Nextera Considers Nuclear Restart In Iowa, While Renewable Deals Swell

Wedoany.com Report-Oct 24, NextEra Energy (NEE.N),  is conducting engineering studies and speaking with federal regulators about the possible restart of its Duane Arnold nuclear power plant in Iowa, company executives said on Wednesday.

Growing power demand from AI data centers, and the electrification of buildings and transportation, has propelled the country's electric utility industry and led to unprecedented power contracts.

NextEra is assessing the Duane Arnold plant and speaking with regulators with the Nuclear Regulatory Commission and local groups, CEO John Ketchum said on a company earnings call.

"We're very interested in recommissioning the plant," said Ketchum, adding that the site uses a boiling water reactor, which can be simpler than other systems to revive.

"That gives us optimism of being able to do this at an attractive price and without as much risk," Ketchum said.

After struggling for decades with poor economics and safety concerns that led 13 reactors to shut since 2012, the nuclear industry is experiencing a revival driven by a sudden turnaround in electricity demand.

Two shut U.S. nuclear power plants, including Three Mile Island in Pennsylvania, are in the process of being restarted. If the plants are resurrected, it will be the first re-launch of a retired reactor.

"We think NextEra's Duane Arnold nuclear plant is among those in the U.S. that is most likely to restart given it closed fairly recently," said Mike Doyle, senior equity analyst for utilities at Edward Jones, citing the plant's August 2020 closure.

Still, NextEra said it was focused on growing its renewable energy business. Nuclear power uses uranium to produce carbon-free electricity and is not renewable like wind and solar power.

NextEra, which includes the world's largest renewables business and one of the biggest U.S. regulated electric utilities, has entered into "incremental framework agreements" with Fortune-50 to develop 10.3 gigawatts renewable energy and storage.

The company's third-quarter profit beat Wall Street estimates on Wednesday, helped by strength in its renewables unit. The S&P index tracking utilities (.SPLRCU), opens new tab jumped 18.4% in the third quarter, compared to a 5.5% rise in the S&P 500 (.SPX), opens new tab.

NextEra's renewables arm, NextEra Energy Resources, projected a backlog of 24 gigawatts (GW) in the third quarter, up from nearly 22.6 GW in the second quarter.

The company's regulated utilities business, Florida Power & Light, reported net income of $1.29 billion, compared with $1.18 billion a year earlier.

NextEra's overall quarterly revenue of $7.57 billion, however, missed estimates of around $8.10 billion, according to analysts' estimates compiled by LSEG.

The company, which is based in Florida, maintained its 2024 adjusted earnings-per-share forecast. Executives said they expect EPS in 2025 to be in a range of $3.45 to $3.70.

On an adjusted basis, NextEra earned $1.03 per share in the quarter, compared with estimate of 98 cents, according to data compiled by LSEG.

NextEra Energy Partners (NEP.N), opens new tab, a unit of the company created to acquire, manage and own contracted energy projects, said it would repower an additional 225 megawatts (MW) of wind facilities, bringing the total backlog of wind repowerings to around 1.6 GW through 2026. Repowering upgrades existing wind farms to produce more power from the sites.

However, the unit reported a loss of $40 million due to higher interest payments and a loss on some continuing operations, compared to year-ago net income of $53 million. Its shares were down 11.5% in early morning trade.