NEE
#Is in terms of our equities for 2016, our base case is that we have recycling opportunities available in our merchant generation portfolio that we will continue to explore, similar to what we did with the Lamar Forney transaction back in 2015.
We also have some renewable assets that may be rolling off of contract that could be good opportunities as well.
And then we have some renewable assets on the balance sheet that we have not previously put debt financing up against, that could provide additional sources of capital for 2016 offsetting what would otherwise be a modest equity need in 2016 for NextEra Energy.
Julian, this is <UNK>.
I think the way you should think about it is, everything we have is always for sale.
And if there's an opportunity to sell something that's accretive to our earnings going forward and makes sense from a strategic standpoint, we're going to sell it.
But we're also not betting that we are going to have to sell in order not to have to issue equity this year.
How much equity content we need in any given year is always driven by how much capital we are going to deploy, what the opportunities are, how we're doing against all of our financing activities.
And we have a whole host of things that we ---+ a whole host of levers at our disposal that we go to.
And obviously issuing equity is very well ---+ and the team knows this, this is very low on my list of the kind of things that we want to do to finance the plan.
Obviously, the flip side of that is, is we need a strong balance sheet and we are committed to strong ratios to maintain a strong balance sheet.
So what we said is I think very clear in the script.
We said we don't believe we're going to have an equity need this year, and if there is one, it's going to be very modest.
On the one hand, you could say it should create more opportunities, given the distressed nature of that space and potential assets coming up for sale.
On the other hand, it does provide somewhat of a limitation in that you have to be able to identify producer operators that are willing to sell in today's lower natural gas and price environment at a price that makes sense for Florida customers.
But we're working hard to identify those opportunities through the FPL origination efforts.
Yes.
Julian, this is <UNK>.
I will just add that on the three solar projects, it has no impact.
Those are underway.
And remember, those were advantaged sites that we had because we had the property, the transmission was there and so we're moving forward with those.
They provide customer benefits right up front.
So, <UNK>, I think the first thing we look at is, if you go back over the last several years, you've probably had a renewable market in the US of 8 to 9 gigawatts.
It's lumpy though, as you know.
When we look at 2017 through 2020, we see a market that's probably much closer to 13 to 15 gigawatts and there are some out there that would say that towards the latter part of the decade, that that market could get up to 18 to 20 gigawatts.
So when we look at it, we say well, gee whiz, we've gotten our fair share in the past and so our expectation is to continue to get our fair share in the future.
If you look at wind on its own, and by the way, it's often very difficult to separate how much of that is going to be wind and how much of it is going to be solar.
Although I will tell you that solar is more and more competitive the longer you go out.
But if you look at the near term, if you look at 2017 and 2018 on the wind side, certainly the expectations are that there's going to be an awful lot of wind build.
Especially if the IRS comes through with what we think they are going to come through, the same interpretation of in construction as they've had before, you're going to likely get 100% PTCs for CODs on wind all the way through the end of 2018.
2017 remains to be seen whether that will be a banner year for wind or not, but I think combined 2017 and 2018 will be pretty good on the wind site.
Then you look at wind a little further out, obviously you've got CPP.
We and others have provided comments to EPA on CPP.
One of those comments that EPA asked for was, what do we do with the clean energy incentive program.
So right now, states have to have a state implementation plan that could go in as late as the fall of 2018.
Before that plan goes in, you can't really get under the incentive plan for renewables, so that's probably a 2020 to 2021 build that you see there.
We're hoping that that comes up a little bit.
We do see CPP making a difference for wind, probably starting in 2019, but certainly no later than 2020.
On the solar side, the way that it's been structured, you could potentially get 30% ITC on solar all the way through 2020.
I've said this over and over again in the past.
We continue to be surprised by the demand for solar out there.
It's certainly it's more competitive, but there's a lot of demand for solar.
So we see fairly steady solar growth from 2018 through 2020.
I think it was <UNK> that asked the question before about 2016 maybe go to 2017, which I don't ---+ I agree with what <UNK> said.
But the point there also on solar is, you may actually see a smaller 2017, because so much is getting built in 2016.
So, is that good.
It will have ---+ look, I know that a lot of people have read the CPP.
We have read it 100 times.
It's complicated.
We want to make sure that we understand what we think is going to happen in the market.
But in addition, we are out talking to all of our customers to make sure that we understand what their plans are for the next couple of years.
So we are making good progress in terms of timing on the projects.
And so I feel good about ---+ on the pipeline projects, I feel good about that.
There's always pressure on timing, and certainly FERC has been a little slower in terms of pipeline permitting than it's been historically, but we're feeling good about that.
In terms of counterparty risk, obviously, we feel good with our portfolio of projects that the vast, vast, vast majority of the counterparties that we have on all of our pipelines across both the Florida pipelines, Mountain Valley pipeline, and the Texas pipelines are all very strong credit-worthy entities.
And so we don't have that counterparty risk that some of the other folks in the pipeline business do, and our average contract length is quite long.
It's probably close to 20 years.
So given where the market is at, obviously there's a lot of distress in this market right now.
We would have interest only in pipelines with strong credit counterparties and long-term contracts.
So if there are those that come available, and there may be some of those that come available, given some of the things going on in the industry, we will be interested in that.
Obviously, we will be disciplined as we always are, vis a vis acquisitions, but it would be something that we would look at.
But I have no interest in adding anything with commodity exposure and short contracts.
Okay, <UNK>, this is <UNK>.
I will take the first one, and then I'll turn it over to <UNK> for the second one.
On the depreciation question about $200 million.
And the surplus amortization balance, I think the $263 million that I mentioned earlier for 2016, rolls off by the end of the year as part of our settlement agreement that expires.
And, <UNK>, we're going to have to get back to everybody.
Obviously, it's $37 million next year, which <UNK> mentioned in the call.
I don't recall what it is in the following year.
Hey, <UNK>, this is <UNK>.
I think the way you should think about the impacts of the reserve amortization, first of all, when you do a depreciation study, everything gets washed out in the study.
So you are looking at things fresh, you are looking at the current ---+ what would currently depreciate in terms of our ongoing depreciation expense, and we do a new study and we come up with a new revenue requirement from that study.
There are a lot of puts and takes in it.
And the fact that we've had some surplus amortization over the last several years has led to rate base being a little bit higher than it otherwise would have been had we not had the surplus amortization.
But actually doesn't have a giant impact on the ongoing depreciation expense in the study.
So, <UNK>, I give the sponsors a lot of credit for working to try to get something done in this environment ---+ that, this environment in Washington.
That said, I think it's highly, highly unlikely that anything gets done this year.
