Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2022

Derivative [Line Items]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The tables below present NEE's and FPL's gross derivative positions at September 30, 2022 and December 31, 2021, as required by disclosure rules. However, the majority of the underlying contracts are subject to master netting agreements and generally would not be contractually settled on a gross basis. Therefore, the tables below also present the derivative positions on a net basis, which reflect the offsetting of positions of certain transactions within the portfolio, the contractual ability to settle contracts under master netting arrangements and the netting of margin cash collateral, as well as the location of the net derivative position on the condensed consolidated balance sheets.

	September 30, 2022
	Level 1		Level 2		Level 3		Netting(a)		Total
	(millions)
Assets:
NEE:
Commodity contracts	$	4,477	$	12,281	$	2,280	$	(15,990)	$	3,048
Interest rate contracts	$	—	$	533	$	—	$	(14)	519
Foreign currency contracts	$	—	$	—	$	—	$	(23)	(23)
Total derivative assets									$	3,544
FPL – commodity contracts	$	—	$	13	$	50	$	(9)	$	54
Liabilities:
NEE:
Commodity contracts	$	6,687	$	11,671	$	3,956	$	(16,463)	$	5,851
Interest rate contracts	$	—	$	33	$	—	$	(14)	19
Foreign currency contracts	$	—	$	189	$	—	$	(23)	166
Total derivative liabilities									$	6,036
FPL – commodity contracts	$	—	$	4	$	29	$	(9)	$	24
Net fair value by NEE balance sheet line item:
Current derivative assets(b)									$	1,431
Noncurrent derivative assets(c)									2,113
Total derivative assets									$	3,544
Current derivative liabilities(d)									$	2,969
Noncurrent derivative liabilities(e)									3,067
Total derivative liabilities									$	6,036
Net fair value by FPL balance sheet line item:
Current other assets									$	52
Noncurrent other assets									2
Total derivative assets									$	54
Current other liabilities									$	20
Noncurrent other liabilities									4
Total derivative liabilities									$	24

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(a)Includes the effect of the contractual ability to settle contracts under master netting arrangements and the netting of margin cash collateral payments and receipts. NEE and FPL also have contract settlement receivable and payable balances that are subject to the master netting arrangements but are not offset within the condensed consolidated balance sheets and are recorded in customer receivables – net and accounts payable, respectively.

(b)Reflects the netting of approximately $570 million in margin cash collateral received from counterparties.

(c)Reflects the netting of approximately $221 million in margin cash collateral received from counterparties.

(d)Reflects the netting of approximately $6 million in margin cash collateral paid to counterparties.

(e)Reflects the netting of approximately $1,258 million in margin cash collateral paid to counterparties.

	December 31, 2021
	Level 1		Level 2		Level 3		Netting(a)		Total
	(millions)
Assets:
NEE:
Commodity contracts	$	1,896	$	5,082	$	1,401	$	(6,622)	$	1,757
Interest rate contracts	$	—	$	106	$	—	$	(30)	76
Foreign currency contracts	$	—	$	8	$	—	$	(17)	(9)
Total derivative assets									$	1,824
FPL – commodity contracts	$	—	$	3	$	13	$	(3)	$	13
Liabilities:
NEE:
Commodity contracts	$	2,571	$	4,990	$	1,231	$	(6,594)	$	2,198
Interest rate contracts	$	—	$	739	$	—	$	(30)	709
Foreign currency contracts	$	—	$	86	$	—	$	(17)	69
Total derivative liabilities									$	2,976
FPL – commodity contracts	$	—	$	8	$	5	$	(3)	$	10
Net fair value by NEE balance sheet line item:
Current derivative assets(b)									$	689
Noncurrent derivative assets(c)									1,135
Total derivative assets									$	1,824
Current derivative liabilities(d)									$	1,263
Noncurrent derivative liabilities(e)									1,713
Total derivative liabilities									$	2,976
Net fair value by FPL balance sheet line item:
Current other assets									$	13
Current other liabilities									$	9
Noncurrent other liabilities									1
Total derivative liabilities									$	10

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(a)Includes the effect of the contractual ability to settle contracts under master netting arrangements and the netting of margin cash collateral payments and receipts. NEE and FPL also have contract settlement receivable and payable balances that are subject to the master netting arrangements but are not offset within the condensed consolidated balance sheets and are recorded in customer receivables – net and accounts payable, respectively.

(b)Reflects the netting of approximately $150 million in margin cash collateral received from counterparties.

(c)Reflects the netting of approximately $56 million in margin cash collateral received from counterparties.

(d)Reflects the netting of approximately $6 million in margin cash collateral paid to counterparties.

(e)Reflects the netting of approximately $172 million in margin cash collateral paid to counterparties.

Significant unobservable inputs used in valuation of contracts categorized as Level 3

The significant unobservable inputs used in the valuation of NEE's commodity contracts categorized as Level 3 of the fair value hierarchy at September 30, 2022 are as follows:

	Fair Value at				Valuation	Significant				Weighted-
Transaction Type	September 30, 2022				Technique(s)	Unobservable Inputs	Range			average(a)
	Assets		Liabilities
	(millions)
Forward contracts – power	$	178	$	619	Discounted cash flow	Forward price (per MWh)	$(7)	—	$461	$51
Forward contracts – gas	330		323		Discounted cash flow	Forward price (per MMBtu)	$3	—	$35	$5
Forward contracts – congestion	50		12		Discounted cash flow	Forward price (per MWh)	$(24)	—	$25	$1
Options – power	79		1		Option models	Implied correlations	42%	—	89%	56%
						Implied volatilities	20%	—	225%	57%
Options – primarily gas	1,368		1,271		Option models	Implied correlations	42%	—	89%	56%
						Implied volatilities	24%	—	192%	63%
Full requirements and unit contingent contracts	129		1,583		Discounted cash flow	Forward price (per MWh)	$12	—	$512	$99
						Customer migration rate(b)	—%	—	122%	6%
Forward contracts – other	146		147
Total	$	2,280	$	3,956

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(a)Unobservable inputs were weighted by volume.

(b)Applies only to full requirements contracts.

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation

The sensitivity of NEE's fair value measurements to increases (decreases) in the significant unobservable inputs is as follows:

Significant Unobservable Input	Position	Impact on Fair Value Measurement
Forward price	Purchase power/gas	Increase (decrease)
	Sell power/gas	Decrease (increase)
Implied correlations	Purchase option	Decrease (increase)
	Sell option	Increase (decrease)
Implied volatilities	Purchase option	Increase (decrease)
	Sell option	Decrease (increase)
Customer migration rate	Sell power(a)	Decrease (increase)

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(a)Assumes the contract is in a gain position.

Reconciliation of changes in the fair value of derivatives measured based on significant unobservable inputs

The reconciliation of changes in the fair value of derivatives that are based on significant unobservable inputs is as follows:

	Three Months Ended September 30,
	2022				2021
	NEE		FPL		NEE		FPL
	(millions)
Fair value of net derivatives based on significant unobservable inputs at June 30	$	(1,594)	$	83	$	584	$	—
Realized and unrealized gains (losses):
Included in operating revenues	(695)		—		(1,138)		—
Included in regulatory assets and liabilities	92		92		1		1
Purchases	90		—		62		—
Settlements	482		(154)		80		(2)
Issuances	(57)		—		(52)		—
Transfers out(a)	6		—		15		—
Fair value of net derivatives based on significant unobservable inputs at September 30	$	(1,676)	$	21	$	(448)	$	(1)
Gains (losses) included in operating revenues attributable to the change in unrealized gains (losses) relating to derivatives held at the reporting date	$	(446)	$	—	$	(1,107)	$	—

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(a)Transfers from Level 3 to Level 2 were a result of increased observability of market data.

	Nine Months Ended September 30,
	2022				2021
	NEE		FPL		NEE		FPL
	(millions)
Fair value of net derivatives based on significant unobservable inputs at December 31 of prior period	$	170	$	8	$	1,374	$	(1)
Realized and unrealized gains (losses):
Included in operating revenues	(3,215)		—		(1,795)		—
Included in regulatory assets and liabilities	161		161		2		2
Purchases	469		—		153		—
Settlements	1,043		(148)		(54)		(2)
Issuances	(289)		—		(116)		—
Transfers in(a)	—		—		1		—
Transfers out(a)	(15)		—		(13)		—
Fair value of net derivatives based on significant unobservable inputs at September 30	$	(1,676)	$	21	$	(448)	$	(1)
Gains (losses) included in operating revenues attributable to the change in unrealized gains (losses) relating to derivatives held at the reporting date	$	(2,081)	$	—	$	(1,581)	$	—

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(a)Transfers into Level 3 were a result of decreased observability of market data. Transfers from Level 3 to Level 2 were a result of increased observability of market data.

Net notional volumes

NEE and FPL had derivative commodity contracts for the following net notional volumes:

	September 30, 2022				December 31, 2021
Commodity Type	NEE		FPL		NEE		FPL
	(millions)
Power	(660)	MWh	—		(103)	MWh	—
Natural gas	(1,467)	MMBtu	151	MMBtu	(1,290)	MMBtu	91	MMBtu
Oil	(38)	barrels	—		(33)	barrels	—

Not Designated as Hedging Instrument

Derivative [Line Items]

Derivative instruments, gain (loss) in statement of financial performance

Gains (losses) related to NEE's derivatives are recorded in NEE's condensed consolidated statements of income as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(millions)
Commodity contracts(a) – operating revenues (including $10 unrealized losses, $1,236 unrealized losses, $2,942 unrealized losses and $2,563 unrealized losses, respectively)	$	(122)	$	(1,291)	$	(3,488)	$	(2,708)
Foreign currency contracts – interest expense (including $32 unrealized losses, $15 unrealized losses, $113 unrealized losses and $69 unrealized losses, respectively)	(36)		(13)		(121)		(69)
Interest rate contracts – interest expense (including $16 unrealized gains, $23 unrealized gains, $1,131 unrealized gains and $382 unrealized gains, respectively)	236		7		1,321		340
Losses reclassified from AOCI to interest expense:
Interest rate contracts	—		(1)		(5)		(4)
Foreign currency contracts	(1)		(1)		(2)		(2)
Total	$	77	$	(1,299)	$	(2,295)	$	(2,443)

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(a)For the three and nine months ended September 30, 2022, FPL recorded gains of approximately $131 million and $110 million, respectively, related to commodity contracts as regulatory liabilities on its condensed consolidated balance sheets. For the three and nine months ended September 30, 2021, FPL recorded gains of approximately $9 million and $13 million, respectively, related to commodity contracts as regulatory liabilities on its condensed consolidated balance sheets.