Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies [Abstract]

Commitments - NEE and its subsidiaries have made commitments in connection with a portion of their projected capital expenditures. Capital expenditures at FPL and Gulf Power include, among other things, the cost for construction of additional facilities and equipment to meet customer demand, as well as capital improvements to and maintenance of existing facilities. 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 development and construction of natural gas pipeline assets. Capital expenditures for Corporate and Other primarily include equity contributions to a joint venture for the construction of a transmission facility and the cost to maintain existing transmission facilities at NEET.

At September 30, 2019, estimated capital expenditures for the remainder of 2019 through 2023 for which applicable internal approvals (and also, if required, regulatory approvals such as FPSC approvals for FPL and Gulf Power) have been received were as follows:



	Remainder of 2019		2020		2021		2022		2023		Total
	(millions)
FPL:
Generation:^(a)
New^(b)	$	490	$	1,380	$	695	$	505	$	550	$	3,620
Existing	410		740		1,050		835		790		3,825
Transmission and distribution^(c)	965		3,175		3,685		3,750		3,750		15,325
Nuclear fuel	50		205		220		165		120		760
General and other	265		545		470		370		360		2,010
Total	$	2,180	$	6,045	$	6,120	$	5,625	$	5,570	$	25,540
Gulf Power	$	465	$	885	$	665	$	665	$	720	$	3,400
NEER:
Wind^(d)	$	805	$	3,055	$	25	$	20	$	20	$	3,925
Solar^(e)	545		605		190		—		—		1,340
Nuclear, including nuclear fuel	70		160		180		170		140		720
Natural gas pipelines^(f)	195		530		140		20		—		885
Other	60		95		55		70		60		340
Total	$	1,675	$	4,445	$	590	$	280	$	220	$	7,210
Corporate and Other	$	75	$	285	$	85	$	—	$	—	$	445

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(a)	Includes AFUDC of approximately $15 million, $80 million, $70 million, $40 million and $20 million for the remainder of 2019 through 2023, respectively.


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


(c)	Includes AFUDC of approximately $5 million, $35 million, $40 million, $35 million and $35 million for the remainder of 2019 through 2023, respectively.


(d)	Consists of capital expenditures for new wind projects, repowering of existing wind projects and related transmission totaling approximately 4,815 MW.


(e)	Includes capital expenditures for new solar projects and related transmission totaling approximately 1,525 MW.


(f)	Construction of a natural gas pipeline is subject to certain conditions, including FERC approval. In addition, completion of another natural gas pipeline is subject to final permitting.

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 firm commitments under long-term contracts primarily for the transportation of natural gas and coal with expiration dates through 2042.

At September 30, 2019, NEER has entered into contracts with expiration dates ranging from late October 2019 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 $4.3 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 2019 through 2034.

The required capacity and/or minimum payments under contracts, including those discussed above, at September 30, 2019 were estimated as follows:



	Remainder of 2019		2020		2021		2022		2023		Thereafter
	(millions)
FPL^(a)	$	250	$	1,005	$	1,000	$	980	$	975	$	11,525
NEER^(b)(c)	$	1,590	$	2,505	$	220	$	195	$	120	$	1,480
Corporate and Other^(d)	$	110	$	90	$	75	$	5	$	5	$	50

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(a)

Includes approximately $80 million, $385 million, $415 million, $415 million, $410 million and $7,175 million for the remainder of 2019 through 2023 and thereafter, respectively, of firm commitments related to the natural gas transportation agreements with Sabal Trail and Florida Southeast Connection. The charges associated with these agreements are recoverable through the fuel clause. For the three and nine months ended September 30, 2019, the charges associated with these agreements totaled approximately $80 million and $236 million, respectively, of which $28 million and $81 million, respectively, were eliminated in consolidation at NEE. For the three and nine months ended September 30, 2018, the charges associated with these agreements totaled approximately $76 million and $224 million respectively, of which $24 million and $69 million, respectively, were eliminated in consolidation at NEE.

(b)

Includes approximately $70 million, $70 million, $70 million and $1,180 million for 2021 through 2023 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 in 2020.


(c)	Includes approximately $120 million of commitments to invest in technology investments through 2029.


(d)	Excludes approximately $320 million, $305 million, $30 million, $25 million, $15 million and $10 million for the remainder of 2019 through 2023 and thereafter, respectively, of joint obligations of NEECH and NEER which are included in the NEER amounts above.

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 $13.5 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 $1.1 billion ($550 million for FPL), plus any applicable taxes, per incident at any nuclear reactor in the U.S., payable at a rate not to exceed $164 million ($82 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 $16 million, $41 million and $20 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 $500 million. 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 $174 million ($106 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 $3 million, $4 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 either FPL's or Gulf Power's future storm restoration costs exceed their respective storm reserve, FPL and Gulf Power may recover their 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. See Note 11 - Storm Reserve Deficiency.

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 or Gulf Power, would be borne by NEE and either FPL or Gulf Power, and could have a material adverse effect on NEE's and FPL's financial condition, results of operations and liquidity.