Summary of Significant Accounting and Reporting Policies

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting and Reporting Policies

Summary of Significant Accounting and Reporting Policies

Rate Regulation - In June 2019, the FPSC issued a final order in connection with its review of impacts associated with tax reform, which allows FPL to continue to operate under the 2016 rate agreement. The order confirms that FPL's actions to use available reserve amortization to offset nearly all of the expense associated with the write-off of the regulatory asset related to Hurricane Irma cost recovery were permitted under the terms of the 2016 rate agreement, that FPL is able to credit the reserve with tax savings resulting from tax reform and that FPL's rates remain just and reasonable. In July 2019, the State of Florida Office of Public Counsel filed a notice of appeal challenging the FPSC's order, which notice of appeal is pending before the Florida Supreme Court.

Construction Activity - In September 2019, NEER determined it was no longer moving forward with the construction of a 220 MW wind facility due to unresolved permitting issues. NEE recorded charges of approximately $73 million ($54 million after tax), which are included in taxes other than income taxes and other in NEE’s condensed consolidated statements of income for the three and nine months ended September 30, 2019, primarily related to the write-off of capitalized development costs.

Storm Reserve Deficiency - In early September 2019, FPL’s service territory was impacted by the outer bands of Hurricane Dorian, which initially posed a threat to peninsular Florida for days and was forecasted to make a landfall in FPL’s service territory with as much as Category 5 force winds. Although FPL has not finalized its estimate of storm restoration costs associated with Hurricane Dorian, FPL recorded recoverable storm restoration costs during the quarter ended September 30, 2019 of approximately $274 million, which primarily included costs for pre-staging resources in advance of the storm and to repair damage to its distribution system. The storm restoration costs exceeded the balance of the storm and property insurance reserve by approximately $166 million at September 30, 2019. This deficiency has been recorded by FPL as a regulatory asset (primarily current) on NEE’s and FPL’s September 30, 2019 balance sheet. Under the terms of the 2016 rate agreement and subject to prudence review by the FPSC, FPL is authorized to recover storm restoration costs on an interim basis from customers through a surcharge. FPL is currently evaluating the timing and method of recovery. The unpaid portion of the recoverable storm restoration costs at September 30, 2019, approximately $240 million, is included in other current liabilities on NEE’s and FPL’s condensed consolidated balance sheets.

Restricted Cash - At September 30, 2019 and December 31, 2018, NEE had approximately $427 million ($151 million for FPL) and $4,615 million ($142 million for FPL), respectively, of restricted cash, of which approximately $338 million ($62 million for FPL) and $89 million ($81 million for FPL), respectively, is included in current other assets and the remaining balance is included in noncurrent other assets on NEE's and FPL's condensed consolidated balance sheets. Restricted cash is primarily related to debt service payments, bond proceeds held for construction at FPL and margin cash collateral requirements, and, at December 31, 2018, also related to cash restricted for the acquisition of Gulf Power (see Note 7 - Gulf Power). In addition, where offsetting positions exist, restricted cash related to margin cash collateral of $55 million is netted against derivative assets at September 30, 2019 and $184 million is netted against derivative assets at December 31, 2018. See Note 4.

Disposal of Businesses - In June 2019, subsidiaries of NEER completed the sale of ownership interests in three wind generation facilities and three solar generation facilities, including noncontrolling interests in two of the solar facilities, located in the Midwest and West regions of the U.S. with a total net generating capacity of 611 MW to a NEP subsidiary for cash proceeds of approximately $1,020 million, plus working capital of $12 million. A NEER affiliate will continue to operate the facilities included in the sale. In connection with the sale, a gain of approximately $341 million ($259 million after tax) was recorded in NEE's condensed consolidated statements of income for the nine months ended September 30, 2019, which is included in gains on disposal of businesses/assets - net, and noncontrolling interests of approximately $118 million were recorded on NEE's condensed consolidated balance sheet as of September 30, 2019.