RRA Is the Leading Authority on Utility Securities and Regulation
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RRA RRA is the leading authority on utility securities and regulation. Understanding the financial and strategic impact of state-level regulation is a key to success in the energy business. For 30 years, Regulatory Research Associates (an SNL Energy company) has been the leading provider of independent research, expert analysis, proprietary data and consultation on utility securities and regulation. Expert intelligence on utility regulation In-depth analysis of utility financials RRA Regulatory Focus provides access to expert analysis RRA Financial Focus provides company-specific research on regulatory issues affecting energy utilities, including reports, monthly and weekly market performance summaries, proprietary data, electric and gas rate case data going back to quarterly financial quality analyses, issue-specific research and 1980, and direct interaction with RRA’s experienced analysts. consultative access to RRA’s equity-focused analysts. From the latest rate case decisions to commission profiles The RRA Index RRA’s real-time online reports, weekly Focus Notes and rate Comprehensive financial analysis of major electric and gas case analyses provide insights on the latest rulings, state-by- utility holding companies, with weekly and monthly updates of state and case-by-case. comparative market performance and financial metrics. Rate case data available in SNL Office, our Excel® add-in Periodic company-specific write-ups Quarterly earnings and quality measures analysis. Continuously updated profiles of state regulatory commissions with RRA’s proprietary rankings, details on commissioners and topics related to utility regulation. May 1, 2015 NEXTERA ENERGY (NEE) Key Statistics: Pricing Information Earnings Credit Ratings: Holding Co. Sr. Unsec Long-term Issuer Closing Price as of 4/30/2015 $100.93 Year Ended EPS P/E S&P BBB A- Shares Outstanding (000s) 444,124 12/31/14 $5.40 18.7 x Moody's - Baa1 Market C ap. ($M) 44,825 12/31/15E $5.55 18.2 x Fitch - A- Market/Book 225% 12/31/16E $6.00 16.8 x Dividend Return on Equity 12.4% Rate Yield Payout $3.08 3.1% 57.0% Summary As has been the case for several years, NEE NEE stock price performance (%) 4/30/14 to 4/30/15 continues to focus on growth opportunities at utility 20 subsidiary Florida Power & Light (FP&L) and 10 independent energy subsidiary NextEra Energy Resources (NEER). The Florida economy and housing 0 market have improved significantly and over the May 4, 2015 -10 long-term should support above-industry-average customer and sales growth at FP&L. In addition, the Price (%) Stock Utility Market Comment – Week Ended May 1, 2015 -20 Florida regulatory environment is constructive, as 4/30/14 6/30/14 8/31/14 10/31/14 12/31/14 2/28/15 4/30/15 Broad markets, utilities down on economic and Fed hike uncertaintiesevidenced by the Florida Public Service NEE (+1.08%) DJIA (+7.60%) Commission's (PSC's), December 2012 adoption of a Source: SNL Energy Total Return: NEE (+4.09%) Broad markets and utilities moved down last week Index (%) Pricemulti Change-year - 05/01/14 rate to 05/01/15settlement for FP&L. primarily on continued uncertainty concerning the DJIA RRA Index timing of a rate hike by the Fed, much weaker-than- 15 Major projects at FP&L include the conversion Capital expenditures ($B) historical and forecast* expected Q1 U.S. GDP, and continued mixed signals of three generating plants to high-efficiency gas 10 regarding the direction of jobs, manufacturing, and 10 units; the first and second achieved8.8 commercial 9 consumer sentiment. The RRA Index, Dow Jones operation in 2013 and 2014, respectively, with the 8 Industrial Average, S&P 500, and NASDAQ were down 5 third expected to be completed in mid-2016. FP&L is 7 1.7%, 0.3%, 0.4%, and 1.7%, respectively. Thus far 3.3 6 0 also investing in storm-hardening of its delivery in 2015, the DJIA, S&P 500, and NASDAQ are up system and is constructing a third (600-mile) natural 5 4 1.1%, 2.4%, and 5.7%, respectively, whereas the RRA -5 gas pipeline that will extend into central Florida. Index is down 6%. Over the last 12 months, the RRA 3 ` NEER, at year-end 2014, owned about 19,800 MW of 2 Index was up about 3%, while the other indices we -10 unregulated generation (up from 18,300 MW at year- track posted gains within a range of 9% to 21%. 5/1/14 7/1/14 9/1/14 11/1/14 1/1/15 3/1/15 5/1/15 1 end 2013), of which approximately 12,270 MW was 0 Source: SNL Energywind- or solar-powered, making the company one of 2012 2013 2014 2015E 2016E 2017E 2018E 2019E Best performers for the week the largest wind and solar generators in North *The above reflect both "committed" and "incremental" capital expenditures America. During the years 2015 and 2016, NEER that are calculated, apportioned, and/or estimated per RRA adjustments. PG&E Corp. rose 1.4% last week, and was the group’s expects to increase its generation portfolio by best performer. On April 29, the company reported Source: NextEra Energy 1,100 MW to 1,300 MW of wind capacity and 150 MW adjusted earnings that beat consensus (and were Index Performance to 250 MW of solar capacity. In an endeavor to considerably stronger than the results for the same Price Change through 05/01/15 (%) period last year), due primarily to the timing of expense better capitalize on the value of its renewables NextEra Energy 2014 Fuel Mix (MWh) portfolio, NEE, in June 2014Year- launchedLast a "yieldco," recoveries authorized in Pacific Gas & Electric's (PG&E's) Week to-Date 12 mos. Nuclear NextEra Energy Partners, LP. 28% 2014 general rate case. However, on a GAAP basis, RRA -1.7 -6.0 3.3 earnings fell by greater than 85% from the impact of DJIA -0.3 1.1 8.8 fines levied by the California Public Utilities Commission NEE estimates capital expenditures of at least S&P 500 -0.4 2.4 11.9 (PUC) related to the San Bruno accident (see the $22.85 billion from 2015 through 2019. The Hydro / NA SDA Q Composite -1.7 5.7 21.3 April 29 SNL Energy article for additional details). PCG company's financials, which are among the strongest Solar / plans to issue between $700 million and $800 million of Source: SNL Energyin the utility sector, should continue to provide Oil / Wind Coal 42% equity in 2015 to offset the impact of the $1.6 billion in flexibility and resiliency in a difficult pricing 3% PUC fines to date (see April 29 SNL Energy article for environment for wholesale power markets. In For a product demonstration, contact:additional information). PG&E may face additional CPUC addition, the company has reduced its exposure to Natural fines, and up to $1.13 billion in federal fines should the RRA Index - Bestpricing Performers variability in merchant generation markets by Gas 866.296.3743 • [email protected] be found guilty of knowingly and willfully Week-to-Weekincreasin (4/24/15 tog 5/1/15)its non and -Year-to-Dateregulated Performancecapacity that is under 27% violating the federal Pipeline Safety Act and obstructing contract. % Change Source: NextEra Energy Top Performers Week YTD the National Transportation Safety Board's investigation PG&E Cor p. 1.4 0.5 into the San Bruno explosion (see April 30 SNL Energy article for additional information). Exelon Corp. 0.2 -8.0 Charlottesville (HQ) | Hong Kong | London | New York | SNL.com/RRACenterPoint Energy Inc. 0.0 -10.1 Exelon Corp. advanced 0.2% last week on stronger- Edison International -0.1 -6.0 than-expected earnings due primarily to lower storm Southern Co. -0.1 -8.7 costs and favorable weather at subsidiary PECO Energy Source: SNL Energy Co., lower costs at its merchant business Exelon Generation Co., and higher distribution revenue at Baltimore Gas & Electric from increased rates (see RRA Index - Worst Performers April 29 SNL Energy article for additional information). Week-to-Week (4/24/15 to 5/1/15) and Year-to-Date Performance For a comprehensive analysis of the company, see the % Change recent RRA Company Report on EXC. Bottom Performers Week YTD Southw est Gas Corp. -5.7 -11.1 CenterPoint Energy was unchanged last week, though it Portland General Electric Co. -5.1 -6.9 has underperformed meaningfully this year, losing over Pinnacle West Capital Corp. -5.1 -11.5 10% year-to-date. Despite strong results at its electric IDA CORP Inc. -4.5 -9.6 and natural gas utility operations in 2014, concerns Vectren Corp. -3.7 -6.5 remain regarding the future performance of the Source: SNL Energy RRARegulatory Research Associates: Coverage, proprietary data and services RRA Research Notes Company Reports • Real-time online updates of regulatory developments • Discussion of strategic overview and business model • Customize access based on states/companies that are • Earnings and market performance analysis of most interest to you. • Challenges and outlook • Compiled weekly in RRA Focus Notes • Detailed service territory and asset map Rate Case History Monthly Reports • Historical rate case data dating back to 1980 • Overview of market performance of RRA Index companies • Summary information on pending cases • Analysis of weather data and impact on utility earnings • Filterable by state, date and company • Statistical analysis Topical Special Reports • Exportable custom spreadsheets • Comparative information and analysis concerning • Rate Case Profiles provide detail on individual cases, such topics as capital expenditures, dividends and including RRA’s analytical Rate Case Final Reports retail electricity prices Commission Profiles Quality Measures • Comparative analysis and ranking of interest and fixed • Continuously updated profiles of state regulatory -2- November 10, 2014 charge coverage, ROE, ROR and Capital Structure commissions with RRA’s valuable rankings Regarding the slight projected spending fall-off in 2015 and 2016, we attribute this (forecasted) decline to the• completion Separate of large reportsgeneration projectsfor RRA and environmentalIndex parent projects companies undertaken to comply and with the • Details on commissioners and topics related to Mercury and Air Toxins Standards (MATS) and other standards promulgated by the Environmental Protection Agency (EPA)their.