FPL Group, Inc. (FPL)
Q1 2010 Earnings Call Transcript
April 27, 2010 9:00 am ET
Armando Pimentel – EVP, Finance and CFO
Lew Hay – Chairman and CEO
Daniel Eggers – Credit Suisse
Paul Patterson – Glenrock Associates
Jonathan Arnold – Deutsche Bank
Paul Ridzon – KeyBanc Capital Markets
Brian Chin – Citi
Reza Hatefi – Decade Capital Management
Phyllis Gray – Dwight Asset Management
Previous Statements by FPL
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Good day everyone and welcome to the FPL Group’s first quarter 2010 earnings release conference call. Today’s conference is being recorded. At this time for opening remarks, I would like to turn the conference over to Ms. Rebecca Kujawa. Ms. Kujawa, please go ahead.
Thank you Mike. Good morning everyone, and welcome to our first quarter 2010 earnings conference call. Armando Pimentel, FPL Group’s Chief Financial Officer will provide an overview of our performance for the quarter. Also joining us this morning are Lew Hay, FPL Group’s Chairman and Chief Executive Officer; Jim Robo, President and Chief Operating Officer of FPL Group; and Armando Olivera, President and Chief Executive Officer of Florida Power & Light Company.
Following our prepared remarks, our senior management team will be available to take your questions. We will be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions that 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 release, in 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 & Exchange Commission each of which can be found on the Investors section of our Website at www.FPLGroup.com.
We do not undertake any duty to update any forward-looking statements. Please also note that today’s presentation includes references to adjusted earnings, which is a non-GAAP financial measure. You should refer to the information contained in the slides accompanying this presentation for definitional information and reconciliations of the non-GAAP measure to the closest GAAP financial measure.
With that, I will turn the call over to Armando Pimentel. Armando?
Thank you Rebecca and good morning everyone. As many of you know, next week, we are planning to host our Investor Conference which will be webcast. At that time, we plan to provide a strategy review of both of our main businesses, as well as our long-term growth prospects.
Today, we will review our results for the first quarter of 2010. FPL Group’s adjusted earnings per share results grew approximately 4% over the comparable period a year ago. Our quarterly results were driven by favorable weather and new asset additions at Florida Power & Light Company primarily offset by lower-than-normal wind resource at NextEra Energy Resources.
At FPL, we continued to make capital investments that we expect will improve our already clean emission profile and provide long-term customer benefits. On January 11, 2010, FPL’s electrical system experienced not only a new winter record peak demand, but also an all-time record peak demand of 24,346 megawatt hours. We are proud that our system performed well and FPL continued to provide safe and reliable service with minimal disruptions to its customers.
Shortly after the quarter ended, FPL commissioned the Space Coast Next Generation Solar Energy Center. It is located on NASA property at the Kennedy Space Center, and is producing an estimated 10 megawatts of clean, emissions-free power. With the completion of this facility, we have commissioned 35 megawatts of the total 110 megawatts of solar capacity that we indicated we would add at FPL. The 75-megawatt Martin Solar Thermal facility is expected to be placed in service by the end of this year.
The three facilities in total will add roughly $700 million to our rate base and be recovered through the environmental clause. Also in April, FPL announced that we signed a definitive agreement with the US Department of Energy to receive $200 million in Recovery Act Funding, which FPL will use to further our Energy Smart Florida initiative. Energy Smart Florida represents an expected overall investment of about $800 million. We are investing in Smart Grid technologies as part of our commitment to building a stronger, smarter, cleaner and more efficient electrical infrastructure.
Energy Smart Florida is designed to help keep service reliability high over the long term and get customers more information to manage their energy usage. The deployment of state-of-the-art Smart Grid technologies including smart meters which should improve the service we provide our 4.5 million customers and provide them with changeable benefits today while laying out the foundation for a host of future benefits. Although the weak wind resource negatively affected first quarter results of NextEra Energy Resources, the operational performance of our fleet was strong.
The forced outage rate for our fossil fleet was best-in-class for the industry based on available data and in addition the forced outage rate for our wind fleet was one of our best ever and continues to lead the industry.
Finally during the quarter, our Point Beach nuclear facility completed the refueling outage. In addition, we continued to pursue development opportunities in Canada, and a couple of weeks ago, we were awarded approximately 148 megawatts of wind projects in Ontario, Canada, as part of the province's feed-in tariff program.
We were excited that one of the projects we were awarded was the largest projects selected and that in total we were awarded approximately 12% of the total land-based wind projects. Separately, in the last couple of weeks, we commissioned 99 megawatts of new wind in the US and we have approximately 140 megawatts either under construction or approved for construction.