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Income Taxes
9 Months Ended
Sep. 30, 2011
Income Tax Disclosure [Abstract] 
Income Taxes
5.  Income Taxes

NextEra Energy's effective income tax rate for the three months ended September 30, 2011 and 2010 was approximately 28% and 25%, respectively.  The reduction from the federal statutory rate mainly reflects the benefit of wind production tax credits (PTCs) of approximately $45 million and $66 million, respectively, related to NextEra Energy Resources' wind projects and approximately $9 million and $26 million, respectively, of deferred income tax benefits associated with grants (convertible investment tax credits (ITCs)) under the American Recovery and Reinvestment Act of 2009, as amended (Recovery Act), primarily for certain wind projects expected to be placed in service.  NextEra Energy’s effective income tax rate for the three months ended September 30, 2010 also reflects an income tax benefit of $24 million related to employee benefits.

NextEra Energy's effective income tax rate for the nine months ended September 30, 2011 and 2010 was approximately 18% and 24%, respectively.  The reduction from the federal statutory rate mainly reflects the benefit of wind PTCs of approximately $208 million and $229 million, respectively, and approximately $17 million and $56 million, respectively, of deferred income tax benefits associated with convertible ITCs.  NextEra Energy’s effective income tax rate for the nine months ended September 30, 2011 also reflects a state deferred income tax benefit (state deferred income tax benefit) included in the Corporate and Other segment of approximately $64 million, net of federal income taxes, related to state tax law changes and a $26 million reduction in income tax expense, net of federal income taxes, primarily related to a valuation allowance reversal for certain state ITCs reflecting state income tax planning initiatives (state ITC benefit). NextEra Energy’s effective income tax rate for the nine months ended September 30, 2010 also reflects an income tax benefit of $24 million related to employee benefits.

NextEra Energy recognizes PTCs as wind energy is generated and sold based on a per kilowatt-hour (kwh) rate prescribed in applicable federal and state statutes, which may differ significantly from amounts computed, on a quarterly basis, using an overall effective income tax rate anticipated for the full year.  NextEra Energy uses this method of recognizing PTCs for specific reasons, including that PTCs are an integral part of the financial viability of most wind projects and a fundamental component of such wind projects' results of operations.  PTCs can significantly affect NextEra Energy's effective income tax rate depending on the amount of pretax income and wind generation.

During the first quarter of 2011, NextEra Energy finalized a settlement with the Internal Revenue Service (IRS) with respect to the 1988 through 2005 tax years and closed out the examination of years 2006 through 2008 (collectively, IRS settlement).  The IRS settlement primarily related to NextEra Energy’s and FPL’s timing of certain deductions for repairs, casualty losses and indirect service costs.  During the second quarter of 2011, NextEra Energy received a cash refund from the IRS of approximately $278 million related to the IRS settlement.  Also as a result of the IRS settlement, NextEra Energy's gross liability for unrecognized tax benefits was reduced by $248 million ($214 million for FPL) and accrued net interest receivable was reduced by $131 million ($38 million for FPL).  The IRS settlement did not have a material effect on NextEra Energy's or FPL's net income.