FPL parent to expand Florida utility holdings
Florida’s largest utility company is about to get bigger, and investors like the idea.
NextEra Energy, parent company of Florida Power & Light Co., announced agreements Monday to acquire Gulf Power, Florida City Gas and other assets from Atlanta-based Southern Company for $6.48 billion.
Following the news, NextEra’s stock soared Monday, closing at $160.22, up $3.77 a share or 2.41 percent on the New York Stock Exchange. The stock’s 52-week high is $165.15, with the low at $137.
In 2017, NextEra reported $17 billion in operating revenue. Its subsidiary FPL is already the largest electric utility in Florida, providing power to nearly half of residents and businesses. The acquisition expands its reach to northwest Florida, as well as adding natural gas assets.
“These transactions will provide meaningful benefits for the state of Florida, and Gulf Power and Florida City Gas customers, as well as NextEra Energy shareholders,” said Jim Robo, chairman and CEO of NextEra Energy, in the news release.
Like FPL, Gulf Power and Florida City Gas are already regulated by the Florida Public Service Commission, so no approval by the commission is needed, Robo said on a conference call Monday with Wall Street analysts. He said that separation from FPL’s territory and Gulf Power’s growth made that acquisition attractive for NextEra.
But the Southern Alliance for Clean Energy raised concerns that a monopoly utility would control “such a significant percentage of Florida’s energy market.”
“Such consolidation of control may limit competi-
tion at a time when we need more and not less,” according to the energy watchdog group based in Knoxville, Tenn.
Gulf Power provides electricity to about 450,000 customers in eight counties in northwest Florida. The utility has about 9,500 miles of power lines and 2,300 megawatts of electric generating capacity.
Florida City Gas, provides natural gas to 11,000 customers in Miami-Dade, Brevard, St. Lucie and Indian River counties. The company has 3,700 miles of natural gas pipelines.
The purchase also includes Plant Oleander, a natural-gas fueled combustion turbine electric generation plant near Cocoa that has generating capacity of 791 megawatts and 65 percent ownership in Stanton Energy Center, a combined-cycle electric generating unit with 660-megawatt capacity. Stanton is under contract with with the Orlando Utilities Commission and Florida Municipal Power Agency.
NextEra Energy’s acquisition of Gulf Power includes $1.4 billion in debt, according to NextEra’s news release.
The acquisitions of Gulf Power and ownership interests in Oleander and Stanton are subject to regulatory approval from the Federal Energy Regulatory Commission and the acquisitions including Florida City Gas are subject to a waiting period under the Hart-Scott-Rodino Act. But NextEra Energy said it expects to complete the acquisition of Florida City Gas in the third quarter, with Gulf Power and the natural gas plant acquisitions anticipated to close in the first half of 2019.