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NextEra Sees Path Amid Virus to Expand Clean-Power Dominance (1)

April 22, 2020, 8:03 PM

NextEra Energy Inc., the world’s largest utility owner by market value, says it’s poised to increase its dominance over other renewable power developers amid fallout from the coronavirus.

The Juno Beach, Florida-based company will benefit from its access to cheap financing and other advantages as its smaller rivals struggle, John Ketchum, who leads NextEra’s competitive power business, said on a call with analysts Wednesday.

“We’re actually seeing more opportunities coming our way,” Ketchum said.

NextEra was the first major U.S. utility to report quarterly earnings and said its performance has been largely unaffected by the pandemic. Its results exceeded analysts expectations, and the company left its outlook unchanged.

The shares rose 5% Wednesday.

“It seems as though everything is running smoothly,” Scotiabank analyst Andrew Weisel, who has a recommendation equivalent to ‘buy’ on the stock, said in a note to clients. “The company is well-positioned to take market share.”

NextEra’s become the world’s first utility with a market capitalization of more than $100 billion last year, thanks largely to its clean-power business. It has wind and solar farms in about two dozen U.S. states and four Canadian provinces. Demand for renewables should remain strong amid falling costs relative to other sources of energy, executives said.

A NextEra wind farm in Pennsylvania.
Photographer: Gene J. Puskar/PUNGS/AP Photo

“We believe the market opportunity for low-cost renewables has never been greater,” Chief Executive Officer Jim Robo said on the call. “In times when consumers and businesses are dealing with the challenges of economic uncertainty, we expect our customers will help ease those impacts by lowering the cost of power for their customers through new renewable generation.”

During the first quarter, NextEra added more than 1.6 gigawatts of wind and solar projects to its pipeline. Most deals were closed remotely.

NextEra’s strong first-quarter performance and outlook underscores how utilities may be better poised to weather the pandemic than other sectors. While power use has ebbed as millions of businesses close, residential demand remains robust.

Yet it remains to be seen whether utilities elsewhere in the U.S. will fare as well. Officials in Florida were slower to impose sweeping lockdowns than leaders in New York, California and elsewhere. Plus, warm southern weather helped drive up electricity use 10% over the past four weeks in NextEra’s territory compared to the past two years.

(Adds analyst comment in the sixth paragraph.)

To contact the reporter on this story:
Gerson Freitas Jr. in New York at gfreitasjr@bloomberg.net

To contact the editors responsible for this story:
Joe Ryan at jryan173@bloomberg.net

Patrick McKiernan

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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