NextEra Energy, Inc. (NYSE:NEE)

CAPS Rating: 4 out of 5

The Company is a provider of electricity-related services. Its principal subsidiary, FPL, is a rate-regulated utility engaged primarily in the generation, transmission, distribution and sale of electric energy.


Player Avatar InvestWhatWorks (92.36) Submitted: 8/17/2011 10:30:05 PM : Outperform Start Price: $50.37 NEE Score: +1.23

The Environmental Protection Agency (EPA) might institute new rules that will possibly force the closure of many coal-burning power plants in the United States over the coming years. If the US government is engaged in a crusade against coal, it might be best to invest with a company like NextEra Energy that has very low exposure to coal.

In 2010, NextEra Energy's power generation was made up of 54.2% natural gas, 26.4% nuclear, 11.9% wind and only 3.6% coal. And that coal percentage will only continue to decrease as NextEra continues to close very old and inefficient coal power plants in order to replace them with new, more efficient and much cleaner-burning natural gas power plants.

In August of 2010, NextEra demolished their 45-year old coal power plant in Cape Canaveral, Florida. Last month (July 2011), NextEra did the same to their nearly 50-year old coal power plant in Riviera Beach, Florida. In their place, NextEra is currently building brand new natural gas power plants. The new natural gas plant will use 33% less fuel in order to generate the same amount of power as the old coal plants.

The Cape Canaveral Next Generation Clean Energy Center is scheduled to be up and running in 2013. The Riviera Beach Next Generation Clean Energy Center will be ready for business 2014.

As well as building new plants, they are also modernizing their older plants to make them more efficient and to increase power generating capacity (without increasing emissions).

In addition, NextEra Energy is continuing to expand their presence in wind energy and solar energy. It was recently revealed (in August of 2011) that NextEra is partnering with General Electric to acquire the Desert Sunlight Solar Farm, a 550-megawatt project located near Palm Springs, California.

If the US government and the EPA does force the closure of some coal power plants, NextEra is in a great position with their very lower exposure to coal. If the EPA relaxes their rules, NextEra Energy, with its growth potential and over 4% dividend (at the time of this post), is still a great stock to own.

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