NEE · Earnings call · 2026Q3T · Full report

Interest Rate Exposure

NEXTERA ENERGY INC · 2026-10-21 · Importance 13 · Surprise 6

The CFO said NextEra locks in interest rates when signing power purchase agreements (PPAs), thereby locking in project economics. Management said it can pass higher interest costs through to customers because customers need power and its alternatives are higher-cost or less reliable to execute; wind and solar tax credits also help reduce their cost relative to other choices. The CEO said rising rates could benefit NextEra’s market share and returns because low-cost bidders with thinner margins are under greater pressure to raise prices.

Key facts

• NextEra Energy's forward-starting interest rate hedging program exceeded $48 billion, had an average rate of approximately 4%, and an average tenor of approximately nine years.
• A 50-basis-point interest-rate move was expected to affect NextEra Energy's 2028 EPS by $0.01–$0.03 per share, less than 1% of expected 2028 adjusted EPS.
• NextEra locks in interest rates when it signs PPAs to lock in the economics.
• NextEra says it is able to pass through interest rates to its customers for renewable projects.