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FPL announces innovative plan to acquire and phase out coal-fired power plant, saving customers millions of dollars

- Plan is expected to save FPL customers an estimated $70 million

- Reducing plant's output will prevent nearly 1 million tons of carbon dioxide emissions annually

Mar 6, 2015

JUNO BEACH, Fla., March 6, 2015 /PRNewswire/ -- Florida Power & Light Company (FPL) today filed a petition with the Florida Public Service Commission (PSC) to request approval to acquire a power plant that it has had under a long-term contract to purchase power since 1988.

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Upon taking ownership of the Cedar Bay Generating Plant, a 250-megawatt coal-fired facility located in Jacksonville, Fla., FPL plans to immediately terminate the contract and reduce the plant's operations by 90 percent, with the intention of eventually phasing the plant out of service. This plan is projected to save FPL customers an estimated $70 million and prevent nearly 1 million tons of carbon dioxide emissions annually.

"Although years ago it made sense to buy this plant's power to serve our customers, times have changed. We have invested billions of dollars to improve the efficiency of our system, reduce our fuel consumption, prevent emissions and cut costs for our customers," said Eric Silagy, president and CEO of FPL. "Now we're in a position to take ownership of the facility and effectively buy out an outmoded contract with the goal of ultimately phasing the plant out of service, which will mean reduced carbon emissions and millions of dollars in savings for our customers. This proposal is another smart step forward in our ongoing effort to serve our customers with affordable clean energy now and in the future."

"The Nature Conservancy welcomes FPL's innovative approach to promote energy solutions that will help reduce emissions in Florida," said Temperince Morgan, executive director of the Florida Chapter of The Nature Conservancy.

In 1988, the PSC approved a long-term purchased-power agreement between FPL and the direct owner of the Cedar Bay plant, Cedar Bay Generating Company, Limited Partnership. The contract was based on the cost of power at the time; however, today FPL can generate electricity at a much lower cost. Also, while the Cedar Bay plant is well-run, it nonetheless emits very high rates of CO2 compared with FPL's current generation fleet, which has an overall CO2 emissions rate much lower than the national average.

Under the existing purchased-power agreement, fixed payments for capacity and operating and maintenance total more than $120 million a year currently with annual increases until the contract's expiration in 2024. Like other purchased-power agreements, the fixed payments are paid for by customers through their rates, in addition to the cost of energy when the plant is operating.

In its filing with the PSC today, FPL proposes to purchase CBAS Power Inc., the indirect owner of the plant, from CBAS Power Holdings, LLC, for a price of $520.5 million. FPL would then terminate the purchased-power contract, avoiding the fixed payments that customers would otherwise pay through their rates over the remaining life of the contract.

Upon taking ownership, FPL expects to decrease plant operations by about 90 percent so that it operates no more than about 5 percent of the time based on its true economics. Reducing the plant's operations will prevent nearly 1 million tons of carbon dioxide emissions every year. The U.S. Environmental Protection Agency (EPA) calculates that this amount of carbon reduction is equivalent to saving more than 100 million gallons of gasoline or switching more than 23 million incandescent light bulbs to energy-efficient compact-fluorescent lights every year.

Based on the company's current analysis of operational needs, FPL expects to permanently decommission the Cedar Bay plant within the next two to three years. In 2017, when Florida's access to clean natural gas is expected to be enhanced by the new interstate natural gas pipeline entering commercial operation, FPL believes that the Cedar Bay plant will no longer be economic to dispatch or needed for reliability, and therefore would be retired nearly eight years sooner than it otherwise would have been.

FPL is requesting PSC approval of the purchase by July 31, 2015, so that the purchase can be completed as soon as possible to maximize customer savings. The fixed payments under the existing purchased-power contract are paid for through the capacity cost recovery clause on a customer's electric bill, and FPL requests that the costs and customer savings associated with its proposal be handled through the same mechanism. Compared with the current fixed payments, the net cost is expected to be slightly higher during approximately the first three years, but then significantly lower over the remaining life of the contract – producing total projected net savings of approximately $70 million for customers.

The proposed plan is consistent with FPL's ongoing strategy of making smart, innovative investments to deliver affordable clean energy for its customers. Since 2001, FPL's investments in high-efficiency natural gas generation have enabled the company to cut its use of foreign oil by more than 99 percent – from more than 40 million barrels of oil in 2001 to less than 1 million barrels annually today. FPL has been strategically phasing out older, less efficient fossil fuel plants and replacing them with new, high-efficiency natural gas energy centers that use approximately one-third less fuel per megawatt-hour. The company has also invested heavily to increase its use of zero-emissions nuclear and solar energy and recently announced plans to triple its solar capacity by the end of 2016.

Thanks in large part to the company's affordable clean energy strategy FPL is well-positioned to meet the EPA's Clean Power Plan targets for reductions in CO2 emissions – with no expected additional costs – unlike many electric utilities across the country. Likewise, by lowering the state's overall emissions rate, the plan filed today will help Florida meet the EPA's proposed statewide CO2 emissions reduction goals.

"It's this kind of forward-thinking that not only identifies solutions that are truly a win-win, but also contribute to our parent company's recognition as one of the world's most admired companies and among the top 10 in the world for innovativeness and community responsibility," noted Silagy.

Florida Power & Light Company

Florida Power & Light Company is the third-largest electric utility in the United States, serving more than 4.7 million customer accounts across nearly half of the state of Florida. FPL's typical 1,000-kWh residential customer bill is approximately 25 percent lower than the national average and, in 2014, was the lowest in Florida among reporting utilities for the fifth year in a row. FPL's service reliability is better than 99.98 percent, and its highly fuel-efficient power plant fleet is one of the cleanest among all utilities nationwide. The company was recognized in 2014 as the most trusted U.S. electric utility by Market Strategies International, and has earned the national ServiceOne Award for outstanding customer service for an unprecedented 10 consecutive years. A leading Florida employer with approximately 8,700 employees, FPL is a subsidiary of Juno Beach, Fla.-based NextEra Energy, Inc. (NYSE: NEE), a clean energy company widely recognized for its efforts in sustainability, ethics and diversity, including being ranked in the top 10 worldwide for innovativeness and community responsibility as part of Fortune's 2015 list of "World's Most Admired Companies." NextEra Energy is also the parent company of NextEra Energy Resources, LLC, which, together with its affiliated entities, is the world's largest generator of renewable energy from the wind and sun. For more information, visit these websites: www.NextEraEnergy.com, www.FPL.com, www.NextEraEnergyResources.com.

Cautionary Statements And Risk Factors That May Affect Future Results

This news release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra Energy, Inc. (together with its subsidiaries, NextEra Energy) regarding future operating results and other future events, many of which, by their nature, are inherently uncertain and outside of NextEra Energy's control. Forward-looking statements in this news release include, among others, statements concerning future operating performance. In some cases, you can identify the forward-looking statements by words or phrases such as "will," "may result," "expect," "anticipate," "believe," "intend," "plan," "seek," "aim," "potential," "projection," "forecast," "predict," "goals," "target," "outlook," "should," "would" or similar words or expressions. 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These risks and uncertainties include, but are not limited to, the following: effects of extensive regulation of NextEra Energy's business operations; inability of NextEra Energy to recover in a timely manner any significant amount of costs, a return on certain assets or a reasonable return on invested capital through base rates, cost recovery clauses, other regulatory mechanisms or otherwise; impact of political, regulatory and economic factors on regulatory decisions important to NextEra Energy; disallowance of cost recovery based on a finding of imprudent use of derivative instruments; effect of any reductions to or elimination of governmental incentives that support utility scale renewable energy projects or the imposition of additional taxes or assessments on renewable energy; impact of new or revised laws, regulations or interpretations or other regulatory initiatives on NextEra Energy; effect on NextEra Energy of potential regulatory action to broaden the scope of regulation of over-the-counter (OTC) financial derivatives and to apply such regulation to NextEra Energy; capital expenditures, increased operating costs and various liabilities attributable to environmental laws, regulations and other standards applicable to NextEra Energy; effects on NextEra Energy of federal or state laws or regulations mandating new or additional limits on the production of greenhouse gas emissions; exposure of NextEra Energy to significant and increasing compliance costs and substantial monetary penalties and other sanctions as a result of extensive federal regulation of its operations; effect on NextEra Energy of changes in tax laws and in judgments and estimates used to determine tax-related asset and liability amounts; impact on NextEra Energy of adverse results of litigation; effect on NextEra Energy of failure to proceed with projects under development or inability to complete the construction of (or capital improvements to) electric generation, transmission and distribution facilities, gas infrastructure facilities or other facilities on schedule or within budget; impact on development and operating activities of NextEra Energy resulting from risks related to project siting, financing, construction, permitting, governmental approvals and the negotiation of project development agreements; risks involved in the operation and maintenance of electric generation, transmission and distribution facilities, gas infrastructure facilities and other facilities; effect on NextEra Energy of a lack of growth or slower growth in the number of customers or in customer usage; impact on NextEra Energy of severe weather and other weather conditions; threats of terrorism and catastrophic events that could result from terrorism, cyber attacks or other attempts to disrupt NextEra Energy's business or the businesses of third parties; inability to obtain adequate insurance coverage for protection of NextEra Energy against significant losses and risk that insurance coverage does not provide protection against all significant losses; a prolonged period of low gas and oil prices could impact NextEra Energy's gas infrastructure business and cause NextEra Energy to delay or cancel certain gas infrastructure projects and for certain existing projects to be impaired, risk of increased operating costs resulting from unfavorable supply costs necessary to provide full energy and capacity requirement services; inability or failure to manage properly or hedge effectively the commodity risk within its portfolio; potential volatility of NextEra Energy's results of operations caused by sales of power on the spot market or on a short-term contractual basis; effect of reductions in the liquidity of energy markets on NextEra Energy's ability to manage operational risks; effectiveness of NextEra Energy's risk management tools associated with its hedging and trading procedures to protect against significant losses, including the effect of unforeseen price variances from historical behavior; impact of unavailability or disruption of power transmission or commodity transportation facilities on sale and delivery of power or natural gas; exposure of NextEra Energy to credit and performance risk from customers, hedging counterparties and vendors; failure of counterparties to perform under derivative contracts or of requirement for NextEra Energy to post margin cash collateral under derivative contracts; failure or breach of NextEra Energy's information technology systems; risks to NextEra Energy's retail businesses from compromise of sensitive customer data; losses from volatility in the market values of derivative instruments and limited liquidity in OTC markets; impact of negative publicity; inability to maintain, negotiate or renegotiate acceptable franchise agreements; increasing costs of health care plans; lack of a qualified workforce or the loss or retirement of key employees; occurrence of work strikes or stoppages and increasing personnel costs; NextEra Energy's ability to successfully identify, complete and integrate acquisitions, including the effect of increased competition for acquisitions; environmental, health and financial risks associated with ownership and operation of nuclear generation facilities; liability of NextEra Energy for significant retrospective assessments and/or retrospective insurance premiums in the event of an incident at certain nuclear generation facilities; increased operating and capital expenditures at nuclear generation facilities resulting from orders or new regulations of the Nuclear Regulatory Commission; inability to operate any owned nuclear generation units through the end of their respective operating licenses; liability for increased nuclear licensing or compliance costs resulting from hazards, and increased public attention to hazards, posed to owned nuclear generation facilities; risks associated with outages of owned nuclear units; effect of disruptions, uncertainty or volatility in the credit and capital markets on NextEra Energy's ability to fund its liquidity and capital needs and meet its growth objectives; inability to maintain current credit ratings; impairment of liquidity from inability of credit providers to fund their credit commitments or to maintain their current credit ratings; poor market performance and other economic factors that could affect NextEra Energy's defined benefit pension plan's funded status; poor market performance and other risks to the asset values of nuclear decommissioning funds; changes in market value and other risks to certain of NextEra Energy's investments; effect of inability of NextEra Energy subsidiaries to pay upstream dividends or repay funds to NextEra Energy or of NextEra Energy's performance under guarantees of subsidiary obligations on NextEra Energy's ability to meet its financial obligations and to pay dividends on its common stock; and effect of disruptions, uncertainty or volatility in the credit and capital markets of the market price of NextEra Energy's common stock. NextEra Energy discusses these and other risks and uncertainties in its annual report on Form 10-K for the year ended December 31, 2014 and other SEC filings, and this news release should be read in conjunction with such SEC filings made through the date of this news release. The forward-looking statements made in this news release are made only as of the date of this news release and NextEra Energy undertakes no obligation to update any forward-looking statements.

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SOURCE Florida Power & Light Company

For further information: Florida Power & Light Co. Media Line: 561-694-4442



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