NextEra to buy Gulf Power, expands footprint in Florida energy market

In what may seem to be a major move in the state’s energy industry, NextEra Energy, the parent company of Florida Power & Light (FPL) announced that it will be buying Northwest Florida’s Gulf Power. Reportedly, the deal has been finalized at USD 6.475 billion. In addition, the company also seems to have entered into a definitive agreement to buy Florida City Gas, a natural-gas company and its ownership interests in two power plants: Plant Stanton & Plant Oleander.

Sources reveal that if approved, the deal is set to expand NextEra Energy’s already prevailing footprint in the Florida energy industry, where FPL is one of the state’s largest electricity utilities. According to a 2016 report by the U.S. Energy Information Administration, adding Gulf Power would put the combined residential customer base at over 51%.

Industry experts deem that the regulated energy industry utilities such as Florida City and Gulf Power are currently the prime targets for holding companies such as NextEra, that has an extensive portfolio of gas generators and renewable energy assets.

The acquisition deal comes amid NextEra’s failed attempt to win regulatory approval to acquire Hawaii’s major utility in 2015 and its attempt to purchase the Texas-based Oncor Electric for USD 18.7 billion. If industry experts are to be believed, NextEra has since long indicated that it wants to step toward adding more regulated utility assets, however, it had been unable to crack major deals in the recent years.

NextEra said that it expects the Florida city deal to be completed by the third quarter of 2018, while the other Gulf Power and natural-gas deal are likely to take until Q1 2019.

If the deal is approved by the state regulators, NextEra is anticipated to add about 110,000 gas customers from Florida City and over 450,000 customers for electricity from Gulf Power. It has been reported that the purchase deal is subject to approval from the Federal Communications Commission and the Federal Energy Regulatory Commission.