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Derivative Instruments (Tables)
 9 Months Ended
Sep. 30, 2023
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, 2023 and December 31, 2022, 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, 2023
Level 1Level 2Level 3
Netting(a)
Total
(millions)
Assets:
NEE:
Commodity contracts$2,511 $4,609 $1,765 $(6,162)$2,723 
Interest rate contracts$— $1,031 $— $— 1,031 
Foreign currency contracts$— $— $— $(17)(17)
Total derivative assets$3,737 
FPL – commodity contracts
$— $2 $21 $(6)$17 
Liabilities:
NEE:
Commodity contracts$4,052 $4,613 $1,074 $(7,135)$2,604 
Interest rate contracts$— $15 $— $— 15 
Foreign currency contracts$— $62 $— $(17)45 
Total derivative liabilities$2,664 
FPL – commodity contracts
$— $10 $14 $(6)$18 
Net fair value by NEE balance sheet line item:
Current derivative assets(b)
$1,659 
Noncurrent derivative assets(c)
2,078 
Total derivative assets$3,737 
Current derivative liabilities(d)
$788 
Noncurrent derivative liabilities(e)
1,876 
Total derivative liabilities$2,664 
Net fair value by FPL balance sheet line item:
Current other assets$9 
Noncurrent other assets8 
Total derivative assets$17 
Current other liabilities$9 
Noncurrent other liabilities9 
Total derivative liabilities$18 
———————————————
(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 $29 million in margin cash collateral received from counterparties.
(c)Reflects the netting of approximately $55 million in margin cash collateral received from counterparties.
(d)Reflects the netting of approximately $586 million in margin cash collateral paid to counterparties.
(e)Reflects the netting of approximately $471 million in margin cash collateral paid to counterparties.
December 31, 2022
Level 1Level 2Level 3
Netting(a)
Total
(millions)
Assets:
NEE:
Commodity contracts$5,372 $7,559 $2,094 $(12,030)$2,995 
Interest rate contracts$— $583 $— $(49)534 
Foreign currency contracts$— $— $— $(4)(4)
Total derivative assets$3,525 
FPL – commodity contracts
$— $11 $25 $(7)$29 
Liabilities:
NEE:
Commodity contracts$7,185 $7,620 $2,948 $(13,010)$4,743 
Interest rate contracts$— $191 $— $(49)142 
Foreign currency contracts$— $130 $— $(4)126 
Total derivative liabilities$5,011 
FPL – commodity contracts
$— $4 $16 $(7)$13 
Net fair value by NEE balance sheet line item:
Current derivative assets(b)
$1,590 
Noncurrent derivative assets(c)
1,935 
Total derivative assets$3,525 
Current derivative liabilities(d)
$2,102 
Noncurrent derivative liabilities(e)
2,909 
Total derivative liabilities$5,011 
Net fair value by FPL balance sheet line item:
Current other assets$19 
Noncurrent other assets10 
Total derivative assets$29 
Current other liabilities$12 
Noncurrent other liabilities1 
Total derivative liabilities$13 
———————————————
(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 $299 million in margin cash collateral received from counterparties.
(c)Reflects the netting of approximately $262 million in margin cash collateral received from counterparties.
(d)Reflects the netting of approximately $328 million in margin cash collateral paid to counterparties.
(e)Reflects the netting of approximately $1,213 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, 2023 are as follows:

Fair Value atValuationSignificantWeighted-
Transaction TypeSeptember 30, 2023Technique(s)Unobservable InputsRange
average(a)
AssetsLiabilities
(millions)
Forward contracts – power
$543 $482 Discounted cash flowForward price (per MWh)$(6)—$166$49
Forward contracts – gas
343 50 Discounted cash flowForward price (per MMBtu)$1—$15$4
Forward contracts – congestion
70 34 Discounted cash flowForward price (per MWh)$(20)—$30$1
Options – power
44 9 Option modelsImplied correlations49%—63%58%
Implied volatilities52%—190%110%
Options – primarily gas
129 126 Option modelsImplied correlations49%—63%58%
Implied volatilities18%—140%51%
Full requirements and unit contingent contracts
481 280 Discounted cash flowForward price (per MWh)$(2)—$427$69
Customer migration rate(b)
—%—65%6%
Forward contracts – other
155 93 
Total$1,765 $1,074 
———————————————
(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 InputPositionImpact on
Fair Value Measurement
Forward pricePurchase power/gasIncrease (decrease)
Sell power/gasDecrease (increase)
Implied correlationsPurchase optionDecrease (increase)
Sell optionIncrease (decrease)
Implied volatilitiesPurchase optionIncrease (decrease)
Sell optionDecrease (increase)
Customer migration rate
Sell power(a)
Decrease (increase)
———————————————
(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,
20232022
NEEFPLNEEFPL
(millions)
Fair value of net derivatives based on significant unobservable inputs at June 30
$755 $13 $(1,594)$83 
Realized and unrealized gains (losses): 
Included in operating revenues87 — (695)— 
Included in regulatory assets and liabilities(2)(2)92 92 
Purchases27 — 90 — 
Settlements(320)(6)482 (154)
Issuances(18)— (57)— 
Transfers in(a)
(61)— — — 
Transfers out(a)
223 2 6 — 
Fair value of net derivatives based on significant unobservable inputs at September 30
$691 $7 $(1,676)$21 
Gains (losses) included in operating revenues attributable to the change in unrealized gains (losses) relating to derivatives held at the reporting date$85 $— $(446)$— 
———————————————
(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.

Nine Months Ended September 30,
20232022
NEEFPLNEEFPL
(millions)
Fair value of net derivatives based on significant unobservable inputs at December 31 of prior period$(854)$9 $170 $8 
Realized and unrealized gains (losses):    
Included in operating revenues2,114 — (3,215)— 
Included in regulatory assets and liabilities
5 5 161 161 
Purchases356 — 469 — 
Settlements(1,045)(9)1,043 (148)
Issuances(119)— (289)— 
Transfers in(a)
(46)— — — 
Transfers out(a)
280 2 (15)— 
Fair value of net derivatives based on significant unobservable inputs at September 30
$691 $7 $(1,676)$21 
Gains (losses) included in operating revenues attributable to the change in unrealized gains (losses) relating to derivatives held at the reporting date$994 $— $(2,081)$— 
———————————————
(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, 2023December 31, 2022
Commodity TypeNEEFPLNEEFPL
(millions)
Power(127)MWh— (104)MWh— 
Natural gas(1,297)MMBtu793 MMBtu(1,307)MMBtu258 MMBtu
Oil(43)barrels— (38)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,
2023202220232022
(millions)
Commodity contracts(a) – operating revenues (including $362 unrealized losses, $10 unrealized losses, $1,794 unrealized gains and $2,942 unrealized losses, respectively)
$(318)$(122)$1,595 $(3,488)
Foreign currency contracts – interest expense (including $5 unrealized losses, $32 unrealized losses, $66 unrealized gains and $113 unrealized losses, respectively)
(6)(36)(73)(121)
Interest rate contracts – interest expense (including $658 unrealized gains, $16 unrealized gains, $634 unrealized gains and $1,131 unrealized gains, respectively)
766 236 915 1,321 
Losses reclassified from AOCI to interest expense:
Interest rate contracts— — — (5)
Foreign currency contracts
(1)(1)(2)(2)
Total$441 $77 $2,435 $(2,295)
———————————————
(a)For the three and nine months ended September 30, 2023, FPL recorded approximately $2 million of gains and $7 million of losses, respectively, related to commodity contracts as regulatory liabilities and regulatory assets on its condensed consolidated balance sheets. 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.