Morningstar | Florida Solar Potential Drives Regulated Growth; NextEra Reports First-Quarter Earnings Growth
We are reaffirming our $175 per share fair value estimate, along with our narrow economic moat and stable moat trend ratings, after NextEra Energy reported first-quarter operating earnings of $2.20 per share, compared with $1.96 in the same year-ago period.Management reaffirmed its 2019 EPS guidance of $8.00 to $8.50, which is in line with our estimates. We continue to forecast that NextEra Energy will reach the top end of its 6% to 8% growth expectations through 2021, supporting our forecast for an industry-leading 12% annualized dividend growth.
Regulatory capital grew 8.3% for the year at Florida Power & Light. The utility forecasts an additional 7,000 megawatts in its Ten-Year Site Plan. Included in this amount are 1,500 megawatts of community solar and 300 megawatts of solar by 2020. FP&L earns near-immediate returns upon completion under the state's highly constructive automatic base rate adjustment plan. FP&L also announced a 1,650 MW modernization plan for its Manatee power station, which will include battery, solar, and turbine upgrades. FP&L recently completed the 1,750 MW Okeechobee Clean Energy Center.
At the recently acquired Gulf Power, achieved ROE for the rolling 12 months was 10%, in the lower half of its allowed 9.25% to 11.25% band. We expect management to reach the upper half of the band for 2019, driven by cost efficiencies and new capital investment.
At Energy Resources, we remain confident that NextEra will deliver at the high end of its 10.1 GW to 16.5 GW planned development expectations from 2017 to 2021. In the first quarter, the subsidiary added 1,000 MW of renewable energy projects to its backlog. At NextEra's analyst day in June, we expect management to announce a similarly aggressive development plan with a higher concentration of solar and battery storage than the current plan.
NextEra Energy is a holding company, engaged in electric power and energy infrastructure. The company has two principal businesses, Florida Power & Light Company (FPL) and NextEra Energy Resources, LLC (NEER). FPL is a rate-regulated electric utility engaged primarily in the generation, transmission, distribution and sale of electric energy in Florida. FPL provides service to its electric customers through a transmission and distribution system that links its generation facilities to its customers. NEER, through its subsidiaries, owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets primarily in the United States and Canada.
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