NextEra Energy, Inc.NEENYSE
LOADING
|||
Operator: Good day, and welcome to NextEra Energy, Inc. Q3 2025 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mark Eidelman, Director of Investor Relations. Please go ahead.
Mark Eidelman: Thank you, Steve. Good morning, everyone, and thank you for joining our third quarter 2025 financial results conference call for NextEra Energy. With me this morning are John Ketchum, Chairman, President and Chief Executive Officer of NextEra Energy; Mike Dunne, Executive Vice President and Chief Financial Officer of NextEra Energy; Armando Pimentel, President and Chief Executive Officer of Florida Power & Light Company; Brian Bolster, President and Chief Executive Officer of NextEra Energy Resources and Mark Hickson, Executive Vice President of NextEra Energy. John will start with opening remarks, and then Mike will provide an overview of our third quarter 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 reports and filings with the Securities and Exchange Commission, each of which can be found on our website, www.nexteraenergy.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.
John Ketchum: Thanks, Mark, and good morning, everyone. NextEra Energy delivered strong third quarter results with adjusted earnings per share increasing 9.7% year-over-year. In addition, through the first 9 months of the year, our adjusted earnings per share has increased 9.3% year-over-year. The continued strong financial and operational performance at both FPL and Energy Resources positions our company well to meet its overall objectives for the year. America is in a golden age of power demand. The country needs more electricity than ever. New electrons can't get on the grid fast enough. NextEra Energy is uniquely positioned to help lead this pivotable moment for our sector. We develop, build and operate all forms of energy infrastructure. At our core, we're a development company. We have a world-class platform that enables us to quickly build low-cost generation and electric and gas transmission. We're not just recontracting around existing assets, we're also building new energy infrastructure needed to power America. Our 2 world-class companies, Florida Power & Light Company and NextEra Energy Resources are the perfect complement to one another. Day in and day out, we are powering today and building tomorrow. Importantly, we are in a terrific position to continue delivering near-term and long-term value to our customers and shareholders. As we discussed with you earlier this month, our long-term earnings growth drivers are extensive, both inside and outside Florida. Simply put, we have many ways to grow across our platform, both this decade and the next. We are excited to discuss this in much more in greater detail with you at our investor conference on December 8. The Florida economy continues to see significant economic growth and Florida Power & Light Company continues to make smart long-term investments to serve that growth, while keeping bills low and reliability high. We put our customers first and the results speak for themselves. FPL customers experienced top decile reliability that's nearly 60% better than the national average. And typical FPL residential bills are 20% lower than they were 20 years ago when adjusted for inflation. And that's not by accident. FPL's nonfuel O&M costs are 70% lower than the national average and over 50% lower than second best in our industry. And approximately 90% of FPL's power generation comes from the nation's largest gas-fired fleet and 4 nuclear units. This baseload power is the backbone of our system, giving us the flexibility to meet our customers' needs with the lowest cost forms of energy right now, solar and storage. Remember, a robust gas and nuclear fleet means we don't necessarily need nighttime electrons. We need more low-cost electrons to meet our daytime peak, which is why solar and storage are the perfect complement and choice for FPL system and customers today. FPL is also preparing for the future, which will require even more baseload gas generation and perhaps further down the road, nuclear generation. And it's all happening in a state that needs more electricity, not less, just like America. Florida is one of the nation's fastest-growing states and the world's 16th largest economy. It's why FPL plans to invest approximately $40 billion over the next 4 years in new all-the-above energy infrastructure, including 5.3 gigawatts in solar, 3.4 gigawatts in battery storage and a gas peaker plant that is pending regulatory approvals. We look forward to continuing the successful multi-decade approach of adding low-cost generation to meet Florida's growing need for power, while also increasing reliability and keeping customer bills low. This approach is at the heart of our new 4-year rate proposal. As a reminder, on February 28, we initiated FPL's 2025 base rate proceeding for new rates effective in January 2026. We reached a proposed settlement agreement in August with most of the intervenors in the proceeding, reflecting a broad set of constituents across our customer base. The 4-year proposed agreement would provide an allowed midpoint regulatory return on equity of 10.95% with a range of 9.95% to 11.95%. There would be no change to FPL's equity ratio of 59.6%. The proposed agreement also includes a rate stabilization mechanism similar to what we filed in February. The proposed settlement also includes 2 new large load tariffs that are designed to ensure large load customers pay for the incremental generation needed to serve them. We believe the proposed settlement is fair, balanced and constructive and supports our continued ability to provide highly reliable, low-cost service for our customers through the end of the decade. If the proposed agreement is approved, typical residential customer bills would increase only about 2% annually between 2025 and 2029. This means bills would remain well below the current national average, providing our customers with the economic certainty that comes from a 4-year rate agreement. We completed evidentiary hearings earlier this month and expect the Florida Public Service Commission to provide a final decision on the proposed settlement agreement on November 20. This summer, we received a constructive outcome on federal tax credits, providing policy certainty for our renewables build at Energy Resources. We expect to receive tax credits for our renewable development plans through 2030, while our suppliers are positioned to be FEOC compliant. We've also been able to reduce development risk for a large part of our planned build. That's because Energy Resources has approximately 1.5x coverage of the project inventory required to support its development expectations through 2030. This provides us the runway we need to continue delivering low-cost power solutions to our customers, who need power today and tomorrow. Renewables are just the start. We also plan on delivering power through battery storage, gas-fired generation and nuclear. Over the second and third quarters alone, we have originated 2.8 gigawatts of new battery storage opportunities, as we continue to grow the world's leading storage business backed by a domestic supply base with batteries made in America. We're also leading the much-needed development of linear transmission infrastructure, both electric and gas, and our customer supply business has proven integral to serving data center customers. We're tying it all together through our AI-driven world-class development platform and decades of experience. And we are doing it at a time when the combination of development capabilities and a strong balance sheet are more important than ever. It's why we are ideally positioned to work with hyperscalers, who are increasingly looking to power their business by bridging -- by bringing their own generation. We are unique in that we combine a national footprint, a strong balance sheet, supply chain capabilities and experience in building all forms of generation and transmission, together with unmatched customer relationships and an industry-leading team on a development platform second to none and that's what we believe it takes to serve this new customer class, which is investing tens of billions of dollars per project. Hyperscalers, data center operators and load serving entities continue to tell us they need solutions for large load today and tomorrow to address growing energy demand across America. As a leader in serving this demand, I am pleased to announce that we have entered into a 25-year power purchase agreement with Google that pending regulatory approvals, enables us to recommission our Duane Arnold Energy Center nuclear plant in Palo, Iowa, just outside of Cedar Rapids. The 615-megawatt plant is just the beginning and will help power Google's growing cloud and AI infrastructure in Iowa once it returns to operation, which we expect to occur no later than the first quarter of 2029 and perhaps as early as the fourth quarter of 2028. Duane Arnold shut down in August 2020 after safely and reliably serving Eastern Iowa for decades. And because we carefully and methodically went through the decommissioning process, we have confidence in the investment required to restart it. During our evaluation of recommissioning Duane Arnold, we collaborated closely with the plant's minority owners, Central Iowa Power Cooperative, known as CIPCO, which provides power to the local community and Corn Belt Power Cooperative. As part of that collaboration, CIPCO will purchase 50 megawatts of the plant's output on terms and conditions consistent with the Google PPA, and we have signed definitive agreements to acquire CIPCO and Corn Belt's combined 30% interest in the plant, which will bring our ownership to 100%. Restarting Duane Arnold marks an important milestone for NextEra Energy. Our partnership with Google not only brings nuclear energy back to Iowa, it also accelerates the development of next-generation nuclear technology. With the support of the Trump administration, Google and NextEra Energy are creating more than 1,600 jobs and adding more than $9 billion to local economy, creating a win for the U.S., a win for both companies and a win for Iowa. As a demonstration of the pride of working at Duane Arnold and for NextEra Energy, a significant number of Duane Arnold's previous workforce are looking to return to work at the facility. And our team working to recommission Duane Arnold includes many of the same employees who decommissioned the plant 5 years ago. Beyond the nuclear plant, we have ample land available to provide additional power and capacity solutions, including battery storage to support data center build and potential future expansion. As part of the agreement, NextEra Energy and Google have also signed an agreement to explore the development of advanced nuclear generation to be deployed in the U.S., which will help power America's growing electricity needs. Of course, to move that forward, we'll be certain to appropriately mitigate and limit our financial exposure as new nuclear technologies continue to advance. We expect Duane Arnold will be eligible for a nuclear production tax credit with a 10% energy community bonus. And once restarted, we expect Duane Arnold to contribute up to $0.16 of annual adjusted EPS on average over its first 10 years of operation. Duane Arnold is one example of data center hubs we are developing across the country. When you put it all together, our opportunity set is not contained to a single utility service territory. NextEra Energy has a national footprint. We serve America and have relationships with all types of customers, including cooperatives, municipalities and utilities of all sizes looking to attract data center load to their service territories. We are committing to building new infrastructure and building energy for our customers where and when they want it. And I believe there is no team and no company in this country with a comprehensive set of skills and balance sheet better positioned to get the job done. Bottom line, we have many ways to grow, and we remain well positioned not just for the rest of the decade, but into the next decade as well. We look forward to sharing many more details with you in December. With that, I'll turn the call over to Mike to walk you through detailed results from the quarter.
Michael Dunne: Thank you, John, and good morning, everyone. For the third quarter of 2025, FPL's earnings per share increased by $0.08 year-over-year. The principal driver of this performance was FPL's regulatory capital employed growth of approximately 8% year-over-year. FPL's capital expenditures were approximately $2.5 billion for the quarter, and we expect FPL's full year capital investments to be between $9.3 billion and $9.8 billion. For the 12 months ending September 2025, FPL's reported return on equity for regulatory purposes will be approximately 11.7%. During the third quarter, we reversed approximately $218 million of reserve amortization, leaving FPL with a balance of roughly $473 million. Looking forward, we expect to use a portion of the remaining reserve amortization balance for the remainder of the year. FPL's third quarter retail sales decreased 1.8% from the prior year comparable period due to milder weather. On a weather-normalized basis from the prior year comparable period, retail sales increased by 1.9% due to an increase in customer growth and underlying usage. Now let's turn to Energy Resources, which reported adjusted earnings growth of approximately 13% year-over-year. At Energy Resources, adjusted earnings per share increased by $0.06 year-over-year. Contributions from new investments increased $0.09 per share, primarily driven by continued growth in our renewables portfolio. Contributions from our existing clean energy portfolio remained unchanged year-over-year despite weaker wind resource due to better performance at our nuclear fleet. Wind resource for the third quarter of 2025 was approximately 90% of the long-term average versus 93% in the third quarter of 2024. The comparative contribution from our customer supply business increased by $0.06 per share, primarily driven by timing of origination activity during the quarter. All other impacts decreased by $0.09 per share, driven by asset recycling during the third quarter last year as well as higher financing costs, mostly related to borrowing costs to support our new investments. Energy Resources had a strong quarter of new renewables and storage origination, adding 3 gigawatts to the backlog. With these additions, our backlog now totals nearly 30 gigawatts after taking into account more than 1.7 gigawatts of new projects placed into service since our last earnings call. We expect the backlog additions will go into service over the next few years and into 2029. This marks the sixth consecutive quarter that Energy Resources has added 3 or more gigawatts to its backlog. We continue to see strong customer demand for ready now capacity solutions as we had our strongest quarter ever in battery storage origination with 1.9 gigawatts of additions to our backlog. Turning now to our third quarter 2025 consolidated results. Adjusted earnings per share from Corporate and Other decreased by $0.04 per share year-over-year. Our long-term financial expectations remain unchanged. We will be disappointed if we're not able to deliver financial results at or near the top end of our adjusted earnings per share expectation ranges in 2025, 2026 and 2027. From 2023 to 2027, we continue to expect that our average annual growth in operating cash flow will be at or above our adjusted earnings per share 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 always, our expectations assume our caveats. This concludes our prepared remarks. And with that, we will open the line for questions.
Operator: [Operator Instructions] The first question comes from Steve Fleishman with Wolfe Research.
Steven Fleishman: Congrats on the Duane Arnold news. Maybe just on that topic, John, can you give us any sense on what the cost of restart might be and also the buy-in price of the 30% that you're buying in of Duane Arnold?
John Ketchum: Yes. Thanks, Steve. Appreciate the question. So first of all, just the sensitivities, we're not going to go into the CapEx number on this call. But needless to say, we feel very good about our ability to build this to recommission Duane very efficiently. The plant is in great shape. As I said before, the team that will be doing the recommissioning is the same team that did the decommissioning. I've been out there recently tour the facility. It's in good shape. So we'll provide more details on that as we move forward. On your second question on the 30% buyout of CIPCO and Corn Belt, it's really pretty straightforward. I mean that buyout was done in exchange for us assuming their decommissioning liability. It's pretty much that straightforward. And from our standpoint, we have more than ample decommissioning funds that had already been set aside. So I think it's attractive for us. I think it's attractive for CIPCO and Corn Belt as well win-win for all parties involved.
Steven Fleishman: Okay. And then one other question, different topic. Just -- it was great to see another 3 gigawatt quarter add, but there was a gigawatt removed from the backlog. Could you maybe just talk about that 1 gigawatt removal and what's driving that?
John Ketchum: Yes, absolutely, Steve. This is pretty straightforward. So as you said, we added 3 gigawatts. I mean, another really strong quarter of origination, and we are just seeing a lot of demand for renewables and storage in the market. And remember, so out of that 3 gigawatts, we put 1.7 gigawatts into service in the quarter. And really, I think what you're referencing is the 900 megawatts. Let me just break that down. So we removed 650 megawatts from backlog, which was pretty conservative by us. I think you know we're pretty conservative on how we manage the backlog. We did that for various development reasons. And this is really on some smaller projects that we are really -- that we're continuing to manage, as we move forward. I think we're going to get it all back in '26 and '27 on that 650 megawatts. So it will just come a little bit later. And then there was another 250 megawatts that we just had a little bit of a permitting delay on. So we're just shifting that from '25 to '26. And when you put that 900 megawatts together, it's what, call it, 130 of the backlog, but feel good about getting all of that back. It just comes a little bit later in time. Otherwise, had you included that, we would have been at the bottom end of the '24, '25 range. And I think as investors saw, we've reaffirmed our expectations through '27, including the fact we'd be disappointed not to be at the high end of the range. And so these moves really just don't have any impact on our ability to meet our financial expectations that we've communicated to investors. And as you look out, a lot of positives to see in the backlog. I mean '28 and beyond are shaping up unbelievably well. We just got a great head start on those years. So overall, we're in really, really good shape where we sit now. And I have no concerns about where the backlog sits, and it's as strong as it's ever been.
Operator: The next question comes from the line of Shar Pourreza with Wells Fargo.
Shahriar Pourreza: John, I just -- I know you kind of mentioned to Steve, you didn't want to get into the actual CapEx numbers at Duane Arnold, but let me try to maybe ask it a little bit differently and just get into the qualitative part of the plant. I know there's obviously a bogey of $1.6 billion for a Pennsylvania plant that's kind of under budget now. You kind of mentioned that this current plant is in good shape. Can you just maybe directionally talk about what you're seeing with that plant and how we should view it without going into the numbers?
John Ketchum: Yes. Thanks, Shar, welcome back, by the way. Good -- great to have him back.
Shahriar Pourreza: Thanks for having me back.
John Ketchum: Yes. Yes, it's great to hear from you. So sure. I mean I'll just kind of -- without going into the numbers, again, we've spent a lot of time going through Duane Arnold, a lot of diligence. And one -- I'm going to go back to what I said before, having the same team that did the decommissioning, leading the recommissioning is an enormous advantage because folks know exactly what was done. And so the plan that we have, we have a lot of certainty around, right? And so I think the scope is pretty well defined, and we know what needs to be done. The facility is, like I said, in really good shape. I mean when I went through it, it was like we just kind of put a lock on the door and got the keys out and opened the lock back up, and then we're going back through it. And there's obviously some things -- some work that has to be done to bring the plant back online. But the plant is in good shape, and we feel very good about our ability to execute against what's in front of us.
Shahriar Pourreza: Fantastic. And then, John, just one last one is just, I guess, given the lack of additional nuclear sites to kind of repower for you guys, do you see kind of the next wave of deals moving to CCGTs for energy resources? Are you seeing demand there, especially given the partnership you have with GE?
John Ketchum: Yes. Thanks, Shar. So we have many ways to grow, which we talked about a month ago. And I'll talk more about those in a minute. But one of those ways to grow is through new gas-fired technology. Nobody has built more gas-fired generation in this country in the last 20 years than NextEra has. And so we've got a lot of experience at it. And we're really a natural to get back into that area because of our development platform. It's so easy for us to take what we already have in terms of land agents, permitting, all the supply chain capability that we have. You mentioned the partnership that we have with GE Vernova and the strong relationship that we have there, the customer relationships, all the things that go with that development platform, it's easy for us to pivot into gas. And I've said before, we have roughly a 20-gigawatt pipeline already developed because of that development platform and the efficiency that's built into it. And we're excited about what we're seeing on the combined cycle side and some of the opportunities that we have. And we'll talk more about this in December, but a unique advantage that we have is -- because it takes a little longer time to build gas-fired generation, call it, 4, 5, 6 years, a huge leg up that we have that we haven't talked as much about, and again, we'll focus on this in December, is all the renewables and storage that we have. And so when data centers want to get online now and quickly and they want to secure a load interconnect by bringing their own generation, we can accommodate that because we have the solar and the storage that's ready to go and then the gas can come behind it. So we're in a bit of a unique position there in terms of our ability to really kind of hook and anchor data center build-out, as we position our portfolio for these larger scale data center build-outs, we call, data center hubs that can be followed on by gas, maybe SMR technology going back to the collaboration nationally that we have with Google. So just a lot to be excited about.
Operator: The next question comes from the line of Nicholas Campanella with Barclays.
Nicholas Campanella: I just wanted to ask going back on nuclear. There's a lot of momentum right now for AP1000. And just curious what your appetite would be in participating in something like that? Or if in terms of new nuclear, should we be solely kind of focused on SMR and restarts of current large-scale plants?
John Ketchum: Yes. I think for us right now -- I mean, we have Duane Arnold that we talked about. We have Point Beach, we have Seabrook. We have -- we'll be turning our attention to those 2 facilities as we optimize. But one thing that's really exciting is that we probably have 6 gigawatts of SMR capacity across those 3 sites, not to mention back to the development platform. And we are a nationwide development company, right, that has a national footprint. So we also are looking at greenfield sites as well going back to that anchor point around having existing generation ready to go that can accommodate Phase 1, 2, 3 of a data center build-out, as we wait for gas-fired generation to come or SMR technology to come behind that. And we're doing a lot of work around SMRs, and we'll talk more about in December. But I also want to go back to what I said about SMRs, which is that we're going to be very disciplined in our capital allocation strategy and making sure that we have the right commercial and financial structure where we limit any financial exposure that we have, as we invest in those facilities. But when you think about NextEra, I mean, we're really unique because the hyperscaler is investing tens of billions of dollars. This is not like the business 4 or 5 years ago, competing against a lot of small developers. They can't do this, right? The folks that can do this are large-scale developers like NextEra that have a strong balance sheet, a track record, the credibility to be able to match what the hyperscaler needs and the ability to build across generation types, whether it's renewables, whether it's storage, whether it's gas, whether it's nuclear, whether we need to bring a transmission solution to bear, whether we need to build a gas pipeline lateral to enable a gas build-out. I mean, all the things that we bring to the table are pretty unique. And again, combined with that large balance sheet, the team and the customer relationships and the ability to secure load interconnects and work with utilities and co-ops and municipalities, I mean, that really kind of puts us in a pretty small group of folks. And so as we look at the market, really, I think -- I look at the DOE letter that was sent recently over to FERC and more of a focus on bring your own generation. I mean I think that just absolutely plays to all of our strengths and advantages. And it's -- the future is exciting.
Nicholas Campanella: That's great. I really appreciate that. Good points. And I know that you've been doing this 6% to 8% outlook for a long time. You've basically been beating that every year. And you look at some other premium companies out there now doing 7% to 9%. What's your philosophy and how you're thinking about long-term growth? And is that a consideration at all, as we are thinking about what could be out there on the Analyst Day?
John Ketchum: All great questions, and we'll address those on December 8.
Operator: The next question comes from the line of Julien Dumoulin-Smith with Jefferies.
Julien Dumoulin-Smith: Congratulations, team. Good to hear from you. Look, I just wanted to follow up on a couple of things here. First, with respect to the gas and contracted gas strategy, can you speak a little bit to what you're expecting or what success you've had thus far? I know this may be digging a little bit into the December update. But to the extent possible, can you discuss a little bit of the latest progress? And should we expect more of these hyperscaler type announcements like Google, but to be parlayed back into contracted gas? And is there a cadence that you'd be care to share as you think about this ramps up? I mean, I know it's early days in that longer-dated 2030-plus time frame, but how would you begin to characterize that opportunity, as it is -- as it stands today?
John Ketchum: Yes. So a lot in the hopper is how I would describe it, Julien. A lot of different things that we are working on. And I mentioned our data center hub strategy, which I don't want to spend too much time on today because, again, we're going to get into that in December. Obviously, building out combined cycle units is a big part of that. We think the things that we have in front of us are attractive across the class of hyperscalers that we see. We think the position that we have around our existing renewable portfolio is an enticing way to secure an early-stage load interconnect, as the gas comes later. And so the ability to provide gas with renewables and storage or with SMR technology, the ability to build out the infrastructure necessary to accommodate all that, whether it's transmission, whether it's gas pipelines, I think all plays to our strengths and our advantages together with the supply chain capability that we have. And so in terms of cadence, look -- we look forward to kind of laying this out for you guys in December, but I feel really good about the competitive positioning that we have today because, again, I go back to the fact that there are very few folks that can actually garner the trust, the confidence, the balance sheet, all the things that you saw with the partnership that we have with Google that we're having a lot of success with other hyperscalers as well that looks promising for our future. So more to come.
Julien Dumoulin-Smith: Excellent. I appreciate it. And then related here, just to elaborate a little bit further on that net originations discussion here. Can you elaborate a little bit? I mean, obviously, there's been some media attention around Esmeralda and Jackalope, for instance. Can you speak a little bit how that fits in? Were they in your backlog or the position? I mean just trying to juxtapose the broader media conversation, which isn't particularly articulate about this versus what we're seeing in the quarterly update.
John Ketchum: Yes, absolutely. So Esmeralda is just a development project. It was not in our backlog. It was a development project for the future on BLM land. I think the BLM was actually pretty clear that -- while they were not looking to permit this as one large project, they were going to entertain applications around individual projects. But remember, we have a massive pipeline, right? So this was just one piece of it. We spent no money on Esmeralda. It's a project in development that we could develop someday down the road. So really, there's really nothing to see there. And then on Jackalope, that project, we'll extend out a little bit more. We continue to work with the customer there. And we'll see what happens. But I mean, again, that's just one small project in the grand scheme of things for a massive backlog that we have. And again, don't forget, I mean, that's why we have 1.5x coverage on our inventory. I don't worry about it at all. We can easily draw from other projects in our pipeline to be able to satisfy customer needs as we go forward. And that puts us in incredibly good position.
Operator: The next question comes from the line of Carly Davenport with Goldman Sachs.
Carly Davenport: Maybe just another quick follow-up on the backlog. A lot of the additions this quarter coming beyond the 2027 time frame. So just as we think about that potential pull forward in demand related to the tax credits rolling off that you all have referred to, is that strictly a 2028 plus opportunity? Or is there any opportunity to see that impact '26, '27 as well?
John Ketchum: Yes. I think -- the pull forward of demand, Carly, I think it just escalates as you get closer to 2030. So you just continue to see step-ups there. And so for '26 and '27, we feel very good about where we sit right now. I think we've got more quarters to go in terms of filling the '27 piece. But again, we look at our financial plan for '26 and '27 in good shape. And what I'm really focused on is that '28, '29, '30 because there's just so many opportunities, as you look to the back end of that decade and that natural pull forward that you mentioned that we've seen historically where we could see a lot of customer demand, not only in '28, but in '29 and '30, and we're so well positioned around FEOC and around our safe harbor position. I think we have some very unique competitive advantages that we will highlight and spend more time on in December. So as I look at the pipeline shaping up around 30 gigs and the way it's shaping up by year, I feel very good about where we sit.
Carly Davenport: Great. And then maybe just back on Duane Arnold. The $0.16 of average accretion that you mentioned in the first 10 years of the PPA, is there any color that you can provide on the cadence or if there's significant variability year-to-year that we should be thinking about?
John Ketchum: There is not significant variability year-to-year. The reason we said that is -- remember, there's refueling outages for nuclear. And in refueling years, it's not that significant of an impact, but it moves around a little bit around refueling outages. So that's why we use that language.
Operator: Next question comes from Bill Appicelli with UBS.
William Appicelli: Just going back to follow up on Carly's question around the pull forward. And just maybe you can speak to the development capabilities, right? You've sort of been averaging around this -- around 3 gigs a quarter on the low end of that. Where can that go potentially in terms of just from a capability, supply chain perspective?
John Ketchum: Well, we're really well positioned on our -- not only on our supply chain and the things we've been able to do around batteries and the supply chain positioning we have around the rest of the parts and equipment that we plan to purchase. You guys know well, I mean, transformers, electric switchgear, other parts of the supply chain. I mean, I think that's going to create a natural competitive advantage, which goes with having a strong balance sheet and a world-class supply chain capability as we go into '28, '29, '30 that uniquely positions us for the opportunity that can come there, right, which -- because we can do some things that others can't. So I feel very good about, and if you look historically on pull-forward years, we have fared very well on a market share basis compared to our competition there. And also, as we start thinking about being able to not only do what I call kind of the bread-and-butter business around origination, but then also adding on being able to fold in renewables and storage into large load solutions as I've mentioned a couple of times on this call, I mean, it's really an incremental opportunity that we haven't had before, as you think about serving that large load customer. So the demand pull forward is something that we're obviously very focused on and have positioned the business around. And I think we're going to be uniquely capable and positioned to capitalize on the opportunity it's going to bring.
William Appicelli: Great. And then just shifting gears on -- at FPL, the large load growth. I guess how is the valuation of that going? I think you've talked about maybe 3 gigs of initial sites or capability. I'm sure you'll speak more to this in December, but any color there around tariff structure or sort of the work and the conversations around bringing those customers in?
John Ketchum: Yes, I'll turn that over to Armando.
Armando Pimentel: All right. Thank you. So we've got a couple of tariffs that are up for approval at the commission that we are going to hear about on November 20. Regardless of that, we've had folks that have been pinging us all year on availability of getting onto our system, when can they get on to our system and so on. So we are no different at Florida Power & Light than many of the utilities that you guys follow around the nation. These hyperscalers and these data center operators are looking to figure out where they can plug in and how quickly they can plug in. I think what John and Mike Dunne have mentioned before is that this is a potential opportunity at FPL later this decade. And I think for now, that's right. That could certainly change. But we are spending a lot of time doing engineering studies for everyone that you could imagine. And we hope that the environment here in Florida is one that the hyperscalers and data center operators will come to embrace. I mean, why not? We've got a great system at a low cost. So we feel really good about it.
Operator: The next question comes from the line of David Arcaro with Morgan Stanley.
David Arcaro: I was wondering if you could talk about how renewables are interacting with data centers, especially over the next couple of years for projects that you've been working on. I was curious if there's any percentage of power needs that you find are typically covered by renewables when you're powering data centers? Are you seeing any colocation opportunities? And how does battery storage get involved? So curious if you could give kind of a sense of the typical relationship or design that you're seeing there.
John Ketchum: Yes, David, what we're seeing there is data centers want to get going immediately, right? And so they want to build out the initial phases of their campus, which could be -- end up being 1,000 -- 3,000, 4,000, 5,000-acre campuses. Every 1,000 acres is about a gigawatt of capacity. But as they think about permitting and constructing their facility, I mean, the first thing they're looking for is load interconnect. And a lot of parts of the country in securing a load interconnect, you've got to bring your own generation. And so what's unique, I think, about what we can do around renewables is we can get them over the hump over those first few years of being able to identify a site, being able to identify a generation solution that's sufficient to get them that load interconnect, whether it's through a combination of renewables or renewables and battery storage. We've seen that in a number of places. We've also seen the ability to leverage like grid alliance, where we can do upgrades on a system that can actually free up additional megawatts needed to secure that initial load interconnect. But that's the key. You got to get the load interconnect to be able to take the power off the grid to be able to satisfy the initial phases. And many of the load serving entities are saying, well, bring your own generation to make that happen. And we're able to do that with renewables, with storage, with grid alliance. And then the plan is to bring the baseload generation behind it. And so when you can combine a comprehensive solution for the hyperscaler, that's what they're looking for and a trusted partner that they know can get it done over time. And we can grow right alongside with them as they're expanding their existing facility.
David Arcaro: Got it. Makes sense. That's helpful. And I was wondering if you could talk about what you're seeing in terms of project returns, the trajectory there? And is there a case for higher returns too as we go forward through the end of the year?
John Ketchum: Yes, that's a great question. And I said this a month ago, returns have been higher than I've ever seen them in this industry. And I think that's due in part to the unique competitive advantage that we have, and it's exciting for us because as I think about all the opportunities that we have, not only this decade but into the next, recontracting is a big piece of that. And so we have a lot of existing generation that rolls off a contract by the end of the decade that we're going to be able to recontract into the market at much higher premiums. But look, it's just supply and demand. It's that simple. There's a lot of demand out there, and there's just not as much supply to match it. And so that's commanding premiums in the market and high and attractive returns. And that's why it's great to be in a position where we have a really strong pipeline and a really strong supply chain position. And I think we're going to be uniquely positioned going forward to be able to capitalize on what is going to become just a growing market demand, particularly as we get to the end of this decade and into the next.
Operator: The next question comes from the line of Nick Amicucci with Evercore ISI.
Nicholas Amicucci: Just wanted to touch upon kind of the evolution that we just kind of left upon. So as we kind of think about over the balance of this decade into the next, how should we be thinking about the kind of the portfolio, the kind of culmination of that and kind of if we think about it by energy and generation source, obviously, we saw storage kind of tick up here from a backlog perspective. Just interested in kind of hearing your thoughts around it.
John Ketchum: Yes. I mean -- so as I think about the next decade, we've always had Florida Power & Light. And Florida Power & Light benefits from being in fastest-growing state in the United States, 16th largest economy in the world, strong growth as we accommodate all that population that continues to move into Florida. Don't see that slowing down next decade. But as you think about our regulated businesses, it's not just what I call kind of the baseload Florida Power, it's the large load with the large load tariff that we have not had before. It's electric transmission. There's an incredible demand for transmission around the country. We have the leading competitive transmission business in NextEra Energy Transmission. So a lot of CapEx opportunities and growth opportunities for NEET as we go forward. And then you add on gas transmission as well, not only around the existing pipeline assets that we own today, but also, I think, some long-haul greenfield opportunities that we'll be talking more about gas laterals to accommodate hyperscale build-outs. So that really helps to frame even a larger regulated business than we have had historically. And then you think about all the other levers and ways to grow that we have on the Energy Resources side, not just the renewable business that just gets stronger and stronger as we get into the next -- the end of this decade, and then that will carry into the next, but storage as well. We are in a capacity short market. Storage is economically advantaged. It's flexible. It can be built very quickly in 16 to 18 months, whereas gas-fired peakers take 4 to 5 years in many cases. So very flexible, very low cost. And that we are the world's leader in storage and have a unique position with our battery supply agreement that's all domestic and is derisked from a FEOC standpoint. And then I think about nuclear, the agreement that we announced today not only around Duane Arnold, but the collaboration around advanced nuclear nationwide, all the opportunities we have around Point Beach, we have around Seabrook and then greenfield advanced nuclear build-out and then gas-fired generation as well, having been the leader in gas-fired generation development over the last 20 years, leveraging the development platform that we have today, the 20-gigawatt pipeline that's in place. And then you combine all those capabilities into serving the large load customer, which really, as I said before, creates a unique position for us when you combine all the capabilities we have around generation, all the capabilities we have around electric transmission and gas pipelines and also our customer supply business because remember, whenever you're trying to secure a load interconnect, you've got to have a retail energy capability to get that load interconnect from load-serving entities. The customer supply business plays a very important role. You have to be able to do many, many things to be able to enable a large load transaction, and you have to have the balance sheet and you have to have the team. And we also have a 50-state footprint to be able to execute against that, which is really, really unique, given that we've been doing that for 20 years. And then the recontracting opportunity that I mentioned before. I mean we have a massive long power position that becomes open as we get to the end of this decade. And then all the artificial intelligence things that we're doing to really help drive efficiencies and cost savings across the business and revenue opportunities for us as well. So you put all those pieces together, we are in really good shape post 2030.
Nicholas Amicucci: Perfect. Yes, that makes a ton of sense. And then just one last quick one for me, too. As we kind of think about now, obviously, just topic du jour with Duane Arnold and the potential restart. How are you guys seeing the nuclear fuel supply chain kind of shape up, as we kind of think about it going forward, just knowing that Russia is going to be coming offline from an enriched uranium capacity in 2028?
John Ketchum: Yes. I mean I think the U.S. government is very focused on that. The industry is very focused on that. And we've been very disciplined in terms of how we secure our long-term fuel going forward. So I feel good about where we stand. We baked into our numbers that we gave you on Google our position around where nuclear fuel sits today.
Operator: This concludes our question-and-answer session. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Thank you.