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NextEra's Green Units Come Online

NEE TE XEL

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Florida-based large-scale utility company NextEra Energy Resources LLC, a business wing of NextEra Energy Inc. (NEE - Analyst Report), brought online its Limon I and II wind energy programs in Denver, Colorado. NextEra joined forces with Colorado major, Xcel Energy Inc. (XEL - Analyst Report) in a long-term agreement to sell all the power from the twin projects.

The facility owned and run by NextEra Energy has a total generating capacity of 400 megawatt (MW) which constitutes dual 200-MW projects covering an area of 55,000 acres in the Arapahoe, Elbert and Lincoln counties. A single facility comprises of wind turbines of 125 GE 1.6-MW capacities. Apart from this, the company constructed a 345 Kilovolt transmission line to connect the wind farms to the Missile Site substation in Arapahoe.

The Limon facilities are NextEra Energy’s fourth and fifth wind projects and are part of the company’s mammoth 1,500 MW U.S. wind program. The aggregate installed capacity generation from these projects stands at 975 MW which is expected to power around 450,000 homes in Colorado on an average. The completion of the 1,500 MW program will bring NextEra’s overall wind portfolio to approximately 10,000 MW by year-end 2012.

NextEra engaged more than 300 workers during the peak construction period and estimates generation of roughly $130 million in state, local tax payments and royalties from this program within the first 25 years. The Limon endeavors will provide low-cost and clean energy services in the Colorado communities. Along with this, the programs are expected to contribute positively to the indigenous economy by creating job opportunities.

We believe this long run arrangement will bode well with NextEra Energy’s future business development goals. The company’s consistent growth-via-investment strategy in renewables will spur near term top-line as usage of green energy is expected to increase in the U.S. market in the coming years.

However, strong weather variations and uncertainty associated with cases related to airline tariff and proposed implementation of market rates on petroleum products could partially offset growth.

NextEra Energy maintained its earnings expectation for 2012, in the range of $4.35−$4.65 per share. Similarly, the company upheld its pro forma earnings expectation for 2014 in the band $5.05−$5.65 per share.

The Zacks Consensus Estimates for the fourth quarter and full year 2012 currently stand at 94 cents per share and $4.52 per share, respectively. Its main competitor is Teco Energy Inc. (TE - Analyst Report).

The company has a Zacks #3 Rank (Hold rating). Headquartered in Tampa, the company through its subsidiaries engages in the generation, transmission, distribution, and sale of electric energy in the United States and Canada.

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