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Florida Power & Light Company (FPL), a subsidiary of NextEra Energy Inc (NYSE:NEE)., has filed a petition with the Florida Public Service Commission (FPSC) seeking approval for a new four-year base rate plan set to commence in January 2026. The proposal, submitted today, aims to replace the current base rate settlement agreement that has been in effect since 2022.
The proposed rate plan includes an increase to base annual revenue requirements by approximately $1.545 billion starting January 2026 and an additional increase of about $927 million effective January 2027. This comes as NEE’s revenue reached $24.75 billion in the last twelve months, with a solid gross profit margin of 60%. The plan also introduces a Solar and Battery Base Rate Adjustment (SoBRA) mechanism to recover costs associated with the construction and operation of new solar and battery storage projects. NEE has demonstrated strong dividend performance, having maintained payments for 55 consecutive years, as noted by InvestingPro. Specifically, the SoBRA mechanism would enable FPL to recover revenue requirements for an additional 1,490 megawatts (MW) of solar and 596 MW of battery storage in 2028, and 1,788 MW of solar and 596 MW of battery storage in 2029.
In addition to the revenue requirement increases, FPL’s proposal includes a non-cash tax adjustment mechanism similar to the non-cash depreciation reserve surplus mechanisms used in previous rate settlements. The plan also maintains a storm cost recovery mechanism and outlines a process to address potential changes in tax laws, both of which are components of the 2021 rate agreement.
FPL has committed that if the proposed rate adjustments are approved, it will not seek further general base rate increases before January 2030. The requested increases are based on a regulatory return on common equity of 11.90% and the continuation of FPL’s regulatory capital structure.
Hearings on the base rate proceeding are anticipated to occur in the third quarter of 2025, with a final decision expected in the fourth quarter of the same year. With analysts setting price targets ranging from $52 to $103 per share and maintaining a moderate buy consensus, investors seeking detailed insights can access comprehensive analysis through InvestingPro’s exclusive research reports, which cover over 1,400 top US stocks including NEE.
The information in this article is based on a press release statement from NextEra Energy, Inc. and Florida Power & Light Company, as filed with the U.S. Securities and Exchange Commission. The forward-looking statements within the filing indicate that the actual results may vary based on future events, which are uncertain and beyond the control of NextEra Energy and FPL. The filing also contains cautionary statements and risk factors that could affect future results, including the effects of regulation, the impact of political and economic factors on regulatory decisions, and the risks associated with the operation and maintenance of energy facilities.
In other recent news, NextEra Energy has made significant financial moves with the issuance of bonds and debentures. The company, along with its subsidiary Florida Power & Light Company, announced the sale of $2 billion in First Mortgage Bonds, divided into three series with varying maturities. Additionally, NextEra Energy Capital Holdings, another subsidiary, issued $2.5 billion in junior subordinated debentures, featuring two series with different interest rates and maturity dates. Furthermore, the company disclosed the sale of $5 billion in debentures through its subsidiary, NextEra Energy Capital Holdings, with varying interest rates and maturities. These financial activities were reported in recent SEC filings, ensuring regulatory compliance and providing transparency to investors.
In a separate development, NextEra Energy announced a 10% increase in its quarterly common stock dividend to $0.5665 per share, payable on March 17, 2025. This dividend hike aligns with the company’s strategy to achieve an annual growth rate of approximately 10% in dividends per share through at least 2026. These recent developments reflect NextEra Energy’s ongoing efforts to manage its capital structure and deliver consistent returns to shareholders.
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