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NextEra Energy Partners LP  (NYSE:NEP)
Q4 2018 Earnings Conference Call
Jan. 25, 2019, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning and welcome to the NextEra Energy, Inc. and NextEra Energy Partners, LP Q4 and Full-Year 2018 Earnings Conference Call. All participants will be in a listen-only mode.

(Operator Instructions) In today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

And now, I would like to turn the conference over to Matt Roskot, Director of Investor Relations. Please go ahead.

Matthew Roskot -- Director of Investor Relations

Thank you, Kathy. Good morning everyone, and thank you for joining our fourth quarter and full-year 2018 combined earnings conference call for NextEra Energy and NextEra Energy Partners.

With me this morning are Jim Robo, Chairman and Chief Executive Officer of NextEra Energy; John Ketchum, Executive Vice President and Chief Financial Officer of NextEra Energy; Armando Pimentel, President and Chief Executive Officer of NextEra Energy Resources; and Mark Hickson, Executive Vice President of NextEra Energy, all of whom are also officers of NextEra Energy Partners, as well as Eric Silagy, President and Chief Executive Officer of Florida Power & Light Company.

We'll provide some (inaudible) and we'll then turn the call over to John for a review of our fourth quarter and full-year results. We will be making forward-looking statements during this call. Based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements, if any of our key assumptions are incorrect or because of other factors discussed in today's earnings news release, in the comments made during this conference call, in the Risk Factors section of the accompanying presentation, on our latest reports and filings with the Securities and Exchange Commission, each of which can be found on our websites, nexteraenergy.com and nexteraenergypartners.com.

We will not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure.

With that, I will turn the call over to Jim.

James L. Robo -- Chairman and Chief Executive Officer

Thanks, Matt and good morning everyone. As John will detail later in our -- in the call, 2018 was a terrific year for both NextEra Energy and NextEra Energy Partners, by successfully executing on our plans at both FPL and Energy Resources. NextEra Energy was able to achieve our target 2018 adjusted EPS of $7.70 , an increase of approximately 15% over our 2017 results.

Dating back to 2005, we've now delivered compound annual growth in adjusted EPS of over 8.5%, which is the highest among all Top 10 power companies, who have achieved on average compound annual growth of roughly 3% over the same period.

We delivered a total shareholder return of over 14% in 2018, outperforming the S&P 500 by nearly 19% and the S&P 500 Utilities Index by more than 10%. Since 2005, we've outperformed 86% of the S&P 500 and 100% of the other companies in the S&P 500 Utilities Index, while continuing to outperform both indices in terms of total shareholder return on a one, three, five, seven and 10-year basis. We are, once again, honored to be named for the 12th time in 13 years, Number 1 in the electric and gas utilities industry on Fortune's list of World's Most Admired Companies, and to be among the Top 25 of Fortune's 2018 Change the World list.

During 2018, FPL successfully executed on its ongoing capital plan, including a continuation of one of the largest solar expansions ever in the US, and achieved its O&M efficiency targets to further improve its already best-in-class customer value proposition. As a result of continued smart investments to benefit our customers, FPL's typical residential bill is more than 30% below the national average, the lowest of all 54 electric providers in the State of Florida and nearly 10% below the level it was in 2006. In addition to low bills, FPL delivered its best ever service reliability performance in 2018 and was recognized for the third time in four years, as being the most reliable electric utility in the nation.

Throughout the year, we were fortunate to be in a position to assist other utilities across the country in their recovery from natural disasters and we remain grateful for the support that others have given us over the years. After a nearly 10-year process, last month FPL closed on the purchase of the City of Vero Beach's municipal electric system. We look forward to extending FPL's value proposition to Vero Beach's approximately 35,000 customers, while also generating significant long-term savings for FPL's existing customers. The benefit to both new and existing customers is reflective of FPL's collaborative efforts with city, local and regional leaders, as well as other state authorities to find the best outcome for all stakeholders.

Earlier this month, we were pleased to close on the purchase of Gulf Power and excited to welcome our new colleagues to the NextEra Energy family. We've now successfully completed all three transactions with Southern Company that we announced in the middle of last year. The acquisitions are an excellent complement to our existing operations and further expand NextEra Energy's regulated business mix through the addition of attractive electric and natural gas franchises. By executing on the same long-term strategy that we've deployed at FPL, we expect the acquisitions to benefit customers, shareholders and the Florida economy.

The Energy Resources team also continued its long track record of strong execution in 2018. The renewables origination success was particularly strong, as the team added approximately 6,500 megawatts including storage and repowering to our backlog over the past year. This represents the most successful origination year in our history and is nearly twice as many megawatts as we originated in 2017, our prior record year.

Our ongoing renewable origination success results from operating in what we believe to be the best renewables development environment in our history and our ability to leverage Energy Resources' competitive advantages. These competitive advantages include our best-in-class development skills, strong customer relationships, purchasing power, best-in-class construction expertise, resource assessment capabilities, strong access to and cost of capital advantages and the ability to combine wind, solar, and battery storage into integrated nearly firm low-cost products.

During the year, we were pleased to receive the IRS started construction guidance on the solar ITC, which we believe positions us well for substantial solar and storage growth well into the next decade. In 2018, more than 40% of the solar projects that were added to our backlog included a battery storage component highlighting the beginning of the next phase of renewables development that pairs low cost wind and solar energy with a low cost battery storage solution. With continued technology improvements and cost declines, we expect that without incentives, wind is going to be a $0.02 to $0.025 per kilowatt hour product and solar is going to be a $0.025 to $0.03 per kilowatt hour product early in the next decade.

Combining these extremely low costs with a $0.05 to $0.75 (ph) adder for a four-hour storage system will create a nearly firm renewable generation resource that is cheaper than the operating cost of coal, nuclear and less fuel-efficient oil and gas-fired generation units. We continue to believe that this will be massively disruptive to the nation's generation fleet and creates significant opportunities for renewables growth well into the next decade. Consistent with our focus on growing our rate regulated and long-term contracted business operations, during the fourth quarter NextEra Energy Transmission announced an agreement to acquire Trans Bay Cable, a 53-mile high-voltage direct current underwater transmission cable system with utility rates set by FERC which provides approximately 40% of San Francisco's daily electric power needs. Subject to regulatory approvals, the approximately $1 billion acquisition, including the assumption of debt is expected to close later this year and to be immediately accretive to earnings. The proposed acquisition combined with the Midcontinent Independent System Operator selection of NextEra Energy Transmission to develop the approximately 20 miles single circuit 500 KV Hartburg-Sabine junction transmission line in East Texas furthers our goal of creating America's leading competitive transmission company.

In addition to successfully growing our regulated operations, both organically and through acquisitions during 2018, we further strengthened Energy Resources' existing portfolio during the year. In December, the Connecticut Department of Energy and Environmental Protection selected approximately 20% of the Seabrook nuclear plants generation and 80 megawatts of new solar projects which are not yet included in our backlog for long-term contracts. By operating one of the top-performing nuclear plants in the nation, Energy Resources expects to provide significant amounts of carbon free energy at prices generally in line with current forward curves, while generating attractive shareholder returns.

As a result, Seabrook's contract pricing is expected to be roughly 50% lower than the cost of offshore wind, generating significant savings for Connecticut customers over the eight-year contract term. The Seabrook award complements Energy Resources' exited the merchant business, which we began back in 2011 and essentially completed in 2016 with the sale of our Forney, Lamar and Marcus Hook natural gas generation assets. Excluding Seabrook, the remaining merchant generation assets contribute less than 1% of NextEra Energy's consolidated adjusted EBITDA. Going forward, we expect this contribution to decline as the focus remains on regulated and long-term contracted opportunities in renewables, natural gas pipelines, and regulated transmission.

As always, we will continue to opportunistically evaluate recycling capital through sales of non-strategic assets in our portfolio, including the remaining fossil generation assets to fund the additional growth of the long-term contracted businesses. As a result of increasing the expected adjusted earnings contribution from rate regulated businesses to roughly 70% and the steps that we've taken to further derisk the Energy Resources portfolio. S&P announced earlier this month that they reside -- revised their assessment of NextEra Energy's business risk profile upward from strong to excellent. As a result of this improvement, S&P reduced NextEra Energy's FFO-to-Debt downgrade threshold from 23% to 21%. This follows Moody's announcements last year that with the expansion of the Company's regulated operations to roughly 70% following the Gulf Power transaction, NextEra Energy's CFO pre-working capital-to-debt downgrade threshold would be reduced from 20% to 18%. At these revised rating agency thresholds and following some utilization of balance sheet capacity for the Trans Bay transmission acquisition, we now expect to maintain $billion to $6 billion of excess balance sheet capacity through to 2021.

While we have multiple alternatives for utilization, we expect to use approximately $2 billion of this capacity in the near term to support additional regulated capital investments at FBL. Consistent with the significant incremental smart investment opportunities that exist at FPL, last week we announced FPL's groundbreaking 30-by-30 plan to install more than 30 million solar panels by 2013, resulting in an incremental 10,000 megawatts of solar projects versus what is in operation at FPL today. We will give further details on these and other potential investments, which are mostly expected to help maintain our long-term adjusted EPS compound annual growth rate beyond 2021 at our Investor Conference, which we plan to hold on June 20th in New York City.

Following the strong results from 2018, I continue to believe that we have one of the best organic opportunity sets in execution track records in the industry. I remain as enthusiastic as ever about our long-term prospects. And based on the strength and diversity of our underlying businesses, I will be disappointed if we were not able to deliver financial results at or near the top end of our 6% to 8% compound annual growth rate range through 2021, plus the expected yield accretion from the Florida transactions, while at the same time maintaining our strong credit ratings.

Let me now turn to NEP, which also had a terrific year of execution in 2018. As John will describe later in the call, NEP successfully delivered on its growth objectives for adjusted EBITDA, CAFD and LP distributions. During the year we recycled the proceeds from the sale of NEP's Canadian portfolio into a higher yielding US portfolio that benefits from a more favorable tax position. As a result of this accretive transaction, NEP extended its expectations for 12% to 15% per year DPU growth by one additional year to 2023. The 1.4 gigawatt renewable portfolio that was acquired from Energy Resources, further enhanced the diversity of NEP's existing portfolio and was financed through a combination of the Canadian asset sale proceeds and a $750 million convertible equity portfolio financing with BlackRock. The financing demonstrates NEP's ability to excess -- to access additional low cost sources of capital to finance its growth. And with the right to convert a minimum of 70% of the portfolio financing into NEP units issued at no discount, the transaction further reduces NEP's equity needs going forward.

NEP grew the LP distribution by 15% year-over-year and delivered a total unitholder return of approximately 4% in 2018, which is on the heels of a total unitholder return of over 75% the year prior. NEP outperformed both the S&P 500 and the other yield curves by 7% on average, and its total unitholder return was more than 15% higher than the Alerian MLP index. I continue to believe that the combination of NEP's growth visibility along with its flexibility to finance that growth, offer unitholders an attractive invest -- offer unitholders an attractive investor value proposition. For these reasons, NEP is well positioned to continue executing on its growth objectives and delivering strong performance going forward.

Before turning the call over to John, I'd like to announce some important organizational changes. Armando Pimentel, President and Chief Executive Officer of NextEra Energy Resources and President and a member of the Board of Directors of NextEra Energy Partners, will retire from each of these positions on March 1 of this year, as part of a planned leadership succession process that began when Armando shared his plans with me more than a year ago. John Ketchum, currently Executive Vice President and Chief Financial Officer of NextEra Energy, will replace Armando as President and Chief Executive Officer at NextEra Energy Resources. As part of John's new responsibilities, he will continue to serve as a member of the Board of Directors of NEP and will be appointed President of NextEra Energy Partners. Rebecca Kujawa, currently Vice President of Business Management in NextEra Energy Resources, will succeed John as Executive Vice President and Chief Financial Officer of NextEra Energy. Rebecca will also become a member of the Board of Directors of NEP. Each of these changes will become effective on March 1 of this year.

Armando has been an enormous contributor to NextEra Energy's success during his more than 10 years with the company, helping to build an industry-leading business during his tenure as CEO of Energy Resources. His leadership, his commercial judgment, his financial discipline, have all guided Energy Resources through a period of truly unprecedented growth and financial success. Armando's contribution set the Company on a path to become what it is today, the world's leading renewable energy company. He's been a great friend, colleague and a truly valued counselor to me personally. And it's an understatement to say I'll miss him. But I am also excited for Armando and what will come next for him and his family in retirement.

With regard to John's promotion, I've had the chance to work closely with John for more than 16 years as he has successfully progressed through a variety of different roles in our Company. We're fortunate to have a person of his capability, vision and experience. He's an exceptional leader who's emerged as one of the premier CFOs in our sector, and I have tremendous faith that John is the ideal successor to lead the Energy Resources team into the future due to his strong financial acumen, knowledge of the sector, and passion for building a world-leading energy company.

Likewise, Rebecca has distinguished herself as a well-rounded executive with a proven track record of execution, outstanding finance and commercial skills and an unparalleled understanding of NextEra Energy -- of the NextEra Energy enterprise. She's been instrumental in helping Armando lead Energy Resources and develop our strategy for NEP over the last several years and here in -- her innovative, analytical and strategic mindset will serve us well in her new role. I'm very happy to have Rebecca as our new Chief Financial Officer.

I'll now turn the call call over to Armando, who'd like to make some personal remarks.

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Thank you, Jim. First, I want to thank Jim for providing me the opportunity to lead Energy Resources for the 7.5 years. And I want to thank those of you on the phone today, who I've had the privilege of meeting and interacting with, since I began at NextEra Energy in 2008. I thank you for the interactive dialog and the opportunity to continue to tell our story. And today, there is no doubt that Energy Resources is not only the largest developer, operator and owner of renewable energy in the world, but also it's most profitable and innovative. And as I tell our employees and customers, I believe we are just getting started.

I strongly believe that the renewable energy opportunity is actually just beginning. The combination of energy storage with wind and solar is a revolution, which will expand the opportunities for renewables and is very exciting, and profoundly comfortable in the continued success of Energy Resources, NextEra Energy Partners and NextEra Energy. I want to thank all of our employees at NextEra Energy for providing me the opportunity to work alongside them. I have learned and laughed much over the years and will miss the innovative fast-paced environment in which we work.

I have no concrete plans as of now, but I am excited about pursuing new adventures and honing old skills. At the very least, retirement will allow me to pursue one of my great passions, fishing. Thanks again, to all of you who have helped guide me and our Company successfully over the years. Our Company is in terrific shape and I congratulate and applaud John and Rebecca on their new roles. Well deserved.

I will now turn the call over to John.

John Ketchum -- Executive Vice President Finance and Chief Financial Officer

Thank you, Armando and Jim. Let's now turn to the detailed results beginning with FPL. For the fourth quarter of 2018, FPL reported net income of $407 million or $0.85 per share, up $0.01 per share compared to FPL's adjusted earnings in the prior year period. For the full year 2018, FPL reported net income of $2.2 billion or $4.55 per share, an increase of $0.46 per share versus FPL's adjusted earnings in 2017.

Regulatory capital employed increased by approximately 12.4% for 2018 and was a principal driver of FPL's adjusted net income growth of 12.5% for the full year. FPL's capital expenditures were approximately $1.5 billion in the fourth quarter, bringing its full year capital investments to a total of roughly $5.1 billion. FPL's reported ROE for regulatory purposes was 11.6% for the 12 months ended December 31, 2018, which is at the upper end of the allowed band of 9.6% to 11.6% under our current rate agreement.

During the fourth quarter, we restored an additional $240 million of reserve amortization leaving FPL with a year-end 2018 balance of $541 million. We continue to expect that FPL will end 2020 with a sufficient amount of reserve amortization to operate under the current base rate settlement agreement for up to two additional years, creating further customer benefits by potentially avoiding a base rate increase in 2021 and perhaps 2022. Before moving on, let me now take a moment to update you on some of our key capital initiatives at FPL. During 2018 FPL completed construction on schedule and on budget for the first eight 74.5 megawatt solar energy centers developed under the Solar Base Rate Adjustment or SoBRA mechanism of the rate case settlement agreement. In 2018, we also deployed the first two projects under FPL's 50 megawatt battery storage pilot program, pairing battery systems with existing solar projects and highlighting FPL's innovative approach to further enhance the diversity of its clean energy solutions for customers.

The next 300 megawatts of solar projects being built under the SoBRA mechanism remain on budget and on track to begin providing cost effective energy to FPL customers in early 2019. To support the significant solar expansion that FPL is leading across Florida, we have secured sites that could potentially support more than 7 gigawatts of future projects. Beyond solar, construction on the approximately 1750 megawatt Okeechobee Clean Energy Center remains on budget and on schedule to enter service in the middle of this year.

Additionally, the roughly 1200 megawatt Dania Beach Clean Energy Center received Siting Board approval during the quarter to support its projected commercial operation date in 2022. We continue to expect that FPL's ongoing smart investment opportunities will support a compound annual growth rate in regulatory capital employed, net of accumulated deferred income taxes of approximately 9% from the start of the settlement agreement in January 2017 through at least December 2021, while further enhancing our customer value proposition.

The economy in Florida remains healthy. The current unemployment rate of 3.3% remains below the national average and at the lowest levels in a decade. Florida's consumer confidence level remains near 10-year highs. The real estate sector also continues to show strength with new building permits remaining at healthy levels and the Case-Shiller Index for South Florida home prices up 4.8% from the prior year.

FPL's fourth quarter retail sales increased 4% from the prior year comparable period. We estimate that weather related usage per customer contributed approximately 0.6% to this amount. On a weather normalized basis, fourth quarter sales increased 3.4% with positive contributions from both weather normalized usage per customer and ongoing customer growth, including the addition of Vero Beach's customers. For 2018, we estimate that FPL's retail sales on a weather-normalized basis increased by 2.6%. Continued customer growth and an estimated 1.7% increase in weather-normalized usage per customer, both contributed favorably. While we are encouraged by the growth and underlying usage in 2018 which was a consistent benefit during all four quarters, as we have often discussed, this measure can be volatile and we are not yet ready to draw any firm conclusions about long-term trends. We will continue to closely monitor and analyze underlying usage and we'll update you on future calls.

Let me now turn to Energy Resources which reported fourth quarter 2018 GAAP earnings of $263 million or $0.55 per share. Adjusted earnings for the fourth quarter were $317 million or $0.66 per share. For the full year Energy Resources reported GAAP earnings of $4.66 billion or $9.75 per share and adjusted earnings of $1.46 billion or $3.05 per share. In the fourth quarter Energy Resources contribution to adjusted earnings per share increased by $0.18 from the prior year comparable period. Positive contributions from new investments, customer supply and trading our gas infrastructure business including existing pipelines and the reduction in the corporate federal income tax rate all supported the strong year-over-year growth. These favorable contributions were partially offset by lower contributions from our existing generation assets as a result of particularly poor fleetwide wind resource, which was the lowest fourth quarter on record over the last 30 years and higher interest in corporate expenses due to growth in the business.

Energy Resources full-year adjusted earnings per share contribution increased $0.45 or approximately 17% versus 2017. For the full year, contributions from the new investments declined by $0.04 per share due in part to the expected smaller than usual 2017 renewable bill. For 2019 and beyond we expect meaningful growth from new investments as we continue to execute on our renewables development backlog. Increased PTC volume from approximately 1600 megawatts of repowered wind projects that were commissioned in 2017 helped to increase contributions from existing generation assets by $0.10 per share. Contributions from our gas infrastructure business, including existing pipelines, increased by $0.17 per share year-over-year. As expected, the reduction of corporate federal income tax rate was accretive to Energy Resources increasing adjusted EPS by $0.45 compared to 2017.

All other impacts reduced results by $0.23 per share primarily as a result of higher interest and corporate expenses driven largely by increased development activity to support the favorable renewables development environment. Additional details are shown on the accompanying slide.

In 2018, Energy Resources continued to advance its position as a leading developer and operator of wind, solar and battery storage projects commissioning nearly 2700 megawatts of new renewable projects in the US including an additional 900 megawatts of repowered wind.

Since the last call, we have added 1791 megawatts of renewable projects to our backlog including 680 megawatts of wind, 797 megawatts of solar and 215 megawatts of battery storage, all of which will be paired with new solar projects. Included in the solar megawatts, we added to backlog this quarter is a 150 megawatt solar build-own-transfer project with a 10-year O&M agreement that will allow the customer to leverage Energy Resources best-in-class operating skills while providing meaningful ongoing revenue through the contract term.

During the quarter Energy Resources signed an additional 99 megawatts of wind repowering and successfully commissioned approximately 600 megawatts of repowering projects. For 2017 and 2018, this brings the total repowering projects placed in service to roughly 2500 megawatts near the top end of the previously outlined range for this period.

We continue to expect to be in the upper half of the $2.5 billion to $3 billion in total capital deployment for repowering for 2017 through 2020. Following the record origination year in 2018 and with nearly two years remaining in the development period, we are now within the previously outlined 2017 to 2020 ranges for US wind, solar and wind repowering. For the post 2020 period, our backlog is already nearly 2000 megawatts placing us well ahead of our historical origination activity at this early stage.

The accompanying slide provides additional detail on where our renewables development program now stands. Beyond renewables, we completed a construction of approximately 175 miles of the mountain valley pipeline during 2018. As planned, MVP is continuing with its scaled back construction efforts for the winter while we continue to target our previously announced full in-service date for the pipeline during the fourth quarter of 2019 and a revised overall project cost estimate of $44.6 billion. We also continue to work through the project's outstanding legal challenges and to closely monitor developments related to the Atlantic Coast Pipeline and the current government shutdown as the outcome of any one of these issues could impact MVP's project schedule and cost estimate.

We also continue to evaluate mitigation alternatives to address potential adverse outcomes should they arise. MVP's expected annual contribution to NextEra Energy's ongoing adjusted EPS is approximately $0.07 to $0.09. We do not expect any material adjusted earnings impacts nor any change in NextEra Energy's financial expectations as a result of the ongoing challenges. We'll provide further updates as those proceedings evolve.

Turning now to the consolidated results for NextEra Energy, for the fourth quarter of 2018 GAAP net income attributable to the NextEra Energy was $422 million or $0.88per share. NextEra Energy's 2018 fourth quarter adjusted earnings and adjusted EPS were $718 million or $1.49 per share respectively. For the full year 2018, GAAP net income attributable to NextEra Energy was $6.64 billion or $13.08 per share. Adjusted earnings were $3.67 billion or $7.70 or per share, reflecting growth of 15% off our 2017 adjusted EPS including approximately $0.45 benefit from lower federal income taxes.

For the Corporate and Other segment adjusted earnings for the full year increased $0.09 per share compared to 2017 primarily due to lower interest and certain favorable tax items. We continue to expect NextEra Energy's adjusted EPS compound annual growth rate to be in a range of 6% to 8% through 2021 off our 2018 adjusted EPS of $7.70 plus accretion of $0.15 and $0.20 in 2020 and 2021 respectively from the Florida acquisitions. For 2019, we continue to expect our adjusted EPS to be in the range of $8 to $8.50. From 2018 to 2021, we expect that operating cash flow will grow roughly in line with our adjusted EPS compound annual growth rate range. We are closely following the recent developments with Pacific Gas and Electric. Projects directly affected by the potential PG&E bankruptcy have an expected annual adjusted EPS contribution of roughly $0.13 to $0.15 for NextEra Energy. Regardless of the outcome of PG&E's anticipated bankruptcy proceedings, we expect to achieve NextEra Energy's adjusted EPS expectations that I just outlined and we'll be disappointed if we are not able to deliver growth at or near the top of our 6% to 8% compound annual growth rate range off our 2018 base of $7.70 plus the expected deal accretion from the Florida transactions.

We continue to expect to grow our dividends per share 12% to 14% per year through at least 2020 off a 2017 base of dividends per share of $3.93. As always our expectations are subject to the usual caveats including, but not limited to normal weather and operating conditions. Let me now turn to NEP which also had a strong year of operational and financial performance in 2018. Yesterday the NEP board declared a quarterly distribution of $46.50 per common unit or $1.86 per unit on an annualized basis, up 15% from the comparable quarterly distribution a year earlier and at the top end of the range we discussed going into 2018. For the full-year 2018, adjusted EBITDA and CAFD increased to 18% and 36% respectively, primarily as a result of portfolio growth.

In addition to meeting NEPs growth objectives with the acquisition from Energy Resources, during 2018, we were also pleased to announce the execution of a long-term contract that enables an expansion investment in the Texas pipelines. The opportunity, which is subject to regulatory approvals is expected to be in service during the fourth quarter of 2020, demonstrates the organic growth potential of NEP's underlying portfolio.

Beyond the attractive low-cost convertible portfolio equity financing of BlackRock, NEP took additional steps to further enhance its financial -- financing flexibility during 2018. In the fourth quarter, NEP entered into an additional $1 billion interest rate hedge agreement to help mitigate interest rate volatility on future debt issuances. NEP's hedge agreement has a fixed rate of approximately 3.95% and can be flexibly utilized at any date until December 11th, 2028. The swap is incremental to the $5 billion hedge agreement that we announced last year, providing significant protection against interest rate risk and NPE executes on it's long-term growth plan -- as NEP executes on its long-term growth plan.

Additionally, during 2018 we successfully raised approximately $85 million through the sale of roughly 1.8 million (ph) common units under NEP's ATM program. Going forward, we will continue to flexibly seek opportunities to use the ATM program depending on market conditions and other considerations.

Now let's look at the detailed results. Fourth quarter adjusted EBITDA was $165 million and cash available for distribution was $44 million, a decrease of $35 million and $33 million from the prior-year comparable quarter, respectively. The decline was primarily driven by the sale of the Canadian portfolio earlier in the year with those assets not replaced until the late December closing on the 1.4 gigawatt acquisition from Energy Resources. For the full-year 2018, adjusted EBITDA and CAFD were $881 million and $339 million, up 18% and 36% respectively, primarily driven by growth of the underlying portfolio.

Existing projects benefited from increased contributions from Texas pipelines versus the prior year. For adjusted EBITDA, this benefit was offset by the year-over-year reduction in the pre-tax value of NEP's tax credits as a result of the decline in the federal income tax rate. This change has no income -- no impact on CAFD. Cash available for distribution from existing projects also benefited from reduced debt service, which was roughly offset by higher corporate level interest expense. As a reminder, these results include the impact of IDR fees, which we treat as an operating expense. Additional details are shown on the accompanying slide.

For NEP, absent any impact from a PG&E bankruptcy filing, our December 31, 2018 run rate expectations for adjusted EBITDA of $1 billion to $1.15 billion and CAFD of $360 million to $400 million, are unchanged, reflecting calendar year 2019 expectations for the portfolio with which we ended the year. Our previously announced December 31, 2019 run rate expectations for adjusted EBITDA of $1.2 billion to $1.375 billion and CAFD of $410 million to $480 million, are also unchanged. Our expectations are subject to our normal caveats and include the impact of anticipated IDR fees, as we treat these as an operating expense.

From an updated base of our fourth quarter 2018 distribution per common unit at an annualized rate of a $1.86, we continue to see 12% to 15% per year growth in LP distributions as being a reasonable range of expectations through at least 2023. We expect the annualized rate of the fourth quarter 2019 distribution that is payable in February 2020, to be in a range of $2.08 to $2.14 per common unit. NEP expects to be able to manage through the impacts of the anticipated PG&E bankruptcy and to achieve the growth expectations that I just outlined. As we have previously disclosed, the 420 megawatts of projects that are contracted with PG&E, represent 15% to 18% of NEP's expected year-end 2018 run rate cash available for distribution.

As a result of the PG&E Board of Directors authorizing the commencement of a bankruptcy filing, we believe an event of default has likely occurred under the Genesis financing. The administrative agent for the Desert Sunlight 300 financing has notified and said an event of default has occurred under those agreements, which we dispute. And they are currently withholding the January distribution. For any financing where an event of default is determined to have occurred, cash distributions can be restricted and other remedies could be exercised, including acceleration of the debt. Additionally, due to provisions in the financings, an event of default under the Desert Sunlight 300 financing, can prevent distributions from Desert Sunlight 250, which is contracted with SCE.

We expect the combination of Desert Sunlight 250 and the PG&E projects to contribute roughly 18% of NEP's year-end 2019 run rate CAFD. As we execute on NEP's growth strategy, we expect this to further decline over time and that the PG&E projects and Desert Sunlight 250, will not represent a significant percentage of NEP's 2023 cash available for distribution. For projects where cash distributions are restricted, we expect that over time these funds will go toward paying down the principal on existing financings, which would potentially result in more distributable cash flows to NEP in the future. In each of these projects, we are reviewing our alternatives and we'll pursue all options to protect our interests, including vigorously defending our contracts and working with key stakeholders of each financing.

Even in a worst-case scenario, where we receive no further contributions from projects that are contracted with PG&E or Desert Sunlight 250, we continue to expect that NEP will achieve its annual 12% to 15% growth and distributions per unit through 2023 without the need to sell common equity until 2020 at the earliest, other than modest at-the-market issuances. We are pleased with NEP's strong performance in 2018 and believe it continues to provide a best-in-class investor value proposition. With the flexibility to grow in three ways, acquiring assets from Energy Resources, organically or acquiring assets from other third parties, NEP has clear visibility to support its growth going forward.

Following a new record renewables origination year by Energy Resources and the continued strength of the best renewables development environment in our history, NEP's growth visibility further improved in 2018. Additionally, NEP's cost to capital and access to capital advantages further improved over the past year providing flexibility to finance its growth over the long term. When NEP's growth potential and financing flexibility are combined with its favorable tax position and enhanced governance rights, we believe NEP is well-positioned to meet its financial expectations and we look forward to delivering on NEP's strategic and growth initiatives in 2019 and beyond.

That concludes our prepared remarks. And with that, we will open the line for questions.

Questions and Answers:

Operator

Speaker O-Operator

Thank you. We will now begin the question-and-answer session. (Operator Instructions) And we'll go first to Stephen Byrd of Morgan Stanley.

Stephen Byrd -- Morgan Stanley -- Analyst

Hi, good morning.

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Hi. Good morning, Stephen.

Stephen Byrd -- Morgan Stanley -- Analyst

Armando, congratulations on your retirement, and John and Rebecca congratulations on your new role, all very well deserved.

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Thank you, Stephen.

Stephen Byrd -- Morgan Stanley -- Analyst

I wanted to just talk, as you can imagine, about California for a minute. If all of the project debt essentially withheld cash to the -- arguably to the extent that they were -- would be permitted, I wanted to make sure I was clear, how much CAFD would be restricted? You mentioned 18% related to several projects, but I wanted to check if every single piece of debt relating to PG&E sort of exercised their cash -- cash trap right. What amount of CAFD would be impacted?

John Ketchum -- Executive Vice President Finance and Chief Financial Officer

Yeah, so again, it would comprise roughly 18% of our run rate CAFD for 2019. We have included a page in our investor materials that details -- page 41, page 41 that details the CAFD from each of these projects totals about $90 million.

Stephen Byrd -- Morgan Stanley -- Analyst

Understood.

John Ketchum -- Executive Vice President Finance and Chief Financial Officer

So let's go back though to what I just said, which is that first of all, even if all of that cash is trapped, we expect to be able to meet our financial expectations, 12% to 15% growth in distributions per unit through 2023. We expect we will not have a need to issue common equity until 2020 at the earliest. So our financial expectations are not impacted by any means, while the second, the impact of PG&E and SCE cash flows is going to diminish over time. So by the time, we get to the end of the period of our financial expectations, the cash flows from these projects is not going to be significant -- a significant contributor to the overall CAFD.

And then, I think you have to take a look too Stephen at the -- at what is happening in California. I mean, obviously, we are not going to sit on our heels, we're going to pursue all avenues with our note holders to try to -- to try to free up that cash and we'll work vigorously to do that as I said in the prepared remarks.

Stephen Byrd -- Morgan Stanley -- Analyst

That all makes sense. And John, in terms of any exposure to other California utilities, I'm thinking of the Edison International and Sempra, just wanted to check both at NEP and NextEra, would you mind just speaking briefly to your other California exposure?

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Yeah. So on our on our other California exposure with SCE, I mean, right now we don't have any because there's -- none of those financings are in default other than the SCE contract that I mentioned which is about 250 megawatts on Desert Sunlight, because that's part of a portfolio financing. But again, the impacts of that are included in the numbers that I gave you earlier. So the 250 impact is included in the $0.13 to $0.15 at NextEra Energy. It is also included in the roughly 18% of total CAFD for 2019.

Stephen Byrd -- Morgan Stanley -- Analyst

Okay. But do you have any CAFD exposure not in default, but does -- where are the offtaker is a subsidiary of either Edison International or Sempra?

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

No. Zero.

Stephen Byrd -- Morgan Stanley -- Analyst

Okay.

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

At NEP. At NEP...

Stephen Byrd -- Morgan Stanley -- Analyst

Okay, great. Just wanted to check...

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Zero.

Stephen Byrd -- Morgan Stanley -- Analyst

At NEP? Okay. And at NextEra, is that significant or is it relatively small?

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

It's relatively small. I mean the contributions that we would have from SCE contracts are roughly $0.08 and that includes the Desert Sunlight 250. So without -- without it, it's about $0.06, so small.

Stephen Byrd -- Morgan Stanley -- Analyst

Understood. Sorry for all the questions on California, maybe just one last one. You filed at Burke to sort of secure your legal rights under the contracts. Would you mind just to kind of briefly talk in through your legal arguments around ensuring that you protect your rights under your contracts?

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Yeah. I mean the bottom line is, we think a majority those contracts have (inaudible) provisions and that these contracts are in the public interest and that the Federal Power Act pre-empts what the bankruptcy court can do and if -- and they forecast the final say on assumption or rejection.

Stephen Byrd -- Morgan Stanley -- Analyst

That's very good. That's all I have. Thank you very much.

Operator

We will now go to our next question and that will come from Steve Fleishman of Wolfe Research.

Steve Fleishman -- Wolfe Research. -- Analyst

Yeah. Good morning. So just -- first on the NEP plan. I assume your -- embedded in there you're assuming that you can continue to get financing other than equity I assume, including some of the -- like private financings, converts and such that you've gotten in the past. How do you feel about the ability to get those with this California uncertainty?

John Ketchum -- Executive Vice President Finance and Chief Financial Officer

First of all, on the finances like the BlackRock financing, still feel good about our ability to be able to execute against those types of financings, and again, we also have a lot of debt capacity at NPE that we can always fall back on as well.

Steve Fleishman -- Wolfe Research. -- Analyst

Okay. And then just separate question, off topic. Could you update your interest -- thoughts and interest in Santee Cooper?

James L. Robo -- Chairman and Chief Executive Officer

Yeah, thanks Steve. This is Jim. We -- we did put a proposal in to acquire Santee Cooper. I think I've been very clear that we have been interested in pursuing Santee Cooper over the last 18 months or so. And we did put a proposal in to -- to acquire it and we look forward to the next steps of the process that the committee is going to be going through.

Steve Fleishman -- Wolfe Research. -- Analyst

Do you have any idea when you'll get an answer?

James L. Robo -- Chairman and Chief Executive Officer

I think this is a process that ultimately has to -- if the legislature decides to sell Santee Cooper, it's going to have to actually pass a law to do so essentially. And the legislative session ends at the end of May or June in that time period. So it's going to play out over the next several months is the bottom line, Steve.

Steve Fleishman -- Wolfe Research. -- Analyst

Armando, best to you. Thank you.

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Thanks, Steve.

Operator

And now we will go to Julien Dumoulin-Smith of Bank of America Merrill Lynch.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Hey good morning. Congrats, Armando, can you hear me?

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Yeah. Thanks, Julien.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Good. Well, just one quick clarification on the FERC strategy under NEP and then I'll move away from it, but just if there is indeed some kind of stay, how does that impact the technical default and the possibility of distribution? So I want to clarify that, or cash and PG&E for that matter.

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Yeah, from a FERC standpoint, if there were a FERC -- well, first of all, if FERC were to grant the relief that we're seeking by the end of the week, I mean, I think it just would grant FERC the final say in what happens to the contract. So I don't think it really has any impact on the status of the existing finances.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Got it. Okay, fair enough. Excellent. And then I just want to turn back to FPL real quickly, specifically on the last call, you talked about having, shall we say, adequate reserve amortization. You also talk about usage trends et cetera and the ability to potentially avoid base rate increases in '21 and '22. Where does that stand now? How, if at all, is that impacted by some of the latest events? Just curious on how you're positioning FPL into the longer term here.

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Yeah, I don't think it's impacted by any of the current events. We feel very good, very good about our position in front of the OPC, if that Julian, was what you were referring to as other events. We've ended the year...

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Or maybe being more specific, were you expecting to pen something more formal about further rates there?

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Well, here's where we are right now. We have $540 million of surplus and in the year we have -- we believe and expect to have enough surplus to potentially stay out of a rate case for '21 and '22. We will make those strategic rate case decisions later. But we have a lot of flexibility and that flexibility is very good for Florida customers because the longer we are able to stay out, the longer period of time that, that bills stay where they are and they don't see a bill impact from another rate case.

James L. Robo -- Chairman and Chief Executive Officer

Hey, Julien, this is Jim. I think you can expect us to give you all -- some more thoughts on that front in the June investor conference.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Excellent. And then maybe Jim, this is a quick question to your direction, but as you think kind of conceptually, especially given the commitments from the last Analyst Day around midstream, potentially some of the latest developments you've already alluded to around renewables, especially some of the RPF expansions that might be coming in the next six months prior to the June Analyst Day, could you give us a little bit of your latest thought process around your future investment prospects just a little bit more holistically?

James L. Robo -- Chairman and Chief Executive Officer

Yeah, sure. I mean when you look at our capital investment plans, I think they are over $12 billion this year. When you look at what we're doing at FPL Gulf and Energy Resources combined, something in that range. We are as of -- as of the year before last, we don't have the details yet on last year, we were the fourth largest investor of capital in the United States in any industry. Only AT&T, Verizon and Amazon invested more in this country than we did in terms of capital investment. And we are going to continue to do what we have done for more than a decade, which is invest smart capital at FPL to improve the value proposition for customers. And we're going to -- we're very excited about and we'll have more to say about what we're doing at Gulf in our June meeting, but we've hit the ground running, very excited about what we're doing in terms of what investment prospects there are on the Gulf front and we're moving aggressively forward on that, pretty much on day one.

And at Energy Resources, it is the best renewable environment that we've ever seen and we are going to continue to invest in renewables going forward. And as we see pipeline opportunities, contract and pipeline opportunities, we'll continue to invest in those as well. So, I don't think you should expect a big change in our thinking in June. I think you'll just see us frankly roll forward our vision for the amount of investment and the amount of customer improvement that we're going to bring to our customers, as well as the amount of what we're gonna do in terms of earnings going forward.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

I'll leave it there. Thank you very much.

John Ketchum -- Executive Vice President Finance and Chief Financial Officer

Thanks, Julien.

Operator

We will now go to Greg Gordon of Evercore ISI.

Greg Gordon -- Evercore ISI -- Analyst

Congratulations to all three of you, goes without saying. You're all terrific at your jobs. And Armando, someone asked me to ask you if you could get -- circle back with people and tell us where you like to fish, that would be good. Now that you're going to have (multiple speakers).

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

That's coming.

Greg Gordon -- Evercore ISI -- Analyst

A couple of questions. Can you just go back over what you said about the levelized cost of energy for battery with storage, and what I'm particularly interested other than just a restatement of that is, what delivery year you see that crossover happening on sort of a large enough scale to tip this sort of disruptive transition that you're you're talking about?

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Yes. So, what we covered in Jim's remarks, we'll start with the wind. So wind, we are expecting to be right around $20, $25 a megawatt hour. I'd kind of put that wraps and PTC helping there, this is a no incentive look. So call it when those incentives expire more toward the middle of the decade, that 2024 time frame. So $20, $25 megawatt for wind and we think batteries are going to be about a $0.05 to $0.075 adder and so, that's how we were able to -- I'm sorry, per megawatt. That's how we're able to get to the ranges that Jim provided for wind. So just take the $20 plus the $20, $25 add on $0.05 to $0.075 (ph) for battery storage.

For solar, don't forget we have the solar ITC at 30% through the end of 2023. And so when those ITCs go away and they don't ever go away, right. They go from 30% to 10%, we are expecting that we -- solar given how quickly panel costs are coming down, balance of plant costs are coming down, solar is a product we're going to be selling in the $25 megawatt hour to $30 megawatt hour range. And then the same adders for batteries is how you get to the math that were in -- were in Jim's remarks. And those are the expectations we have and solar pricing isn't really all that far off from what we're doing today. So that's not much of a leap of faith.

Greg Gordon -- Evercore ISI -- Analyst

Yeah. That makes sense. I appreciate it. And last question, you didn't mention it explicitly anywhere in your comments, but the balance sheet capacity of $5 billion to $7 billion, I mean your credit metrics and the position on the balance sheet seems unchanged from last quarter. So I would assume that you still feel like that balance sheet capacity is in place?

John Ketchum -- Executive Vice President Finance and Chief Financial Officer

Yeah, Gordon-Greg one of the things that we've said there is that, we had $5 billion to $7 billion right, we bought Trans Bay, there was a $1 billion, so we took that down, call it, $4 billion to $6 billion and we're earmarking probably another $2 billion of CapEx opportunities for FPL. We'll update what -- where exactly that will be used at our June conference, but certainly some of that money is going to go toward the 30-by-30 initiative that we already announced earlier last week.

Greg Gordon -- Evercore ISI -- Analyst

Got you. Great update. Thank you guys.

Operator

We now will go to Michael Lapides of Goldman Sachs.

Michael Lapides -- Goldman Sachs -- Analyst

Hey guys. Obviously Armando congrats on your announcement and to the rest of the team, to John and Rebecca as well. Great to see people move around and getting new opportunities. One question about Florida, ballot initiative that is being pushed right now, can you just talk about what is actually in that ballot initiative, what it would mean if it were to garner the votes, and what's the process from here?

John Ketchum -- Executive Vice President Finance and Chief Financial Officer

Yeah, I'm going to turn that question over to Eric.

Eric Silagy -- President and Chief Executive Officer, Florida Power & Light Company

Hi, Michael. How are you doing today?

Michael Lapides -- Goldman Sachs -- Analyst

Great Eric. Thanks for taking this.

Eric Silagy -- President and Chief Executive Officer, Florida Power & Light Company

Yeah, no problem. The ballot initiative, it's been famous about helping Florida customers. It's not about their law. When you look at it, it's really about furthering the business interests of a few folks, including a retail electric provider that's located and based out Gainesville that markets power currently outside of Florida. This is group they tried on successfully to get this proposal in front of voters. Through the Constitution Revision Commission and also through the (inaudible) where they tried two legislation in Tallahassee. Their efforts have been unsuccessful in the past, because frankly, Florida's regulated electricity market works really well. It's -- our -- when you look at the state, the power prices are among the lowest in the nation with electricity that's among the cleanest and most reliable in the country.

As an example, Florida Power & Light offers our customers bills that more than 30% lower than the national average, lower than bills in 45 states. And as John said earlier, we're just recognized third time in four years as the most reliable electric provider in the country, which as you can appreciate in a state like this, is important when our customers need us most, particularly during times of storms and hurricanes. So plain and simply, it's a proposal that just -- it actually will lead to increases in electric rates across the state, reduce reliability particularly during periods of storms, hurricanes things of that nature. And I think it's going to compromise the clean energy goals that have been announced, including the one we just did on FPL's 30-by-30 initiative, as the unregulated power producers would. They'd have no restrictions on the type of generation that they would build. Also I think it's important to understand on these type of things that consumer projections are removed. You no longer have Florida Public Service Commission role in determining what rates are. They would no longer be viewed as being just and reasonable. If that's the standard, it would go out the window and that's going to impact reliability as well. The ability of customers, this language would actually prohibit customers from being able to buy power from the existing utilities. So Florida Power & Light customers would not be able to continue to be customers of Florida Power & Light.

There's some other areas too that I think is receiving a lot of focus on, including the fact that franchise fees which we collect and pay to municipalities across the state would be eliminated. And that is significant amount of revenue that would no longer be available to pay for things like first responders, firefighters, police, hospital, employees, these municipalities that everybody counts on. Even you look at now Attorney Generals and a number of other states have called for the end of deregulation due to all of the consumer complaints and the deceptive trade practices.

So, there's a lot of reasons why these proposals have failed across the country, since frankly the early 2000s. You look at -- including even recently, in Nevada, where it failed. There's -- when you look at other states that looked at this -- a lot of them backed away particularly after the California crisis there and when Enron moved in to California to take advantage of their so-called market based model, which was ultimately the catalyst for that crisis and helped contribute to the state having some of the highest power prices in the country. So I don't think it's by accident that there hasn't been a state of fast deregulation since the California power crisis, which occurred now nearly 20 years ago. So there's a number of hurdles. To answer your question, they have to be cleared for this proposal to go forward to be placed on the ballot. We're going to be very actively engaged. We're going to be educating Floridians on the true motives of the special interest groups and we're going to also spend a lot of time educating folks on the significant negative impacts that -- this failed idea would have on the state and on their pocketbooks.

Michael Lapides -- Goldman Sachs -- Analyst

Got it. Thank you Eric. I appreciate that. I have one other for either Jim, John or Armando. When you're -- and this is more longer term. When you're watching what's happening in California with PG&E, with Edison International or so (inaudible), and put California in the context of being the nation's largest renewable market and with the most aggressive renewable target, how do you think this impacts the broader U.S. development over renewables if one of the largest markets is going through some turmoil and how do you think about that kind of longer-term?

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

So it's great question Michael. I think one of -- the first thing I'd say is California has some very aggressive renewable targets and some very aggressive climate change goals. The turmoil around the credit of the most important counterparties in the state is to say the least is not conducive to continued capital investment to continue to further those goals. And so I think it's a -- from an energy policy standpoint in the state of California it's going to be very important for the state to recognize that and to recognize that there's been significant capital investment by companies from around the world to make that happen. And to the extent to that that investment is somehow diminished by these credit issues, I think that's going to have a real impact on their market going forward. And I think the state understands that and it's one of the elements of the things that they're grappling with now as they deal with the fallout from the tragic fires, as well as some of the other issues that they've been facing.

So the good news from a market standpoint is California was obviously the biggest market in the country 10 years ago in the renewable business. It isn't anymore. It's an important market but it's no longer the most important market in the country. And with the cost declines in renewables nearly every state in the country is in the -- we have an opportunity to do business. I mean we have -- my last count we have development going on in 48 states right now. We don't have operating projects in 48 states, but we have development going on in 48 states. So while I think it's very important for the state to address these issues from a climate change standpoint going forward I think the renewable market is going to be robust going forward, because it is just gotten so big. And the cost declines have expanded the market to such a dramatic fashion.

Operator

And with that we'll go now to Jonathan Arnold of Deutsche Bank.

Jonathan Arnold -- Deutsche Bank -- Analyst

Good morning guys. Thanks for taking my question.

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Hey good morning, Jonathan.

Jonathan Arnold -- Deutsche Bank -- Analyst

Quick question on -- this is as I think about you talked about managing through the situation at NEP in context of the growth rate. So as we think about things you might do that would fall under that header, you mentioned pushing to have the cash released and I guess you could drop down other assets more quickly you could let the dividend drift down in the range and still be within 12 to 15 (ph). Is there anything else that I'm missing and which of those kind of alternatives would you either be planning to use or not use?

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Yeah, I think I'd go first of all back to the prior -- one of the prior questions about are there other attractive financing vehicles available. One, yes, we think there are but two, even if we had the finance additional drops to meet our financial expectations with existing debt capacity that we have, we can do that, we're fine. And so really the way I would answer that question is that, obviously we'll vigorously try to negotiate something with the holders that would allow us to and the DOE, don't forget the DOE is in all of -- is in these projects, that would allow us to free up the cash. We can't do that. We have debt capacity, plenty of debt capacity at NEP. Energy Resources is coming off the best development year in its history. We have very clear visibility to growth prospects going forward and there are many levers in the vehicle. So we are comfortable in our ability to manage through even a worst case scenario, which would be where the cash is trapped until a final call is made on the contract.

Jonathan Arnold -- Deutsche Bank -- Analyst

Okay. But John just you've -- I think to be clear you've said in some of them the cash is trapped just by virtue of PG&E saying that it may file. Is that correct and, yeah, just curious --

John Ketchum -- Executive Vice President Finance and Chief Financial Officer

Yeah, (multiple speakers) get into the technicalities but one of the financings has a provision that basically just says if there's corporate action taken in furtherance of a bankruptcy, which our lawyers view the filing of the 8-K to be that that would constitute -- potentially constitute an event of default.

Jonathan Arnold -- Deutsche Bank -- Analyst

So that was just on one of them.

John Ketchum -- Executive Vice President Finance and Chief Financial Officer

That's on the Genesis financing.

Jonathan Arnold -- Deutsche Bank -- Analyst

Okay. And then what would...

John Ketchum -- Executive Vice President Finance and Chief Financial Officer

It's on some of -- it's on some of the other NEE financings. But the NEE financings are small, it's a series of four or five projects that don't have any meaningful contribution to earnings at NEE.

Jonathan Arnold -- Deutsche Bank -- Analyst

So there would be a sort of a judgment as to what would definitively constitute that not occurring presumably?

John Ketchum -- Executive Vice President Finance and Chief Financial Officer

Yeah, I mean, it doesn't happen then I think it's back to business as usual.

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

Jonathan, let me just add -- just let me add something, I mean obviously I think it's appropriate for the focus on the PG&E assets and the cash flows, but we still have at both at NextEra Energy resources and the NextEra Energy Partners, we still have a lot of projects that are not PG&E Southern California Edison projects that have significant cash flows. And there are still many parties that are interested in attractive financings, attractive for us and presumably for them that we're talking to. And it's not necessarily about what's the risk of PG&E in Southern California Edison. It's about, hey, what other assets are available for us to be able to enter into those types of financing. So I think while it's appropriate to have some focus on what's going on with PG&E, we got to remember that NextEra Energy Resources has had its -- we had 6600 megawatts of origination this year, which is a record year and that's twice the amount we had last year, which was a record year.

And I got to tell you we feel at least internally very comfortable as John said that even if these PG&E cash flows are tied up in these debt financings that we can meet our current expectations. And one of the reasons that we feel that way is because we're talking to the market and, two, origination is going very well in Energy Resources.

Jonathan Arnold -- Deutsche Bank -- Analyst

Great. That's helpful perspective. Thank you, Armando. And then could I just one other thing (inaudible) -- with the Gulf and Florida acquisitions having closed sooner, I think than maybe you thought, is there -- but you're not talking of any accretion in '19 that would just sort of help us understand the bump in '20. What's driving that and why nothing this year?

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

So Jonathan, obviously we got it done a little earlier than we thought, but we also always assume that we'd have some cost to achieve this year to get there. So we're being conservative as we always are. And we feel very good about our plans at Gulf and you can bet I'm pushing the team very hard to get things done even faster than we've laid out. And so I'm really optimistic about the future for Gulf in this Company and our ability to bring real value to their customers and real value to shareholders, so very excited about it. We'll have more to talk about it in June. But remember we don't have any cost to achieve in any of these numbers in '19.

Jonathan Arnold -- Deutsche Bank -- Analyst

Okay. Thank you very much.

Operator

And with that, ladies and gentlemen, that does conclude today's conference. We want to thank you again for attending today's presentation.

Duration: 76 minutes

Call participants:

Matthew Roskot -- Director of Investor Relations

James L. Robo -- Chairman and Chief Executive Officer

Armando Pimentel -- President and Chief Executive Officer, NextEra Energy Resources, LLC

John Ketchum -- Executive Vice President Finance and Chief Financial Officer

Stephen Byrd -- Morgan Stanley -- Analyst

Steve Fleishman -- Wolfe Research. -- Analyst

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Greg Gordon -- Evercore ISI -- Analyst

Michael Lapides -- Goldman Sachs -- Analyst

Eric Silagy -- President and Chief Executive Officer, Florida Power & Light Company

Jonathan Arnold -- Deutsche Bank -- Analyst

More NEP analysis

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