Revises limited partner distribution per unit growth expectations to 5% to 8% per year through at least 2026, with a target of 6% growth
Expects no growth equity until 2027

NextEra Energy Partners today announced that it is revising its growth rate to better position the partnership to continue to deliver long-term value for unitholders. The partnership is revising its limited partner distribution per unit growth rate to 5% to 8% per year through at least 2026, with a target growth rate of 6%.

"NextEra Energy Partners is revising its long-term growth rate expectations for limited partner distributions to increase its flexibility as it continues to execute on its growth opportunities," said John Ketchum, chairman and chief executive officer. "Tighter monetary policy and higher interest rates obviously affect the financing needed to grow distributions at 12%, and the burden of financing this growth has had an impact on NextEra Energy Partners' unit price and yield. In the current market environment, the partnership believes revising its growth expectations for now is the appropriate decision for unitholders and better positions it to continue to deliver long-term value."

By reducing its growth rate and executing on its previously announced transition plans as outlined in May, which includes the sale of the natural gas pipelines and the buyouts of the convertible equity portfolio financing payments due through 2025, NextEra Energy Partners does not expect to require growth equity to meet its revised growth expectations until 2027. If favorable market conditions exist, the partnership may elect to opportunistically issue equity, which would likely be executed through its at-the-market equity issuance program.

NextEra Energy Partners also plans to repower the majority of its wind portfolio in the coming years, which it believes can be accomplished at attractive cash available for distribution (CAFD) yields. It also expects to continue to look to acquire wind, solar and storage assets from NextEra Energy Resources and other third parties at favorable yields.

"Reducing growth expectations will allow NextEra Energy Partners to focus on higher-yielding growth opportunities, such as organic repowerings in the short- to medium-term, and reduce new capital requirements," said Ketchum. "Over the near and longer term, NextEra Energy Resources' industry-leading portfolio of renewables projects, which is expected to total up to 58 gigawatts through 2026, together with organic growth and third-party acquisitions, will continue to provide NextEra Energy Partners with excellent growth opportunities. Through continued execution of its plans, NextEra Energy Partners is charting a course to a sustainable future with significant growth visibility."

Outlook 

Consistent with the reduction to its growth-rate expectations, NextEra Energy Partners is revising its year-end run-rate expectations for adjusted EBITDA and CAFD. NextEra Energy Partners expects run-rate contributions for adjusted EBITDA and CAFD from its forecasted portfolio at Dec. 31, 2023, to be in the ranges of $1,900 million to $2,100 million and $730 million to $820 million, respectively, reflecting calendar-year 2024 contributions from the forecasted portfolio at year-end 2023. 

NextEra Energy Partners now expects the annualized rates of its third-quarter 2023 distribution per common unit to be $3.47, payable in November 2023, and its fourth-quarter 2023 distribution per common unit to be $3.52, payable in February of 2024.

KeyFacts Energy: NextEra Energy US country profile