NextEra Energy: Both Halves Of The Company Face Risk In New Florida Regulations

Summary:

  • NextEra Energy and NextEra Energy Partners are effectively one company, despite their separate tickers, given the extent of their financial interdependence.
  • NextEra Energy is potentially threatened once again by regulatory changes which could induce large-scale grid defection in Florida, after such changes were thought to have been abandoned.
  • The creation of any significant pricing differential in solar power production and consumption for households drives residential to batteries, which can induce complete defection from the grid.
  • NextEra relies on Florida utilities for the preponderance of its operating income. Renewables remain a lucrative but secondary income source.
  • Because significant grid defection in Florida could threaten NEE’s main income source, I am avoiding the companies despite recent operational improvements.

Electricity pylons at sunset

James O’Neil

Almost three years ago, I took my first look at NextEra Energy (NYSE:NEE) and NextEra’s affiliate NextEra Energy Partners (NYSE:NEP) because it looked like, just perhaps, some history was about to be made in both Florida and


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