RIVIERA BEACH, Fla. – As part of its annual companywide hurricane season preparedness drill, Florida Power & Light Company today announced a three-year plan to continue and accelerate the strengthening of its electric system against high winds associated with hurricanes and other major weather events.
FPL expects to invest approximately half a billion dollars over the next three years to continue to improve the overall resiliency of the electric system for customers. The plan builds on the company’s industry-leading storm hardening initiative by incorporating additional lessons learned from Superstorm Sandy, such as those related to flooding, as well as from Florida storm activity in 2012. These recent experiences show that electric infrastructure that has been strengthened performs better in preventing some storm-related outages, speeding restoration times following severe weather and delivering better overall everyday reliability.
“If Florida were a country, its economy would be the 21st largest in the world, and business operations and residents’ lives are increasingly reliant on computers, tablets, smartphones and other devices that depend on electricity,” said FPL President Eric Silagy. “When severe weather strikes, it causes damage and produces power outages, so preparation is crucial. While no electric system can be fully stormproof, and we have been working to strengthen the grid and improve its resiliency for some time, the acceleration of this effort will help us get businesses up and running and residents’ lives back to normal more quickly after storms.”
The accelerated hardening effort being announced today builds upon the approved program FPL has been executing since 2007. From 2007 through 2012, FPL invested a total of nearly $460 million to strengthen the electricity-delivery backbone and harden infrastructure serving facilities that are critical to communities such as hospitals, police and fire stations, 911 facilities, water-treatment plants, grocery stores, gas stations and pharmacies.
These investments translate both into faster restoration during major storms and improved everyday reliability for customers. FPL’s experience with the recent tropical storms shows main power lines that have been hardened are roughly half as likely to experience an outage during severe weather. In addition, under normal weather conditions, hardening a power line reduces the frequency of daily outages by up to 40 percent.
“FPL delivers strong reliability and the lowest typical residential customer bills in the state because we are constantly benchmarking ourselves against other electricity providers in order to learn from their best practices. We actively incorporate what we learn into our business in order to improve our customers’ service and experience. The accelerated hardening effort we’re announcing today is a great example of that,” said Silagy. “Importantly, the stable, four-year environment provided by last year’s base rate agreement allows us to make significant investments, such as accelerated hardening, which will benefit our customers for generations to come.”
2013-2015 Electric Infrastructure Storm Hardening Plan
Under FPL’s 2013-2015 Electric Infrastructure Storm Hardening Plan, filed with the Florida Public Service Commission yesterday (May 1), the company expects to invest in the range of $428 million to $646 million over the next three years to continue to improve the overall resiliency of the electric system for customers. Because FPL is operating under a four-year rate agreement, this plan does not impact customer rates during the three-year period of the investments.
Specifically, FPL’s 2013-2015 plan includes investments to:
“Reliable electricity is the lifeblood of Florida’s economy. By continuing and accelerating our effort to strengthen the grid’s backbone and infrastructure serving critical community needs, we’re making our system stronger for the benefit of all of our customers,” said Silagy. “While we haven’t been hit by a hurricane in several years, the investments we’re making now will help us restore power to customers and get the economy moving again more quickly when the next severe storm strikes.”
Annual Company-Wide Hurricane Simulation
Today’s announcement comes as part of the company’s annual week-long storm drill, one element of the year-round preparations that thousands of FPL employees participate in to prepare for major storms. This week marks the culmination of employee preparations, with a company-wide simulated response to Hurricane Sheryl, a virtual Category 3 storm, making landfall in Southwest Florida, crossing the state and exiting over the Treasure Coast region.
Throughout the week, employees across FPL’s 35-county service territory have been practicing various scenarios designed to hone their readiness, restoration and response capabilities as part of their final preparations prior to the official start of hurricane season.
Using advanced computer modeling to make the simulation as real as possible, the company projects the types and extent of infrastructure damage and customer outages that such a storm would be expected to cause based on real data from prior storms.
One component of FPL’s pre-storm season preparation plan involves the complex coordination of mutual assistance agreements with other utilities. When extreme weather – such as hurricanes, ice storms or major flooding – strikes an area, utilities must work together to restore power for residents and businesses. This often includes bringing in thousands of crews and trucks from out-of-state utilities to help. As a result of what utilities faced following Superstorm Sandy, FPL’s drill this year includes an added emphasis on practicing how the company manages out-of-state crews to supplement efforts to restore FPL customers.
For more information about FPL’s storm preparedness plans and tips on how residents and businesses can get themselves prepared before storm season begins June 1, please visit www.FPL.com/storm.
Florida Power & Light Company
Florida Power & Light Company is the largest rate-regulated electric utility in Florida and serves the third-largest number of customers of any electric utility in the United States. FPL serves approximately 4.6 million customer accounts and is a leading Florida employer with approximately 10,000 employees as of year-end 2012. During the five-year period ended December 31, 2012, the company delivered the best service reliability among Florida investor-owned utilities. As of year-end 2012, its typical residential customer bills are the lowest in Florida, and based on data available in July 2012, are about 26 percent below the national average. A clean energy leader, FPL has one of the lowest emissions profiles and one of the leading energy efficiency programs among utilities nationwide. FPL is a subsidiary of Juno Beach, Fla.-based NextEra Energy, Inc. (NYSE: NEE). For more information, visit www.FPL.com.
Cautionary Statements and Risk Factors That May Affect Future Results
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra Energy, Inc. (NextEra Energy) and Florida Power & Light Company (FPL) regarding future operating results and other future events, many of which, by their nature, are inherently uncertain and outside of NextEra Energy's and FPL's control. Forward-looking statements in this press release include, among others, statements concerning adjusted earnings per share expectations and future operating performance. In some cases, you can identify the forward-looking statements by words or phrases such as “will,” “will result,” “expect,” “anticipate,” “believe,” “intend,” “plan,” “seek,” “aim,” “potential,” “projection,” “forecast,” “predict,” “goals,” “target,” “outlook,” “should,” “would” or similar words or expressions. You should not place undue reliance on these forward-looking statements, which are not a guarantee of future performance. The future results of NextEra Energy and FPL are subject to risks and uncertainties that could cause their actual results to differ materially from those expressed or implied in the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: effects of extensive regulation of NextEra Energy's and FPL's business operations; inability of NextEra Energy and FPL to recover in a timely manner any significant amount of costs, a return on certain assets or an appropriate return on capital through base rates, cost recovery clauses, other regulatory mechanisms or otherwise; impact of political, regulatory and economic factors on regulatory decisions important to NextEra Energy and FPL; risks of disallowance of cost recovery by FPL based on a finding of imprudent use of derivative instruments; effect of any reductions to or elimination of governmental incentives that support renewable energy projects of NextEra Energy Resources, LLC and its affiliated entities (NextEra Energy Resources); impact of new or revised laws, regulations or interpretations or other regulatory initiatives on NextEra Energy and FPL; effect on NextEra Energy and FPL of potential regulatory action to broaden the scope of regulation of over-the-counter (OTC) financial derivatives and to apply such regulation to NextEra Energy and FPL; capital expenditures, increased operating costs and various liabilities attributable to environmental laws, regulations and other standards applicable to NextEra Energy and FPL; effects on NextEra Energy and FPL of federal or state laws or regulations mandating new or additional limits on the production of greenhouse gas emissions; exposure of NextEra Energy and FPL to significant and increasing compliance costs and substantial monetary penalties and other sanctions as a result of extensive federal regulation of their operations; effect on NextEra Energy and FPL of changes in tax laws and in judgments and estimates used to determine tax-related asset and liability amounts; impact on NextEra Energy and FPL of adverse results of litigation; effect on NextEra Energy and FPL of failure to proceed with projects under development or inability to complete the construction of (or capital improvements to) electric generation, transmission and distribution facilities, gas infrastructure facilities or other facilities on schedule or within budget; impact on development and operating activities of NextEra Energy and FPL resulting from risks related to project siting, financing, construction, permitting, governmental approvals and the negotiation of project development agreements; risks involved in the operation and maintenance of electric generation, transmission and distribution facilities, gas infrastructure facilities and other facilities; effect on NextEra Energy and FPL of a lack of growth or slower growth in the number of customers or in customer usage; impact on NextEra Energy and FPL of severe weather and other weather conditions; risks associated with threats of terrorism and catastrophic events that could result from terrorism, cyber attacks or other attempts to disrupt NextEra Energy's and FPL's business or the businesses of third parties; risk of lack of availability of adequate insurance coverage for protection of NextEra Energy and FPL against significant losses; risk to NextEra Energy Resources of increased operating costs resulting from unfavorable supply costs necessary to provide NextEra Energy Resources' full energy and capacity requirement services; inability or failure by NextEra Energy Resources to hedge effectively its assets or positions against changes in commodity prices, volumes, interest rates, counterparty credit risk or other risk measures; potential volatility of NextEra Energy's results of operations caused by sales of power on the spot market or on a short-term contractual basis; effect of reductions in the liquidity of energy markets on NextEra Energy's ability to manage operational risks; effectiveness of NextEra Energy's and FPL's hedging and trading procedures and associated risk management tools to protect against significant losses; impact of unavailability or disruption of power transmission or commodity transportation facilities on sale and delivery of power or natural gas by FPL and NextEra Energy Resources; exposure of NextEra Energy and FPL to credit and performance risk from customers, hedging counterparties and vendors; risks to NextEra Energy and FPL of failure of counterparties to perform under derivative contracts or of requirement for NextEra Energy and FPL to post margin cash collateral under derivative contracts; failure or breach of NextEra Energy's and FPL's information technology systems; risks to NextEra Energy and FPL's retail businesses of compromise of sensitive customer data; risks to NextEra Energy and FPL of volatility in the market values of derivative instruments and limited liquidity in OTC markets; impact of negative publicity; inability of NextEra Energy and FPL to maintain, negotiate or renegotiate acceptable franchise agreements with municipalities and counties in Florida; increasing costs of health care plans; lack of a qualified workforce or the loss or retirement of key employees; occurrence of work strikes or stoppages and increasing personnel costs; NextEra Energy's ability to successfully identify, complete and integrate acquisitions; environmental, health and financial risks associated with NextEra Energy's and FPL's ownership of nuclear generation facilities; liability of NextEra Energy and FPL for significant retrospective assessments and/or retrospective insurance premiums in the event of an incident at certain nuclear generation facilities; increased operating and capital expenditures at nuclear generation facilities of NextEra Energy or FPL resulting from orders or new regulations of the Nuclear Regulatory Commission; inability to operate any of NextEra Energy Resources' or FPL's owned nuclear generation units through the end of their respective operating licenses; liability of NextEra Energy and FPL for increased nuclear licensing or compliance costs resulting from hazards posed to their owned nuclear generation facilities; risks associated with outages of NextEra Energy's and FPL's owned nuclear units; effect of disruptions, uncertainty or volatility in the credit and capital markets on NextEra Energy's and FPL's ability to fund their liquidity and capital needs and meet their growth objectives; inability of NextEra Energy, FPL and NextEra Energy Capital Holdings, Inc. to maintain their current credit ratings; risk of impairment of NextEra Energy's and FPL's liquidity from inability of creditors to fund their credit commitments or to maintain their current credit ratings; poor market performance and other economic factors that could affect NextEra Energy's defined benefit pension plan's funded status; poor market performance and other risks to the asset values of NextEra Energy's and FPL's nuclear decommissioning funds; changes in market value and other risks to certain of NextEra Energy's investments; effect of inability of NextEra Energy subsidiaries to upstream dividends or repay funds to NextEra Energy or of NextEra Energy's performance under guarantees of subsidiary obligations on NextEra Energy's ability to meet its financial obligations and to pay dividends on its common stock; and effect of disruptions, uncertainty or volatility in the credit and capital markets of the market price of NextEra Energy's common stock. NextEra Energy and FPL discuss these and other risks and uncertainties in their annual report on Form 10-K for the year ended December 31, 2012 and other SEC filings, and this press release should be read in conjunction with such SEC filings made through the date of this press release. The forward-looking statements made in this press release are made only as of the date of this press release and NextEra Energy and FPL undertake no obligation to update any forward-looking statements.