NextEra Energy Inc.’s (NEE) business wing Florida Power & Light ("FPL") announced the conclusion of its large-scale modernization program at the Turkey Point Unit 4 and St. Lucie nuclear power facilities located in Miami-Dade County and St Lucie County, respectively.
It took the company five years to complete the plant upgrades. The last to complete the modernization work was Turkey Unit 4 and was linked to Florida’s power grid yesterday.
The generation capacity from the upgrade of these plants reached over 500 megawatts ("MW"), exceeding the prior projection of 399 MW made at the end of 2012. The "extended power uprates" as the upgrades are called involved installation of 38,000 (over seven miles) electric wiring conduit, roughly 16,000 linear feet of pipe which translates to about three miles and 288,500 feet (over 50 miles) of power cables.
In 2012, NextEra Energy completed the modernization of Turkey Unit 3, St Lucie 1 and 2. The company’s investments in nuclear energy are expected to result in major advantages in terms of fuel cost savings and low-emissions. Customers in Florida will thus enjoy lower electricity bills on the back of these considerable programs.
The savings from the first year of operation is estimated to be over $100 million from fossil fuels, which will definitely be passed on to customers in the guise of lower bills. As of now, the company’s power prices are 26% below the national average. Further, the program will help in reducing 33 million tons of greenhouse gas emissions.
Currently, the company charges $95 to an average residential customer consuming 1,000 Kilowatt-hours (kWh), which includes a nuclear cost recovery rate of $1.65 (5 cents per day). With the present nuclear upgrade coming into effect, NextEra plans to cut the nuclear cost recovery rates to about 50 cents equivalent to less than 2 cents per day in 2014.
In early Mar 2013, NextEra Energy disclosed its plans to invest $200 million for equipping its power infrastructure against severe storms as well as improve service reliability.
NextEra Energy’s diversified assets enable the company to maintain a stable revenue position. The housing construction market in Florida is expected to gain traction which will lead to increase in power demand. In this light the upgrade work on its nuclear assets seems timely. These upgrades are also anticipated to enhance operational quality which will lead to customer retention.
NextEra Energy at present maintains a Zacks Rank #3 (Hold). Other utility stocks that look attractive and are worth accumulating now are Brookfield Infrastructures Partners L.P. (BIP), Pike Electric Corp. (PIKE) and Empresa Nacional Electricidad SA (EOC). All these are Zacks Rank #1(Strong Buy) stocks.
Headquartered in Juno Beach, FL, NextEra Energy Inc. is a public utility holding company engaged in the generation, transmission, distribution and sale of electric energy.
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