NextEra Energy (NEE 0.74%) is one of the fastest-growing utilities in the U.S., which is impressive considering that it's the largest one by customer count and market cap. That speed was on full display during the first quarter as NextEra grew its adjusted earnings per share at a double-digit rate. Here's a closer look at what's powering the company's growth and what it sees ahead.

Another strong quarter

NextEra Energy generated nearly $1.5 billion, or $0.74 per share, of adjusted earnings in the first quarter. That's up 10.4% from the prior-year period. The company benefited from strong results at its Florida-based electric utility (FPL) and solid performance from its energy resources segment. 

A person installing solar panels.

Image source: Getty Images.

FPL's earnings surged 12.8%, powered by new investments. Of note, the company completed 450 megawatts (MW) of cost-effective solar energy projects in the quarter. That achieved FPL's planned solar build for the year. That's part of the company's strategy to build out one of the largest ever solar expansions. It's aiming to complete 9.5 gigawatts (GW) of solar energy within a decade.

Meanwhile, NextEra's energy resources segment grew its earnings by 6.7%. The primary driver was the strong performance of its existing generation and storage assets, which offset some weakness in customer supply and trading and its gas infrastructure assets. 

The energy resources segment continues to expand. It completed the construction of the East-West Tie Transmission Line Project to improve power transmission in Ontario, Canada. This segment also added 1.7 GW of new renewable and energy storage development projects to its backlog during the quarter to power future growth.

On track for continued growth

NextEra Energy's solid quarter gave it the confidence to affirm its long-term financial expectations. The company expects to generate between $2.75 and $2.83 of adjusted earnings per share this year. That's 9.4% above 2021's total at the midpoint. Meanwhile, it expects its adjusted earnings to grow at a 6% to 8% annual rate from this year's level through 2025. NextEra also said it would be disappointed if it didn't deliver financial results at or near the high end of its guidance range.

The company also expects to increase its dividend by 10% per year through at least 2024, powered by earnings growth and its conservative dividend payout ratio.

A big growth driver for NextEra is its continued investments in clean energy. FPL is undertaking one of the largest solar energy buildouts by a utility. Meanwhile, the energy resources segment has an enormous and growing backlog of wind energy, solar, energy storage, and wind repowering developments, providing it with increasing growth visibility over the next few years.

However, a couple of uncertainties could affect its future growth. First, due to current legal and regulatory challenges, the company took a $600 million charge related to its investment in the Mountain Valley Pipeline. NextEra and its partners are struggling to build the $6.2 billion pipeline that would move natural gas from West Virginia to North Carolina. They'd hoped to bring it into service this year, but even a 2023 completion date seems up in the air.

In addition, an investigation into Chinese solar panel suppliers could delay some of the company's solar and energy storage projects. NextEra noted that it might have to defer as much as 2.8 GW of projects until next year due to an investigation by the Commerce Department on solar imports from Asia. 

Powerful growth ahead

Despite some near-term headwinds, NextEra Energy expects to continue growing at an above-average rate for the next few years. It has a growing backlog of renewable energy projects, increasing its ability to deliver earnings growth toward the high end of its forecast. That should support continued dividend growth in the coming years. Those growth drivers should enable NextEra to continue generating attractive total returns for investors.