Energy

Florida Utility Becomes US Leader In Renewables Thanks To Taxpayers

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Jason Hopkins Immigration and politics reporter

NextEra Energy has successfully leveraged government mandates and taxpayer-funded subsidies to become an international powerhouse in the renewable energy market.

NextEra — a major U.S. company that boasts a large wind energy portfolio — has served as a model of unprecedented growth over the years. The Florida-based utility company was ranked the 30th largest American power company in 2011 and carried a $10.2-billion valuation. The company currently touts a market capitalization of $74 billion and is heralded as the world’s biggest generator of renewable energy from the wind and sun. Fortune Magazine ranked the company in 2018 as one of the most admired among gas and electric utilities, earning the distinction for the 11th time in 12 years.

NextEra has been able to experience rapid growth, with its expansion even more impressive considering demand for power has mostly flatlined. Credit is given to its executive leadership members — including chief executive James Robo — who have carefully managed longterm contracts and avoided debt. (RELATED: Germany Won’t Meet Its Global Warming Targets Despite Spending $200 Billion On Green Energy)

However, there is another entity that deserves major credit for the company’s rise: the U.S. government.

NextEra has been able to capitalize off federal subsidies and state mandates implemented over the years to promote wind and solar technology, according to a Wall Street Journal report.

Congress began handing out tax credits in earnest for renewables in the 1990s. At the time, the wind and solar industry was minuscule, and no one anticipated the industry to take off. As the sector grew, so did the number of companies wanting credits. NextEra has been especially aggressive at obtaining them. For example, wind farms in 2008 produced around $600 million in tax credits. They are estimated to produce $4.8 billion in 2018. NextEra has been able to use $401 million of these tax credits in the past three years to offset taxes.

State governments have also served as a major contributor to the proliferation of renewables. Almost no state governments enforced a renewable energy mandate at the turn of the 21st century — a requirement that utilities obtain a certain amount of their electricity from renewable sources. Nearly 30 states have some form of a renewable energy mandate in 2018. This total will only rise as states, such as Michigan and Arizona, have experienced environmentalist-lead campaigns to increase their renewable portfolios.

Unable to produce enough energy from wind turbines, many utilities sought to purchase electricity from companies that could. NextEra, a top producer of wind energy, has been able to gobble up many of these contracts, providing renewable energy to companies that are facing higher and higher standards.

NextEra’s renewable energy arm raked in nearly $3 billion in net income in 2017.

As for the future, the company aims to keep expanding. NextEra expects to boost the number of wind and solar projects that are in different stages of the leasing and permitting process.

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