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Derivative Instruments (Tables)
3 Months Ended
Mar. 31, 2022
Derivative [Line Items]  
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
The tables below present NEE's and FPL's gross derivative positions at March 31, 2022 and December 31, 2021, as required by disclosure rules. However, the majority of the underlying contracts are subject to master netting agreements and generally would not be contractually settled on a gross basis. Therefore, the tables below also present the derivative positions on a net basis, which reflect the offsetting of positions of certain transactions within the portfolio, the contractual ability to settle contracts under master netting arrangements and the netting of margin cash collateral, as well as the location of the net derivative position on the condensed consolidated balance sheets.
March 31, 2022
Level 1Level 2Level 3
Netting(a)
Total
(millions)
Assets:
NEE:
Commodity contracts$4,327 $9,170 $1,968 $(12,708)$2,757 
Interest rate contracts$ $243 $ $(33)210 
Foreign currency contracts$ $21 $ $(37)(16)
Total derivative assets$2,951 
FPL – commodity contracts
$ $8 $7 $(9)$6 
Liabilities:
NEE:
Commodity contracts$5,926 $9,042 $3,040 $(13,133)$4,875 
Interest rate contracts$ $387 $ $(33)354 
Foreign currency contracts$ $93 $ $(37)56 
Total derivative liabilities$5,285 
FPL – commodity contracts
$ $6 $17 $(9)$14 
Net fair value by NEE balance sheet line item:
Current derivative assets(b)
$1,392 
Noncurrent derivative assets(c)
1,559 
Total derivative assets$2,951 
Current derivative liabilities(d)
$2,856 
Noncurrent derivative liabilities(e)
2,429 
Total derivative liabilities$5,285 
Net fair value by FPL balance sheet line item:
Current other assets$6 
Current other liabilities$14 
———————————————
(a)Includes the effect of the contractual ability to settle contracts under master netting arrangements and the netting of margin cash collateral payments and receipts. NEE and FPL also have contract settlement receivable and payable balances that are subject to the master netting arrangements but are not offset within the condensed consolidated balance sheets and are recorded in customer receivables – net and accounts payable, respectively.
(b)Reflects the netting of approximately $573 million in margin cash collateral received from counterparties.
(c)Reflects the netting of approximately $74 million in margin cash collateral received from counterparties.
(d)Reflects the netting of approximately $87 million in margin cash collateral paid to counterparties.
(e)Reflects the netting of approximately $985 million in margin cash collateral paid to counterparties.
December 31, 2021
Level 1Level 2Level 3
Netting(a)
Total
(millions)
Assets:
NEE:
Commodity contracts$1,896 $5,082 $1,401 $(6,622)$1,757 
Interest rate contracts$— $106 $— $(30)76 
Foreign currency contracts$— $$— $(17)(9)
Total derivative assets$1,824 
FPL – commodity contracts
$— $$13 $(3)$13 
Liabilities:
NEE:
Commodity contracts$2,571 $4,990 $1,231 $(6,594)$2,198 
Interest rate contracts$— $739 $— $(30)709 
Foreign currency contracts$— $86 $— $(17)69 
Total derivative liabilities$2,976 
FPL – commodity contracts
$— $$$(3)$10 
Net fair value by NEE balance sheet line item:
Current derivative assets(b)
$689 
Noncurrent derivative assets(c)
1,135 
Total derivative assets$1,824 
Current derivative liabilities(d)
$1,263 
Noncurrent derivative liabilities(e)
1,713 
Total derivative liabilities$2,976 
Net fair value by FPL balance sheet line item:
Current other assets$13 
Current other liabilities$
Noncurrent other liabilities
Total derivative liabilities$10 
———————————————
(a)Includes the effect of the contractual ability to settle contracts under master netting arrangements and the netting of margin cash collateral payments and receipts. NEE and FPL also have contract settlement receivable and payable balances that are subject to the master netting arrangements but are not offset within the condensed consolidated balance sheets and are recorded in customer receivables – net and accounts payable, respectively.
(b)Reflects the netting of approximately $150 million in margin cash collateral received from counterparties.
(c)Reflects the netting of approximately $56 million in margin cash collateral received from counterparties.
(d)Reflects the netting of approximately $6 million in margin cash collateral paid to counterparties.
(e)Reflects the netting of approximately $172 million in margin cash collateral paid to counterparties
Significant unobservable inputs used in valuation of contracts categorized as Level 3
The significant unobservable inputs used in the valuation of NEE's commodity contracts categorized as Level 3 of the fair value hierarchy at March 31, 2022 are as follows:

Fair Value atValuationSignificantWeighted-
Transaction TypeMarch 31, 2022Technique(s)Unobservable InputsRange
average(a)
AssetsLiabilities
(millions)
Forward contracts – power
$294 $(450)Discounted cash flowForward price (per MWh)$(4)$223$43
Forward contracts – gas
206 (180)Discounted cash flowForward price (per MMBtu)$2$23$4
Forward contracts – congestion
23 (8)Discounted cash flowForward price (per MWh)$(12)$21$—
Options – power
88 (11)Option modelsImplied correlations37%87%53%
Implied volatilities18%242%61%
Options – primarily gas
1,076 (966)Option modelsImplied correlations37%87%53%
Implied volatilities18%242%43%
Full requirements and unit contingent contracts
35 (1,285)Discounted cash flowForward price (per MWh)$3$386$78
Customer migration rate(b)
—%56%2%
Forward contracts – other
246 (140)
Total$1,968 $(3,040)
———————————————
(a)Unobservable inputs were weighted by volume.
(b)Applies only to full requirements contracts.
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation
The sensitivity of NEE's fair value measurements to increases (decreases) in the significant unobservable inputs is as follows:

Significant Unobservable InputPositionImpact on
Fair Value Measurement
Forward pricePurchase power/gasIncrease (decrease)
Sell power/gasDecrease (increase)
Implied correlationsPurchase optionDecrease (increase)
Sell optionIncrease (decrease)
Implied volatilitiesPurchase optionIncrease (decrease)
Sell optionDecrease (increase)
Customer migration rate
Sell power(a)
Decrease (increase)
———————————————
(a)Assumes the contract is in a gain position.
Reconciliation of changes in the fair value of derivatives measured based on significant unobservable inputs
The reconciliation of changes in the fair value of derivatives that are based on significant unobservable inputs is as follows:
Three Months Ended March 31,
20222021
NEEFPLNEEFPL
(millions)
Fair value of net derivatives based on significant unobservable inputs at December 31 of prior period
$170 $8 $1,374 $(1)
Realized and unrealized gains (losses):    
Included in operating revenues(1,535) (130)— 
Included in regulatory assets and liabilities
(19)(19)(2)(2)
Purchases183  38 — 
Settlements250 1 (89)
Issuances(98) (21)— 
Transfers out(a)
(23) (13)— 
Fair value of net derivatives based on significant unobservable inputs at March 31$(1,072)$(10)$1,157 $(2)
Gains (losses) included in operating revenues attributable to the change in unrealized gains (losses) relating to derivatives held at the reporting date$(1,405)$ $(125)$— 
———————————————
(a)Transfers from Level 3 to Level 2 were a result of increased observability of market data.
Net notional volumes NEE and FPL had derivative commodity contracts for the following net notional volumes:
March 31, 2022December 31, 2021
Commodity TypeNEEFPLNEEFPL
(millions)
Power(97)MWh (103)MWh— 
Natural gas(1,180)MMBtu298 MMBtu(1,290)MMBtu91 MMBtu
Oil(34)barrels (33)barrels— 
Not Designated as Hedging Instrument  
Derivative [Line Items]  
Derivative instruments, gain (loss) in statement of financial performance Gains (losses) related to NEE's derivatives are recorded in NEE's condensed consolidated statements of income (loss) as follows:
Three Months Ended March 31,
20222021
(millions)
Commodity contracts(a) – operating revenues
$(2,389)$(488)
Foreign currency contracts – interest expense
1 (40)
Interest rate contracts – interest expense
471 747 
Losses reclassified from AOCI to interest expense:
Interest rate contracts(5)(1)
Foreign currency contracts
(1)(1)
Total$(1,923)$217 
———————————————
(a)For the three months ended March 31, 2022 and 2021, FPL recorded losses of approximately $12 million and $7 million, respectively, related to commodity contracts as regulatory assets on its condensed consolidated balance sheets.