On Thursday, NextEra Energy (NYSE:NEE) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
NextEra Energy reported a strong first quarter with a 10% increase in adjusted earnings per share year-over-year, highlighting robust financial and operational performance.
The company plans significant capital investments, including $90-$100 billion through 2032, primarily to support Florida's growing economy, with a focus on solar, gas-fired generation, and storage solutions.
NextEra Energy continues to expand its renewable energy and storage project backlog, adding 4 gigawatts of new long-term contracted projects this quarter, driven by strong demand from both hyperscalers and utility customers.
The company is strategically positioned with secured supply chains for solar panels, batteries, and wind components through the end of the decade, anticipating increased demand for renewables.
Management expressed optimism about future growth opportunities, emphasizing their ability to meet growing electricity demand while maintaining low power prices and high reliability.
Full Transcript
OPERATOR
Good day and welcome to the NextEra Energy Inc. First Quarter 2006 Earnings Call. Today, all participants are in a listen only mode. Should you need assistance during today's call, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note that today's event is being recorded at this time. I would now like to turn the conference over to Mark Eitelman, Director of Investor Relations. Please go ahead sir.
Mark Eitelman (Director of Investor Relations)
Good morning everyone and thank you for joining our first quarter 2026 financial results conference call for NextEra Energy. With me this morning are John Ketchum, Chairman, President and Chief Executive Officer, Operations of NextEra Energy Mike Dunn, Executive Vice President and Chief Financial Officer of NextEra Energy Armando Pimentel, Chief Executive Officer of Florida Power and Light Co. Scott Borges, president of Florida Power and Light Co. Brian Bolster, president and Chief Executive Officer of NextEra Energy Resources and Mark Hickson, Executive Vice President of NextEra Energy. John will start with opening remarks and then Mike will provide an overview of our results. Our executive team will then be available to answer your questions. We will be making forward looking statements during this call based on current expectations and assumptions which are subject to risks and uncertainties. Actual results could differ materially from our forward looking statements if any of our key assumptions are incorrect because of other factors discussed in today's earnings news 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 and Exchange Commission, each of which can be found on our website www.nexteraenergy.com. we do not undertake any duty to update any forward looking statements. Today's presentation also includes references to non GAAP financial measures. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of historical non GAAP measures to the closest GAAP financial measure. With that, I'll turn the call over to John.
John Ketchum (Chairman, President, and Chief Executive Officer)
Thanks Mark and good morning everyone. NextEra Energy is off to a terrific start to the year, delivering strong first quarter results. Adjusted earnings per share increased by 10% year over year, reflecting strong financial and operational performance at both Florida Power and Light (FPL) and Energy Resources. Over the past several months, I've been working closely with our customers, policymakers and stakeholders. Two things could not be clearer to me. First, demand for electricity in this country is not slowing down in fact, it's accelerating. Our customers need power now and speed to power is essential. Second, building new power infrastructure must be done in a way that addresses affordability challenges and keeps bills low for existing customers. NextEra Energy is doing both. We're able to meet this increased power demand while keeping power prices low. And we're doing it by leveraging our common platform. We build all forms of energy infrastructure, we have experience across the entire energy value chain at massive scale with a balance sheet to back it up, and we continuously drive operational efficiency across our portfolio to deliver value and affordability to customers. At FPL, our value proposition is clear. Leverage a diverse generation mix and a resilient grid to provide low cost, highly reliable electricity to our customers every single day. At Energy Resources, customers choose us because they know we have an unmatched decades long track record of building energy infrastructure that delivers cost effective solutions tailored to their needs. NextEra Energy was built for this moment of extraordinary growth. With a service area that spans 49 states and with more than 12 ways to grow, I couldn't be more excited about our ability to deliver for our customers, our shareholders and our country. Importantly, our forecasted growth is visible and balanced between our regulated and long term contracted businesses. Florida is a prime example of how we reliably serve growth while keeping bills low. The Sunshine State has been one of the fastest growing states for decades and continues its rapid expansion today. Florida is already a $1.8 trillion economy, the 15th largest in the world, and the growth isn't slowing down. Florida's GDP is forecasted to grow 4.7% annually through 2040. In fact, in the first quarter, Florida Power and Light (FPL) added nearly 100,000 customers compared to the prior year comparable period. For perspective, roughly 90% of utilities nationwide serve less than that day to day. Florida Power and Light (FPL) added these customers to our system in just the last 12 months. Florida Power and Light (FPL) supports this growth by building the right new power generation and the right new transmission infrastructure across the state. In fact, Florida Power and Light (FPL) expects to invest between 90 and $100 billion through 2032 primarily to support Florida's growing economy. Earlier this month, Florida Power and Light (FPL) filed its annual 10 year site plan detailing its approach to reliably and cost effectively meet the growing need for electricity in Florida. The plan shows roughly 4 gigawatts of new gas fired generation, complementing over 12 gigawatts of solar and over 7 gigawatts of storage solutions over the next 10 years, which would further diversify Florida Power and Light (FPL)'s generation fleet. Yet even with significant capital investment, bills have actually gone down over time when you adjust for inflation, the typical Florida Power and Light (FPL) residential customer bill is 20% lower today than it was 20 years ago. In nominal terms, Florida Power and Light (FPL)'s bills are approximately 30% below the national average and only projected to grow on average about 2% annually through the end of the decade. On top of that, Florida Power and Light (FPL) delivers customers top decile reliability that's approximately 68% better than the national average. Low bills and high reliability don't happen by accident. Instead, this performance is a direct result of smart, disciplined capital investments coupled with a relentless focus on operating efficiently. This is a value proposition that not only best serves our existing customers provide but also works really well for new large load customers like hyperscalers who value reliability, cost and speed to market all things we can deliver. As part of Florida Power and Light (FPL)'s approved four year rate settlement agreement that went into effect in January, we proactively developed a large load tariff to provide the necessary certainty for both customers and regulators balancing consumer protections with a competitive rate. Again, both things are possible with the right structure and a smart approach. Florida Power and Light (FPL)'s speed to market advantages combined with its best in class service is creating significant large load interest. So far we have about 21 gigawatts of large load interest at Florida Power and Light (FPL). Of that we are in advanced discussions on about 12 gigawatts, a point portion of which we believe we could begin serving as soon as 2028. We are making good progress on this front and we continue to expect at least one large load customer to sign up for capacity under Florida Power and Light (FPL)'s tariff by the end of the year. Initially, we expect every gigawatt of large load under Florida Power and Light (FPL)'s approved tariff to be equivalent equivalent to roughly $2 billion of capex, and to earn the same return on equity as other Florida Power and Light (FPL) investments. Energy Resources continues to grow its regulated electric and gas transmission portfolio. It can't be stressed enough. Linear infrastructure is absolutely vital to meeting America's electricity demand. Pipelines, fuel power plants and transmission lines deliver electricity into communities. NextEra Energy Transmission is one of America's leading independent electric transmission companies. Our scale and experience position us well as we execute on new transmission opportunities across America. In fact, just this week one of NextEra Energy Transmission subsidiaries, Lone Star Transmission, received ERCOT approval to build portions of two new transmission lines in North Central Texas to improve reliability in the region. Lone Star's investment share of approximately $300 million represents a roughly 40% increase in Lone Star's rate base. NextEra Energy Transmission has now secured more than $5 billion in new projects since 2023 in total, NextEra Energy Transmission has regulated and secured capital of $8 billion, almost twice the rate base size of Gulf Power when we bought the company in 2019. We also continue to execute against our plan to grow our gas transmission business. Energy Resources now has ownership interest in more than 1,000 miles of FERC regulated pipeline pipelines. Importantly, it's a portfolio with a number of organic expansion opportunities. All told, we expect our combined electric and gas transmission business and Energy resources to grow to $20 billion of total regulated and investment capital by 2032, a 20% compounded annual growth rate off a 2025 base. We recently added new senior leadership to our pipeline business to focus on growth opportunities, demonstrating our commitment to expanding our gas transmission business. Turning to Energy Resources Long Term Contracted Business As I said at the outset, it simply can't be overstated. Our customers need a lot of power and they need it now. Renewables and storage continue to be the fastest way to get new electrons on the grid until additional gas fired generation can be built. This is why we had a record quarter at Energy resources adding to backlog 4 gigawatts of new long term contracted renewables and storage projects. This includes another strong quarter of battery storage origination at 1.3 gigawatts. Importantly, we have four growth avenues for battery storage. We build stand alone battery storage, co locate storage at existing sites, develop storage as a grid solution and expand batteries from 4 hours to 8 hours at existing storage projects. Our standalone and co located battery storage pipeline sits at over 110 gallon gigawatts excluding expansion opportunities. Bottom line In a market driven by a significant need for quick capacity solutions, Energy Resources remains well positioned to serve customers with battery storage. We're also off to a terrific start executing against our data center hub strategy which is built on the power of scale. Scale shortens development pipelines, reduces execution risk and keeps costs low as we build infrastructure needed to meet data center power demand. To this end, last month the US Department of Commerce selected Energy Resources to build nine and a half gigawatts of new gas fired generation to serve large load. The projects are in connection with Japan's $550 billion investment commitment to the United States as part of the U S Japan Trade deal. These are two separate projects, one located in Texas and the other located in Pennsylvania. Both are designed to serve large load in each state. The US And Japan would own the projects while Energy Resources would develop, build and operate them. We are actively developing both projects, advancing site development, procurement, permitting and commercial structuring as we work toward definitive agreements with the US and Japan. The projects are drawn from our existing group of data center hubs, a group that totals over 30 hubs with a year end goal to secure roughly 40. We now have four origination channels feeding into our base case goal of securing 15 gigawatts of new generation to serve large load by 2035. These four origination channels can also help us achieve our upside case of 30 gigawatts or more by 2035. We are working hard to meet this goal with all forms of Energy Approximately 50% from gas fired generation and the remainder from all other forms of energy. The first channel is working directly with hyperscalers to power their data centers. These are companies we have good long standing relationships with. A great example is our collaboration with Google to recommission our Dwayne Arnold nuclear plant outside Cedar Rapids, Iowa. Our second channel is working with investor owned utilities. A perfect example is a joint development agreement which we signed with ACCEL earlier this week to jointly plan and rapidly deploy new generation, storage and transmission to capture accelerating data center demand across Xcel Energy's eight state service territory. Our third channel comes through our strong relationships with co ops and municipalities. Our plan to work with Basin Electric to develop a 1.5 gigawatt combined cycle plant in North Dakota is a great example. Our co op and municipality customers value our skills, our capabilities, our customer relationships with hyperscalers and our balance sheet making us the perfect partner. Working with the federal government to build new natural gas power generation is our fourth channel on Duane Arnold. We continue to make good progress. Earlier this month the Nuclear Regulatory Commission approved a license transfer from the plant's minority owners, Central Iowa Power Cooperative and Corn Belt Power Cooperative to NextEra Energy. This key federal approval clears the way for Energy Resources to finalize the acquisition of their 30% ownership stake which will give us full ownership of Duane Arnold. At the same time, the process to regain interconnection rights for Duane Arnold continues to progress. As expected, the plant remains on track to reenter service no later than Q1 2029. We also continue to evaluate advanced nuclear closely evaluating the capabilities of various SMR OEMs. We have 6 gigawatts of SMR colocation opportunities at our nuclear sites and we are working to develop new greenfield sites. Of course, any new nuclear build would have to include the right commercial terms and conditions with appropriate risk sharing mechanisms that limit our ultimate exposure. Given that we built more energy infrastructure over the last two decades than any other company, that means we have a lot of operating assets coming off contract. In fact, we have up to 6 gigawatts of renewables and 1 1/2 gigawatts of nuclear recontracting opportunities through 2032. The timing couldn't be better. The projects were generally built and contracted years ago during much less favorable market conditions. As the PPAs begin to expire over the next several years, we believe recontracting will command a higher price. In fact, in the first quarter we contracted over 600 megawatts of existing projects, locking in contracts for an average of over 18 years, reflecting the strong electricity demand environment we're seeing today. Energy Resources Customer Supply Business advanced its growth strategy during the first quarter, highlighted by our strategic acquisition of Symmetry Energy Solutions, which is one of the US leading natural gas suppliers. Symmetry operates in 34 states and provides us access to additional physical assets, enabling us to deliver a broad range of solutions for our customers. In fact, across all of our businesses, we now transport and deliver approximately 2.9 trillion cubic feet of natural gas annually, or about 8 billion cubic feet per day, making us one of the largest and most active gas suppliers serving wholesale, retail and industrial customers nationwide. And while we continue to grow and to deliver value and innovative solutions for customers every single day, we're also focused on making ourselves better and taking steps to redefine the future of the entire electric industry. We're doing this through our new Rewire initiative and a partnership with Google Cloud. Rewire is a company wide initiative to reimagine how we work and how we do business paired with an enterprise wide AI transformation that we expect to unlock top line growth and cost savings opportunities for our customers. At the same time, Rewire is serving as our AI product development platform. We believe the new AI tools and solutions that we build will not only redefine how we do business and create a competitive advantage, but will also help transform how our industry generates and delivers electricity and serves customers. Partnering with Google, we are delivering these products to the utility industry to unlock savings for American homes and businesses. In the first quarter we brought to market our first Rewire products. For example, Conduit is an AI powered tool designed to upscale or our already best in class renewables workforce, increasing their efficiency in the field and keeping our power plants up and running. Another product called Generation Entitlement proactively identifies abnormal equipment conditions enabling teams to take early action and optimize power plant performance across the fleet. And a product called Grid Composer uses AI to optimize and orchestrate all aspects of the power generation process. It brings real time recommendations into one place to enable faster, more informed decisions around unit commitment, power and fuel dispatch, and maintenance scheduling. Importantly, we believe these tools have the potential to drive significant savings for customers. Florida Power and Light (FPL)'s bill today is already approximately 30% below the national average. One of the reasons that's possible is because of our relentless focus on technology and driving costs out of the business. Florida Power and Light (FPL)'s non fuel O&M is more than 71% lower than the industry average. In fact, we're 50% more cost efficient than the second best utility in America. We believe our Rewire products reinforce our position as the lowest cost electric utility operator in the country. But it doesn't stop there. By working closely with hyperscalers, we're structuring solutions that support growth while keeping power prices affordable for American families. As we've discussed previously, that's why Energy Resources has been focused on the bring your own generation or BYOG model that ensures large load customers pay their fair share. Not coincidentally, that happens to be perfectly aligned with where the market and policymakers are moving. The concept is simple. We build energy infrastructure for hyperscalers and they pay for it. Everyday Americans do not. That's the way to power America's growth and keep power bills affordable. But we believe there's much more to the story. Remember, many parts of the country are starting at real capacity deficits. As we approach the end of the decade, BYOG power solutions could become critical elements of a resilient grid if we start to think about them as dispatchable resources during times of extreme demand. It's exactly what we're working on with Nvidia, a collaboration we announced in the first quarter. Just think about being able to temporarily cycle down or shift data center activity for a few hours during extreme cold or extreme heat. That would allow local load serving entities to use that power to meet customer demand when power is scarce and at a higher cost, increasing reliability and lowering power bills for everyday Americans. This is another example of how we're trying to lead a move to where we believe the market is going to be bottom line. At this unique moment in our industry scale, experience and innovation matter more than ever, and our common platform provides us with what we believe is an unmatched competitive advantage. It's more than just our operating scale. We have a robust supply chain, we have global banking relationships, we've worked hard to maintain one of the largest and strongest balance sheets in the sector, and we use technology and data to deliver solutions for our customers. This platform is what enables us to build all forms of energy across the energy value chain. It's also hard to replicate. That's because we've been building it, refining it, and optimizing it for decades. It's how we deliver customers the reliable and affordable solutions they need when they need it, no matter where they are in America. And as power demand rises, these unique capabilities become increasingly important. All of which is a big one for our customers, stakeholders, shareholders. We are honored to serve. I'm pleased with how we started the year and even more excited for the rest of 2026 as we execute on our more than 12 ways to grow. With that, I'll turn the call over to Mike.
Mike Dunn (Executive Vice President and Chief Financial Officer)
Thanks, John. Let's begin with FPL's detailed results for the first quarter of 2026, FPL's earnings per share increased $0.06 year over year. Regulatory capital and growth of approximately 8.8% was a significant driver of FPL's earnings per share growth versus the prior year comparable quarter. FPL's capital expenditures were approximately $3.2 billion for the quarter and we expect FPL's full year capital investments to be between 12 and $13 billion. For the 12 months ending March 2026. FPL's reported return on equity for regulatory purposes will be approximately 11.7%. During the first quarter, we utilized approximately $306 million of the rate Stabilization Mechanism, leaving FPL with an after tax balance of approximately $1.2 billion. This quarter, FPL placed into service approximately 600 megawatts of new cost effective solar, putting FPL's owned and operated solar portfolio at over 8.5 gigawatts. Key indicators show Florida's Economy Remains Healthy Florida continues to be one of the fastest growing states in the Nation and had three of the five fastest growing US metro areas between 2024 and 2025. And as John mentioned, FPL had a strong quarter of customer growth, with the average number of customers increasing by nearly 100,000 from the comparable prior year period. FPL's first quarter retail sales increased by approximately 3.4% year over year. After taking weather into account. First quarter retail sales increased by roughly 0.3% on a weather normalized basis from the comparable prior year period, driven primarily by continued favorable underlying population growth. Now let's turn to Energy Resources, which reported adjusted earnings growth of approximately 14% year over year. Contributions from new investments increased $0.04 per share year over year, primarily reflecting continued growth in our power generation portfolio. Our existing clean energy portfolio increased $0.01 per share during the quarter. The comparative contribution from a customer Supply business decreased by $0.04 per share, primarily driven by lower production volume in our upstream operations and continued normalization of margins in our flow requirements. Business contributions from Nextera energy transmission increased $0.05 per share year over year net of financing costs driven by the sale of a 50% equity interest in a transmission asset located in California. We had no change from other impacts as lower tax costs were largely offset by higher financing costs which are primarily related to new borrowings to support our new investments. We remain well positioned to navigate the current interest rate environment through our over $43 billion interest rate hedging program. We have also planned for potential trade impacts and positioned ourselves to deliver and execute for our customers. That's why we proactively secured supply to support both FPL's and energy resources development plans, including the development of our national data center hub footprint for solar. We've secured panels through 2029. We're also well protected for battery storage with competitively priced domestic supply also secured through 2029. We've secured key wind components domestically for our new build expectations through 2027 and we have sufficient transformer capacity to support our build forecast. Through the end of the decade, Energy Resources had a record quarter of new renewables and storage origination with 4 gigawatts added to the backlog. With these additions, our backlog now totals approximately 33 gigawatts after taking into account 0.3 gigawatts of new projects placed into service since our last earnings call. This highlights the continued strong demand for renewables and storage, and our backlog additions reflect the diverse power demand we're seeing across our customers. Roughly 30% of our backlog additions are driven by hyperscalers. While the remaining 70% comes from power utility customers including cooperatives and municipalities. Turning now to our first quarter 2026 consolidated results, adjusted earnings from corporate and other decreased by $0.02 per share year over year. Our 2026 adjusted earnings per share expectations range of $3.92 to $4.02 remains unchanged and we are targeting the high end of that range. We expect to grow adjusted earnings per share at a compound annual growth rate of 8% plus through 2032 and are targeting the same from 2032 through 2035, all off the 2025 base of $3.71 adjusted earnings per share from 2025 to 2032. We expect that our average annual growth in operating cash flow will be at or above our adjusted earnings per share compound annual growth rate range and we also continue to expect to grow our dividends per share at roughly 10% per year through 26 off a 2024 base and 6% per year from year end 2026 through 2028. As always, our expectations assume our caveats. This concludes our prepared remarks and with that we will open the line for questions.
OPERATOR
Thank you. We will now begin the question and answer session. As a reminder to ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If your question has been addressed and you would like to withdraw it, please press star then two. At this time, we will pause momentarily to assemble our roster. And today's first question comes from Steve Fleishman with Wolf Research. Please proceed.
Steve Fleishman (Equity Analyst)
Yeah, hi. Good morning everyone. So the just a couple questions on the US Japan projects. First of all, I guess do you have anything you could share on milestones and timeline to get to a final agreement there? And just do you have the turbines for these projects? And also just like pipeline and transmission access, is that something you might be able to participate in as well, helping to build pipe or transmission for these projects? Thanks. Yes, Steve, I'll go ahead and take this. This is John and good morning. You know, first of all, on the milestones, you know, we continue to be, you know, heavily engaged, as you would expect, with both the Department of Commerce and the Japanese government right now as we negotiate definitive agreements. We're looking to have those completed in the next two to three month period on both of those projects. So that's the first piece on milestones and timeline. And then after those are executed, you can imagine the agreements themselves will contain a series of milestones with payments time tied to those milestones as they are achieved. On the second piece in terms of product development or project development, we are heavily engaged at both sites, both the Texas site and the Pennsylvania site in terms of advancing those sites forward in terms of turbine supply, we'll have ample supply to turbines. Not concerned about that for both of those projects. And in terms of gas pipeline access, obviously that's one of the skills that we bring to the table. You know, Anderson in Texas is strategically located because it's, you know, one of our partners there is Comstock. And so we have bountiful, you know, gas supply, you know, available in the region, which makes that project a extremely attractive. And then, you know, as we advance Pennsylvania, that will be a key part of the decision making matrix as we look to further the development activities there. And then obviously transmission access on both of those sites is something that we will obtain as we move those projects forward. And you know, the development pieces, that's what we do. That's what we do every day. And you know, I think that was a big part of what I was trying to get across in my remarks when I look at the environment today. And I think a big reason, you know, we got these awards, you know, with, from the, from the doc, is there's really nobody that looks like us today. There's nobody out building generation at scale. We intentionally went out and shifted our strategy last year to bring your own generation. We knew that was where the market was heading. We saw it ahead of time, I think based on where our peers are. And we set up our strategy around it, our supply chain around it, our development activities around it. And a lot of what we're doing, not only with the federal hubs, but outside of it with the data center hubs, is we know the market will wants power solutions at scale. And to do that you have to have a combination of capabilities and skill sets that we've been building for two to three decades at this company. They're very hard to find, they're very hard to put together if you don't have them today. And so being a builder in Today's market across 49 states, with all the know how and capability sets that we have, I think really sets us up apart from the competition. Great. Just one other unrelated question. Good to see the 600 megawatts of recontracting being done. Do you have any data point on the price increase or price change in the new contracts versus the old ones?
John Ketchum (Chairman, President, and Chief Executive Officer)
Yes, Steve. The pricing on the new contracts is roughly $20 per megawatt hour on average increase relative to the price prior realized pricing.
Steve Fleishman (Equity Analyst)
Great, thank you.
OPERATOR
And today's next question comes from Julian Dumoulin Smith with Jefferies. Please proceed.
Julian Dumoulin Smith (Equity Analyst)
Hey guys, good morning. Nicely done. Genuinely just wanted to follow up a little bit on the linear infrastructure. How do you think about expanding this business?
John Ketchum (Chairman, President, and Chief Executive Officer)
I mean you talk about hires, et cetera, but can you talk a little bit about is this an acquisitive strategy potentially or how do you think about building or building, rebuilding, however you want to frame it? Yeah, so you know, I'll take it in pieces. I'll start with transmission, then I'll talk about pipelines. But first of all, when you think about the transmission business, I mean this is really just leveraging all the skill sets that we have on the generation side. Because when you think about what it takes to build generation and what it takes to build linear Infrastructure. It's a lot of the same skill sets. Right. You've got to have a very sophisticated land operation. You have to be able to really understand how to manage the permitting and approval process. You have to have a good ground game in terms of reaching out to local communities, working with stakeholders at the state and the federal level. And you have to find projects that make sense, that result in affordability for customers. And these are the things that we do on the generation side every day that transcend over into linear infrastructure around transmission. And then given all the know how we already have from fpl, you know, the success we've had, you know, building, you know, transmission in Florida, all that from an operation standpoint extends out into what we're doing there. So terrific Greenfield opportunities. It's a lot of the same strategic steps we take around generation. So I think those give us a big leg up in terms of acquisitions. Sure. I mean, if we found the right project that made sense, we could look at acquisition. It would depend on what stage of development it is. I mean, sometimes there are good development assets that make sense that could be a good fit with our overall portfolio. Wally's lean towards Greenfield for the reasons I just gave, you know, buying operating transmission assets. Sure. I mean, if we could be opportunistic about that and they made sense, we're in the right places, you know, that's something, you know, that we could continue to look at as well. But you know, where we've seen a lot of success on the transmission side is our ability to partner with incumbents and the relationships that we've been able to build across the investor owned utility co op and municipality space, I think not only lends and serves us well on generation, but on transmission as well. And we're just seeing a lot of success through those partnering arrangements. So I feel great about where the transportation mission and linear infrastructure opportunity set sits. And then on pipelines, you know, that's just naturally, you know, capitalizing on all those same Greenfield skill sets I already talked about around generation and transmission, they equally applied the pipeline business. And then you think about all the different skill sets that we have just around market knowledge on where transmission can, where, where gas transmission can make sense. The symmetry acquisition being a big part of that. You're one of the largest movers of gas molecules in the United States. You also probably have more information and more knowledge as to where gas pipelines expansions are required. It really helps inform our decision making around our data center hubs on where they're going to be most Economical and really can be optimized around gas. And so all the investments and other pieces that we have around customer supply and symmetry feed in equally well in the pipeline business. And it's a natural extension of our ability to enable data center hubs by being able to build gas or build transmission to be able to serve hyperscalers. Because we've really moved away from hey, let's go build 2 or 300 megawatts. That just doesn't get it done for a hyperscaler. We're looking at Building 2 to 5 gigawatts for hyperscalers. You would just be amazed at the amount of interest and the amount of demand that we are seeing in the market for that solution. And we are really unique in the ability to deliver that product because you have to have all the things I talked about in my prepared remarks to be able to do it and to be able to do it right. Awesome. And if I can just squeeze in a quick follow up here, maybe this where Steve was going. I mean just how would you set expectations for other non Japanese tied projects as far as the BTM effort goes? I mean BTM is obviously linked this time to power dynamic, creating a little bit of an accelerated timeline I suspect. But I'm curious how you would frame that. Yeah, no, great question, Julian. I mean, and so we've talked a lot about our ability to work with co ops and municipalities and you know, that really helps enable situations where we can move behind the meter, you know, in those service territories, maybe build something out that ultimately has what I call the extension cord. Right. The access to the grid over time. A lot of. Because even if you start behind the meter, you have to be able to demonstrate a path to be front of the meter within three, three, four, five years. But a lot of the discussions that we're having around our data center hubs are starting behind the meter. Right. Islanded solutions. I think more and more the market's going to go there, particularly in areas of the country where the load interconnect process is taking five to seven years to clear. People can't wait. There's too big of an opportunity cost around the data center business model and the cloud storage model to work. Wait five to seven years for load interconnect. We solve that problem with a behind the meter solution. But you have to know what you're doing, you have to know where to site those, you have to know how to bring a number of technologies to bear and you have to have the foresight to be able to plan and Credibly lay out a situation where you can be interconnected within three, four or five years, because that interconnection allows you to really optimize the value of that data center. Because I truly believe that we need to be, as a country looking at data centers as giant batteries that sit behind the grid. And I talked about our Nvidia collaboration being able to flex chips in terms of how they consume and use power. And given all the software we've developed around dispatchability of batteries, we're uniquely positioned to design a product and if you combine it with our customer supply business, to firm and shape products during scarcity intervals, hot summer day, cold winter day, where a data center can be dispatched like a battery, and think about what that does for affordability for customers in the region when you're providing that excess supply, that really helps to take a big hit out of the bill for everyday Americans that may struggle to pay those during those scarcity times that we have seen over the last five, 10 years in this industry. So something we're very focused on, something hyperscalers are very interested in. And I think it's unique for Nextera because we have all this expertise around technology, our partnership with Google being a part of that.
Julian Dumoulin Smith (Equity Analyst)
Awesome. Glad to see what you can pull off with Google here. All the best. All right, thank you. Hey, thanks, Julian.
OPERATOR
And the next question comes from Char Pereza with Wells Fargo. Please proceed.
John Ketchum (Chairman, President, and Chief Executive Officer)
Hey, guys, good morning. Good morning. Morning, John. John, just on large scale nuclear, I know the government and hyperscalers have indicated some level of interest in the AP1000, and there seems to be this consortium of regulated utilities forming that could consider new nuclear development as a group with, you know, a good portion of the cost inflation above budgeted amounts being borne by the hyperscalers. So the off takers. Turkey Point is obviously under an active review with the nrc. Are you sort of part of this consortium? Is it something you would consider with the right cost overrun protections or are you just really focused on recontracting like Point beach and Seabrook? Yeah, so let me, let me take those in pieces. So the first, the first part, you're right. I mean, Turkey Point is kind of an unusual position because Turkey Point 6 and 7 already have their licenses. Right. So you kind of skip to the front of the line on seven to eight years of approvals that would otherwise be required. So we've always had Turkey Point as a what I'll call a natural gas fuel hedge. If we wanted to do something there around an AP1000, that being said for us, I think we would probably be more inclined to toe in the water, maybe an SMR down at Turkey Point rather than an AP1000. And we would do it in a way where we could combine like I always like to talk about the four wallets, right, which is the oem, the developer, the hyperscaler, and the federal government. Because you have to, one, be comfortable with the technology and the technical feasibility of it. Will it work at the end of the day? And number two, as we keep saying, it has to be structured in a way that protects our customers and protects our shareholders. And so that's what we would look to do. We would not be interested in doing that together, together with a consortium. We have a lot of experience here. We feel very comfortable in our ability to do this on our own. But you got to get the insurance tower, so to speak, right, in terms of who takes that ultimate cost overrun risk. And so beyond Turkey Point, and if you think outside of Florida, we are working closely with SMR OEMs and with hyperscalers, you know, we have our national collaboration with Google, for example, around advanced nuclear. We're looking together with Google at where that might make the most sense. We have 6 gigawatts of SMR capacity at our existing sites. We have the ability to greenfield development as well. But again, any of those opportunities have to include those four wallets. And we have to get the technical and the commercial risk sharing right for those to advance. Got it. I guess your view is, despite the learning curves of Vogel, the SMRs are still more economical than an AP1000. Yeah, I mean, I just, I look at it, you know, there's two types of SMRs, right? There's Gen 3s, which are just what I would call a downsized AP1000. Right. So you're looking at building an AP1000 just in a smaller chunk, a little bit of a smaller bet. You know, GE's got, you know, the Ontario project going on now. Be a lot of lessons learned coming out of that. And the Gen 4s, you know, really are, you know, you're taking two step changes around a Gen 4. Gen 4 is the technology, which is not really an extension of an AP1000. Tried proven. And you're jumping into an additional fuel risk with the highly enriched uranium, which we still haven't really perfected in this country. So our focus would be more around the Gen3 technology.
Char Pereza (Equity Analyst)
Got it. And then just lastly on Point Beach, I know we're getting close to when a decision needs to be made on the ppa especially for the off taker who's going to need to plan ahead on new generation needs if the PPAs aren't renewed, I guess. How are the dialogues going with wecc? Do you have an interest interest there from a hyperscaler? I guess. When can we get an update around Point Beach? Thanks.
John Ketchum (Chairman, President, and Chief Executive Officer)
Yeah, thanks Char. There is a lot of interest for Point beach as you might imagine. Right. I mean a lot of interest from a number of folks. And so you know, we are just, you know, being, you know, diligent and making sure that we make the right decision around Point Beach. I'm not going to call out who exactly we're talking to, what the names are, but needless to say, just a lot of interest around that asset for obvious reasons given where it's located and all the hyperscaler opportunities around it. And so discussions are continuing to progress there and we like what we see and it's an attractive and a valuable asset. Got it. Fantastic.
Char Pereza (Equity Analyst)
Thanks guys. Appreciate it. Thank you Char.
OPERATOR
The next question is from Bill Appicelli with ubs. Please proceed.
Bill Appicelli (Equity Analyst)
Hi, good morning. Just addressing the backlog update. I think you've seen some strong progression here from about 3 gigs in Q3 to 3.6 to now 4 gigs. So would you say this reflects some acceleration of the contracting ahead of the tax credit roll offs at the end of the dec? Is this just underlying demand being exceedingly strong irrespective of the tax credits? It's Brian, I'd say at this point we haven't actually stepped into the acceleration yet. This is just a reflection of some of the growth that we've seen out in the market. And so it's really the reflection of the growth as opposed to acceleration. We'll probably see that as we start to move out here in the coming quarters. But this is just kind of fundamental demand for fundamental growth that's tied to what's the best economic answer for the demand that's in front of us as opposed to people trying to move in in advance of the tax credits. Yeah. And the other thing I would add to that is I made comments in the prepared remarks about where we stand in our supply chain. Right. With solar panels bought through 29 transformers through the end of the decade, batteries through 29 wind components, so on and so forth. We are so well positioned to capitalize on this back end demand that we see coming, you know, which is I think going to be a fantastic opportunity for this company. And you combine that with the safe harbor position that we already have that we were, you Know, quite aggressive on, you know, a while back. I just can't imagine there's any company in America for better position to seize upon the demand that we are going to see over the next three to four years and beyond for renewables and for storage. Particularly given, you know, how long it's taking to build gas fired generation, you know, in this country. And you know, like I keep saying, we're building it all.
John Ketchum (Chairman, President, and Chief Executive Officer)
We're building. We're a big believer that gas is needed and is going to provide a big impact. But it's not quick right to get to market and solar and storage are. And we have positioned our company around the ability to seize upon those opportunities. I think you're seeing the first showing of that here this quarter and we look forward to for many more strong quarters to come. So there's upside to a four gig a quarter run rate, I guess is another way to put that. Well, you said it, I didn't. But we feel really, really good about where we sit. Okay. And then just shifting gears outside of the Texas and Pennsylvania projects, can you just speak a little bit to the gas generation new build contracting? I know it's sort of subsumed in some of the hub strategy, but it does seem like there's some complexities in the market around getting deals announced on new build gas contract. To your points that you just made there in those in my prior question, is there anything you can point to in terms of gating factors? Is it just the complexity around managing fuel risk or is it getting the off takers to be able to commit to that? Just curious there. Yeah, no, I mean, look, I think that gas buildout continues to advance around the country. But remember we were starting gas fired generation development, we being the industry right from kind of a standing start a year or two ago. And so, you know, we've seen manufacturing start to ramp up. We've seen EPC labor, you know, respond as well. But I think the biggest constraint that I see in the market right now is, you know, on getting gas built faster is labor. Right. It's EPC contractors. We used to have 9, 10, 11 EPC contractors building gas plants. You know, back 10, 20 years ago. Some filed bankruptcy, some pivoted other businesses. If you look at really what I would call the four EPC contractors that we do business with today, a lot fewer than what we've ever had in the squeeze on labor in the market today when you're building a gas plant, pipe fitters, welders, so on and so forth, you know, the same EPC firms are building LNG terminals, they're building data centers, they're in other parts of the market and so lining up the labor, getting labor secured and in place, you know, that's a piece of it. And then depending on where you're building, permitting, you know, we keep talking about permitting reform. We have got to get permitting reform done in this country. It is imperative that we get that done both for linear facilities and also just to export. But permitting at the state and the federal level, those are the things more than anything that I think are contributing. The gas will be built, it will come online and Nextera is one of the companies that will drive that. But it's just not as fast as other forms of generation. So that's why we keep saying need it. All right, you need to put it all together and we need to get every electron on this grid as fast as possible. Speed to power is essential and that will allow us to unleash American energy dominance across America. Great, thank you very much.
OPERATOR
The next question comes from Nick Campanella with Barclays. Please proceed.
Nick Campanella (Equity Analyst)
Hey, good morning. Thanks for taking the questions. A lot of good updates. So I just wanted to ask quickly on the 1 gigawatt you want to deliver on at FPL, is that already kind of in the plan? And just we noticed the capital expenditures are now 12 to 13 billion for 26 and I think at the analyst event there was 10 to 11. So nice increase there and just wondering if that's for the 1 gigawatt you were already talking about. Is that kind of the new run rate we should expect going forward for ftl? Understanding that, I think you just reaffirmed
Mike Dunn (Executive Vice President and Chief Financial Officer)
the total capex outlook today. Thanks. So a few things on. Hey Nick, Mike Dunn here. Few things on that I think firstly we've not said how many gigawatts or gigawatt of large O we expected fpl. I think we've only said that we expect to have a large load transaction finalized this year and so but we have not said a 1 gigawatt or what that number would be. Second piece is as you do look at the capex increase. This is really aligned with what John said earlier about being prepared. So as we brought in and secured solar supply, a piece of that solar supply is bringing that in today at locked in prices to remove any trade impacts and we'll be able to use that to cost effectively serve our customers in Florida in the future. But a piece that was pulling in some of those capital expenditures. So FPL situated extremely well for low cost to our customers by taking proactive measures to reduce any trade impacts.
Nick Campanella (Equity Analyst)
Understood. Okay, thank you. And then just maybe if I can, one follow up on the Japan deal and framework. It's our understanding that that's a bit of a kind of capital light opportunity. They're the owners, you're the builder. So just how would you kind of view the return of that opportunity to like the 13 to 20% plus equity IRR that you had out there at the investor conference? It's just that the nine, you know, nine and a half gig gigawatts is a very large number and trying to understand how that supports or, you know,
Mike Dunn (Executive Vice President and Chief Financial Officer)
accelerates the 8% plus EPS view. Thank you. Right, so to your tier first piece. Remember, this is a capital light investment, essentially zero capital for us. So from a returns perspective, it's essentially infinite. We are putting no capital down and we would potentially receive fee streams for a long period of time. Importantly, in order for us to capture that our incentives are 100% aligned with the US government and with Japan, because we will need to perform in order to receive those payments. And they're also through the duration of the assets. So they are not just development payments or construction payments, but also ongoing O and M payments. As you look at what those fees can be and what that value can be to Nextera, I think we'd like to take the time to make certain that we have the contracts in place before we know what that will be. But we are looking at these investments, at making this time investment, working through these, because we think it can be value accretive to our shareholders.
Nick Campanella (Equity Analyst)
Thank you.
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