NextEra Energy, Inc. (NEE) Q4 2020 Earnings Report, Transcript and Summary

Good morning and welcome to the NextEra Energy, Inc. and NextEra Energy Partners Fourth Quarter and Full Year 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jessica Aldridge, Director of Investor Relations. Please go ahead.

Thank you, Jason. Good morning, everyone, and thank you for joining our fourth quarter and full year 2020 combined earnings conference call for NextEra Energy and NextEra Energy Partners. With me this morning, are Jim Robo, Chairman and Chief Executive Officer of NextEra Energy; Rebecca Kujawa, Executive Vice President and Chief Financial Officer of NextEra Energy; John Ketchum, President and Chief Executive Officer of NextEra Energy Resources; and Mark Hickson, Executive Vice President of NextEra Energy, all of whom are also officers of NextEra Energy Partners; as well as Eric Silagy, President and Chief Executive Officer of Florida Power & Light Company. Jim will provide some opening remarks and will then turn the call over to Rebecca for a review of our fourth quarter and full year 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 or because of other factors discussed in today’s earnings news release and 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 websites, nexteraenergy.com and nexteraenergypartners.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 will turn the call over to Jim.

Thanks, Jessica and good morning, everyone. 2020 was a terrific year for both NextEra Energy and NextEra Energy Partners. NextEra Energy’s performance was strong both financially and operationally. We had outstanding execution on our initiatives to continue to drive future growth across the company. Across all of our businesses we successfully executed on the largest capital program in our history, deploying more than $14 billion in 2020 as we lead America’s clean energy transformation. By successfully executing on our plans, NextEra Energy extended its long track record of delivering value for shareholders with adjusted earnings per share of $2.31, up 10.5% from 2019. A key element of our value proposition in NextEra Energy is a culture focused on delivering outstanding results for our shareholders. Over the past ten years, we’ve delivered compound annual growth and adjusted EPS of 8%, which is the highest among all top ten power companies who have achieved on average compound annual growth of less than 3% over the same period. Amid this significant growth, the company has maintained one of the strongest balance sheets and credit positions in the industry. In 2020, we delivered a total shareholder return of approximately 30%, significantly outperforming both the S&P 500 and the S&P 500 Utilities Index and continuing to outperform both indices in terms of total shareholder return on a one year, three year, five year, seven year and ten year basis. Over the past 15 years, we’ve outperformed all of the other companies in the S&P 500 Utilities Index and 86% of the companies in the S&P 500, while more than tripling the average total shareholder return of both indices. While we are proud of our long-term track record of creating shareholder value, we remain laser-focused on the future and on delivering our commitments. NextEra Energy remains well positioned to capitalize on the disruptive forces reshaping our industry, which have expanded and accelerated over the past two years even beyond what we had anticipated. A combination of low cost renewable with low cost storage in the form of batteries today and hydrogen in the longer term has substantially increased the total addressable market for NextEra Energy. We now believe that a substantial and economic decarbonization of the electricity, transportation and industrial sectors is possible, which represents the potential investment opportunity of trillions of dollars in the coming decades. In the Electricity sector, we expect that older and more inefficient generation will continue to be retired and replaced with cleaner and more affordable alternatives. In the Transportation sector, we believe it will be increasingly economic to replace fossil fuel vehicles with vehicles powered by fuel cells and batteries charged with renewable energy. And in the Industrial sector, grey hydrogen and other high carbon feedstocks can be replaced with green hydrogen. We believe these trends have already been put into motion driven by economics. In addition, we believe it is possible that the Biden administration, supported by a significant shift in public support towards taking action to address climate change may act to further accelerate these shifts through the extension of existing incentives, as well as initiating other forms of policy support. Importantly, we believe that no company is better equipped to take advantage of these substantial and long-term trends than NextEra Energy. In fact, NextEra Energy is already proof that you can be clean, low cost, and financially successful, all at the same time. We are at the vanguard of building a sustainable energy era that is both clean and affordable and we are driving hard to continue to be at the forefront of the disruption that is occurring within the energy sector in broader parts of the U.S. economy. We expect that the execution of our strategy will drive meaningful CO2 emissions reductions across the country and will help advance NextEra Energy towards its goal of reducing its CO2 emissions rate by 67% by 2025 from a 2005 baseline, while simultaneously lowering generation cost for customers and maintaining best-in-class reliability. We expect the disruptive nature of renewable to be terrific for customers, terrific for the environment and terrific for shareholders by helping to drive tremendous growth for this company over the next decade and beyond. FPL is already capitalizing on the disruption in our sector with continued focus on its grid and fleet modernization efforts. During 2020, FPL successfully executed on its strategic initiatives including placing more than 1100 megawatts of cost-effective solar in service on time and on budget in support of its ongoing capital plan. This solar expansion is part of FPL’s Solar Together community solar program and its groundbreaking 30 by 30 plan, which is one of the world’s largest solar expansions and would result in roughly 10,000 megawatts of total solar capacity on FPL’s system by 2030. Additionally, the 409-megawatt Manatee Energy Storage Center, which will be the world’s largest integrated solar powered battery system is on track and on budget to be placed in service later this year as part of the approximately $1 billion that NextEra Energy is investing in battery storage projects in 2021. Smart capital investments such as these help FPL improve its already best-in-class customer value proposition, while also maintaining an emissions profile that is among the cleanest in the nation. FPL also had continued success with its cost saving initiatives making even further reductions to its already best-in-class dollar per retail megawatt hour non-fuel O&M costs from 2019 to 2020. Through our unrelenting focus on cost savings and on making disciplined long-term investments for the benefit of our customers, FPL has been able to maintain typical customer bills that are the lowest in the nation when compared to the 20 largest investor-owned utilities in the country. In addition to old builds, FPL has continued to provide reliability that is by far the best in the State of Florida, achieving its best ever reliability rate in 2020. FPL’s investments to build a stronger, smarter energy grid have resulted in best-in-state reliability for the last 14 years in a row, as well as earning numerous national awards. In 2020, FPL was recognized for the fifth time in six years as being the most reliable electric utility in the nation. Let me now turn to Gulf Power. In the two years that it has been part of the NextEra Energy family, Gulf Power has realized an approximately 30% reduction in O&M costs, a 50% improvement in service reliability, a 93% improvement in safety, and a nearly 20% reduction in CO2 emissions. Gulf Power has grown regulatory capital employed at a 17% compound annual growth rate since 2018 and we are well on our way to achieving the objectives we laid out at our investor conference in 2019. In addition to the excellent operational execution that we delivered in 2020, we continue to progress our smart capital investment program that is expected to generate further customer benefits over the coming years. In the fourth quarter, we completed the Plant Crist coal to natural gas conversion. As a result, consistent with our commitment to remain a clean energy leader, we were able to complete the accelerated shutdown of the coal units at Plant Crist, which is now been renamed the Gulf Clean Energy Center. With the retirement of FPL’s Indiantown Cogeneration facility also occurring late last year, 2021 is the first time in nearly 70 years that there are no coal-fired power plants in Florida for either FPL or Gulf Power. Earlier this month, FPL filed the test year letter with the Florida Public Service Commission to initiate a rate proceeding for new rates beginning in January 2022. The four year plan that we intend to propose is designed to provide continued longer term cost certainty for customers, while allowing FPL to continue investing in clean energy, storm-hardened infrastructure and other innovative technologies that are the foundation of our communities. The stability of multi-year rate plans allows FPL to focus on efficiency in the business which is critical to keeping customer bills low, while at the same time enabling FPL to maintain strong credit ratings and balance sheet which allows for consistent access to the capital markets. We look forward to the opportunity to showcase our long-term track record of providing low bills, high reliability, and clean energy for Floridians and our plan is to build an even more resilient and sustainable energy future for Florida in the coming years. Turning to Energy Resources, in 2020, we continued to advance our position as the leading developer and operator of wind, solar and battery storage projects commissioning approximately 5750-megawatts of new projects more than doubling the amount of total renewable commissioned versus the previous year. This was also a record year for renewable origination in Energy Resources with the team adding a net nearly 7000 megawatts to our backlog during the year. As a result of the team’s origination success and alongside the backdrop of the terrific market outlook I just outlined at the beginning of my remarks, we now expect to construct approximately 23 to 30 Gigawatts of new renewable in the 2021 to 2024 timeframe, which if we are successful at the midpoint would mean adding a portfolio of generation projects that is approximately 1.5 times the size of Energy Resources’ entire operating renewable portfolio as of year-end 2019. Energy Resources execution success is reflective of our ability to leverage our significant committed advantages, including our best-in-class development skills, large pipeline of sites in interconnection queue positions, strong customer relationships, purchasing power, best-in-class construction expertise, resource assessment capabilities, cost of capital advantages, and world-class operations capability to capitalize on the ongoing energy transition that is occurring in the nation’s generation fleet. We believe that we are in a terrific position to be able to capture a significant share of the market opportunities going forward and what we continue to believe is the best renewable development environment we have ever seen. Along with the broader public shift towards calls for action to fight climate change, over the past few years, there has been an increased focus on environmental, social and governance or ESG on the part of many of our stakeholders. While we expect this trend to amplify demand among our traditional customers and in our core renewables business, we also believe that it is opening up significant new markets and business opportunities for Energy Resources. We anticipate our development program to be further enhanced by an ability to attract new non-traditional customers, particularly in the commercial and industrial sector as improving renewable economics are increasingly aligned with corporate objectives to procure energy from clean generation sources. In summary, I continue to remain as enthusiastic as ever about NextEra Energy’s long-term growth prospects. In 2020, we extended our long track record of executing for the benefit of customers and shareholders and further developed our best-in-class organic growth prospects. Based on the strength and resiliency of our underlying businesses, I will be disappointed if we are not able to deliver financial results at or near the top end of our adjusted earnings per share expectation ranges in 2021, 2022, and 2023, while at the same time maintaining our strong credit ratings, we remain intensely focused on execution and continuing to drive shareholder value over the coming years. Let me now turn to NextEra Energy Partners, which delivered a total unit return – unitholder return of approximately 32% in 2020 further advancing its history of value creation since the IPO. NextEra Energy Partners is uniquely positioned to take advantage of the disruptive factors reshaping the energy industry and benefit from the enormous market opportunity in the coming decades for renewables. NextEra Energy Partners also had a terrific year of execution in 2020 and continued to deliver on its commitments that history of execution is supported by NextEra Energy Partners’ outstanding portfolio of clean energy assets, which was further diversified in 2020. During the year, NextEra Energy Partners enquired interests in approximately 1100-megawatts of high-quality renewable energy assets including the Partnership’s first battery storage project from Energy Resources. Additionally, during the year, NextEra Energy Partners successfully completed its first three organic growth prospects, including the repowering of 275-megawatts of new projects. For 2020, NextEra Energy Partners grewitsL.P. distributions by 15% year-over-year and delivered 40% year-over-year cash available for distribution growth, highlighting the strength of its operating portfolio. With this strong year-over-year growth and cash available for distribution, NextEra Energy Partners achieved its distribution growth objectives, while maintaining a trailing 12 month payout ratio in the high 60% range as of yearend 2020. In the fourth quarter, we published our first NextEra Energy Partners ESG report, highlighting its high quality clean energy portfolio, visible opportunities for renewables growth, and ability to leverage the operational expertise of NextEra Energy Resources. The continued origination success at Energy Resources is expected to benefit NextEra Energy Partners in meeting its future growth objectives. I continue to believe that the combination of NextEra Energy Partners’ clean energy portfolio, growth visibility and flexibility to finance that growth offers L.P. unitholders a uniquely attractive investor value proposition. As with NextEra Energy, we remain intensely focused on continuing to execute and deliver that unitholder value over the coming years. Finally, I would like to take a moment to thank all of NextEra Energy’s employees for their continued dedication, hard work and focus during the extraordinary circumstances of the past year. Despite the significant disruption caused by the pandemic, and in amidst of the most active hurricane season in the Atlantic Basin on record, our employees’ unwavering focus on our customers is what enabled the yet another year of flawless execution in the business, while also delivering our best ever safety results across the company. It is because of their commitment to excellence that we were able to deliver above and beyond our commitments in 2020, and why I remain as confident as ever in our ability to deliver on all our expectations moving forward. With that, I’ll now turn the call over to Rebecca, who will review the 2020 results in more detail.

Thank you, Jim, and good morning, everyone. Let’s now turn to the detailed results beginning with FPL. For the fourth quarter of 2020, FPL reported net income of $502 million or $0.25 per share, up $0.05 per share year-over-year. For the full year 2020, FPL reported net income of $2.65 billion or $1.35 per share, an increase of $0.15 per share versus 2019. Regulatory capital employed increased by approximately 11% for 2020 and was the principal driver of FPL’s net income growth of more than 13% for the year. FPL’s capital expenditures were approximately $2.2 billion in the fourth quarter bringing its full year capital investments to a total of roughly $6.7 billion. FPL’s reported ROE for regulatory purposes was 11.6% for the twelve months ended December 31, 2020, which is at the upper-end of the allowed band of 9.6% to 11.6% under our current rate agreement. During the fourth quarter, we utilized approximately $100 million of reserve amortization, leaving FPL with a year 2020 balance of $894 million. Approximately, $206 million of reserve amortization was used to offset the restoration costs associated with hurricanes Isaias and Tropical Storm Eta which FPL elected not to recover from customers through a surcharge. FPL’s reserve amortization mechanism under its current settlement agreement, combined with our aggressive cost-cutting measures and the benefits of tax reform provided significant customer benefits including avoided surcharges for approximately $1.7 billion in storm restoration cost since 2017. Our overall capital program at FPL is progressing well. We continue to advance one of the nation’s largest ever solar expansions. During the year, the Florida Public Service Commission approved FPL’s Solar Together program, which is the nation’s largest community solar program that is expected to generate $249 million in total net cost savings for participating and non-participating customers over the program’s life. After commissioning over 1100 megawatts or more than 3.5 times the amount of solar capacity in 2020 versus the prior year, FPL expects to commission roughly 670 megawatts of additional Solar Together capacity in 2021 and the customer demand for this innovative program across all customer classes remains strong. Beyond solar, construction of the highly efficient, roughly 1200-megawatt Dania Beach Clean Energy Center remains on schedule and on budget as it continues to advance towards its projected commercial operations date in 2022. It should be noted that all of these significant accomplishments including the deployment of nearly $7 billion in capital, we are in the midst of not only a global pandemic, but also during the most active hurricane season in the Atlantic basin on record. We’ve delivered our best ever reliability results when our customers needed us the most. And we remain committed to supporting customers experiencing economic hardship as a result of the challenges caused by the pandemic. To-date, FPL has provided customers with approximately $75 million in relief through various programs and initiatives. As Florida recovers, we will continue to help our customers navigate this difficult time, while maintaining our best-in-class customer value proposition. Let me now turn to Gulf Power, which as a reminder was legally merged into FPL on January 1st 2021, but will continue to be reported as a separate regulated segment during 2021. Gulf Power reported fourth quarter 2020 GAAP earnings of $53 million or $0.03 per share, up $0.02 per share year-over-year. For the full year, Gulf Power reported net income of $238 million or $0.12 per share, an increase of $0.02 per share year-over-year on an adjusted basis. Base O&M reductions were the primary driver of Gulf Power’s 19% year-over-year growth and adjusted earnings. Gulf Power’s reported ROE for regulatory purposes is expected to be approximately 11.1% for the 12 months ending December 2020, which is near the upper end of the allowed band of 9.25% to 11.25% under its current rate agreement. For the full year 2021, we expect that regulatory ROE to be in the upper half of this allowed band assuming normal weather and operating conditions. All of our major capital initiatives at Gulf Power are progressing well. Gulf Power’s first solar development project, the roughly 75-Megawatt Blue Indigo Solar Energy Center went into service in 2020 and is expected to generate significant customer savings over its lifetime. Gulf Power anticipates bringing another 150-Megawatts of cost-effective zero emission solar capacity online later this year. The North Florida resiliency connection, which among other things will allow customers to benefit from greater diversity in solar output across two different time zones is expected to be in service in mid-2022. Continued smart capital investments such as these renewables and core infrastructure are expected to drive customer benefits for many years to come. The Florida economy continues to recover from the ongoing impacts of the COVID-19 pandemic. A number of current economic indicators including retail taxable sales, new building permits and consumer confidence have meaningfully improved since the start of the pandemic in early 2020. Additionally, Florida’s most recent seasonally adjusted unemployment rate of 6.4% is below the national average. While it is unclear at this point how the economy will be impacted by the current wave of COVID-19 cases, we continue to believe that Florida offers a unique proposition in terms of housing affordability, great weather, low taxes and a pro-business economy, all of which should support ongoing FPL customer growth and economic rebound once the worst of the pandemic is behind us. We remain deeply engaged in helping Florida return from this stronger than ever and we will continue to do our part to support that outcome including pursuing our smart capital investment program and economic development efforts, which help create jobs, provide investment in local communities and further enhance our best-in-class customer value proposition. During the quarter, FPL’s average customer growth was strong increasing by nearly 76,000 from the comparable prior year quarter. FPL’s fourth quarter retail sales were up 0.9% versus the prior year period, largely driven by a 2.3% year-over-year growth and underlying usage per customer. For 2020, FPL’s retail sales increased 1.5% versus the prior year, driven primarily by ongoing strong growth in customers and a favorable weather comparison. On a weather-normalized basis, FPL’s retail sales increased by 0.7% for the full year 2020. The overall impacts of the pandemic on last year’s retail sales were relatively muted and FPL’s underlying usage per customer was flat year-over-year. For Gulf Power, the average number of customers increased approximately 0.9% versus the comparable prior year quarter. For 2020, Gulf Power’s retail sales declined 3.3% primarily as a result of a more favorable weather in the prior year, as well as lower usage per customer, which we attribute in part to the ongoing impacts of the pandemic on our commercial and industrial customers. As Jim mentioned, FPL is preparing to file a base rate adjustment proposal that would cover the next four years, 2022, through 2025 and provide customers longer term visibility to the future cost of electricity. While the details are still being finalized, we expect the proposal to include base rate adjustments of approximately $1.1 billion starting in January of 2022 and $615 million starting in January of 2023. We also expect the proposal to request support for continued deployment of cost-effective solar with the continuation of our solar base rate adjustment or silver mechanism to recover the revenue requirements associated with up to 900-megawatts of cost-effective solar projects in each of 2024 and 2025, which we currently estimate to be approximately $140 million each year. For the period 2019 through the end of 2022, FPL is planning to have invested approximately $29 billion with additional significant investments expected in 2023 and beyond to meet the growing needs of Florida’s economy and to continue delivering outstanding value for Florida customers by keeping reliability high and fuel and other costs low. While the benefits of building a stronger, smarter, and cleaner grid, more efficient generation fleet are passed along regularly to customers through higher service reliability and lower bills. We must periodically seek recovery for these long-term investments supported by base rates. As we’ve previously indicated, we plan to request the commission authorized unified rates and capital structure for both FPL and Gulf Power customers. We believe the combination of the two businesses will result in approximately $2.8 billion of savings for customers through those operational savings and overall system benefits. FPL expects to request an 11.5% ROE inclusive of a 50 basis point incentive for superior performance. Compared with peer utilities in the southeastern U.S., FPL has the most efficient – most cost-efficient operations, the highest reliability, the lowest customer bills, all while remaining one of the cleanest utilities in the country and is widely regarded as the top overall performer in the industry bringing exceptional value to customers. We believe that the performance adder would reflect FPL’s current superior value proposition and encourage strong – continued strong performance. In addition, we continue to believe that a strong balance sheet, including strong credit ratings remains critical to ensure FPL maintains uninterrupted access to the capital markets even in times of significant market disruptions in the aftermath of hurricanes, as well to attract capital to support the investments FPL is making to further improve the value we offer our customers. The total of these base rate increase requests over the four year period from 2022 to 2025 would result in an estimated average increase in total revenues of about 3.7% per year. Today, FPL’s typical residential bill is about 30% lower than the national average, if the full amount of the requests were granted under our proposal and assuming other utilities experience bill increases only at their historical rate of increase, FPL’s typical customer bills would remain significantly lower than the national average through 2025. To put this proposal in context, the proposal would result in a typical customer bill in January 2022, that is nearly 22% less than it was in real terms fifteen years ago, even with our proposed base rate increases. Even in nominal terms, FPL bills would be only about 3.5% higher in 2022 than in 2006, a fraction that the nominal increases of 25% to 75% in the cost of groceries, medical care, health insurance and housing over the past 15 years. Moreover, through the consolidation of FPL and Gulf Power, the typical 1000-kilowatt hour residential customer bill in Northwest Florida is projected to be lower in 2025 than it was in 2019. We look forward to the opportunity to present the details of our case and expect to make our formal filing with testimony and required detailed data in March. The timing for the proceeding will ultimately be determined by the commission. But we currently expect that we will have hearings in the third quarter and a final commission decision in the fourth quarter and time for new rates to go into effect in January of 2022. As always, we are open to the possibility of resolving our rate request through a fair settlement agreement. During the course of the past 22 years, FPL has entered into six multi-year settlement agreements, that has provided customers with a high degree of rate stability and certainty and helped FPL execute to deliver its best-in-class customer value proposition. Our core focus will be to pursue a fair and objective review of our case that supports continued execution of our successful strategy for customers. And we will continue to provide updates throughout the process. Energy Resources reported fourth quarter 2020 GAAP loss of $644 million or $0.33 per share. Adjusted earnings for the fourth quarter was $342 million or $0.17 per share. Energy Resources contribution to adjusted earnings per share in the fourth quarter is flat versus the prior year comparable period as favorable results from the continued growth and performance in our renewables portfolio were roughly offset by a number of items none of which are particularly noteworthy. For the full year, Energy Resources reported GAAP earnings of $531 million or $0.27 per share and adjusted earnings of $1.95 billion or $0.99 per share. Energy Resources full year adjusted earnings per share contribution increased $0.12 or approximately 14% versus 2019. For the full year growth was driven by continued new additions to our renewables portfolio as contributions from new investments increased by $0.07 per share. Contributions from existing generation assets increased $0.03 versus 2019, due primarily to increased production tax credit volume from our repowered wind projects and an improvement in wind resource, which were partially offset by the planned nuclear outages and retirement of our Duane Arnold nuclear facility. Also contributing favorably was NextEra Energy Transmission, which increased results by $0.02 year-over-year, primarily as a result of full year contributions from Trans Bay Cable acquisition that closed in the middle of 2019. Contributions from all other impacts were flat year-over-year. Amid the disruption of the pandemic, Energy Resources had one of its best years ever including successfully executing on the largest construction program in our history, as well as delivering our best year ever for originations, adding a net nearly 7000-Megawatts of new renewables projects to our backlog. In 2020, we commissioned about 5750-Megawatts of wind, solar and storage projects on schedule and on budget. In addition, since the last call, we have added approximately 2000-Megawatts of renewables projects to our backlog including approximately 1030-Megawatts of new wind and wind repowerings, 670-Megawatts of solar, and 300-Megawatts of battery storage including 75 additional megawatts of capacity on Desert Peak storage, which is now expected to total 400-Megawatts and remains the world’s largest standalone storage project. Following the terrific origination year in 2020, our renewables backlog now stands at approximately 13,500-Megawatts. Despite a record year of megawatts placed in service, Energy Resources grew its yearend backlog by approximately 1500-Megawatts year-over-year providing terrific visibility to the strong growth that lies ahead. Since 2017, our backlog additions have grown at a roughly 25% compound annual growth rate. As a result of our tremendous progress in 2020 and our strong continued origination success, we are raising our 2021 to 2022 renewables development expectations to a range of 10,525-Megawatts to 12,700-Megawatts, which at the midpoint is approximately 3500-Megawatts above our previous expectations. Our expectations for 2021 and 2022 are now up more than 50% at the midpoint relative to the expectations that we laid out at the 2019 investor conference reflecting the significant acceleration of renewables activity over the past year-and-a-half. We are also introducing our 2023 to 2024 renewables development expectations of 12,150-Megawatts to 17,300-Megawatts. This is by far the largest expected two year development program in our history and reflects our high level of confidence in Energy Resources’ ongoing leadership position and renewables energy development. The accompanying slide provide some additional details. As we’ve previously discussed, we are optimistic about the we are optimistic about the expanded investment opportunities that the broad decarbonization of the U.S. economy presents for Energy Resources, and we are pursuing a number of pilot projects to rapidly develop our capabilities across this potential investment opportunity set. Today, we are announcing a new innovative green hydrogen project at Energy Resources that includes a 12-Megawatt solar array, onsite hydrogen production and storage, and a hydrogen fuel cell. This emissions-free project will utilize solar energy to create green hydrogen to power the fuel cell, which will be able to provide electricity to the local grid during periods of peak demands. Subject to final terms and regulatory approvals, this approximately $20 million innovative green hydrogen project is expected to begin construction in 2022 with commercial operations in mid-2023. Energy Resources is also in advanced discussions with a number of potential customers across the industrial landscape, including food processing, specialty chemicals and refineries to continue to develop clean energy solutions for a more efficient green production processes. One potential project includes a solar tracker combined with an electrolyzer at a large industrial plant. The project would deliver green hydrogen as an industrial feedstock to the facility and we are not producing hydrogen, the solar power would offset a portion of the plant's energy consumption further decarbonizing the facility's operations. In addition, today, Energy Resources announced a planned partnership to preserve – pursue large school bus fleet conversions to electric and hydrogen with the nation's largest school bus owner and operator and transportation services provider. With its partner, Energy Resources anticipates investing in bus electrification upgrades and charging stations, as well as providing energy management services. This transaction is consistent with our toe in the water approach, as we explore potential opportunities in the electrification of the transportation sector. We are excited about all of these opportunities, as well as the previously announced hydrogen pilot project, we plan to propose at FPL's Okeechobee Clean Energy Center, which highlight the significant opportunities that the broad decarbonization of the U.S. economy presents. Consistent with our long-term track record, NextEra Energy will remain disciplined as we take steps to be at the forefront of these developing markets while taking a leadership role in the clean energy transition. Beyond renewables and storage, since the last earnings call, Mountain Valley Pipeline made progress with its outstanding permitting issues, including receiving the Bureau of Land Management Right-of-Way Grants, which authorizes MVP to cross the Jefferson National Forest once the stream and wetland permitting is complete. While the Fourth Circuit denied the stay request on MVP's new biological opinion, the court did grant a stay on the Nationwide 12 Permit, and the project is now pursuing an alternate path forward to permit and complete stream and wetland crossings. Due to these continued legal and regulatory issues, as well as the substantial delays in commercial operation and increased costs associated with those delays, the carrying value for our investment in MVP now exceeds its fair market value and as a result, we have reflected a 1 to – $1.2 billion after-tax impairment in our GAAP financial statements, which we have excluded from adjusted earnings. While we are disappointed with the extended development and construction timeline due to the legal challenges that the project has faced, we intend to continue pursuing completing the project with our partners. Finally, during 2020, NextEra Energy Transmission furthered its efforts to grow America's leading competitive transmission company and had its best year ever. During the year, the business delivered record earnings contribution and realized constructive rate case outcomes at Trans Bay Cable and Lone Star Transmission, as well as entered into an agreement to acquire GridLiance, which owns three FERC-regulated transmission utilities spanning six states. We continue to expect to obtain all necessary regulatory approvals and close on the GridLiance acquisition in the first half of this year. Turning now to the consolidated results for NextEra Energy. For the fourth quarter of 2020, GAAP net losses attributable to NextEra Energy were $5 million or $0.00 per share. NextEra Energy's 2020 fourth quarter adjusted earnings and adjusted EPS were $785 million or $0.40 per share respectively. For the full year 2020, GAAP net income attributable to NextEra Energy was $2.92 billion or $1.48 per share. Adjusted earnings were $4.55 billion or $2.31 per share. As a reminder, all of our financial results have been adjusted to account for the four-for-one stock split, which became effective in the fourth quarter. For the Corporate and Other segments, adjusted earnings for the full year decreased $0.07 per share compared to the 2019 prior comparable period, primarily as a result of higher interest in refinancing costs associated with certain liability management initiatives completed during the fourth quarter to take advantage of the low interest rate environment. In total, for NextEra Energy, our refinancing activities reduced nominal adjusted net income by roughly $103 million during the fourth quarter, inclusive of approximately $39 million associated with Energy Resources' share of refinancing cost at NextEra Energy Partners. We expect these initiatives to translate into favorable net income contributions in future years and an overall improvement in net present value for our shareholders. Long-term financial expectations, which we increased and extended late last year through 2023 remain unchanged. For 2021, NextEra Energy expects adjusted earnings per share to be in a range of $2.40 to $2.54. For 2022 and 2023, NextEra Energy expects to grow 6% to 8% of the expected 2021 adjusted earnings per share, and we will be disappointed if we are not able to deliver financial results at or near the top end of these ranges. From 2018 to 2023, we continue to expect that operating cash flow will grow roughly in line with our adjusted EPS compound annual growth rate range. We also continue to expect to grow our dividends per share at a roughly 10% per year rate through at least 2022 off of a 2020 base. As always, our expectations assume normal weather and operating conditions. Let me now turn to NextEra Energy Partners, which also had a strong year of operational and financial performance in 2020. Fourth quarter adjusted EBITDA was $308 million and cash available for distribution was $106 million, an increase of 10% and 8% from the prior year period respectively. EBITDA growth was driven primarily by favorable resource across the portfolio and the full contributions from new projects acquired in late 2019, and it was slightly offset by a planned outage at our Genesis project late in the fourth quarter. For the full year 2020, adjusted EBITDA was $1.263 billion, up 14% year-over-year. Cash available for distribution was $570 million, an increase of 40% from the prior year. Similar to the quarterly results, full year growth in adjusted EBITDA was primarily driven by full year contributions from acquisitions in the prior year and favorable wind resource. For the full year, wind resource was 100% of the long-term average versus 97% in 2019. The benefit to cash available for distribution from lower project-level debt service was partially offset by higher corporate level interest expense. As a reminder, these results include the impact of IDR fees, which we treat as an operating expense. Additional details are shown on the accompanying slide. Yesterday, the NextEra Energy Partners Board declared a quarterly distribution of $0.615 per common unit or $2.46 per unit on an annualized basis, up 15% from the comparable quarterly distribution a year earlier and at the top-end of the range we discussed going into 2020. During 2020, NextEra Energy Partners executed several financings to support its ongoing growth investments and optimize its capital structure for the benefit of LP unitholders. As Jim mentioned, during the quarter, we closed on an acquisition from Energy Resources of interest in an approximately 1100-Megawatt portfolio of long-term contracted renewables projects. As part of this transaction, NextEra Energy Partners raised a 10-year, approximately $1.1 billion convertible equity portfolio financing, that includes the acquired assets, plus four existing NextEra Energy Partners' wind and solar projects. Combining this acquisition with the recapitalization of four existing NextEra Energy Partners' assets through the longest dated and lowest cost convertible equity portfolio financing in the partnership's history is expected to provide significant benefits for unitholders. By leveraging the strong demand for high quality clean energy assets, NextEra Energy Partners was able to secure financing for both the current transaction and future growth, while enhancing returns for L.P. unitholders and limiting downside risk. NextEra Energy Partners expects to further strengthen its balance sheet and have access to approximately $2.4 billion in available financing capacity, including capacity under its corporate revolving credit facility and commitments from investors to potential future convertible equity portfolio financings, which further supports the Partnership's long-term growth. During the second half of the year, NextEra Energy Partners completed the successful conversion of approximately $300 million of convertible debt and the remaining balance of the convertible preferred securities that were issued in 2017 into approximately 5.7 million units and 4.7 million units - common units respectively. These conversions help NextEra Energy Partners achieve its goal of using low-cost financing products to efficiently issue equity over time. Finally, NextEra Energy Partners raised approximately $600 million in new 0% coupon convertible notes during the quarter and used the net proceeds from this offering to redeem a portion of its outstanding 4.25% senior notes due in 2024. Coincident with the issuance of the convertible notes, NextEra Energy Partners entered into a capped call structure that will result in NextEra Energy Partners retaining up to 90% of the upside in its unit price associated with the convertible notes over the next five years. NextEra Energy Partners' runrate expectations for adjusted EBITDA and CAFD at December 31st 2021 remain unchanged. Year-end 2021 runrate adjusted EBITDA expectations are $1.44 billion to $1.62 billion and CAFD in the range of $600 million to $680 million. As a reminder, all of our expectations are subject to our normal caveats and include the impact of anticipated IDR fees, as we treat these as an operating expense. From an updated base of our fourth quarter 2020 distribution per common unit at an annualized rate of $2.46, we continue to see 12% to 15% growth per year in LP distributions as being a reasonable range of expectations through at least 2024. We expect the annualized rate of the fourth quarter 2021 distribution that is payable in February of 2022 to be in a range of $2.76 to $2.83 per common unit. In summary, we continue to believe that both NextEra Energy and NextEra Energy Partners have excellent prospects for growth both in the near and longer-term. FPL, Energy Resources and NextEra Energy Partners each have outstanding set of opportunities across the board. The progress we’ve made in 2020 reinforces our longer-term growth prospects and while we have a lot to execute on in 2021, we believe that we have the building blocks in place for another excellent year. \ That concludes our prepared remarks. And with that, we'll open up the line for your questions.

[Operator Instructions] The first question is from Steve Fleishman from Wolfe Research. Please go ahead.

Yes. Couple questions. Just first – just a clean up on the MVP announcement. Could you just talk about, maybe a little more color on what you need to get that done and when and why?

Sure. Thanks, Steve. And we appreciate the question. First, obviously, the project has taken longer and cost more than what we anticipated. And so the impairment is really related to reflecting not only that value that we have on our books, but really in relation to what we believe is the current fare on valuation for the investment given what we do still have to accomplish. And obviously a lot changed in the fourth quarter including the nationwide 12 permits stay that I mentioned in the prepared remarks, as well as the various things that have happened in January and against a backdrop of obvious changes including the change in the administration, including the change in control of the Senate which happened here in January. So, the impairment does reflects our view of what we still need to accomplish and the associated fair values related to the chances of being able to successfully execute on that. But this was an accounting exercise. There was a lot of due diligence that we needed to evaluate and we think we’ve made the appropriate changes. But it does not change our commitment to work with our partners to put this project into service. So, as I noted in the comments, we do have now a path that we are going to pursue in terms of the outstanding permitting. We work closer with our partners to pursue that path. But we felt it was appropriate and obviously took the actions that we did with respect to the impairment.

Okay. And then, just on the continued higher growth in renewables, could you maybe just touch a little bit on funding plans for that over the period, just high level?

Super high level. As you know, we’ve prided ourselves in a variety of approaches to the capital markets to support our business retaining all of those options as circumstances change is one of the things that I think has been particularly successful for us over a long period of time. One aspect at this point I wouldn’t expect to change, particularly as it relates to financing the projects of energy resources is that we will continue to execute a significant amount of tax equity, given our current position and tax capacity. But I think it’s all of the tools in the toolbox that you would expect us to utilize to finance the business. But our commitment to our strong balance sheet remains unchanged and we will grow both profitably and maintaining a strong balance sheet.

Great. And then, last, maybe, kind of a strategic question, I guess for Jim. Just the – as we see the continued – just dramatic ramp up in renewable growth and the revaluation of the company probably tied to that and what does it mean for some of the statements you’ve made in the past on utility M&A? Does it make it more likely, because you need to balance the mix or less likely because there is just so much opportunity on this other side of the business?

So, Steve, obviously, the relative valuation of the two big businesses has changed over the last several years, right? And that’s just accelerated over – in particular over the last 24 months. I think what that means is it’s changed a bit of our analytic framework of how we think about utility M&A. On the one hand, I continue to believe that there is enormous value creation that we can bring to the table and you only need to look at what we’ve been able to do with Gulf in the last 24.5 months to see how much value creation, bringing our playbook and our operating platform to bear can create, right? So, that is – that I think remains clear and if anything is clear to me. On the other, I think it’s also clear that, probably a sweet spot for us in terms of M&A is, things in the less than $20 billion range that we can pay cash and finance through the normal course. And at that point, if you do that, you are not shifting the mix one way or another all that tremendously and in our set of analytics, we are looking really more at how much value creation we bring to the table when we do this. And so, for example, like at Santee Cooper is a great example of that. That’s a – it’s a roughly $8 billion or $9 billion transaction. And something that we can finance in the normal course and a place where we think we can create enormous value very quickly. And so, that’s the kind of things that we are focused on and – but most importantly, we are focused on running the business and executing, staying financially disciplined as we always have been and executing against the terrific growth prospects we have in energy resources and then executing at FPL as we always have for the benefit of our customers and continuing and for benefit the state. So, that I think is a – just a little different overview of how our current status of our thinking on.

Great. Okay. Thanks so much.

The next question is from Julien Dumoulin-Smith from Bank of America. Please go ahead.

Hey, good morning, team. Thanks for the time. I’ll make it brief. If I can, just coming back to renewable expectations, now redefined upsized expectations over the longer term here, can you talk about a few factors here? First, C&I, you guys haven’t been as involved. It seems like that could be accelerating here. Can you talk about how that’s sheltered into your expectations? Secondly, the new expectations explicitly do not include any future build on transfer. How do you see that is incremental and any heuristics you might offer as to how to think about value creation there? And a third one on that if I can just throw in there is the attach rates on storage. It seems like, the bulk of the storage that you are talking about in the future is probably tied to your solar assets. How do you think about standalone as being incremental to what you talk about already? I’ll leave with that.

Okay Julien, thanks for the questions and you may need to prompt me if I forgot one or more aspects of the multipart question. Let me start with C&I. As I highlighted in the prepared remarks, John and his team across Energy Resources have really cultivated a nice suite of opportunities with C&I customers. And if we look at our core base of other major investor on utilities, our munis and coops and our C&I business, other investor on utilities and muni coops are still large overall, but the opportunity set with C&I customers is definitely growing, not just in your standard PPA, but more in the suite of types of opportunities that I mentioned as one of the pilot projects that John and his team are pursuing, kind of more holistic energy solution provider to these C&I customers. And I think what’s really changed over the last year plus, maybe it’s even two years is the inbound request to C&I has really expanded as they really start to look at their own carbon footprint, their own ESG messaging, how do they source energy to do their business and how do they source that from a cleaner energy solutions has become a higher topic of interest and higher priority for them and therefore terrific opportunity set for us. So I think that that’s a growing opportunity for us that we continue to be really excited about. In terms of build-own transfers, we will continue to present our expectations, both our expectations and our signed contracts consistent in a way that we’ve shown that in the past that there will be some build-own transfer on the Energy Resources pursues, if it is a strict just sell the project to somebody else, we think there is a lot of value creation there, but we won’t necessarily incorporate in our backlog for purposes of reporting unless there is a long-term operation and maintenance or other stream of revenue to us that we benefit from. So we’ll consistently report that. I think the opportunity set is there for both traditional build-own transfers, as well as build-own transfers where we provide some incremental long-term value to our customers. And then finally, storage, the opportunity set is terrific. Obviously, we’ve had tremendous success in attaching storage to new solar facilities, existing solar facilities, and even some standalone storage projects. If there is a standalone storage incentive that Congress pursues, obviously that would support near-term growth of standalone storage opportunities even beyond what we’ve seen. But the growth is terrific and as we outlined back in 2019, we were surprised how fast the market evolved and I think we continue to be really supportive of that overall market. And one last thing I’ll highlight, Julien is, is really the innovative nature of the FPL team in working with the Solar Together program to work with our commercial and industrial customers in Florida to support their needs to build the most cost-effective solar. And that’s what the Solar Together program offered is the ability to really source clean energy solutions in the most profitable way for them and in a way that we structured at the benefits both those participating customers and non-participating customers to meet their needs. Don’t mix up there Julien. Did I miss any aspect of it?

Just the standalone piece. I mean, how incremental is that and to what your view?

The standalone storage, as an investment opportunity?

Yes, absolutely.

Yes, over time, Julien, it could be very significant. In the short-term, is it imperative for renewables’ growth, and in certain pockets, yes, broadly speaking, no. But as you start to see what we referenced today, trillions of dollars of renewable deployment over time increasing storage deployment both in the forms of batteries, as well as other forms of long duration storage which we believe includes hydrogen will become not only increasingly important, but a very large capital investment opportunity.

Yes. And just to add, Julien, on what Rebecca said, I mean, Desert Peak, which we announced today 400 megawatts larger standalone project in the world. So, we are actively seeking out standalone opportunities and having the largest solar fleet in North America positions us for storage add-on. So, a tremendous amount of leverage up the operating fleet. And with new origination, I think of attach rates being roughly 60% on all the new stuff that we do. And then, one more comment on C&I, we are positioning the business to be the preferred strategic partner with C&I customers. And we are looking at the business in a holistic way where we can provide clean energy solutions across the board, it’s wind, it’s solar, it’s storage, it’s hydrogen, it’s mobility, the First Student transaction that we just announced today. It’s an energy management services capability. It’s analytics. All the things we’ve done for decades, we can now offer to C&I customers and we’ve got a huge head start.

Great guys. Thank you. I’ll pass it on.

Thanks, Julien.

The next question is from Shar Pourreza from Guggenheim Partners. Please go ahead.

Hey, good morning, guys.

Good morning, Shar.

Just a couple quick questions, on the rate case in particular, obviously, we have a March filing that’s ahead of us. And one of the sort of the big moving piece is the rate base, it’s 11% year-over-year growth for FPL, 24% for Gulf. As we sort of think about like the cap structure improvement especially for Gulf, the ROE add or the capital plan request, how do we sort of think about sort of the filing? Does it kind of relates to your current growth guide as it’s effective well within your current trajectory is like – is the filing consistent with the top end and extends the runway. Is it better? And more importantly, as we sort of think about you rolling forward the plan into 2024 is that kind of a post-GRC decision?

. : From a NextEra Energy perspective, as you would expect, when we provide expectations, we do a variety of scenario planning analysis to feel comfortable with the expectations that we’ve laid out. So, there is not one answer to what do you have in your assumptions that you’ve laid for expectations. There is a range and we feel comfortable today as we’ve obviously reiterated those expectations for the 2021, 2022 and 2023 timeframes. So we look forward to presenting our case to the commission and shareholders. We feel very confident in the decisions that we’ve made in terms of where we’ve been investing, where we plan to invest. And obviously the results, into some measure obviously speaks for themselves in terms of low bills, high reliability, terrific customer service, and a clean energy profile that is substantial and we are obviously looking forward to not only telling that story, but also the Gulf changes over the last couple of years that Jim highlighted. So, we’ll have more as the process unfolds and obviously, when we have – we finally have clarity on the rate case outcome or a potential settlement if we are so fortunate as to reach a constructive agreement with interveners, we’ll provide some updates once we have that information.

Got it. And then, just as we think about rolling the consolidated outlook into 2021, is that a post-GRC decision or settlement?

So, 2021 obviously assumes the current rate agreements, since both for FPL and Gulf, they go to see the 2021 timeframe. And then, 2022 and 2023, again I’ll put in context a variety of scenarios that we assume for both FPL and Energy Resources to support the expectations that we’ve laid out.

Got it. And then, just maybe a quick strategy question for Jim. And Jim obviously, with Santee Cooper in particular, the sales discussions have been steadily growing and interest in the legislator. What do you sort of think will be different in 2021 either from the legislator side or the NEE side? I.e. would you sort of anticipate making a substantially similar bid if the process comes up for sale? And then, just on for transmission, obviously you highlighted the GridLiance acquisition last year. How do you sort of see that opportunity set on the sort of transmission side? How large do you want NextEra Transmission to be as part of the business mix? Do you see any – is there more to come there?

So, first of all on Santee Cooper, well, there is an offer on the table and that offer remains on the table and as does our $25 million deposit, which the state still has. So, the offer is there and we are ready to negotiate whenever the state is ready to get going. And so, we stand ready and are hopeful that the legislator will move forward on that process. And we’ll know more obviously over the next 90 days or so. On NextEra Energy Transmission, I think, Rebecca in her prepared remarks had just a terrific year last year, their best year ever as a company. Remember, we started that business from scratch, little over ten years ago and it’s a business that made over $100 million in net income last year and we think has the ability to grow mid-teens double-digit over the next several years just organically with what they have in front of them without doing any other acquisitions and we are pursuing other acquisitions there, because we think we add an enormous amount of value through our operating model, number one. And then number two, probably the biggest inhibitor to renewable in this country is not consumer demand or it is not interest on the part of the Federal government or state governments to get renewable builds. It’s not that customers don’t want it. It is fundamentally broken processes with the ISOs in terms of how they manage their queues and transmission and just broadly transmission planning in this country. And I think with the Biden administration and a new FERC, there is a new opportunity to fix that. And our transmission business I think is a great example of what FERC Order 1000 can do when you get competition going in the transmission world and it is also, I think every bit of transmission we build in that business is incremental and helpful to the renewable business that we have and that it makes the delivery of lower cost renewable even more fast to come on to the grid than they otherwise would. So, I am very excited about transmission business. We are going to continue to push it and I think it’s got a lot of runway to grow.

Terrific. Thanks for that. And congrats on the results.

The next question is from Michael Lapides from Goldman Sachs. Please go ahead.

Thank you for taking my question. I actually have two. One is, your post-integrate 2020 with EPS growth north of 10%, just curious, do you think you could potentially come in above the high end of your range? So is kind of the 6% to 8% target a very modest target growth when you think about the next couple of years given the runrate you hit this past year?

So, Michael, I appreciate and I appreciate the optimism and the support that that your question might suggest. We are really proud of the results for 2020. There is a couple of things to remind you. One, that does include some incremental contributions from Gulf and obviously we expected Gulf in the deal for our Florida acquisitions and we expect some incremental benefit from that for 2021 as we highlighted in the – when we laid out expectations initially. And then, just recall, we did raised our 2021 expectations late last year and the rebased our 6% to 8% off of that higher base. We are really excited about both the positioning of the regulated utilities, as well as Energy Resources going into 2021. We know what we need to accomplish and the teams are set out to go after and achieve those objectives. And of course, we’ll update you over time as we go through the year. But for today, we have reiterated those expectations of the $2.40 to $2.54 for 2021.

Got it. And then, a follow-up one and it’s more of a policy one and I think it’s more of the state policy one. There is still lots of coal generation in rate base in a lot of states. Not all of which probably is economic. But the owners of that and clearly your Florida utility don’t have exposure to this. The owners of that benefit from having a rate base. How do you, from an earnings perspective, how do you think that dichotomy, Jim, gets resolved over time? And are there lessons that other states can learn from Florida that might be able to haze in the pace of fleet transformation?

So, Michael, I think you are being kind honestly to the regulated coal fleet in this country. There is not a regulated coal plant in this country that is economic today full period and stop when it’s dispatched on any basis, not a single one, okay. And so, why haven’t it – I think you’ve hit on the crux of some of the issues. Obviously, there have been, in certain states, a reluctance to what our utility customers retire the coal plant and then will be able to recover their investment, right? And so, of course, if you run a utility, you don’t want to retire an asset that you are going to then either have to write-off or not be able to earn on, right? I think one of the things that has been really constructive and very smart about the Florida regulatory environment and Florida Commission’s view on a modernizing generation fleet is that they have – we’ve spread that capital recovery over a period of five or ten years. And that has both I think moderated the impact of customer builds on the one hand and also on the other, given us the right incentive to do the right thing by our customers and bring on lower cost generation. So, I think it’s about – the other piece I think that’s going to change is, there is no question this administration through the EPA and other means is going to make the continued operation of coal plants very difficult in this country. And so, there is going to be, I think more pressure, more Federal pressure to accelerate that transition away from coal than there has been, obviously over the last four years where there has been, in fact, the opposite of Federal pressure. But the complete lack of Federal pressure do anything about with your coal fleet. So, I think the combination of that, plus states becoming – it become clear and clear the economics as we go along that the operating cost of coal plants are higher than the new build cost of renewable with storage is that becomes even clearer as cost come down. For renewables when cost continue to go up, for operating cost continue to go up for coal, that’s – I mean, the bottom-line, in Florida, we’ve shut our coal down and we save customers literally billions of dollars of present value over the expected life of the new generation that we’ve put in place. So, there is an enormous opportunity. There is several states in the country that are not taking advantage of that opportunity, because of some of the regulatory approaches. And honestly, I think with the new administration and some of the policies there, that’s going to accelerate the replacement of coal in this country and it should be, because there is no – it costing customers’ money. Leave aside the environmental benefits just on pure economics that costing customers’ money every day and that’s bad for the country and let alone that it’s terrible for the climate. It is – and for the environment, it is bad for customers, because economics are - the coal economics are so what a whack.

Got it. Thank you, Jim. Much appreciated. And maybe one last one for Rebecca. Rebecca you outraced your renewable growth targets materially that implies higher CapEx, but obviously you get the benefit of the tax every year. So you all utilize convertible financing or equity units. Should we assume that as part of your EPS growth guidance that there is continued use of kind of new convertible units in the financing plan and maybe that level grows and scale with the change in the CapEx forecast?

Michael, I appreciate it. And I’ve talking to a couple of comments that we’ve made in the past that I know you know. First, we keep all the tools in the toolkit and we believe that at various times, various tools are more economic than others. But at the end of the day, our commitment to our balance sheet remains very strong and that we will finance it in a way that retains our strong balance sheet. One additional thing I’ll remind you of that over time is certainly been very valuable to you is, not only maintaining the balance in our business, which we’ve talked about frequently. But if the recycling a capital as a source of proceeds to finance that new growth and as NEP grows and our recycling of capital grows to NEP, obviously, that’s also a source of financing from the new investments that Energy Resources is making. But there was one thing that I know at the beginning of the year, we have a financing plan by the end of the year. It ends up being different than what we originally thought. But again, the most important thing to us is no matter what, we will remain committed to that balance sheet and we will finance it in a way that makes sense and it is ultimately profitable for our shareholders as well.

Got it. Thank you, Rebecca. Thank you, Jim.

Thank you very much, Michael.

This concludes our Question-And-Answer Session as well as the conference. Thank you for attending today’s presentation. You may now disconnect.