high-quality, portfolio assets approximately financing, that investor for

raising or completed program, Energy expired proceeds. $XX NEP ATM approximately Partners successfully the recently million NextEra sale through year-to-date Finally, XXX,XXX at-the-market its roughly has units of common in

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me Let the Energy for NextEra detailed review now results Partners.

comparable adjusted was EBITDA versus projects in million the flat roughly solar XXXX. favorable and prior approximately quarter, wind year by the $XXX new of quarter megawatts from acquired contributions XXX driven of Second

and existing solar million from for portfolio available quarter of by in adjusted versus the positive by second wind in contribution the projects Texas repowerings also to long-term last equity in distributions second convertible contributions due partially XX% was the into was year's the $XX for reduced year. the the second quarter's quarter million, existing Weaker for to distribution quarter average EBITDA resource this XXX% last late of the resource offset the from pipelines. entered $XXX of for XXXX. Cash reduced financing EBITDA which adjusted Wind projects roughly was quarter, for

Genesis Resources. portfolio used were to other equity Partners assets fund and and financing recapitalized acquisition from last solar convertible existing this proceeds year's project Energy reminder, a As the Energy NextEra

accompanying objectives shown the second for remain with distributions results XXXX. Additional at through long-term least We are slide. growth XX% quarter the unit year per growth full our of to details consistent XX% growth on strong on track our of

As our long-term portfolio execute I plan which an XXX-megawatt be NextEra portfolio Resources. The acquire XXX net consists previously solar of will diverse of mentioned, Energy we from renewables, acquiring interest. on a and megawatts portfolio Energy assets of agreement to Partners Energy approximately to contracted Partners' with to expand continue an NextEra approximately wind in projects of

generation projects acquired which and cash universal scale solar first of available assets. NextEra Energy Energy approximately The Partners of portfolio distributed Partners' of Next XX Energy life contract is distributed of years distribution XXX Partners' portfolio projects, megawatts to NextEra acquisition interest rating has Moody's approximately the BBB+ S&P. of solar consist in and approximately at average will be wind of XX the at megawatts BaaX a weighted by counterparty and credit a for and

on details acquired today's in portfolio of to appendix NextEra Additional Energy the be be Partners by can assets of found the presentation.

of industrial capital portfolio generation commercial XXXX. XXXX its currently Resources assets distributed customers triple with investment distributed the largest to and owns through Energy in expects country's from and generation

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Energy a for portfolio total subject million, consideration to and the $XXX of Partners other to NextEra acquire expects adjustments. capital working

share rate at X-year of time contribute expected is beginning to approximately million EBITDA distribution acquisition to Energy $XXX to be estimated XX, December average $XX $XX XXXX. each approximately $XXX available on $XX on of equity of a cash basis run the million, approximately and million million NextEra annual closing. of for million tax Partners' financing adjusted The and debt portfolio's the to is

immediately prior and to The distributions. for to accretive be and close transaction to is LP year-end expected liquidity the existing funded purchase transaction be the is with price to expected

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of $X.XX is range $X.XX We payable be quarter expect per rate in XXXX February distribution annualized the to of that to fourth the the XXXX common of unit. in

impact Energy, remain growth XXX making Magazine's In and NextEra to At on as we world. summary, top which around first-ever about list highlights named of enthusiastic Time honored Energy long-term were prospects Energy ever be businesses the NextEra Most for Influential as the we extraordinary both Companies, Partners. NextEra an

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open questions. concludes that, remarks. And That prepared for will up the line we our with

Operator

comes [Operator Guggenheim first today question from Pourreza Shar Instructions] Partners. Our from

Shahriar Pourreza

on organically? of prior is there big the changes? solar grow you obviously, with do NextEra development see roll feel Rebecca, with stand-alone wind at the have from platform obviously, discussions any level going up closed, the acquisitions sort projects, policy Transmission of Or enough And to to question an and you highlighted more and the a a upside like interest you entities? federal infrastructure side, sort Just does on opportunities

Rebecca Kujawa

build across U.S., of not imperative to transmission infrastructure it renewables be build-out. over looking of to and Thanks, important over be that that Appreciate time. that's at certainly today needed built, some is it's new support to that for the necessarily to time, the opportunity the the today build From type And start but perspective, transmission is needs clear decades Yes. it and our Shar. question. looking we're out built enormous to

time Energy we have excited that So NextEra And like expect acquisition opportunities has. we're of that for organically both to look last about and Transmission out excited team over would build the on of and couple grow supplement board, opportunities to I closed years to over continue the the will over the really a couple acquisition ago. thrilled time. the bring Cable continue We're we'll both portfolio. with years GridLiance focus opportunities, organically and and on to that through Bay that we Trans we Very team acquisition

thought From focus And are how a the see for broader to standpoint, start regional on particular, you policy to certainly be continue do important we this a to that focus it and and ISOs FERC to year, build-out. support making contemplating to at the that forward. administration, we transmission not in FERC that of happy renewables a the in think laying support just audience that's a they And going receptive next how but couple do the foundation in they Biden decades. next years couple of there's supportive support I sure it in of

optimistic we're know So our direct term. near But well tuned. so the in longer prospects term stay slowly, that, you transmission about as moves as

Shahriar Pourreza

And backlog quarter. additions then Got this solid look it. the obviously more

thinking maybe backlog additions dynamics, with stabilized? a was Just pricing large of been are the of the pressure follow-up, market that? just commodity input is Have inflation, you there? contracted 'XX kind and there And about storage and energy or early headwinds has the largely some in still as costs some slowdown Or there seen component a right?

Rebecca Kujawa

that back them, encourage terrific a the but And but had has seen not that this of also increase just able 'XX look such to forward. individual horizon at end pleased and and and the back on the to taking And the we're only this of 'XX be today. we're number signings we're proud one Our our focus quarter only team, year broader confidence that's everybody going just expand and an only have but trend. evidenced number what at early success. is X-year XX by our slightly looking not for team now, looking to already to origination excited the back through gigawatts which just Resources for Energy starting what development really quarter and XX And been at the what at looking just team really development is XX% thrilled period exceptional quite as I'd low not us gave quarters on, not on, we've execute expectations an to a with clearly

excited contracts remains In terms it signed of the bringing going that certainly our board, very about strong forward. more across customer into we're demand, and

as we'll our In continue comfortable with expectations terms in feel to opportunities returns of the very we costs, for and expectations going about incorporate we and you the know, latest latest that forward. costs, excited see industry's the

Shahriar Pourreza

fully litigated a that you you of versus a mean, constructive Is lastly, on you outcome case. And case? Got any aren't Where you're there. Rebecca, for just prefer building record moving settlement. think then a rate focused? just having a pieces feel there it. And flexibility do the sort I obviously, highlighted with of you're case you obviously, kind conversations always some interveners have and you

Rebecca Kujawa

continued value our a we've the sure on to about see on as years can on on energy possible. with standpoint, team talked an And up as now the X in support we service has and leading Shar, from articulating to over coming putting proposition we're course, is also of that because to the what the accomplished our case focus continued in what that years best making the control execution customer in plan that control. customer forward ensure we strategy you our in best investor matter not you strategy possible to our do the but are on very that's execution. clean reliability, only of focused generation that's all O&M, case What's

commission but short broader that the think on far. at to if of that's We continue to win-win But outcome not the utilities hearings hand, where And with any in stakeholders stakeholder accomplish continuing focused very we through process and at we'll appreciate us positive is we customers with history go base. the and we team year. the we could can go on the forward that always it. We for engaged year that accommodating sort of later in very and remain So Florida, decision the in of and with very interested this our bring process if task order will stakeholders. in other broader focused constructive But continue solution and stakeholders. having the we're end with a certainly also through and the see we're we are with a just

Shahriar Pourreza

Congrats Terrific. results. guys the on

Rebecca Kujawa

Shar. Thanks,

Operator

Our from next from Julien question comes BofA. Dumoulin-Smith

Julien Dumoulin-Smith

customers, as also right? mean of historically. just higher relatively where to logistics? I especially But your bit how you you this prices, you seems inflation, seems you speak you higher and to your cost off, whether staying the through goods outlook can your mean and this speak to of like left the the a execution here? it guys I that prices speak if have some will, to Can little Maybe some you like just of about same a what Shar picking are vein 'XX/'XX dynamics dynamic up in does or of power your passed certainly as simply it of gas through freight intact. track and of inflation are and elevated you effectively can there being in that's passing offtake more here about proxy for It thinking confidence? on some the is PPA

Rebecca Kujawa

supply feel remarks. in And the the to and with business talked years. variety I'll secured that over to equipment remarks, and term we've and about second. some need really our And in frame. out And XXXX of that approach credit comments and Julien. reflected to that prepared about in circumstances broader Near projects agreements backlog through we way have course, as teams Yes. and think are construction real then chain time and those prepared that in our working and, we last build it's Thanks, integrated we a kind term, us feel build start very the comfortable with with engineering X.X about a of of comfortable contractual position. we what place that XXXX different And our the the we help we thoughts where plan the this some the near-term

seen remains be still it think in I respects. standpoint, longer-term a to some From

discussion this across may near-term of supply that persist or of and or in in if and persisting. to is set the temporary, is not snapbacks and broad demand a not the it whether time in the U.S. financial that see broader can over hurdles related economy systemic You dialogue chain

little be remains I seen. bit a So to that think

fortunate very not know, well least of as energy cost most that One many U.S. all you generation of very renewable if projects the of thing is parts, for in are that's renewables, much parts, the form

very clear persistent is renewables even these a to time, a pricing, systemic period there alternatives. relative and proposition cost of long is change increases So for if value the if still are over in

if beyond then will need about any, changes. also we policy to think implications, there And from that, what be

and So the I set we're comfortable we circumstances of of premised that is in, the honestly, where think are, ahead. variety the with feel for we is the of somewhat in we're and with net question thrilled decades your renewables takeaway prepared growth a position opportunities

John Ketchum

actually opportunities I creating small add would for just John. said. us. It's is what This One to make, Julien, Rebecca

manage the to that because can in buying space ability our creating renewable we us execute and we in capability for opportunities a year, chain $XX power can't. that and spending others supply supply chain, Our CapEx it's have, deliver billion where the

Julien Dumoulin-Smith

against how of to full way better the that I meaningful have all describe point, you planning about speak to a lack against up, eventualities? procurement much you to all guys the here. forward I how outlook that X-year you here? talked I you do know are this, mean kind hedged these done of can you for mean

John Ketchum

in basically mean we've Julien. headway we've Yes. locked making as I 'XX, well. Pretty 'XX really good well 'XX, hedged obviously in against up, locked

leverage so a at where around others can't look 'XX commitments deliver, 'XX remember, same don't they in you concerned. put a is that us And of great the do, creating rest opportunities supply have because we we stand position the out chain those or or against the bit And got 'XX to that's really little particularly where the market. when years. you've And in it's in customer

that that lowers leverage, So those types players for market smaller don't supply chain it more go constantly the that players having the back price-ups are if to of they're it fall for creates opportunities way. with have and COD our credibility extensions, or same really to in them of the dealing

a opportunity I'd that's say so us. it's real for And why

Julien Dumoulin-Smith

awarded perhaps clarify existing to contracts, further. or you And future suggesting Are awarded? could been just over get it. even that are that to that you not the Got suggesting only defunct be have that take might able PPAs you already you

John Ketchum

customer the back or if sometimes for but bid out over, the or take Not RFP opportunity away a fall because bilateral us. those those out with to offtake that opportunities or it work can't arrange developer, creates get sometimes

Operator

Wolfe from question from Research. Steve Fleishman Our comes next

Steven Fleishman

me, you Rebecca? Can hear

Rebecca Kujawa

I fine. can you hear

Steven Fleishman

adds solar. question first, changing? be growth of of quarter, lot happened roughly with a Are a just announced backlog you storage. on storage kind weighted It if getting I to you've more of that little Is quarter? So a this adoption but just solar -- stand-alone this been just solar bit seeing recall, XX% of the

Rebecca Kujawa

Steve, Yes. into read I wouldn't it.

with consistent of the kind additions. Just overall backlog

not an at a trends. I broader in is to new of all. given slowdown a certain opportunities even bit see little customers regulatory What period dynamics just a various lot indication helpful think you but need standpoint particularly get from of interest not in storage our could storage we where certain than with X-month in markets. be storage a a There's jurisdictions just in

in the dynamics excited very see a the overall don't we're opportunities. opportunity about storage and of So change

John Ketchum

have Steve, real And the weather that Yes. with And past thing hot the all seen we a to add in one in those storage would markets. to advantage only out drive opportunity. think in I you've more that, that's seeing as going I you're is competitive the West,

Steven Fleishman

over switching to just maybe And NEP. Great. Okay.

new the the X%. been of CAFD should of the be on is around second so months long-term this for or drops I that Is have So think, yields kind NEP contracted where drop, range last the expecting assets? in X we

Rebecca Kujawa

of constantly and I can think Steve, looking we projects, demands and dynamics. are of this valuations the we with reflects Resources' I and renewable for the NEP about Energy appreciate, perspective think third-party as all capital those transacted where Board think is lights. in those cost valuations you and and have And transactions where and are course what balances at transaction appropriately

Steven Fleishman

discussing discussion Okay. is renewables structure of risk that on thoughts and And up a market kind mean on just of in need renewables, on question, on they're treatment of to there any end I I renewables last ancillaries? there. how ERCOT some Texas paying changes guess for the

Rebecca Kujawa

it, Steve, were events and properly Obviously, account where characterize progress. February and work work the that pretty a would happened there political, are sources significant, it as and in were in And I pressure a takes to from through through for obviously, standpoint. a of what of from policy think importantly course, I still sorting it. regulatory the a they're -- and appropriate from responses most but a time

think opposed like. from disruption framework think Obviously, Governor consumption actions that we supply, of lot only work addressed Abbott supply, help be has to ERCOT things time has lay there's actions in to is users. the the February, to the in and what those that of progress. focused We what and of on been there's in And PUCT details amount a it's and well we've active necessarily in but including aspects not the really by that focus to on in market have gas hand. the we fundamental important work as know a and needs wrong perspective ultimately, now will you ERCOT. From that certain massive a from most a I asked I problems transmission the But solve on end taken through won't to to across for hope that But our very went be perspective, well part look particular what be PUCT a started variety still in out. strong and certainly

John Ketchum

market. an And year, Yes. right? an really talking trying of think NCF-adjusted to system. we're I to during after part the is focus let's the of going I of lose on gigawatts. frame to the prices address that renewables coal, of that fact face if focus focus XX-gigawatt problem, on driving basis power you sight what add you're ERCOT mean on nuclear And to you're would really the problem, X small way the are units, that economics to has are renewables, have gas-fired renewables. low really you and a is problem, very really efficiencies and the because You And the have have what you it, go about I can't to to you that. that On reason have the

through So there's be level. much to workshop told. the bigger we're a what at That's story working

said, some time going play Rebecca to to take out. this is As

Operator

Stanley. Our next Morgan question comes from Stephen Byrd from

Stephen Byrd

interested different take a impacts dynamics. there But result potential the and that commodity of you Wall thinking cost Street have solar, on perspective. of about I we're talk storage, in terms Journal to be this areas trying for a your innovations high excite the make are article innovation. was sort just green very I level, storage in the it views of hedging, in things to I costs, wanted through cost I or on of in there's there's significant outlook we're the sure performance? breakthroughs. in And in whether storage and at just potential areas know could curious reduction renewable attention innovation, on to positive an energy lot week in but more from interesting been a it was that on side, cost of or

Rebecca Kujawa

all of of and across lot the innovation Stephen. happening us, we excited changes certainly about are You that love we are sector. technology, a know We energy love

and latter and build-out help Those all very the XXXXs course, part in Street And -- of over the of create longer stimulating sector I change need also significant that think today our whether will the the lithium which cost you're think term, amount referencing about. renewables for excited we're support technology biggest time is are the that the that, adoption that of today. for alone in a more Journal we're overall really applications, and ion is very could storage-like into or interesting driver beyond, the particularly dynamic it's I which XXXX the even Wall substantial the hydrogen of expecting.

nearer short of the see is the we change term, which than think is biggest about think we innovations of you're policy. even some at the economic value the hand, In that talking renewables. term I proposition What could what probably is dynamic

addressed are the following incentives of in big just timing. could Washington. if in in driver But discussions the and a be You of like legislation, change of all, in as that variety are we well I in participating industry a know, terms are

Stephen Byrd

helpful. of amount was And to assets NAV? to very I the just was gain back to to drop-down what from go the That's announced. NextEra of then I the you wanted that curious, down drop-down

Rebecca Kujawa

you sure Stephen. the understand about the talking Are I'm question, proceeds? I not

Stephen Byrd

Well, of developing of proceeds just I achieve to to degree the able was assets? those the was cost the developing. of NextEra cost what to of relative relative premium curious sort

Rebecca Kujawa

We that disclosed haven't yet, Stephen.

consistent types financial pleased assuming and the with perspective projects, solar from go But the returns wind and we across distributed see through we these generation the we update course, that of Energy projects. an very the process, we'll Resources closes. statements of that returns overall are As transaction with

returns. be a to On about the I excited job a remarks, DG very team prepared to be the done triple And side, commented And we those the tend business in the terrific in in we're expecting has investment Resources. continue to building it. as The made that this we've very attractive Energy business.

Stephen Byrd

the looking relatively that was that's but looked -- be may just low, of of was is I some there I X% EBITDA not surprising, cash part yield, multiple CAFD Fleishman the Understood. multiple elements Steve missing. I'm asking I there at in -- just mean, as but the mentioned, EBITDA.

Rebecca Kujawa

returns of reflective the don't that prospects market And Stephen. to overall do the the the excited continue for are very -- see NEP. really marketplace we in that in the CAFD I We're think yields that think I was reflective for I demand we think and transactions project. of wouldn't with characterized anything about And unusual, of happy substantial be renewables.

Operator

Suisse. from next Crédit Our from Maheep question comes Mandloi

Maheep Mandloi

or the that remains else guidance on CAFD because side? and the that of timing the in on EBITDA something expected following Just adjusted Is side, drop-downs unchanged. NEP

Rebecca Kujawa

the What the sorry. Was part. was that guidance I -- I'm changed? missed

Maheep Mandloi

is guidance and EBITDA CAFD adjusted the quarter. same the as last The

wondering new if EBITDA drop-downs accretive XXXX the on just levels and... So are

Rebecca Kujawa

I understand now.

for at look high talking the as This year, end at was expectations. at anticipating even of year-end. they to expectations as be if what expectations, articulated guidance we this we've transaction expect were our are you which for CAFD our increase. Sorry part of an From rate about We and end ranges when adjusted end run last is year, growth expectations that the for that. started both of for do the about something the EBITDA we at our the of

Maheep Mandloi

XXXX be XXXX for drop-downs a needs? fair Got it. statement drop-downs, in terms distribution for this additional And it is And Got more might comfortable it. you that would growth? need of

Rebecca Kujawa

NEP will portfolio. continue be lot We of the to within opportunistic. There's flexibility a

We pretty payout continue to a ratio. low have

uncertainty we ratio. recall, of If disperse, also but you about relatively actions the low bankruptcy supplement X.X the delever to the to years ago, portfolio took have payout during some and PG&E continue a

but EBITDA expectations is of targets rate, against the them, really One achieve We of in ensure a really is we of give meet its how Partners the CAFD unit flexibility expectations. NextEra can to we're per is growth for to managing which run distribution how opportunistic that we can to of there. Energy to XX% meeting advantages and those of XX%, be expecting in sense and there get adjusted the provide that metric the terms measuring business

Maheep Mandloi

input of Got near meet costs the near-term some avoid does -- you. the the just one the And last a in maybe from side, terms that given you just equipment of billion using in recent the on on needs? having pressures cost and help news -- development that Or safe The harbor any term? to any upfront $X.X harbor me. higher are safe of

Rebecca Kujawa

to that as opportunity of flexibility we option create it incentives. inherent lot an see There's safe a the harbor the realize mostly tax portfolio, to to but

of terms Just of and seen available period. frames extensions terms in tax the time years, of in of extensions there a given have the in even we've as been credit percentage over the couple last

maintaining So priority. first flexibility optionality and is our

frames feel We into service XXXX equipment Energy the an with comfortable very from of to ultimately meet to time the very bring able and XXXX that build them and attractive being Resources needs perspective. continue and are

John Ketchum

of incremental think as certainly would opportunity Yes. extension harbor safe being us. for I an the

vintaging, we and on manage our that because portfolio. vintage good advantages harbor always shape on we were XXXX is the we're fortunate we're in of how we safe One our careful have

And for of opportunity the X.X wind so the safe harbor extension on creates gigawatts us side. X to

just X EBITDA for were back multiples. question could if in And Byrd's this EBITDA with The done what on Stephen past. I on we've multiples the drop-down the on consistent come second

to always remember, gets got tricky You it little bit credits. tax with a

You trade believe get that a a account is portion own assets what IDRs. we sale that the the multiple very after on up you NEP. We get good have renewable marker competitive to an basis, When of with We against remember distributions. end even also we cash all NEP, of into where today. take we EBITDA

Operator

Michael from Goldman from Sachs. question comes next Our Lapides

Michael Lapides

have I a Actually, couple.

the picture actually share renewable the big of overall benefiting are That's the that's think question Meaning First capacity think just space? mostly share? here? to your happening renewables, from from taking in all, one. you market tailwinds Or you U.S. do do you dramatic of broad you're growing is

it's what that of today them doing day start-up. yet about may XX or flow of kind versus in there of is super the oil, out are day, two developing new seeing have and the announced returns you're managers. returns? you ago? and well-funded, one of whether it's into entrants. flow whether Every of before done Are and funding whether Question gets you by saw What's well-capitalized or funds, the entrant, a well-known asset alternative someone, new some European a lots storage projects that yesterday announcement new big cash year months We of large by pension an it's a solar

Rebecca Kujawa

is to the is continue and come. The with grow the start the it for I'll years to growing of middle of Michael, significantly, this to right and So absolutely to expand expect it maybe significantly and it market left. we middle

occasionally Over both mid-teens pie of as market couple of and the time, actually solar, our those than a in of perspective, little our over probably percent is from So the the range higher been probably market has in on storage and bit last has the in significantly this occasionally years. and higher grown very for period remained long strong, a wind mid-teens, absolutely bigger. XX-ish has the getting share

both do out, and is be maintaining time. And have important we them focus we share important. think When and both competitive we enabled very among us is And we advantages also to returns. look on our over market maintaining that attractive think

that put that focused his the the in we the So best the we see portfolio. very are of on projects marketplace and projects John the getting ultimately out into with and team being happy

get We entrants the about asked new question lot. a

You know industry well. this

many position that smaller, opportunity power whole very -- and kind are big development-oriented coming maintain a get but the time. and to couple of that's That's decent-sized to of And eye then more the stack but still a years, in and you'll it of developing in couple we a enhance back bars bar for when continues more very awards of that purchase XXX and that the renewables, agreement twinkle look of it on and projects. we developer, value, a course, you when left small be capturing together of hundred chart COD to has mostly If the is is think really in, There value of create players post-COD. a and in greenfield bunch the you year, capital over been at the see consistent. we over that competitive to megawatts the and dynamic to to given that continue be good those advantages enormous about put

position been we've what about that and able excited the the overall about energy really we're presents. accomplish, to transformation excited excited really our So really opportunities and about

Michael Lapides

just Got NEP. follow-up it. on And then one quick

kind the level the And -- NEP. at IDR and But been and think some you structures at what fact IDR that it's but do from you've point industries as of NEE used point the away a use a have grows, structure gone of to while. at do IDR at revision reevaluate the of other the it, them? necessity you especially that to the given significantly have NEP still that what You becomes made

Rebecca Kujawa

the ensuring exists remains -- it structure each the from that that obviously, NEP. continue Energy of question to NextEra of to we both past. be important, Partners' NEE's Energy's before believe, we the today And of gotten with companies created the we knee perspective, between and their NextEra X that's there's perspective as And from alignment perspective. from place. And creation in value and incentives Michael, between a in and of synergy we've course, from value lot happy relationship

it We about and future the with alignment are But see very the and opportunities we'll both we're continues to pleased brings. work of interest excited the for what businesses today.

Operator

attending call. today's conclude with that, question-and-answer And we'll gentlemen, session do you We conference for presentation. and ladies today's and thank

your lines. You may disconnect now

NextEra Energy Partners (NEP) 23 Jul 212021 Q2 Earnings call transcript