Commitments and Contingencies

Commitments - NEE and its subsidiaries have made commitments in connection with a portion of their projected capital expenditures. Capital expenditures at FPL include, among other things, the cost for construction or acquisition of additional facilities and equipment to meet customer demand, as well as capital improvements to and maintenance of existing facilities and the procurement of nuclear fuel. At NEER, capital expenditures include, among other things, the cost, including capitalized interest, for construction and development of wind and solar projects and the procurement of nuclear fuel, as well as the investment in the development and construction of its natural gas pipeline assets. Capital expenditures for Corporate and Other primarily include the cost to maintain existing transmission facilities at NEET.

At September 30, 2017, estimated capital expenditures for the remainder of 2017 through 2021 for which applicable internal approvals (and also, if required, FPSC approvals for FPL or regulatory approvals for acquisitions) have been received were as follows:



	Remainder of 2017		2018		2019		2020		2021		Total
	(millions)
FPL:
Generation:^(a)
New^(b)	$	350	$	625	$	550	$	1,310	$	950	$	3,785
Existing	380		845		675		615		475		2,990
Transmission and distribution	590		2,725		2,530		2,465		2,680		10,990
Nuclear fuel	20		170		150		135		145		620
General and other	190		280		250		220		250		1,190
Total	$	1,530	$	4,645	$	4,155	$	4,745	$	4,500	$	19,575
NEER:
Wind^(c)	$	350	$	1,925	$	1,175	$	45	$	20	$	3,515
Solar^(d)	115		40		5		—		—		160
Nuclear, including nuclear fuel	85		265		225		205		195		975
Natural gas pipelines^(e)	105		915		40		20		10		1,090
Other	50		60		70		60		55		295
Total	$	705	$	3,205	$	1,515	$	330	$	280	$	6,035
Corporate and Other	$	20	$	60	$	85	$	55	$	40	$	260

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(a)	Includes AFUDC of approximately $30 million, $85 million, $49 million, $56 million and $35 million for the remainder of 2017 through 2021, respectively.


(b)	Includes land, generation structures, transmission interconnection and integration and licensing.


(c)	Consists of capital expenditures for new wind projects, repowering of existing wind projects and related transmission totaling approximately 4,075 MW.


(d)	Includes capital expenditures for new solar projects and related transmission totaling approximately 175 MW.


(e)	Includes equity contributions associated with an equity investment in a joint venture that is constructing a natural gas pipeline. The natural gas pipeline is pending FERC approval to proceed with construction.

The above estimates are subject to continuing review and adjustment and actual capital expenditures may vary significantly from these estimates.

Contracts - In addition to the commitments made in connection with the estimated capital expenditures included in the table in Commitments above, FPL has commitments under long-term purchased power and fuel contracts. As of September 30, 2017, FPL is obligated under a take-or-pay purchased power contract to pay for 375 MW annually through 2021. FPL has entered into an agreement with JEA to shut down the St. Johns River Power Park coal units (SJRPP) (expected to occur in early January 2018), which will have the effect of terminating this take-or-pay purchased power contract, retiring SJRPP and eliminating FPL's 20% ownership interest share, as of that date. The agreement provides for, among other things, an approximately $90 million payment, upon shut down, by FPL to JEA (the 80% owner of SJRPP), which FPL will recover through the capacity clause as a regulatory asset and amortize over the remaining life of the take-or-pay purchased power contract. At September 30, 2017, the net book value of approximately $193 million was included in plant in service and other property on FPL's balance sheets (electric plant in service and other property for NEE) with respect to SJRPP. Upon shut down of SJRPP, NEE and FPL will reclassify the net book value to a regulatory asset. Approximately $150 million of the regulatory asset will be amortized over 15 years in base rates beginning July 1, 2018 and the remainder will be amortized over 10 years through the environmental cost recovery clause beginning when FPL's base rates are next adjusted in a general base rate case. FPL also has various firm pay-for-performance contracts to purchase approximately 114 MW from certain cogenerators and small power producers with expiration dates ranging from 2026 through 2034. The purchased power contracts provide for capacity and energy payments. Energy payments are based on the actual power taken under these contracts. Capacity payments for the pay-for-performance contracts are subject to the facilities meeting certain contract conditions. FPL has contracts with expiration dates through 2042 for the purchase and transportation of natural gas and coal, and storage of natural gas. See Commitments above.

As of September 30, 2017, NEER has entered into contracts with expiration dates ranging from late October 2017 through 2032 primarily for the purchase of wind turbines, wind towers and solar modules and related construction and development activities, as well as for the supply of uranium, and the conversion, enrichment and fabrication of nuclear fuel and has made commitments for the construction of the natural gas pipelines. Approximately $2.5 billion of related commitments are included in the estimated capital expenditures table in Commitments above. In addition, NEER has contracts primarily for the purchase, transportation and storage of natural gas with expiration dates ranging from late October 2017 through 2020.

The required capacity and/or minimum payments under contracts, including those discussed above, as of September 30, 2017 were estimated as follows:



	Remainder of 2017		2018		2019		2020		2021		Thereafter
	(millions)
FPL:
Capacity charges^(a)	$	20	$	65	$	50	$	20	$	20	$	250
Minimum charges, at projected prices:^(b)
Natural gas, including transportation and storage^(c)	$	480	$	1,305	$	865	$	910	$	905	$	12,135
Coal, including transportation	$	35	$	35	$	5	$	—	$	—	$	—
NEER	$	570	$	1,455	$	135	$	105	$	80	$	390
Corporate and Other^(d)(e)	$	55	$	45	$	15	$	15	$	10	$	—

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(a)

Capacity charges, substantially all of which are recoverable through the capacity clause, totaled approximately $18 million and $41 million for the three months ended September 30, 2017 and 2016, respectively, and approximately $58 million and $134 million for the nine months ended September 30, 2017 and 2016, respectively. Energy charges, which are recoverable through the fuel clause, totaled approximately $28 million and $57 million for the three months ended September 30, 2017 and 2016, respectively, and approximately $70 million and $103 million for the nine months ended September 30, 2017 and 2016, respectively.


(b)	Recoverable through the fuel clause.


(c)	Includes approximately $75 million, $295 million, $290 million, $360 million, $390 million and $7,565 million for the remainder of 2017 through 2021 and thereafter, respectively, of firm commitments related to the natural gas transportation agreements with Sabal Trail and Florida Southeast Connection.


(d)	Includes an approximately $90 million commitment to invest in clean power and technology businesses through 2021.


(e)	Excludes approximately $170 million for the remainder of 2017 of joint obligations of NEECH and NEER which are included in the NEER amounts above.

In January 2017, FPL assumed ownership of a 330 MW coal-fired generation facility located in Indiantown, Florida (Indiantown generation facility) for a purchase price of $451 million (including existing debt of approximately $218 million). FPL recorded a regulatory asset for approximately $451 million, which is being amortized over nine years and recovered through the capacity clause with a return on the portion of the unamortized balance of the regulatory asset. Prior to assuming ownership of this facility, FPL had a long-term purchased power agreement with this facility for substantially all of its capacity and energy. FPL expects to reduce the plant's operations with the intention of phasing the plant out of service. FPL will recover the fuel costs of the facility through the fuel clause and operating costs through the capacity clause until FPL's next base rate filing where non-fuel cost recovery will be through base rates.

Insurance - Liability for accidents at nuclear power plants is governed by the Price-Anderson Act, which limits the liability of nuclear reactor owners to the amount of insurance available from both private sources and an industry retrospective payment plan. In accordance with this Act, NEE maintains $450 million of private liability insurance per site, which is the maximum obtainable, and participates in a secondary financial protection system, which provides up to $13.0 billion of liability insurance coverage per incident at any nuclear reactor in the U.S. Under the secondary financial protection system, NEE is subject to retrospective assessments of up to $1.0 billion ($509 million for FPL), plus any applicable taxes, per incident at any nuclear reactor in the U.S., payable at a rate not to exceed $152 million ($76 million for FPL) per incident per year. NEE and FPL are contractually entitled to recover a proportionate share of such assessments from the owners of minority interests in Seabrook, Duane Arnold and St. Lucie Unit No. 2, which approximates $15 million, $38 million and $19 million, plus any applicable taxes, per incident, respectively.

NEE participates in a nuclear insurance mutual company that provides $2.75 billion of limited insurance coverage per occurrence per site for property damage, decontamination and premature decommissioning risks at its nuclear plants and a sublimit of $1.5 billion for non-nuclear perils, except for Duane Arnold which has a sublimit of $1.0 billion. The proceeds from such insurance, however, must first be used for reactor stabilization and site decontamination before they can be used for plant repair. NEE also participates in an insurance program that provides limited coverage for replacement power costs if a nuclear plant is out of service for an extended period of time because of an accident. In the event of an accident at one of NEE's or another participating insured's nuclear plants, NEE could be assessed up to $178 million ($108 million for FPL), plus any applicable taxes, in retrospective premiums in a policy year. NEE and FPL are contractually entitled to recover a proportionate share of such assessments from the owners of minority interests in Seabrook, Duane Arnold and St. Lucie Unit No. 2, which approximates $2 million, $5 million and $4 million, plus any applicable taxes, respectively.

Due to the high cost and limited coverage available from third-party insurers, NEE does not have property insurance coverage for a substantial portion of either its transmission and distribution property or natural gas pipeline assets. If FPL's future storm restoration costs exceed the storm reserve, FPL may recover storm restoration costs, subject to prudence review by the FPSC, either through surcharges approved by the FPSC or through securitization provisions pursuant to Florida law. See Note 9 - Securitized Storm-Recovery Costs, Storm Fund and Storm Reserve.

In the event of a loss, the amount of insurance available might not be adequate to cover property damage and other expenses incurred. Uninsured losses and other expenses, to the extent not recovered from customers in the case of FPL, would be borne by NEE and FPL and could have a material adverse effect on NEE's and FPL's financial condition, results of operations and liquidity.