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 NextEra Energy Transmission, LLC.

At December 31, 2017, estimated capital expenditures for 2018 through 2022 for which applicable internal approvals (and also, if required, regulatory approvals such as FPSC approvals for FPL) have been received were as follows:



	2018		2019		2020		2021		2022		Total
	(millions)
FPL:
Generation:^(a)
New^(b)	$	665	$	555	$	1,250	$	1,105	$	1,110	$	4,685
Existing	1,365		695		485		530		490		3,565
Transmission and distribution	2,395		2,155		2,280		2,545		2,570		11,945
Nuclear fuel	170		150		135		145		165		765
General and other	460		325		290		300		280		1,655
Total	$	5,055	$	3,880	$	4,440	$	4,625	$	4,615	$	22,615
NEER:
Wind^(c)	$	2,105	$	1,810	$	110	$	40	$	40	$	4,105
Solar^(d)	85		—		—		—		—		85
Nuclear, including nuclear fuel	265		225		205		195		240		1,130
Natural gas pipelines^(e)	955		50		25		10		25		1,065
Other	655		50		45		35		35		820
Total	$	4,065	$	2,135	$	385	$	280	$	340	$	7,205
Corporate and Other	$	45	$	25	$	20	$	15	$	5	$	110

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(a)	Includes AFUDC of approximately $118 million, $58 million, $49 million, $33 million and $16 million for 2018 through 2022, 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 3,600 MW.


(d)	Includes capital expenditures for new solar projects and related transmission totaling approximately 140 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. At December 31, 2017, FPL was obligated under a take-or-pay purchased power contract to pay for 375 MW annually through 2021. FPL made an approximately $90 million payment to JEA, the 80% owner of SJRPP in connection with the shutdown of SJRPP in January 2018, which had the effect of terminating this take-or-pay purchased power contract, retiring SJRPP and eliminating FPL's 20% ownership interest. In connection with the FPSC's approval of the retirement, FPL recorded a regulatory asset of approximately $90 million, which is included in current and noncurrent regulatory assets on NEE's and FPL's consolidated balance sheets at December 31, 2017 and will be amortized over the remaining life of the take-or-pay purchased power contract (October 2021) and recovered through the capacity clause. At December 31, 2017, the net book value of approximately $191 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. In January 2018, NEE and FPL reclassified 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. In addition, in connection with the shutdown of the plant, FPL had regulatory liabilities of approximately $62 million which will be refunded to customers through the capacity clause over the remaining life of the take-or-pay purchased power contract. 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.

At December 31, 2017, NEER has entered into contracts with expiration dates ranging from late February 2018 through 2033 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 natural gas pipelines. Approximately $2.2 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 March 2018 through 2020.

The required capacity and/or minimum payments under contracts, including those discussed above at December 31, 2017, were estimated as follows:



	2018		2019		2020		2021		2022		Thereafter
	(millions)
FPL:
Capacity charges^(a)	$	20	$	20	$	20	$	20	$	20	$	225
Minimum charges, at projected prices:^(b)
Natural gas, including transportation and storage^(c)	$	1,310	$	865	$	910	$	905	$	895	$	11,240
Coal, including transportation	$	35	$	5	$	—	$	—	$	—	$	—
NEER	$	1,700	$	205	$	120	$	80	$	100	$	290
Corporate and Other^(d)(e)	$	80	$	15	$	15	$	10	$	—	$	—

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(a)

Capacity charges, substantially all of which are recoverable through the capacity clause, totaled approximately $72 million, $175 million and $434 million for the years ended December 31, 2017, 2016 and 2015, respectively. Energy charges, which are recoverable through the fuel clause, totaled approximately $90 million, $126 million and $262 million for the years ended December 31, 2017, 2016 and 2015, respectively.


(b)	Recoverable through the fuel clause.


(c)	Includes approximately $295 million, $290 million, $360 million, $390 million, $390 million and $7,175 million in 2018 through 2022 and thereafter, respectively, of firm commitments related to the natural gas transportation agreements with Sabal Trail and Florida Southeast Connection, LLC.


(d)	Includes an approximately $75 million commitment to invest in clean power and technology businesses through 2021.


(e)	Excludes approximately $60 million in 2018 of joint obligations of NEECH and NEER which are included in the NEER amounts above.

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. NEE participates in co-insurance of 10% of the first $400 million of losses per site per occurrence. 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 1 - 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.