Energy Awareness Month: FPL's Money-Saving Myth Buster No. 5

October 29, 2009 12:33 PM EDT

With Reliability above the National Average, FPL is Working to Stop Outages before They Start

JUNO BEACH, Fla.--(BUSINESS WIRE)-- At the opening of Florida Power & Light Company's (NYSE: FPL) DeSoto Next Generation Solar Energy Center - the largest solar photovoltaic power plant in the nation - President Barack Obama announced that FPL would be awarded $200 million in Recovery Act funding to invest in a stronger, smarter, cleaner and more efficient electricity grid.

With support from the President's Recovery Act commitment to spur the transition to the Smart Grid, FPL's $800 million Energy Smart Florida project will implement revolutionary new technologies that will help FPL customers better control their energy consumption and enable the company to provide more reliable electric service.

"Through these investments in a variety of smart grid technologies, utilities like Florida Power & Light will also be able to monitor the performance of its electricity grid in real time, which means they'll be able to identify and correct service interruptions more quickly and effectively," President Obama said Tuesday at the DeSoto plant opening.

But Energy Smart Florida isn't FPL's first effort to improve reliability for customers. Throughout October, FPL has been issuing weekly "Money-Saving Myth Busters" to educate customers about common, energy-related misconceptions. It's fitting that the final Energy Awareness Month myth involves the issue of reliability:

Myth: "FPL waits for a power outage to occur before responding."

Fact: FPL works proactively to improve the reliability of its electric service, investing in technology and year-round preventive maintenance to stop outages before they start. Outage prevention and service efficiency result in lower costs to customers and reliability that is 47 percent better than the national average.

The conventional utility approach to power outages is reactive. FPL is breaking with that status quo and developing ways to predict and prevent power outages before they occur -- a proactive approach. FPL employees are using smart technology to spot warning signs of potential outages and take action before an outage occurs.

By strengthening and incorporating smart technologies into the transmission and distribution systems that serve millions of Floridians, FPL's electrical infrastructure will be less vulnerable to disruptions and less costly to maintain.

"Prevention can be less costly than treatment, whether you're talking about healthcare or power outages. The least expensive outage to restore is one that never occurs in the first place," said FPL President and CEO Armando J. Olivera. "That's why we're making investments in smart technology and preventive maintenance to improve reliability and help us to stop outages before they start."

FPL is investing to make its infrastructure smarter by installing intelligent devices on the power lines, equipment and substations that deliver electricity from its power plants to homes and businesses. At FPL's performance and diagnostic centers, employees use historical data, real-time system monitoring, smart technology and predictive analysis to measure, monitor, control and enhance the health and performance of the grid.

As a result of FPL's proactive approach to preventing outages, FPL customers experience fewer and shorter outages, fewer brief interruptions or flickers, fewer power surges and sags and improved system performance in good weather and bad. Energy Smart Florida will help FPL improve its service even more.

Florida Power & Light Company

Florida Power & Light Company (FPL) is the largest electric utility in Florida and one of the largest rate-regulated utilities in the United States. FPL serves 4.5 million customer accounts in Florida and is a leading employer in the state with nearly 11,000 employees. The company consistently outperforms national averages for service reliability while customer bills are well below the national average. A clean energy leader, FPL has one of the lowest emissions profiles and the No. 1 energy efficiency program among utilities nationwide. FPL is a subsidiary of Juno Beach, Fla.-based FPL Group, Inc. (NYSE: FPL). For more information, visit www.FPL.com.

Cautionary Statements And Risk Factors That May Affect Future Results

In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), FPL Group, Inc. (FPL Group) and Florida Power & Light Company (FPL) are hereby providing cautionary statements identifying important factors that could cause FPL Group's or FPL's actual results to differ materially from those projected in forward-looking statements (as such term is defined in the Reform Act) made by or on behalf of FPL Group and FPL in this press release, on their respective websites, in response to questions or otherwise. Any statements that express, or involve discussions as to, adjusted earnings or other expectations, beliefs, plans, objectives, assumptions, future events or performance, climate change strategy or growth strategies (often, but not always, through the use of words or phrases such as will, will likely result, are expected to, will continue, is anticipated, aim, believe, could, should, would, estimated, may, plan, potential, projection, target, outlook, predict and intend or words of similar meaning) are not statements of historical facts and may be forward-looking. Forward-looking statements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors (in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements) that could cause FPL Group's or FPL's actual results to differ materially from those contained or implied in forward-looking statements made by or on behalf of FPL Group and FPL.

Any forward-looking statement speaks only as of the date on which such statement is made, and FPL Group and FPL undertake no obligation to update any forward-looking statement to reflect events or circumstances, including unanticipated events, after the date on which such statement is made, unless otherwise required by law. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement.

The following are some important factors that could have a significant impact on FPL Group's and FPL's operations and financial results, and could cause FPL Group's and FPL's actual results or outcomes to differ materially from those discussed or implied in the forward-looking statements:

FPL Group and FPL are subject to complex laws and regulations and to changes in laws and regulations as well as changing governmental policies and regulatory actions. FPL holds franchise agreements with local municipalities and counties, and must renegotiate expiring agreements. These factors may have a negative impact on the business and results of operations of FPL Group and FPL.

    --  FPL Group and FPL are subject to complex laws and regulations, and to
        changes in laws or regulations, with respect to, among other things,
        allowed rates of return, industry and rate structure, operation of
        nuclear power facilities, construction and operation of generation
        facilities, construction and operation of transmission and distribution
        facilities, acquisition, disposal, depreciation and amortization of
        assets and facilities, recovery of fuel and purchased power costs,
        decommissioning costs, return on common equity and equity ratio limits,
        transmission reliability and present or prospective wholesale and retail
        competition. This substantial and complex framework exposes FPL Group
        and FPL to increased compliance costs and potentially significant
        monetary penalties for non-compliance. The Florida Public Service
        Commission (FPSC) has the authority to disallow recovery by FPL of any
        and all costs that it considers excessive or imprudently incurred. The
        regulatory process generally restricts FPL's ability to grow earnings
        and does not provide any assurance as to achievement of earnings levels.
    --  FPL Group and FPL also are subject to extensive federal, state and local
        environmental statutes, rules and regulations, as well as the effect of
        changes in or additions to applicable statutes, rules and regulations
        that relate to, or in the future may relate to, for example, air
        quality, water quality, climate change, greenhouse gas emissions, carbon
        dioxide emissions, waste management, marine and wildlife mortality,
        natural resources, health, safety and renewable portfolio standards that
        could, among other things, restrict or limit the output of certain
        facilities or the use of certain fuels required for the production of
        electricity and/or require additional pollution control equipment and
        otherwise increase costs. There are significant capital, operating and
        other costs associated with compliance with these environmental
        statutes, rules and regulations, and those costs could be even more
        significant in the future.
    --  FPL Group and FPL operate in a changing market environment influenced by
        various legislative and regulatory initiatives regarding regulation,
        deregulation or restructuring of the energy industry, including, for
        example, deregulation or restructuring of the production and sale of
        electricity, as well as increased focus on renewable and clean energy
        sources and reduction of carbon emissions. FPL Group and its
        subsidiaries will need to adapt to these changes and may face increasing
        costs and competitive pressure in doing so.
    --  FPL Group's and FPL's results of operations could be affected by FPL's
        ability to negotiate or renegotiate franchise agreements with
        municipalities and counties in Florida.

The operation and maintenance of power generation, transmission and distribution facilities involve significant risks that could adversely affect the results of operations and financial condition of FPL Group and FPL.

    --  The operation and maintenance of power generation, transmission and
        distribution facilities involve many risks, including, for example,
        start up risks, breakdown or failure of equipment, transmission and
        distribution lines or pipelines, the inability to properly manage or
        mitigate known equipment defects throughout FPL Group's and FPL's
        generation fleets and transmission and distribution systems, use of new
        or unproven technology, the dependence on a specific fuel source,
        failures in the supply or transportation of fuel, the impact of unusual
        or adverse weather conditions (including natural disasters such as
        hurricanes, floods and droughts), and performance below expected or
        contracted levels of output or efficiency. This could result in lost
        revenues and/or increased expenses, including, for example, lost
        revenues due to prolonged outages and increased expenses due to monetary
        penalties or fines, replacement equipment costs or an obligation to
        purchase or generate replacement power at potentially higher prices to
        meet contractual obligations. Insurance, warranties or performance
        guarantees may not cover any or all of the lost revenues or increased
        expenses. Breakdown or failure of an operating facility of NextEra
        Energy Resources, LLC (NextEra Energy Resources) may, for example,
        prevent the facility from performing under applicable power sales
        agreements which, in certain situations, could result in termination of
        the agreement or subject NextEra Energy Resources to incurring a
        liability for liquidated damages.

The operation and maintenance of nuclear facilities involves inherent risks, including environmental, health, regulatory, terrorism and financial risks, that could result in fines or the closure of nuclear units owned by FPL or NextEra Energy Resources, and which may present potential exposures in excess of insurance coverage.

    --  FPL and NextEra Energy Resources own, or hold undivided interests in,
        nuclear generation facilities in four states. These nuclear facilities
        are subject to environmental, health and financial risks such as on-site
        storage of spent nuclear fuel, the ability to dispose of spent nuclear
        fuel, the ability to maintain adequate reserves for decommissioning,
        potential liabilities arising out of the operation of these facilities,
        and the threat of a possible terrorist attack. Although FPL and NextEra
        Energy Resources maintain decommissioning trusts and external insurance
        coverage to minimize the financial exposure to these risks, it is
        possible that the cost of decommissioning the facilities could exceed
        the amount available in the decommissioning trusts, and that liability
        and property damages could exceed the amount of insurance coverage.
    --  The U.S. Nuclear Regulatory Commission (NRC) has broad authority to
        impose licensing and safety-related requirements for the construction
        and operation and maintenance of nuclear generation facilities. In the
        event of non-compliance, the NRC has the authority to impose fines or
        shut down a unit, or both, depending upon its assessment of the severity
        of the situation, until compliance is achieved. NRC orders or new
        regulations related to increased security measures and any future safety
        requirements promulgated by the NRC could require FPL and NextEra Energy
        Resources to incur substantial operating and capital expenditures at
        their nuclear plants. In addition, if a serious nuclear incident were to
        occur at an FPL or NextEra Energy Resources plant, it could result in
        substantial costs. A major incident at a nuclear facility anywhere in
        the world could cause the NRC to limit or prohibit the operation or
        licensing of any domestic nuclear unit.
    --  In addition, potential terrorist threats and increased public scrutiny
        of utilities could result in increased nuclear licensing or compliance
        costs which are difficult or impossible to predict.

The construction of, and capital improvements to, power generation and transmission facilities involve substantial risks. Should construction or capital improvement efforts be unsuccessful or delayed, the results of operations and financial condition of FPL Group and FPL could be adversely affected.

    --  The ability of FPL Group and FPL to complete construction of, and
        capital improvement projects for, their power generation and
        transmission facilities on schedule and within budget are contingent
        upon many variables that could delay completion, increase costs or
        otherwise adversely affect operational and financial results, including,
        for example, limitations related to transmission interconnection issues,
        escalating costs for materials and labor and environmental compliance,
        delays with respect to permits and other approvals, and disputes
        involving third parties, and are subject to substantial risks. Should
        any such efforts be unsuccessful or delayed, FPL Group and FPL could be
        subject to additional costs, termination payments under committed
        contracts, loss of tax credits and/or the write-off of their investment
        in the project or improvement.

The use of derivative contracts by FPL Group and FPL in the normal course of business could result in financial losses or the payment of margin cash collateral that adversely impact the results of operations or cash flows of FPL Group and FPL.

    --  FPL Group and FPL use derivative instruments, such as swaps, options,
        futures and forwards, some of which are traded in the over-the-counter
        markets or on exchanges, to manage their commodity and financial market
        risks, and for FPL Group to engage in trading and marketing activities.
        FPL Group could recognize financial losses as a result of volatility in
        the market values of these derivative instruments, or if a counterparty
        fails to perform or make payments under these derivative instruments and
        could suffer a reduction in operating cash flows as a result of the
        requirement to post margin cash collateral. In the absence of actively
        quoted market prices and pricing information from external sources, the
        valuation of these derivative instruments involves management's judgment
        or use of estimates. As a result, changes in the underlying assumptions
        or use of alternative valuation methods could affect the reported fair
        value of these derivative instruments. In addition, FPL's use of such
        instruments could be subject to prudence challenges and, if found
        imprudent, cost recovery could be disallowed by the FPSC.
    --  FPL Group provides full energy and capacity requirement services, which
        include load-following services and various ancillary services,
        primarily to distribution utilities to satisfy all or a portion of such
        utilities' power supply obligations to their customers. The supply costs
        for these transactions may be affected by a number of factors, such as
        weather conditions, fluctuating prices for energy and ancillary
        services, and the ability of the distribution utilities' customers to
        elect to receive service from competing suppliers, which could
        negatively affect FPL Group's results of operations from these
        transactions.

FPL Group's competitive energy business is subject to risks, many of which are beyond the control of FPL Group, including, but not limited to, the efficient development and operation of generating assets, the successful and timely completion of project restructuring activities, the price and supply of fuel and equipment, transmission constraints, competition from other generators, including those using new sources of generation, excess generation capacity and demand for power, that may reduce the revenues and adversely impact the results of operations and financial condition of FPL Group.

    --  There are various risks associated with FPL Group's competitive energy
        business. In addition to risks discussed elsewhere, risk factors
        specifically affecting NextEra Energy Resources' success in competitive
        wholesale markets include, for example, the ability to efficiently
        develop and operate generating assets, the successful and timely
        completion of project restructuring activities, maintenance of the
        qualifying facility status of certain projects, the price and supply of
        fuel (including transportation) and equipment, transmission constraints,
        the ability to utilize production tax credits, competition from other
        and new sources of generation, excess generation capacity and shifting
        demand for power. There can be significant volatility in market prices
        for fuel, electricity and renewable and other energy commodities, and
        there are other financial, counterparty and market risks that are beyond
        the control of NextEra Energy Resources. NextEra Energy Resources'
        inability or failure to effectively hedge its assets or positions
        against changes in commodity prices, interest rates, counterparty credit
        risk or other risk measures could significantly impair FPL Group's
        future financial results. In keeping with industry trends, a portion of
        NextEra Energy Resources' power generation facilities operate wholly or
        partially without long-term power purchase agreements. As a result,
        power from these facilities is sold on the spot market or on a
        short-term contractual basis, which may increase the volatility of FPL
        Group's financial results. In addition, NextEra Energy Resources'
        business depends upon power transmission and natural gas transportation
        facilities owned and operated by others; if transmission or
        transportation is disrupted or capacity is inadequate or unavailable,
        NextEra Energy Resources' ability to sell and deliver its wholesale
        power or natural gas may be limited.

FPL Group's ability to successfully identify, complete and integrate acquisitions is subject to significant risks, including, but not limited to, the effect of increased competition for acquisitions resulting from the consolidation of the power industry.

    --  FPL Group is likely to encounter significant competition for acquisition
        opportunities that may become available as a result of the consolidation
        of the power industry in general. In addition, FPL Group may be unable
        to identify attractive acquisition opportunities at favorable prices and
        to complete and integrate them successfully and in a timely manner.

FPL Group and FPL participate in markets that are often subject to uncertain economic conditions, which makes it difficult to estimate growth, future income and expenditures.

    --  FPL Group and FPL participate in markets that are susceptible to
        uncertain economic conditions, which complicate estimates of revenue
        growth. Because components of budgeting and forecasting are dependent
        upon estimates of revenue growth in the markets FPL Group and FPL serve,
        the uncertainty makes estimates of future income and expenditures more
        difficult. As a result, FPL Group and FPL may make significant
        investments and expenditures but never realize the anticipated benefits,
        which could adversely affect results of operations. The future direction
        of the overall economy also may have a significant effect on the overall
        performance and financial condition of FPL Group and FPL.

Customer growth and customer usage in FPL's service area affect FPL Group's and FPL's results of operations.

    --  FPL Group's and FPL's results of operations are affected by the growth
        in customer accounts in FPL's service area and by customer usage.
        Customer growth can be affected by population growth. Customer growth
        and customer usage can be affected by economic factors in Florida and
        elsewhere, including, for example, job and income growth, housing starts
        and new home prices. Customer growth and customer usage directly
        influence the demand for electricity and the need for additional power
        generation and power delivery facilities at FPL.

Weather affects FPL Group's and FPL's results of operations, as can the impact of severe weather. Weather conditions directly influence the demand for electricity and natural gas, affect the price of energy commodities, and can affect the production of electricity at power generating facilities.

    --  FPL Group's and FPL's results of operations are affected by changes in
        the weather. Weather conditions directly influence the demand for
        electricity and natural gas, affect the price of energy commodities, and
        can affect the production of electricity at power generating facilities,
        including, but not limited to, wind, solar and hydro-powered facilities.
        FPL Group's and FPL's results of operations can be affected by the
        impact of severe weather which can be destructive, causing outages
        and/or property damage, may affect fuel supply, and could require
        additional costs to be incurred. At FPL, recovery of these costs is
        subject to FPSC approval.

Adverse capital and credit market conditions may adversely affect FPL Group's and FPL's ability to meet liquidity needs, access capital and operate and grow their businesses, and increase the cost of capital. Disruptions, uncertainty or volatility in the financial markets can also adversely impact the results of operations and financial condition of FPL Group and FPL, as well as exert downward pressure on the market price of FPL Group's common stock.

    --  Having access to the credit and capital markets, at a reasonable cost,
        is necessary for FPL Group and FPL to fund their operations, including
        their capital requirements. Those markets have provided FPL Group and
        FPL with the liquidity to operate and grow their businesses that is not
        otherwise provided from operating cash flows. Disruptions, uncertainty
        or volatility in those markets can increase FPL Group's and FPL's cost
        of capital. If FPL Group and FPL are unable to access the credit and
        capital markets on terms that are reasonable, they may have to delay
        raising capital, issue shorter-term securities and/or bear an
        unfavorable cost of capital, which, in turn, could adversely impact
        their ability to grow their businesses, decrease earnings, significantly
        reduce financial flexibility and/or limit FPL Group's ability to sustain
        its current common stock dividend level.
    --  The market price and trading volume of FPL Group's common stock could be
        subject to significant fluctuations due to, among other things, general
        stock market conditions and changes in market sentiment regarding FPL
        Group and its subsidiaries' operations, business, growth prospects and
        financing strategies.

FPL Group's, FPL Group Capital's and FPL's inability to maintain their current credit ratings may adversely affect FPL Group's and FPL's liquidity, limit the ability of FPL Group and FPL to grow their businesses, and would likely increase interest costs.

    --  FPL Group and FPL rely on access to capital and credit markets as
        significant sources of liquidity for capital requirements not satisfied
        by operating cash flows. The inability of FPL Group, FPL Group Capital
        and FPL to maintain their current credit ratings could affect their
        ability to raise capital or obtain credit on favorable terms, which, in
        turn, could impact FPL Group's and FPL's ability to grow their
        businesses and would likely increase their interest costs.

FPL Group and FPL are subject to credit and performance risk from third parties under supply and service contracts.

    --  FPL Group and FPL rely on contracts with vendors for the supply of
        equipment, materials, fuel and other goods and services required for the
        construction and operation of, and for capital improvements to, their
        facilities, as well as for business operations. If vendors fail to
        fulfill their contractual obligations, FPL Group and FPL may need to
        make arrangements with other suppliers, which could result in higher
        costs, untimely completion of power generation facilities and other
        projects, and/or a disruption to their operations.

FPL Group and FPL are subject to costs and other potentially adverse effects of legal and regulatory proceedings, as well as regulatory compliance and changes in or additions to applicable tax laws, rates or policies, rates of inflation, accounting standards, securities laws, corporate governance requirements and labor and employment laws.

    --  FPL Group and FPL are subject to costs and other potentially adverse
        effects of legal and regulatory proceedings, settlements, investigations
        and claims, as well as regulatory compliance and the effect of new, or
        changes in, tax laws, rates or policies, rates of inflation, accounting
        standards, securities laws, corporate governance requirements and labor
        and employment laws.
    --  FPL and NextEra Energy Resources, as owners and operators of bulk power
        transmission systems and/or critical assets within various regions
        throughout the United States, are subject to mandatory reliability
        standards promulgated by the North American Electric Reliability
        Corporation and enforced by the Federal Energy Regulatory Commission.
        These standards, which previously were being applied on a voluntary
        basis, became mandatory in June 2007. Noncompliance with these mandatory
        reliability standards could result in sanctions, including substantial
        monetary penalties, which likely would not be recoverable from
        customers.

Threats of terrorism and catastrophic events that could result from terrorism, cyber attacks, or individuals and/or groups attempting to disrupt FPL Group's and FPL's business may impact the operations of FPL Group and FPL in unpredictable ways.

    --  FPL Group and FPL are subject to direct and indirect effects of
        terrorist threats and activities, as well as cyber attacks and
        disruptive activities of individuals and/or groups. Infrastructure
        facilities and systems, including, for example, generation, transmission
        and distribution facilities, physical assets and information systems, in
        general, have been identified as potential targets. The effects of these
        threats and activities include, but are not limited to, the inability to
        generate, purchase or transmit power, the delay in development and
        construction of new generating facilities, the risk of a significant
        slowdown in growth or a decline in the U.S. economy, delay in economic
        recovery in the United States, and the increased cost and adequacy of
        security and insurance.

The ability of FPL Group and FPL to obtain insurance and the terms of any available insurance coverage could be adversely affected by international, national, state or local events and company-specific events.

    --  FPL Group's and FPL's ability to obtain insurance, and the cost of and
        coverage provided by such insurance, could be adversely affected by
        international, national, state or local events as well as
        company-specific events.

FPL Group and FPL are subject to employee workforce factors that could adversely affect the businesses and financial condition of FPL Group and FPL.

    --  FPL Group and FPL are subject to employee workforce factors, including,
        for example, loss or retirement of key executives, availability of
        qualified personnel, inflationary pressures on payroll and benefits
        costs and collective bargaining agreements with union employees and work
        stoppage that could adversely affect the businesses and financial
        condition of FPL Group and FPL.

The risks described herein are not the only risks facing FPL Group and FPL. Additional risks and uncertainties also may materially adversely affect FPL Group's or FPL's business, financial condition and/or future operating results.

    Source: Florida Power & Light Co.

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