John Ketchum
Chairman, President and Chief Executive Officer of NextEra Energy at NextEra Energy
Thank you, Mark, and good morning, everyone. NextEra Energy delivered strong third quarter results and remains well-positioned to meet its overall objectives for the year. Adjusted earnings per share for the third quarter increased approximately 10% year-over-year, reflecting continued solid financial and operating -- operational performance at both FPL and Energy Resources.
As a sign of the robust underlying demand for new renewables generation and storage, we are pleased to announce that for the second quarter in a row, we have added approximately 3 gigawatts to our backlog, bringing our running four-quarter total to approximately 11 gigawatts. We are also pleased to announce incremental framework agreements with two Fortune 50 customers for the potential development of renewables and storage projects, totaling up to 10.5 gigawatts between now and 2030, none of which is in our backlog today.
When combined with our Entergy joint development agreement from last quarter, our recent announced framework agreements now total up to a potential 15 gigawatts, demonstrating our unique position in the market and our customers' confidence in our ability to help meet the nation's need for power.
Before I turn it over to Brian to take you through the detailed results, I want to spend a moment on FPL and Hurricanes Helene and Milton. I then will discuss our view of the industry at this transformative time.
I would like to extend our deepest sympathies to all those who have been affected by the widespread destruction caused by these two hurricanes over the last month. Hurricane Helene was one of the most destructive hurricanes to ever make landfall in the continental United States. The powerful and destructive storm hit Florida as a high-end Category 4 hurricane with devastating storm surges and sustained winds of approximately 140 miles per hour, causing approximately 680,000 FPO customers to lose power.
Hurricane Milton made landfall in Florida as a high-end Category 3 hurricane with sustained winds of approximately 120 miles per hour, producing numerous tornadoes, widespread flooding and causing approximately 2 million FPL customers to lose power. Hurricane Milton made landfall on the West Coast of Florida and FPL service territory in Sarasota County and exited on the East Coast of Florida and FPL service territory in Brevard County. In preparation for the hurricanes, FPL assembled a combined restoration workforce of more than 30,000 workers across these two storms. This preparation and core data response enabled FPL to restore service to roughly 95% of affected customers after the second full day of restoration following Hurricane Helene's landfall and 95% of affected customers after the fourth full day of restoration following Hurricane Milton's landfall.
I would like to thank all of our employees who made personal sacrifices, leaving their own homes to serve our customers, our communities, and our state. It was because of their training, their preparation, their dedication and their commitment that we were able to restore power to our customers so quickly. I would also like to thank other members of the restoration team, including the contractors, vendors, and first responders that supported our efforts for their dedicated assistance during this critical time.
Finally, I would like to express our sincere gratitude to Governor DeSantis for his unwavering leadership and support during these devastating hurricanes. We are also deeply grateful for the resources provided by our industry partners who came from 41 different states in Canada to help support our customers during Hurricanes Helene and Milton.
Mutual aid in times of disaster was one of the hallmarks of our industry, and we were proud to be able to assist other utilities to help rebuild some of the damaged Southeastern power grid that saw significant impacts from Hurricane Helene in Georgia and the Carolinas.
For nearly two decades, FPL has invested significantly in building a stronger, smarter and more storm-resilient grid. The performance of our system demonstrates that FPL's hardening, undergrounding, automation and smart grid investments are providing significant benefits to our customers.
During sustained winds of approximately 140 miles per hour during Hurricane Helene and 120 miles per hour during Hurricane Milton, our smart grid technology investments avoided 185,000 outages during Hurricane Helene and avoided 554,000 outages during Hurricane Milton.
Additionally, initial performance data shows that FPL's underground distribution power lines performed more than six times better in terms of outage rates than existing overhead distribution power lines in Florida.
We are proud to report that our generation fleet, including our solar sites sustained no significant damage despite 66 of FPL's 88 existing solar sites or approximately 16 million panels being exposed to storm conditions during Hurricanes Helene and Milton less than 0.05% of our solar panels were affected. We believe these investments together with our preparation and coordinated response have improved FPL's overall reliability and resiliency, providing significant value to our customers.
The recent storms underscore the importance of a reliable and resilient power grid, and this need will only intensify as we face a period of unprecedented growth in power demand. Over the last 80 years, our sector has experienced many demand cycles from growth emerging out of the World War II and the industrial revolution to multiple decades of essentially little-to-flat demand. That's all changed.
Today, there are forecast for an approximate 6 times increase in power demand growth in the next 20 years versus the prior 20. That significant projected shift in fundamental demand is across industries, driven in large part by 7/24 loads from data centers, reshoring and manufacturing and electrification of industry, including oil and gas and chemicals, to name a few.
U.S. data center power demand alone is expected to increase substantially, adding approximately 460 terawatt hours of new electricity demand at a compound annual growth rate of 22% from 2023 to 2030, which could potentially enable 150 gigawatts of new renewables and storage demand over the same period.
With all of that demand -- with all of that power demand, it's important to consider what it will take to meet that demand, what type of generation will be required over the next decade or so, and importantly, when can it practically be brought to market. If that demand is not met in a smart, prudent way, power prices could escalate over time and affordability could become an increasing concern, driving inflation and making U.S. industry uncompetitive on a global scale.
Fortunately, at FPL, we have a playbook in place. We have been addressing the benefits and challenges of fundamental growth for years now while continuing to deliver on our strong customer value proposition, which is anchored in bills that are nearly 40% below the national average and maintaining top decile reliability.
We are making smart capital investments in low-cost solar generation and battery storage, which are continuing to reduce our overall fuel cost, and when combined with generation modernizations, have saved customers nearly $16 billion since 2001. We are delivering best-in-class non-fuel O&M where we're 70% better than the national average, saving our customers $3 billion every year compared to the average utility.
Our experience at FPL puts Energy Resources in a unique position to help our customers meet their power demands. We know what it is going to take to successfully meet the challenge that is in front of our industry. We need low-cost, reliable energy that can also deliver the capacity needed to support grid and we need it now.
Cost, capacity, and speed are the three big issues that need to be addressed in meeting power demand. And as we have demonstrated in Florida, a mix of new renewable storage and gas generation is the solution.
When it comes to economics, renewables and storage are the lowest-cost generation and capacity resource for customers in many parts of the U.S. We believe new wind is up to 60% cheaper and new solar up to 40% cheaper than new gas power generation and that's on a nearly firm basis when paired with a four-hour battery. Incentives for wind, solar and storage flow directly to customers in the form of lower bills.
Over the past several years, we have seen the customer benefits of low-cost solar and storage at FPL, where the two combined resources are currently the lowest cost option for customers, beating out new-build gas-powered peakers [Phonetic] and combined-cycle units in our 10-year site plan. As a result, FPL now has the largest utility-owned solar portfolio in the country.
What FPL has seen in Florida is also playing out across the rest of the country, whether with investor-owned utilities, municipalities, cooperatives or commercial and industrial customers. And when it comes to speed to market, no technology is quicker to deploy than renewables and storage. Wind, solar and storage not only can be built quicker, but they're already in the interconnection queue. But don't just take our word for it. Look at our backlog. We've added another approximately 3 gigawatts of renewables and storage this quarter, our second quarter in a row.
As a top operator of all forms of power generation, we often get asked about nuclear and gas. Let me start with nuclear. Nuclear will play a role, but there are some practical limitations. Remember, on a national level, we expect we are going to need to add 900 gigawatts of new generation to the grid by 2040. There are only a few nuclear plants that can be recommissioned in an economic way. We are currently evaluating the recommissioning of our Duane Arnold nuclear plant in Iowa as one example. But even with a 100% success rate on those recommissionings, we would still only meet less than 1% of that demand.
Existing merchant nuclear generation is also limited in its ability to meet that demand given there are only approximately 20 merchant nuclear plants in this country. That nuclear capacity is also not evenly spread across the U.S. and is not in many places. We know hyperscalers are looking to develop data centers or manufacturing -- manufacturers are looking to expand their footprint. For example, there are only two merchant nuclear plants west of the Mississippi.
Nuclear plants across the country are already serving existing demand. So even if they are contracted by specific customers, new resources need to be built to meet new demand. And alternatives such as new utility-scale nuclear and SMRs are unproven, expensive, and again, not expected to be commercially viable at scale until the latter part of the next decade.
Turning to gas, when it comes to gas power generation, nobody has built more over the last two decades in NextEra Energy. We understand the benefits and the challenges and we know what it all costs and how long it takes to build.
The power sector is going to need to build more gas power generation and battery storage to meet growing capacity needs over the next decade. And as we build more, we also enable more renewables to come to market as the lowest-cost generation source of energy.
Renewables will be built for energy and battery storage and gas for capacity. That being said, while we are going to need both, storage has an advantage because it's ready now as it can be paired with renewables at the same interconnect, and there are no wait times or permitting hurdles for batteries. And renewables and storage will only get cheaper and cheaper over time, and we believe we'll continue to make up the lion's share of new additions over the long haul.
To summarize, we believe power demand is at an inflection point, and we expect much of that demand to be met by renewables and storage because they're low cost, fast to deploy, and in the transmission queue now. And the potential opportunity is significant.
Forecasts are projecting a tripling in renewables growth over the next seven years compared to what we've seen over the prior seven. No one is better positioned to capitalize on that demand growth than NextEra Energy, and we have the track record to prove it.
Since 2021 at Energy Resources, we have originated more than 33 gigawatts of renewables and storage, while placing nearly 18 gigawatts into commercial operation. We have advanced from originating on average 8 gigawatts per year from 2021 to 2023 to approximately 11 gigawatts over the last four quarters. If we achieve the midpoint of our development expectations, this pace of development is expected to more than double our combined renewable generation portfolio, growing from 38 gigawatts today to potentially 81 gigawatts by the end of 2027.
It's hard to overstate the advantage this would give us as we head into the end of the decade. This potential growth in the portfolio would enable a long-term co-located storage opportunity set of more than 50 gigawatts by the end of 2027, creating a meaningful opportunity for us to win new business and continue to deliver superior returns.
Our new framework agreements with Fortune 50 companies as well as our Entergy joint development agreement announced last quarter, together with our continued origination success are key examples of our leadership in power generation.
While these additions clearly demonstrate that some of the most sophisticated customers in the country understand the value proposition of renewables and storage, I want to close with a reminder of the broader economic impact the build-out of renewables has had and continues to have on the U.S. economy. We have invested tens of billions of dollars in the nation's energy infrastructure, creating tens of thousands of jobs, increased tax revenues, and economic stimulus for the communities we invest in, and we are powering millions of American homes and businesses with low-cost, reliable and clean electricity.
The fact is that renewables are a critical part of the energy infrastructure in this country. Wind, solar and storage are not only ready now and fast to deploy, but also present a cost-effective solution for meeting our country's energy needs. Tens of thousands of good jobs have already been created with many more yet to come over the next several years, boosting manufacturing and helping to revitalize rural communities across America. With scale, experience and technology across the energy value chain and sites ready to develop and interconnect today, NextEra Energy was built for this moment.
With that, I will turn the call over to Brian to cover the detailed results.
