Good day and welcome to the NextEra Energy and NextEra Energy Partners First Quarter 2021 Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jessica Aldridge, Director of Investor Relations. Please go ahead ma'am.

Thank you, Rocco. Good morning, everyone, and thank you for joining our first quarter 2021 combined earnings conference call for NextEra Energy and NextEra Energy Partners. With me this morning are Jim Robo, Chairman and Chief Executive Officer of NextEra Energy; Rebecca Kujawa, Executive Vice President and Chief Financial Officer of NextEra Energy; John Ketchum, President and Chief Executive Officer of NextEra Energy Resources and Mark Hickson, Executive Vice President of NextEra Energy, all of whom are also officers of NextEra Energy Partners as well as Eric Silagy, President and Chief Executive Officer of Florida Power & Light Company. Rebecca will provide an overview of our results and 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 on our websites, nexteraenergy.com and nexteraenergypartners.com. We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. As a reminder Gulf Power legally merged into Florida Power & Light Company effective on January 1, 2021. Gulf Power will continue as a separate reporting segment within Florida Power & Light and NextEra Energy through 2021, serving its existing customers under separate retail rates. Throughout today's presentation when we refer to FPP, we're referring to Florida Power & Light excluding Gulf Power unless otherwise noted or when using the term combined. With that, I will turn the call over to Jim.

Thank you, Jessica and good morning, everyone. NextEra Energy is off to a terrific start in 2021 and has made excellent in the core focused areas that we discussed on the last call. Adjusted earnings per share increased nearly 14% year-over-year reflecting successful performance across all of the businesses. FPL increased net income by approximately $78 million from the prior year comparable period which was driven by continued investment in the business for the benefit of our customers. During the quarter FPL successfully placed in service approximately 300 megawatts of additional cost effective solar projects built under its SolarTogether program which remains the largest community solar program in the nation. FPL now owns and operates approximately 2,640 megawatts of solar on its combined system which is more than any other utility in the country. FPL's other major capital investments including the 409 megawatts Manatee Energy Storage Center and highly efficient 1,200 megawatt Dania Beach Clean Energy Center are also on schedule and on budget. By executing on smart capital investments such as these FPL is able to maintain its best-in-class customer value proposition of clean energy, low bills, highly reliability and outstanding customer service. FPL's typical residential bills remains well below the national average and the lowest in the nation among the 20 largest US investor-owned utilities while our service reliability has never been higher. Gulf Power also had a strong quarter of execution. The focus on the operational cost effectiveness at Gulf Power continues to progress well with a 43% increase in net income year-over-year primarily driven by year-to-date OEM cost declining by approximately 21% versus the prior year comparable period and by more than 34% relative to 2018. Gulf Power also delivered further improvements in service reliability and employee safety with no OSHA recordable year-to-date through the end…

[Operator Instructions] today's first question comes from Shar Pourreza with Guggenheim Partners. Please go ahead.

Just couple of questions here. First just on transmission opportunities, obviously you closed GridLiance this quarter and there's been some proposals across the US including California for transmission expansions. Can we maybe get a little bit of refreshed view on your transmission growth strategy and kind of geographies where you may seek to expand? Do you guys see more opportunities for acquisitions perhaps from other PT [ph] type owners? And just as a follow-up here, any thoughts on sort of the new FERC administration recent language could hinder I think future transmission investment with potentially lower ROE removals some of the ROE adders, so just some thoughts there.

Perfect, thanks Shar. I was going to say yes, the question. But I think its multiple questions in here. So I'll start and obviously John or Jim can jump in, if they want to add something. We are very excited about opportunities in transmission and it is founded on a couple of points that I highlighted in the script. First, is we couldn't be more excited as you well know about the renewables opportunities across the US in the coming decades. A key part of all of those opportunities or at least a lot of those opportunities in later part of this decade going into the 2030s and beyond, is some level of build out of transmission in the US beyond what's been accomplished. So both to enable to long-term renewables development but also to capitalize on those opportunities leaves us very interested in transmission. The Energy Resources team has done a terrific job growing that business both through organic opportunities so long-term development efforts identifying opportunities, participating in processes and ultimately securing opportunities to invest and build and build successfully into line and into operation some of those lines as well as through acquisitions. Obviously with GridLiance being the most recent and Trans Bay Cable not being too much far behind it. I expect that we'll grow the business through both going forward as well continued efforts on the development side as well as participating in opportunities to acquire investments as they come to market. On the FERC transmission side, we do think there are lot of opportunities to improve how transmission is sided and built across the US and we're optimistic that this administration and this FERC will start to focus on those and I think to go through FERC as well as potential focus on transmission in this infrastructure package. So a lot of opportunities to invest in the future.

Yes, the only thing that I would add to what Rebecca said there is, we love GridLiance. Think of our transmission presence of doughnut. We had a hole in the middle. This gets us in the SPP and MISO. We're now a member as a TO - important for [indiscernible] as well. It's strategic. It's going to help enable lot of new renewable development for us. So it lines up really well with where we see renewable growth opportunities going forward. And even with the news coming out of FERC on the ROE, we'll see what they'll ultimately do. Don't forget that we've been able to enter in the long-term settlements at Trans Bay and on Lone Star as well and so our business is really unimpacted.

Got it perfect, thank you. And then just on the rate case and obviously it's starting to pick up steam, intervene is turning together. Are you seeing any early indications for what sort of topics that maybe debated? I mean affordability is the obvious one, cross - subsidization between the two merged utilities that could be another ROE. So just maybe just thinking about the bit ask there. At this juncture, do you sort of feel there is a settlement path or does this case kind of need to be more litigated just given the complexities of merging two utilities.

Thanks Shar. I think it's really early to comment on the rate case. We just filed. I think you've heard us comment a couple of times, these as U-Haul trucks versus filing requirements that we produce and supply to staff and the interveners and the commission itself to start the process. So we're very early and no doubt all of the key stakeholders just trying to review that information and then we'll see the process unfold really over quite a number of months accommodating with the hearings in August. We are very proud as I highlight in the comments both here and in other venues. We're really proud of the case that the FPL team has put together not just the case itself. But it's built on a foundation of execution not just over the last five years during which we've operated under the settlement agreements but of course years and years before that. So we look forward to the opportunity to articulating that through this process. As it relates to settlements, as you know here in Florida there is a great history of settlement agreements not just with Florida Power & Light Company but other utilities in the state. We do think that opportunities to have a negotiated outcomes that meets the need of all stakeholders and historically that is produced consistent rates for many years in the future that provides tremendous value for customers. There's a great history of that. We of course will be open to it. But it's very early in this process and again we look forward to being able to put forward our case.

And just lastly on Santee Cooper, I mean obviously the discussion they're picking up steam at the legislator. And do you think we should we kind of watching for in the near term on the legislature side and your bids out there? So do you see any kind of changes with your offer or you're just kind of standing firm at this point?

Sure, it's Jim. Obviously, you saw the senate asked for folks to re-express an interest. I sent a letter last week re-expressing our interest. We've been pretty clear that we remain interested. We have a very strong bid out there. Obviously, things are changed in the last year with Santee Cooper rate base is different. Their volumes are different etc, etc. But fundamentally our bid stands and we're ready to get going and negotiating with the state on the sale and ultimately the most important thing is, it remains very clear to me that the best route to the state and its customer and the economy of the state is to demunicipalize [ph] Santee Cooper and get it in the hands of an entity like ourselves that will run it in best in class way and there's enormous value I think to bring to the state through our ability to bring to decarbonize, our ability to have low bills over the long period of time and our ability to really operate efficiently and bring great reliability to bear. I think you've seen the progress we've made at Gulf and I think that's a great example of the kind of progress that we'd be able to make at Santee Cooper as well.

Terrific, thank you guys for everything and good execution.

And our next question today comes from Steve Fleishman with Wolfe Research. Please go ahead.

Just curios first on the NEP acquisition, as you mentioned for the most part historically you haven't been able to make the turns lower fund third-party acquisitions. So could you maybe talk about the returns you expect on this transaction and is this a suggestion that you're more optimistic that there'll be more third-party acquisitions that meet your return hurdles.

We're really excited about the acquisition and we've highlighted both in terms of the financial characteristics of it. One of the things that was particularly attractive about this portfolio when we looked at it is, our teams' ability to add value on the operation and maintenance cost side. Really think about as we bring assets into the portfolio, it really gets leveraged on the platform that we already operate and so the team is really excited about how we can add incremental value through the Energy Resources management of these assets at NextEra Energy Partners. We've been very excited about NextEra Energy Partners growth outlook for quite some time as we've always indicated our excitement is well founded, just simply looking at the backlog of those operating and signed contracts and then the potential for new contract synergy resources. But have always alluded to the fact that really our market opportunity is this broader market set and we'll continue to engage and look for opportunities. I do think there are more opportunities out there, third-party acquisitions on the renewables side. It's an area of focus for us to continue to participate in. but we've got the three ways to grow and to the extent that we can put opportunities to be rather great and we'll take advantage of them overtime. But we also continue to have terrific organic opportunities in NEP particularly as the portfolio grows and then of course the continued success of Energy Resources in the broader market is very positive.

Okay and just any sense on the returns you expect on this acquisition?

Sure. We've already highlighted in terms of cap fee produced for the assets $60 million plus relative to the acquisition price that we highlighted obviously that's subject to closing adjustments. So that's at the project level and then we'll optimize the financing overtime particularly as we think about the rest of the growth expectations for 2021 into 2022.

Okay and then just maybe a little bit more color on the Biden infrastructure and tax plan just I guess maybe obviously you made it clear that the infrastructure side will be beneficial for your business. How are you thinking on the tax side and are there any risk to you from that either just the high rate or the minimum book tax issue? Thanks.

Steve, its Jim. Obviously, there was a lot unpacked in the plan. It's very early in the process. I think this is a process that's going to play out over months, not weeks. There's obviously a lot in the plan that's very positive from a renewable standpoint and as Rebecca said in the prepared remarks, we're excited to work with the administration on the plan that I think is really going to accelerate the decarbonization of the US economy over the next several years in a way that we've always said for a long time is going to be essentially free to customers i.e. not more expensive for customers. I mean the thing about the green economy is that it's cleaner, it's greener but it's also cheaper and that's why it's so powerful. So lot of details obviously still to be worked out. We're working them as you can imagine it's very early and probably too early for me to comment on any of the specific details that we feel like need some work versus the ones that we like a lot. On the tax front, I think obviously that's - there are a lot of puts and takes with taxes particularly in a company that has both utility assets as well as renewables assets and we're working through it. Think about the tax rate going up something in the $0.04 to $0.07 of headwinds. I'm not particularly worried about that in the context of all the other things that would be positive for our company if the infrastructure bill gets passed. So we continue to work obviously that as well. Lots of details still be laid out on the minimum tax issue and that also matters as to what the final corporate rate ends up being. And I guess…

Great. Thank you very much.

Our next question today comes from Stephen Byrd at Morgan Stanley. Please go ahead.

Wanted to explore green hydrogen a little bit further. You all have expressed a lot of enthusiasm about the potential for growth here and the potential for joint venture activity and I was just curious, your latest thinking there and I guess broadly I've been thinking that sort of combing best in class renewables that you have with significant capabilities and actually sort of marketing, distributing, selling etc hydrogen would be critical to success in terms of supply of unused customers with green hydrogen. I'm just curious your general outlook enthusiasm for the prospect for more JV announcements.

Perfect. Thanks Stephen. Let me start with the longer-term view first and then come back to the shorter term which would really tie into I think the latter part of your question in comment. The first part which is the latter term view is when we look at substantial deployment of renewable and battery storage and think about how do you further decarbonize the US electricity sector. When we previously ran that analysis just trying to add more renewables and add more battery storage. It became very burdensome for customers because you aren't getting a significant amount of value to the more and more renewables and storage you add, absent other actions. So when we incorporated hydrogen into that thought which is effectively a form of long duration storage that is taking advantage of chief electricity production coming from renewables in some cases excess renewable production at certain times of the day. That substantially changes the value equation for customers to fully decarbonize in the electricity sector. So that gives us great excitement about the potential for substantial renewables and battery storage deployment knowing that as you continue to deploy more and you find economic forms of long duration storage that continues to be very value accretive to customers both in cost and in the performance of clean energy. So that's kind of the starting point, but then coming back to a little bit more nearer term. If you think about how do you decarbonize transportation industrial sectors. The most exciting ways to do that, that we see today is through electrification whether that's in the form of electric vehicles fueled by batteries or other type of fuel cells or through hydrogen and hydrogen probably more applicable on the industrial sector particularly for applications that already exist today. And as…

That's really helpful and then just separately thinking about the mix of growth that resources. Obviously, there's a lot of solar activity, lot of solar megawatts that you'll be deploying. I just wanted to get your latest thinking on the outlook for returns between solar and wind. I guess I generally hear continued views that yes, solar returns certainly lower than wind. There is more competition there. But just curious your latest thoughts on solar versus wind return outlook.

From a return standpoint, we do see a differential we have quite for time overall returns between wind and solar from a risk adjusted basis. We're happy with returns that we've seen in both sets of technologies. In the short-term in terms of backlog John and the Energy Resources team certainly influenced by what I think is the conventional wisdom for a long time, the step downs for the production tax credit on wind and the step down for the investment tax credit on solar or in fact likely to happen. I think our customers now are thinking about that a little differently as discussions in Washington have started to heat up. But as we look what our likely outcomes as Jim was talking through including the potential for extensions of those incentives. I think the key takeaway is, they remain both technologies are very likely to remain economic for our customers to deploy on behalf of their customers and ultimately leading to significant cost savings for electricity buyers at the end of the day. So they remain attractive from our perspective and we continue to focus our development and efforts on wherever we can add value for our customers.

Very good. Thank you very much.

And our next question today comes from Michael Weinstein with Credit Suisse. Please go ahead.

On the subject of third - party acquisition for NEP. Could you comment on any opportunities you're seeing in Texas following Winter Storm Uri? I think we've heard some previous comments there are lots of parties looking at distressed assists in the state and wondering that if there might be an opportunity for NEP as well.

Yes Michael, I think it's probably still a little bit too soon. I think most participants in the market are still working through a lot of the implications and learning's from Texas. So I'm not sure there's a lot to be commented on in the near term. It's obviously something we'll stay engaged in the market and participate where it makes sense. But at this point, I think it's too soon.

Can you comment a little bit about how much it costs to weatherize in the state? What actions you guys have been taking since the storm?

So we've done a lot of deep dives across our portfolio to think about where weatherizing makes sense. As I've talked about in the past and you all know, we have a lot of interest across Texas not only wind investment, solar, battery storage, gas infrastructure investments and of course the small retail business. So we've been carefully thinking through all of - whether the opportunities to learn and perhaps invest going forward. Specifically to weatherizing, I don't know if you were talking exclusively around the renewable fleet or you're talking about the gas infrastructure side. But on the renewable side keep in mind that weatherization really focuses on ambient temperature effects and ambient temperature at least for our fleet. I can't speak for everybody was not the real issue for any sort of production shortfall versus a P-50 forecast. It was really related to the fact in this extraordinary event that happened for multiple days it was preceded by an icing event. So ice was accumulating on our blades and when ice accumulates on the blades it's difficult for them to spin and because the temperatures remained low for several days in a row, there wasn't an opportunity for that ice to shed. Typically weatherization packages don't really address ice accumulation on the blades. This is something the industry is focused on. There are some - what at this point are very expensive solutions to try to address ice accumulation on the blades and given that they don't happen every year and certainly don't happen frequently across specific sites every year and ends up being very cost prohibitive for something that happened very sporadically. So I'm not optimistic that there's a substantial amount due to at least today with respect to weatherization on the wind side to change the events. I do think there's opportunities across the gas supply side to improve the ability for gas to flow which obviously was really at the crux of the issues along with not only natural gas, supply shortages but plant issues in the coal fleet and issues in nuclear fleet. So there's opportunities across the market to invest.

And if I could just add to that, what Rebecca said, this is John. When you look at ERCOT's operating fleet what they really do have to address at the end of the way as weatherization of gas because you think about 87, 88 gigawatts that were supposed to be available. I mean renewables on an MCF adjusted basis for only about 3 gigawatts of that and very much a rounding error and the problem that occurred in Texas and so Texas really needs to think through what are the right solutions for gas because when you have icing conditions. It doesn't matter if it's blades on a turbine. It's combustion gas turbine. It's a nuclear power plant. It's a coal plant. When you have severe icing conditions. They're all going to fail and that's what we saw in Texas. And so the question is, what is going to be the right market construct going forward to provide the appropriate for weatherization and for backup fuel on site to make sure that these facilities are capable of running and I think those are the kinds of issues that the Texas legislature is currently evaluating.

Got you. One last question from me. Does third - party acquisitions at NEP put any kind of pressure on IDR payments [ph] and the IDR scheme going forward?

I'm not sure what you mean by pressure, they're ultimately the calculation for IDRs is one that's known and relates to the overall growth and cash flow within NEP. So it's not specific to where the acquisition source was for the asset.

Okay, just wondering if you see a big uptick in third - party acquisition instead of dropdown cash going up to next year? Is there any kind of pressure one way or another to change the IDR structure?

No there's not a difference in terms of the structure and at this point in time NextEra Energy Partners and NextEra Energy with the idea of the structure that's currently in place.

Great, thank you.

And ladies and gentlemen, this concludes today's question-and-answer session and today's conference call. We thank you all for attending today's presentation. You may disconnect your lines and have a wonderful day.