Commitments and Contingencies

Commitments - NEE and its subsidiaries have made commitments in connection with a portion of their projected capital expenditures. Capital expenditures at FPL include, among other things, the cost for construction or acquisition of additional facilities and equipment to meet customer demand, as well as capital improvements to and maintenance of existing facilities and the procurement of nuclear fuel. At NEER, capital expenditures include, among other things, the cost, including capitalized interest, for construction and development of wind and solar projects and the procurement of nuclear fuel, as well as equity contributions to joint ventures for the construction of natural gas pipeline assets. Capital expenditures for Corporate and Other primarily include the cost to maintain existing transmission facilities at NEET.

At September 30, 2018, estimated capital expenditures for the remainder of 2018 through 2022 for which applicable internal approvals (and also, if required, regulatory approvals such as FPSC approvals for FPL) have been received were as follows:



	Remainder of 2018		2019		2020		2021		2022		Total
	(millions)
FPL:
Generation:^(a)
New^(b)(c)	$	140	$	1,090	$	680	$	1,130	$	985	$	4,025
Existing	340		960		475		560		490		2,825
Transmission and distribution	570		2,235		2,175		2,550		2,570		10,100
Nuclear fuel	50		150		135		145		165		645
General and other	165		400		325		340		325		1,555
Total	$	1,265	$	4,835	$	3,790	$	4,725	$	4,535	$	19,150
NEER:
Wind^(d)	$	750	$	2,155	$	1,455	$	20	$	15	$	4,395
Solar^(e)	170		260		170		—		—		600
Nuclear, including nuclear fuel	55		205		160		165		180		765
Natural gas pipelines	340		660		20		10		20		1,050
Other	160		55		40		40		35		330
Total	$	1,475	$	3,335	$	1,845	$	235	$	250	$	7,140
Corporate and Other	$	10	$	20	$	30	$	15	$	—	$	75

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(a)	Includes AFUDC of approximately $29 million, $57 million, $30 million, $36 million and $38 million for the remainder of 2018 through 2022, respectively.


(b)	Includes land, generation structures, transmission interconnection and integration and licensing.


(c)	Excludes capital expenditures of approximately $800 million for the modernization of two generating units at FPL's Lauderdale facility to a high-efficiency natural gas-fired unit (Dania Beach Clean Energy Center), which is pending approval by the Florida Power Plant Siting Board, comprised of the Florida governor and cabinet.


(d)	Consists of capital expenditures for new wind projects, repowering of existing wind projects and related transmission totaling approximately 6,100 MW.


(e)	Includes capital expenditures for new solar projects and related transmission totaling approximately 580 MW.

The above estimates are subject to continuing review and adjustment and actual capital expenditures may vary significantly from these estimates.

Contracts - In addition to the commitments made in connection with the estimated capital expenditures included in the table in Commitments above, FPL has commitments under long-term purchased power and fuel contracts. FPL has various firm pay-for-performance contracts to purchase approximately 114 MW from certain cogenerators and small power producers with expiration dates ranging from 2026 through 2034. These contracts provide for capacity and energy payments. Energy payments are based on the actual power taken under these contracts and capacity payments are subject to the facilities meeting certain contract conditions. FPL has contracts with expiration dates through 2042 for the purchase and transportation of natural gas and coal, and storage of natural gas.

At September 30, 2018, NEER has entered into contracts with expiration dates ranging from November 2018 through 2032 primarily for the purchase of wind turbines, wind towers and solar modules and related construction and development activities, as well as for the supply of uranium, and the conversion, enrichment and fabrication of nuclear fuel, and has made commitments for the construction of natural gas pipelines. Approximately $3.2 billion of related commitments are included in the estimated capital expenditures table in Commitments above. In addition, NEER has contracts primarily for the transportation and storage of natural gas with expiration dates ranging from late October 2018 through 2038.

The required capacity and/or minimum payments under contracts, including those discussed above, at September 30, 2018 were estimated as follows:



	Remainder of 2018		2019		2020		2021		2022		Thereafter
	(millions)
FPL:
Capacity charges^(a)	$	5	$	15	$	15	$	15	$	20	$	195
Minimum charges, at projected prices:^(b)
Natural gas, including transportation and storage^(c)	$	495	$	1,420	$	1,055	$	940	$	925	$	11,660
Coal, including transportation	$	15	$	5	$	—	$	—	$	—	$	—
NEER^(d)	$	1,110	$	1,760	$	195	$	160	$	180	$	1,470
Corporate and Other^(e)(f)	$	155	$	25	$	10	$	10	$	5	$	—

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(a)

Capacity charges, substantially all of which are recoverable through the capacity clause, totaled approximately $6 million and $18 million for the three months ended September 30, 2018 and 2017, respectively, and approximately $16 million and $58 million for the nine months ended September 30, 2018 and 2017, respectively. Energy charges, which are recoverable through the fuel clause, totaled approximately $8 million and $28 million for the three months ended September 30, 2018 and 2017, respectively, and approximately $23 million and $70 million for the nine months ended September 30, 2018 and 2017, respectively.


(b)	Recoverable through the fuel clause.


(c)	Includes approximately $80 million, $320 million, $385 million, $415 million, $415 million and $7,585 million for the remainder of 2018 through 2022 and thereafter, respectively, of firm commitments related to the natural gas transportation agreements with Sabal Trail and Florida Southeast Connection.

(d)

Includes approximately $15 million, $65 million, $65 million, $65 million and $1,085 million in 2019 through 2022 and thereafter, respectively, of firm commitments related to a natural gas transportation agreement with a joint venture, in which NEER has a 31% equity investment, that is constructing a natural gas pipeline. These firm commitments are subject to the completion of construction of the pipeline which is expected by the end of 2019.


(e)	Includes an approximately $60 million commitment to invest in clean power and technology businesses through 2022.


(f)	Excludes approximately $200 million and $250 million for the remainder of 2018 and 2019, respectively, of joint obligations of NEECH and NEER which are included in the NEER amounts above.

FPL made an approximately $90 million payment to JEA, the 80% owner of St. Johns River Power Park coal units (SJRPP), in connection with the shutdown of SJRPP in January 2018, which had the effect of terminating a 375 MW take-or-pay purchased power contract, retiring SJRPP and eliminating FPL's 20% ownership interest. In connection with the FPSC's approval of the retirement, FPL recorded a regulatory asset of approximately $90 million at December 31, 2017, which is being amortized over the remaining life of the take-or-pay purchased power contract (October 2021) and recovered through the capacity clause. In January 2018, NEE and FPL reclassified the SJRPP net book value of approximately $191 million to a regulatory asset. Approximately $150 million of the regulatory asset will be amortized over 15 years in base rates beginning July 1, 2018 and the remainder will be amortized over 10 years through the environmental cost recovery clause beginning when FPL's base rates are next adjusted in a general base rate case. In addition, in connection with the shutdown of the plant, FPL had regulatory liabilities of approximately $62 million at December 31, 2017, which is being refunded to customers through the capacity clause over the remaining life of the take-or-pay purchased power contract.

Insurance - Liability for accidents at nuclear power plants is governed by the Price-Anderson Act, which limits the liability of nuclear reactor owners to the amount of insurance available from both private sources and an industry retrospective payment plan. In accordance with this Act, NEE maintains $450 million of private liability insurance per site, which is the maximum obtainable, and participates in a secondary financial protection system, which provides up to $12.6 billion of liability insurance coverage per incident at any nuclear reactor in the U.S. Under the secondary financial protection system, NEE is subject to retrospective assessments of up to $1.0 billion ($509 million for FPL), plus any applicable taxes, per incident at any nuclear reactor in the U.S., payable at a rate not to exceed $152 million ($76 million for FPL) per incident per year. NEE and FPL are contractually entitled to recover a proportionate share of such assessments from the owners of minority interests in Seabrook, Duane Arnold and St. Lucie Unit No. 2, which approximates $15 million, $38 million and $19 million, plus any applicable taxes, per incident, respectively.

NEE participates in a nuclear insurance mutual company that provides $2.75 billion of limited insurance coverage per occurrence per site for property damage, decontamination and premature decommissioning risks at its nuclear plants and a sublimit of $1.5 billion for non-nuclear perils, except for Duane Arnold which has a sublimit of $1.0 billion. NEE participates in co-insurance of 10% of the first $400 million of losses per site per occurrence. The proceeds from such insurance, however, must first be used for reactor stabilization and site decontamination before they can be used for plant repair. NEE also participates in an insurance program that provides limited coverage for replacement power costs if a nuclear plant is out of service for an extended period of time because of an accident. In the event of an accident at one of NEE's or another participating insured's nuclear plants, NEE could be assessed up to $177 million ($108 million for FPL), plus any applicable taxes, in retrospective premiums in a policy year. NEE and FPL are contractually entitled to recover a proportionate share of such assessments from the owners of minority interests in Seabrook, Duane Arnold and St. Lucie Unit No. 2, which approximates $2 million, $5 million and $4 million, plus any applicable taxes, respectively.

Due to the high cost and limited coverage available from third-party insurers, NEE does not have property insurance coverage for a substantial portion of either its transmission and distribution property or natural gas pipeline assets. If FPL's future storm restoration costs exceed the storm reserve, FPL may recover storm restoration costs, subject to prudence review by the FPSC, either through surcharges approved by the FPSC or through securitization provisions pursuant to Florida law.

In the event of a loss, the amount of insurance available might not be adequate to cover property damage and other expenses incurred. Uninsured losses and other expenses, to the extent not recovered from customers in the case of FPL, would be borne by NEE and FPL and could have a material adverse effect on NEE's and FPL's financial condition, results of operations and liquidity.