新世紀能源 (NEE) 2014 Q1 法說會逐字稿

Good day, everyone, and welcome to the NextEra Energy 2014 first-quarter earnings call.

Today's conference is being recorded.

At this time for opening remarks, I would like to turn the call over to Amanda Finnis.

Please go ahead.

Thank you, Lisa.

Good morning, everyone, and welcome to our first-quarter 2014 earnings conference call.

With me this morning are Jim Robo, Chairman and Chief Executive Officer of NextEra Energy; Moray Dewhurst, Vice Chairman and Chief Financial Officer of NextEra Energy; Armando Pimentel, President and Chief Executive Officer of NextEra Energy Resources; and Eric Silagy, President of Florida Power & Light Company.

Jim will get us started today with opening remarks, and then Moray will provide an overview of our 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 in 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 in the Investor Relations section of our website, www.nexteraenergy.com.

We do not undertake any duty to update any forward-looking statements.

Today's presentation also includes references to adjusted earnings, which is a non-GAAP financial measure.

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

With that, I will turn the call over to Jim.

Thanks, Amanda, and good morning, everyone.

Before I turn the call over to Moray to discuss our first-quarter results, I'd like to take a moment to update you on an important topic.

As you all know, for some months now, we've been assessing the possibility of forming a so-called yield co.

After extensive analysis and careful thought, we've made the judgment that it is in the best interest of our shareholders for us to take the next step in this process.

And, on April 4, we filed confidentially with the SEC a draft S-1 registration statement, which would allow us to move forward with the yield co structure following the SEC review process, and subject to market conditions.

Unfortunately, having given you this information, we are now very restricted from offering you the additional information that I know you will all be looking for.

As you may know, there is a concern that conveying information about the yield co at this time might be construed by the SEC as a prohibited offer of securities under the SEC rules, which, in turn, could lead to delays in our ability to move forward with the transaction.

Accordingly, we have concluded that it will be best to wait until after the S-1 is public before providing more detail.

Thus, we will not be able to discuss with you today such matters as the exact projects or megawatts involved over time, or the financial performance of the assets that we expect to make available for purchase by the yield co, or many other things that I know you will have questions about.

Further, while it is our present intention to move forward with this transaction, there can be no guarantee that we will be able to execute it successfully on terms that we believe will create long-term value for our shareholders, which remains our objective.

We will continue to work diligently to ensure that we remain focused on this fundamental goal.

While there is much that we cannot discuss at this stage, there are a few points that I can make.

First, we previously said that we would want to be sure that the introduction of a yield co structure would not be negative to credit, since our credit position is an important underpinning of our competitive strategy.

The fact that we are moving forward obviously implies that we've developed comfort that this objective is achievable.

While the principal control on this will be the integration of the yield co into our overall financing plan in such a way that our credit metrics are maintained or strengthened, we will also be sensitive to the impact on our portfolio mix going forward.

We expect to continue to place emphasis on developing new high-quality contracted projects at Energy Resources.

Our view of the credit impact of our proposed transaction is based not only on our own assessment, but also on our discussions with the rating agencies.

Second, we have also previously stated that one area of focus for us would be to ensure as close an alignment of interests as possible between our existing shareholders and investors in the yield co vehicle.

We believe we've developed a suitable structure to support the same, and I look forward to sharing details with you at a later date.

Third, many of you have previously heard me say that an area of concern for us would be the costs and other implications of ongoing reporting and compliance obligations for two publicly traded entities.

We now feel comfortable that we will be able to manage these effectively.

And while there will undoubtedly be extra costs, we do not believe they will detract meaningfully from our ability to create value for NextEra Energy shareholders through the transaction.

Finally, let me reiterate that while our decisions are based on extensive analysis and careful consideration, in the end, we're making judgments about future value creation, and there can be no guarantee we are correct.

With these comments aside, I'm also pleased to be able to tell you that we had an excellent first-quarter overall, notwithstanding some challenges associated with the harsh winter in the Northeast.

And we are off to a good start for the year.

I'll now turn the call over to Moray to fill you in on the details.

Thanks, Jim.

Good morning, everyone.

As Jim said, we had an excellent first-quarter overall.

Our financial and operating performance was very strong, and we continue to make good progress on our capital projects and other strategic initiatives, consistent with the strategies we discussed at our investor conference over a year ago.

We continue to believe we are well-positioned to deliver against the financial expectations we've shared with you out through the 2016 timeframe.

At Florida Power & Light, we continue to drive value for our customers through low bills, high reliability, and excellent customer service, and for our shareholders through strong earnings growth.

For the fifth year in a row, our typical residential customer bills are the lowest in the state and are currently about 25% below the national average.

Our major capital projects remain on track.

And I'm pleased to note that the second of our three generation modernization projects at Riviera Beach entered service just after the end of the first quarter, about two months earlier than originally anticipated, and slightly below the cost estimates submitted to the PSC in 2008.

Construction has begun on the Port Everglades modernization, which we expect to come online in mid-2016.

During the quarter, we invested another $1 billion of capital in FPL, consistent with our strategy of steadily improving the long-term value we offer our customers.

At Energy Resources, our development and construction programs remain on track, and our backlog of contracted renewables projects continues to develop with a PPA for roughly 250 megawatts of US wind signed since the last call.

Increased contributions from our contracted renewables portfolio continued to drive earnings growth.

The extreme market conditions in the Northeast and mid-Atlantic, particularly here in January, caused parts of our customer supply business to underperform, but this impact turned out to be less than we had expected and was offset by other favorable impacts, many of which were driven by the same factors that caused the underperformance in customer supply.

Overall, we were pleased with the quarter.

Now let's look at the results for FPL before moving on to Energy Resources and then the consolidated numbers.

For the first quarter of 2014, FPL reported net income of $347 million or $0.79 per share, up $0.11 per share year-over-year.

We continue to focus on deploying capital productively in ways that have long-term benefits to customers.

As I mentioned, FPL's capital expenditures were approximately $1 billion in the quarter, and we expect our full-year capital investments to be roughly $3.3 billion.

Regulatory capital employed grew 6.7% over the same quarter last year, which, combined with an increase in profitability, resulted in very strong net income growth.

Our reported ROE for regulatory purposes is estimated to be 11.22% for the 12 months ended March 2014.

This includes the impact of the project momentum transition costs incurred late last year.

You will recall the project momentum is our enterprisewide productivity initiative that we started last year.

Absent these costs, regulatory ROE would've been 11.5%.

As a reminder, the impact of the 2013 transition costs will roll off our reported regulatory ROE as we move through the year, since the regulatory ROE is measured on a 12-month trailing basis.

Based on the progress we've made thus far in our cost position, the continued improvement in the Florida economy, our current capital investment program, and the amount of reserve amortization we've taken to date, we are now comfortable targeting a regulatory ROE of 11.5% for the full-year 2014.

As we noted last quarter, under the current rate agreement, we record reserve amortization entries to achieve a predetermined regulatory ROE for each 12-month trailing period -- in this case, the 11.5% that I just mentioned, excluding special charges such as the project momentum transition costs.

We utilized $125 million of reserve amortization during the quarter in order to achieve this predetermined ROE.

As we mentioned before, we always expect to use more reserve amortization in the first half of the year than the second half, given the pattern of our underlying revenues and expenses.

In fact, over the remainder of the year, assuming normal weather and operating conditions, we would expect to reverse the reserve amortization taken in the first quarter and end the year with a balance roughly equal to where we started or possibly even a little better.

Looking beyond 2014, we believe that our reserve balance, when combined with our weather normalized sales growth forecast of 1.5% to 2% per year, and our current O&M expectations, as well as the commitment of a four-year total of roughly $7 billion in infrastructure CapEx, will allow us to support regulatory ROEs in the upper half of the allowed band of 9.5% to 11.5% for the remaining period of the current rate agreement.

Furthermore, we expect that we can do this while keeping typical residential customer bills the lowest in the state and among the lowest in the country, and improving on our already excellent reliability and customer service records.

If we are successful in meeting our expectations by 2016, we will have further improved our already outstanding customer value proposition and will be well-positioned for 2017 and beyond.

The Florida economy continues to strengthen.

And since 2010, most of the indicators we track continue to improve, particularly in the areas of job growth, business expansion, and businesses that have relocated into the state.

This is due in part to a focused effort of the state on economic development and an overall improvement in the business climate, including reductions in taxes benefiting businesses and individual taxpayers alike.

The state's relative economic position compared with the US overall has improved significantly since 2010.

Florida's seasonally-adjusted unemployment rate in March was 6.3%, down 1.4 percentage points from a year ago.

The number of jobs in Florida was up 225,100, an increase of 3% compared to a year earlier, and March was the 44th consecutive month with a positive job growth in Florida, following more than three years of job losses.

Nationally, the number of jobs was up 1.7% over the year.

Florida's annual job growth rate has exceeded the nation's rate since April 2012.

Florida's private sector continues to drive the state's job growth, and more than 550,000 private sector jobs have been added since December 2010.

The housing market in Florida also continues to show signs of resiliency.

As the accompanying chart shows, new building permits have dropped from their recent peak, although they remain at a healthy level, and mortgage delinquency rates continue to decline.

The Case-Shiller Index for South Florida shows home prices up 16% from the prior year.

Other positive economic data across the state include continued improvement in retail taxable sales, as well as bankruptcies declining on an annual basis.

Overall, Florida's economy continues to progress well.

FPL's customer metrics showed solid improvement this quarter.

Underlying usage per customer increased 0.4% compared to the same quarter last year, which is consistent with our long-term expectation of approximately 0.5% per year net of the impact of efficiency and conservation programs, at least through the period of the rate agreement.

However, as we've often pointed out, usage growth tends to be volatile from quarter to quarter.

Another encouraging development during the quarter was a decrease in the percentage of low usage customers.

The 12-month average of the low usage percentage has fallen to 8.1%, its lowest level since May 2007.

The number of inactive accounts has also continued to decline, reaching its lowest level since April 2004.

During the first quarter, we also saw the largest average increase of customers since late 2007, with approximately 87,000 more customers than in the comparable quarter of 2013, representing an increase of 1.9%.

However, roughly 0.9% of the increase can be attributed to the rollout of our remote connect and disconnect capability, enabled by our Smart Meter Program that we highlighted last year.

As a reminder, these new customers, which are disproportionately low usage and residential, had a lower impact on our sales.

We estimate that customer growth accounted for about 1.1% of the increase in sales during the quarter.

Good usage and customer growth combined with a favorable year-over-year weather effect of 2.9% to yield overall retail sales growth of 4.4%.

Let me now turn to Energy Resources, which reported first-quarter 2014 GAAP earnings of $86 million or $0.20 per share.

Adjusted earnings for the first quarter were $211 million or $0.48 per share.

During the quarter, we reversed our prior decision to sell our fossil assets in Maine.

As a reminder, the Maine fossil assets are combined 796 megawatts of oil-fired power plants operating within the NEPOOL market.

In last year's first-quarter call, we announced plans to adjust our portfolio by selling these assets, and we conducted a competitive bid process during the fall and winter.

However, the bids we received were not consistent with our view of the fundamental value of the assets, and recent developments in regional market conditions have reinforced this assessment.

While these assets are not called upon to run frequently, they do play an important role in supporting the reliability of the electric system, and this has real economic value.

Accordingly, we have decided to retain these assets as an integral part of our New England portfolio.

As a result of our decision to retain these assets, we have recognized an after-tax gain of $12 million during the quarter, based on the current estimated fair value of the fossil assets.

And we have reclassified from discontinued operations to income from continuing operations the after-tax loss recorded during the first quarter of last year.

The gain in 2014 and the loss in 2013 are both excluded from adjusted earnings.

The financial impact from operations of these assets for both periods is included in both GAAP and adjusted results.

Energy Resources' adjusted EPS contribution increased $0.06 from the prior-year comparable quarter.

New wind and solar investments added $0.06 per share, reflecting continued strong contributions from growth in our contracted renewables portfolio.

Across the balance of the portfolio, the aggregate of other impacts was flat.

However, because there were individually significant ups and downs, and some of the elements were interrelated, let me provide a few more details.

As discussed earlier in the call, our results suffered from the adverse effect of extreme winter volatility on our Full Requirements business in the Northeast and mid-Atlantic.

This negative effect on the Full Requirements portfolio was much larger than the positive impacts on other parts of the Customer Supply and Trading portfolio, and the overall contribution from all these businesses was down $0.11 per share.

Despite this challenge -- and, in some cases, as a result of the same extreme market conditions -- there were opportunities in other parts of the portfolio.

Contributions from existing assets increased $0.14 per share, including $0.05 from existing wind assets net of PTC rolloff as a result of favorable generation.

The same weather system that drove the challenging market conditions in the Northeast also resulted in above-average wind resource for many of our wind sites.

The same market conditions also meant that the contribution from our main fossil assets increased $0.03.

Finally, there were a number of smaller favorable impacts across other parts of the portfolio that collectively added up to $0.06.

Increased corporate G&A and other costs contributed negative $0.04 to the year-over-year change, including share dilution of negative $0.02.

All other effects were minor, as reflected on the accompanying slides.

For the full-year, we expect to elect CITCs on roughly 265 megawatts for our Mountain View solar project, and the portions of Genesis and Desert Sunlight solar projects that are expected to enter service in 2014.

This equates to roughly $60 million in adjusted earnings, down from roughly $70 million in 2013 on 280 megawatts of solar projects.

The Energy Resources team continues to execute on our backlog and pursue additional contracted renewable development opportunities.

In Canada, we continue to expect the 466 megawatts in our backlog to enter service by the end of 2015, with the majority expected to come into service in 2014.

Our contracted US solar backlog remains on track.

And during the quarter, we brought roughly 165 megawatts of solar into service with the commissioning of Mountain View, the balance of Genesis, and partial commissioning of Desert Sunlight.

We continue to expect to bring the remaining roughly 650 megawatts of our backlog into service by the end of 2016.

In addition to our existing contracted backlog, we continue to pursue additional solar opportunities, including possibly one large 200 megawatt to 250 megawatt project and a development pipeline of smaller 10 megawatt to 40 megawatt projects.

Turning to our US wind program, we commissioned roughly 75 megawatts during the first quarter.

Additionally, the team recently signed a PPA for a roughly 250 megawatt project, which is expected to come into service in 2015, bringing our total contracted US wind development program for 2013 through 2015 to approximately 1675 megawatts.

Based on everything we see at the moment, we continue to believe our total 2013 to 2015 US wind program could be 2000 megawatts to 2500 megawatts.

Turning now to the consolidated results for the first quarter of 2014, NextEra Energy's GAAP net income was $430 million or $0.98 per share.

NextEra Energy's 2014 first-quarter adjusted earnings and adjusted EPS were $557 million and $1.26, respectively.

Adjusted earnings from the Corporate and Other segment were down $0.03 per share compared to the first quarter of 2013, primarily due to consolidating tax adjustments.

As we noted last quarter, financial results and project updates for the pipeline projects will be reported as part of our Corporate and Other business segment.

Both pipeline projects, Sabal Trail Transmission and Florida Southeast Connection, continue to progress well through their respective development processes, and we expect to submit necessary filings with FERC later this year.

We expect to receive FERC approval sometime in 2015, and we expect the projects to be in service by mid-2017.

Spectra Energy Partners, majority owner of Sabal Trail Transmission, continues to lead the effort to market additional available capacity on the upstream pipeline to potential shippers, and detailed siting and environmental activities are underway on both pipelines.

At this point early in the year, we are very pleased with our progress.

Our first-quarter results ended up being a little better than we had expected, but we see nothing to cause us to change our view of the full-year.

Second-quarter comparisons will be challenged by the fact that Seabrook has an outage this year, but we expect the second half of the year to show solid growth, supporting a full-year 2014 adjusted earnings per share range of $5.05 to $5.45.

In the Appendix, we provided a number of sensitivities around our 2014 expectations.

Looking ahead to 2016, we see nothing that would change the ranges of earnings expectations we provided you in March 2013 for 2016.

We continue to expect adjusted earnings per share for 2016 to be in the range of $5.50 to $6.00, which is consistent with EPS growth at a compound annual growth rate of 5% to 7% through 2016, off a 2012 base.

As always, our expectations are subject to the usual caveats we provide, including normal weather and operating conditions.

And with that, we will now open the line for questions.

(Operator Instructions).

Julien Dumoulin-Smith, UBS.

I wanted to ask just quickly if you could, I know you can't comment specifically on the yield co, but as you think about your broader renewables commitment, how does this change your view on what is possible from a development perspective?

And I suppose, could you address that both from a utility scale and from a smaller scale perspective on solar and wind?

Well, as Jim said in the prepared remarks, we are obviously limited in what we can say.

All I can really say is that we continue to believe that we will see long-term growth in demand for renewables in this country.

We continue to believe that we will be well-positioned to compete to gain a share of that demand, and that that demand will be seen both on the wind and the solar side, varying by geography.

But beyond that, I really can't go.

Excellent.

And I suppose just in thinking about what is within the context of eligible, is it fair to say that your prior comments still apply?

Again, I can't really say anything more than we've said to date.

Okay, fair enough.

Just trying to get that out there.

And then just secondly, as you look at the expectation for renewables here, we've heard, I suppose, a little bit on the PTC extension.

What are your thoughts?

What are you seeing out there in the market as a result of that?

Does that mean that clients potentially are pushing out their desire to lock up contracts, given the potential for an extension?

Or how has that changed the dynamic, as best you see it?

Well, I'll ask Armando to offer some more details, but just generally, I will say there continues to be good interest and active dialogue with a number of customers.

But, as always, the uncertainty about the extension of the PTC does play in.

So, at this point, I think there's very good odds that we will see another extension of the PTC, but obviously, the uncertainty does affect how that plays out in the marketplace.

Armando?

I don't have anything to add to that, Moray.

All right, great.

Well, thank you.

Thanks, Julien.

Stephen Byrd, Morgan Stanley.

I wanted to just talk about the growth in solar, and from a strategic point of view, how you think about the approach?

We are seeing more distributed solar done, both residential and commercial.

And there, the economics, you really -- under net metering rules, there's potentially very good margin in the sense of, as solar installation costs drop, you are really able to arbitrage most of the utility bill; whereas in large solar projects, it's often still done under RFP and somewhat competitive in that regard.

How do you think about the growth in solar in terms of -- take, for example, in commercial solar?

Do you see potentially going downmarket in the sense of smaller projects over time?

Or do you think you'll likely remain fairly large-scale in terms of as you think about solar?

Well, Stephen, we're certainly going to continue to have a concentration on large-scale solar projects.

As I think you know, we have had now for some time a relatively small development effort in the distributed C&I space.

So we do think that there will be some opportunities there.

But I guess the main comment that I would make on this subject is that in sort of broad strategy terms, we want to try and be aligned with what we perceive to be the long-term fundamentals of economics.

And even with -- regardless of panel prices coming down, we continue to see the fundamental economics of the larger scale solar projects dominating those of small-scale solar projects, particularly the very small scale solar projects, such as residential rooftop.

So, we recognize that there is a market opportunity for some folks, driven by, I would say, specific market rules, but we are a little leery when those market rules really don't match up with the underlying economics.

So, for the long-term, we want our development activity to be aligned with the fundamentals of the economics.

And I would just add, Stephen -- this is Jim -- that I think it's really dangerous to assume that, from a rate design standpoint, across the utilities across the country, that they are not going to very aggressively address the fact that there is a -- effectively, a net metering subsidy.

And non-solar rooftop, residential solar rooftop users are effectively paying the grid costs of the solar rooftop users through -- as a result of the net metering subsidy.

And I think it's very dangerous to assume that utilities aren't going to aggressively address that through rate design over the next several years.

That's excellent color and very fair points.

Understood.

And just in Florida, as we look, we've seen a lot of potential legislative activity on solar.

Are there any things in particular we should be most focused on as we watch?

It's honestly hard to tell the noise from the substance in terms of just a variety of potential legislative activity.

Any further color you can add on solar legislative activity in Florida?

Well, it's hard to comment specifically, but what's going on in Florida here, at least from our perspective, is that we believe there are some opportunities to introduce more solar into the system.

And we want to come forward with proposals that are the most economic for our customers.

But on the political, Eric, do you have any thoughts?

Yes.

What I would add is that this week is the last week of the legislative session for 2014.

So it's going to end on Friday.

There is no pending legislation with regards to any type of solar or renewables at this point.

And as Moray said, we are exploring opportunities where it makes economic sense.

But there has been a real focus by the legislative body to make sure that, primarily, power prices stay affordable and customers have the lowest bills possible.

Great.

Thank you very much.

Thanks, Stephen.

Paul Patterson, Glenrock Associates.

Just -- I'm sorry if I missed this -- did you guys or can you guys say when the S-1, the public one, will be filed?

Well, the timing obviously depends upon the SEC review process.

I would hope that we would be talking a matter of several weeks rather than several months.

Okay, great.

And then just to make sure the -- I just wanted to follow-up on the merchant, the main merchant stuff and the change, the reversal.

Are you guys -- has there been any strategic change with respect to merchant exposure strategically because of changes in the markets or anything?

Or is this just simply because of this one asset and what you are being offered and what-have-you?

It's really specific to the asset.

And also, to be fair, how the asset fits into our portfolio.

It has a distribution of outcomes that is not at all symmetrical, but it -- when it does well, it offsets other parts of the portfolio that may not be doing so well.

But it was fundamentally a question of the value that we were receiving in the bids wasn't consistent with our view of the fundamentals.

And obviously, the fundamentals of that market have strengthened a little bit relative to this time last year, when we originally made the decision to put it up for sale.

Okay.

But there's been no change in your move to more contracted and what-have-you assets?

Is that correct?

That's correct.

In terms of new development activities, you're going to see pretty much everything we do will continue to be in the contracted space.

Okay.

And then just finally on the weather impact, I just wasn't clear on a normalized earnings basis what the -- I saw the $0.11 that was negative, and I saw the 2.9% sales growth.

I just wasn't clear about what -- and sorry if I missed it -- what the net-net sort of weather impact was for the quarter -- on an EPS basis?

Yes.

You really can't look at a net weather impact for us as an enterprise.

You have to look at the two businesses separately.

Because of the accounting for the rate agreement, the weather impact at FPL is absorbed into the overall calculation, and effectively, is adjusted out by the use of surplus depreciation, because we are effectively managing to the predetermined ROE.

So it has a longer-term impact, but it doesn't have a direct impact in the short-term.

On the Energy Resources side, wind -- on a year-on-year basis, wind resource contributed about $0.09; so, $0.09 up versus a year.

So the pure resource component was about $0.09.

Versus the $0.11 negative, right?

(multiple speakers) Would you net those two?

Right, right.

Okay.

Okay, great.

(multiple speakers) Thanks so much.

(multiple speakers) Okay, to be fair, I mean, not all of the $0.09 can directly be attributed to the weather.

It was associated with the $0.11, if you understand what I mean.

Okay.

Steven Fleishman, Wolfe Research.

First, Moray, congrats on warning of eight of the last two quarterly earnings misses now.

That's a joke.

(laughter) No.

First, just wanted to ask on the utility -- the -- so just so I understand, the 11.5% ROE is what you expect to earn within the guidance for this year, and it's just a matter of how much is kind of the amortization moves around to kind of get you to that?

And the more you can do -- yes.

That's a fair characterization.

So for this year, we'll be at 11.5%.

And as I said in the prepared remarks, looking forward, based on where we are at the moment, we think we can continue to be in the upper-half of the 9.5% to 11.5% allowed range.

Okay.

Okay.

And on the SEC process, maybe you could just make sure we understand the way the private filings work.

So, you file it.

We don't know when you filed it.

We don't know when it will come out.

But once it comes out publicly, that's a fully amended ready-to-go S-1?

So we just see kind of the endgame?

No.

We've said that we filed on the confidential version on April 4. So now we are in the review process.

Obviously, it depends upon the degree of the SEC's review and the comments that come from that, and our responses to that.

So it's a variable time.

But at some point, we will be, we hope, through with that process and then the filing will become public.

But is it only public once we are at the final version that will actually be used on the transaction or --?

So, Steve, this is Jim.

If it does become public ultimately, and market conditions are there and we move forward, all versions of the first S-1 that we filed and then the final S-1 that gets filed will all be available and public.

So everything will be available.

Okay, great.

Thank you.

Michael Lapides, Goldman Sachs.

First on FP&L, I just want to make sure I understand on the regulatory MR, you're basically assuming that you're not going to take any during the course of 2014, because what you took in the first quarter, you'll just reverse out gradually during the rest of the year?

That's correct, broadly speaking.

(multiple speakers) Depends what the summer weather is.

Totally understood.

Second, what is your latest thought about timing of next rate case?

Well, first of all, just to remind everybody, the current rate agreement goes through the end of 2016.

Clearly, we are aiming strategically to put ourselves in a position for whatever comes beyond that, whether it's a formal rate case or whether it's another rate agreement, to continue the track record of delivering value to the customers.

In that vein, I would simply point out that project momentum is a very important part of our ability to be in a good position, come the end of 2016, to continue to offer both customers and shareholders a very attractive value proposition.

Beyond that, it's still only the early part of 2014.

Understood.

I was just trying to think through the longer-term scenario of, do you have to file?

Or can you -- if you manage your costs really well and you get a little bit of demand recovery, can you stay out of potential rate proceedings for beyond 2016 or so?

Yes.

I think it's premature to speculate on the specifics of that, but certainly, we are doing everything we can to put ourselves in the position to go for as long as we can without filing a rate case.

Got it.

Understood.

And finally on the near side, I want to make sure -- can you walk through just the amount of megawatts of US wind and US solar you expect to come online?

Meaning not the stuff that's already online or COD, but that you expect to come online in both 2014 and 2015?

You made some comments in the prepared remarks about specific amounts in 2014.

I just want to make sure we are understanding what's coming when.

Okay.

At the risk of -- well, in order not to confuse it, I'm going to point you to slide 11.

I think that has the basic information, as well as slide 25 has the details of individual projects that go into each of the buckets in slide 11.

So I think the information is there.

Got it.

I can follow-up off-line.

Thank you, Moray.

And congrats on a good quarter.

Thank you.

Angie Storozynski, Macquarie.

So I wanted to actually follow-up on the regulatory plans for FP&L and from two aspects.

One is recent polls in Florida are suggesting that the former governor, Charlie Crist, could be coming back.

And how should we think about it, of the potential impact on your regulatory affairs in Florida?

Secondly, on FP&L, could you give us an update on the upgrades to your gas peakers?

And thirdly, are you seeing any increased interest in potentially contracting new renewable projects from regulated utilities as they anticipate the new carbon emission rule from the EPA?

Angie, on the first, I would just say that we have operated very effectively through many different political and regulatory environments.

And we are simply focused on doing the best job we can to deliver value for our customers.

We think that's the best strategy for putting ourselves in the best position in the regulatory environment.

On the peakers, we are in the midst of a in-the-field testing program where we are monitoring the actual emissions.

We don't know exactly how long that will take, but should certainly be completed by the end of the summer.

Based on that, we will then have a better sense of how we'll move forward.

I think it's likely to be something along the same lines as we had outlined before, although it may not require as much capital as we had originally anticipated.

And I would think that we would still be looking at the bulk of that activity being in the 2016 timeframe.

On -- you're going to have to remind me what your third question was --?

Yes, I was asking about utilities being more susceptible to or willing to sign PPA's for renewable projects in anticipation of the carbon rules from the EPA, basically attempting to offset their carbon emissions with some more renewables in the -- well, either in their portfolio or on the PPA's?

Okay, I understand now.

Yes.

I haven't heard of that being a motivation -- I think the motivations are otherwise.

But, Armando, if you want to comment?

Yes, let me give just a brief update of wind development.

Moray mentioned this before.

I mean, clearly, with the PTC extension out there and the discussion on the PTC, there is a bit of uncertainty with customers whether they are going to sign PPA contracts in 2015 or try to push it out.

But I think that uncertainty will be cleared up really by the end of the year, when we understand what's going on, on that front.

We have a very large and active pipeline of potential opportunities at this point.

We've talked about that pipeline before over the last year, both in the US and Canada.

And a fair number of the PPA's that we've actually signed in the last 18 to 24 months have actually not been driven by renewable portfolio standards in the states, have not been driven by EPA concerns; have actually been driven just by the pure economics of the long-term wind contracts.

I think it's still a bit early to understand what some of the EPA rules might mean for us in -- beyond 2015, but it certainly can't be a negative.

And I would expect it to be a positive.

And I guess the last comment I would make is, because we are getting towards the end of a -- of the PTC extension, which because of IRS guidelines, essentially expires at the end of 2015, there are several acquisition opportunities in the market that we and others are looking at.

Perfect.

Thank you.

And we will take our last question today from Jonathan Arnold from Deutsche Bank.

Is there an update on your latest thoughts on the plans around potential utility investment in the upstream nat gas business?

Anything you can share on that?

Not a lot new that we can share at the moment.

Just remind folks we continue to pursue the potential opportunity to help the FPL customer by reducing the potential volatility of the fuel component of the bill, and possibly lower its average cost over time by investing directly in gas reserves.

We need to find the right set of deals that will make that a reality.

We are in the midst of pursuing that.

And I would certainly hope that we'd be in a position to come forward with something specific within the next 12 months.

But that's -- I've said that before, so there's really nothing new there.

So that we shouldn't be necessarily expecting sort of first sort of trial on this, this calendar year?

It's more a 12-month?

(multiple speakers)

Not necessarily (multiple speakers) --

Could it be as soon as this year, Moray?

It could be as soon as this year, but we'll have to see.

The only other thing to say is that anything we do to start with will be fairly small.

It won't have a huge impact.

Obviously, we want to establish a framework and show that these kind of things can be a good deal before we start to scale up.

Okay, great.

Thank you.

Thanks.

And ladies and gentlemen, this does conclude today's conference.

And we thank you for your participation.