8-KOther EventsExhibits & Filings

NEXTERA ENERGY INC 8-K Report, Corporate Update (Aug 15, 2012)

Filed August 15, 2012For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

This 8-K filing from NextEra Energy Inc. (NEE) on August 15, 2012, reports a significant development for its subsidiary, Florida Power & Light Company (FPL). FPL, along with key intervenors, has filed a joint motion with the Florida Public Service Commission (FPSC) proposing a settlement agreement to resolve FPL's base rate proceeding. This proposed agreement, if approved, would set new retail base rates and charges, expected to increase annual retail base revenues by $378 million starting in January 2013, and would remain effective through December 2016. The settlement outlines a regulatory return on common equity (ROE) of 10.70% with a band, and includes provisions for recovering modernization project costs and future storm restoration expenses. The parties are requesting swift FPSC approval, with a decision due by August 31, 2012, to ensure the new rates can be implemented by January 1, 2013, as planned.

Key Highlights

  • 1FPL and key intervenors have jointly proposed a settlement to resolve the ongoing base rate proceeding.
  • 2The proposed agreement would result in an annualized increase of $378 million in FPL's retail base revenues, effective January 2013.
  • 3The settlement sets FPL's allowed regulatory return on equity (ROE) at 10.70%, with a range of 9.70% to 11.70%.
  • 4Costs associated with FPL's three modernization projects (Cape Canaveral, Riviera, Port Everglades) will be incorporated into retail base rates as they become operational.
  • 5Provisions are included for the amortization of up to $400 million in surplus depreciation and fossil dismantlement reserves, subject to ROE limitations.
  • 6Future storm restoration costs will be recoverable on an interim basis, capped at a surcharge of $4 per 1,000 kwh for residential customers in the first year, with adjustments for costs exceeding $800 million annually.
  • 7The settlement requires approval from the Florida Public Service Commission (FPSC), with parties requesting a decision by August 31, 2012.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce that Florida Power & Light Company (FPL), a subsidiary of NextEra Energy Inc., has reached a proposed settlement agreement with several intervenors in its base rate proceeding. This agreement aims to resolve all issues in the proceeding and establish new rates.

The proposed agreement is expected to increase FPL's annual retail base revenues by approximately $378 million, commencing in January 2013. It also sets a framework for recovering costs related to modernization projects and storm restoration.

The proposed settlement establishes an allowed regulatory return on common equity (ROE) of 10.70%, with a band that allows for adjustments. FPL can seek rate relief if its earned ROE falls below 9.70%, and other parties can seek review if it rises above 11.70%.

The parties have requested that the Florida Public Service Commission (FPSC) consider and issue a decision on the proposed settlement by August 31, 2012. If approved, the new rates are intended to be effective starting January 1, 2013.