Florida Power And Light And Gulf Power Plan To Merge In 2022

NextEra Energy (NEE) said on Wednesday that it will merge two of its subsidiaries, Florida Power & Light and Gulf Power on Jan. 1, 2022.

NextEra had purchased Gulf Power from Southern Co. (SO) in January 2019, while Florida Power & Light, or FPL, has long been NextEra’s principal subsidiary.

FPL is the largest utility in the state with about 5 million customers along most of the East Coast and parts of Southwest Florida and North Florida. Gulf has about 470,000 customers in eight counties in the Florida Panhandle.

“Since the Gulf Power acquisition closed in 2019, FPL and Gulf Power have been reviewing the potential benefits of merging into a single, larger Florida utility company,” NextEra said. “Based on this review, the companies expect that a merger will create both operational and financial benefits for customers. As a result, the companies plan to take additional steps to merge over the coming months.”

A filing with the Florida Public Service Commission indicated that the anticipated 2022 merger closing date is linked to the planned completion of a major new transmission line, which will go from Columbia County in north-central Florida to Jackson County in the northwestern part of the state.

“NextEra Energy’s plan is to integrate FPL and Gulf into a single electric operating system effective on January 1, 2022 after the completion of a new 161 [kilovolt] transmission line -- the North Florida Resiliency Connection line -- that will enhance the electrical connection between the two systems,” the filing stated. “This enhanced connection will benefit customers in both systems by better enabling the siting of clean, reliable, low cost generation, and the transmission of energy from those facilities, to all customers.”

Separately, NextEra Energy posted first quarter earnings of $2.38 per share (beating estimates of $2.21 per share), versus earnings of $2.20 per share a year ago.

NextEra posted revenues of $4.61 billion for the first quarter, falling short of consensus estimate by 1.57%, versus year-ago revenues of $4.08 billion.

Earlier this month, FPL announced that it would drop rates for residential customers by 25% in May due to lower natural gas costs – but also to provide some relief to those who have been negatively impacted by the COVID-19 pandemic. Business customers will also see a rate decrease in May, but the amount will vary.

“Everyone at FPL understands how critical it is to continue to provide reliable electricity and to keep as much money as possible in our customers’ pockets,” said FPL President and CEO Eric Silagy. “Traditionally, our regulators expect these types of savings to be spread out over the balance of the year. However, challenging times call for exceptional measures. I believe this one-time bill decrease is the most effective way to infuse customers with much-needed money as we all navigate through this difficult and unsettling time together.”