|
Nextera Energy Inc's Comment on Competitors and Industry Peers
Electricity markets in the U.S. are regional and diverse in character. All
are extensively regulated, and competition in these markets is shaped and constrained
by regulation. The nature of the products offered varies based on the specifics
of regulation in each region. Generally, in addition to the natural constraints
on pricing freedom presented by competition, NEER may also face specific constraints
in the form of price caps, or maximum allowed prices, for certain products.
NEER's ability to sell the output of its generation facilities is also constrained
by available transmission capacity, which can vary from time to time and can
have a significant impact on pricing.
The degree and nature of competition that NEER faces is different in wholesale
markets and in retail markets. Approximately 90% of NEER's revenue is derived
from wholesale markets.
Wholesale power generation is a capital-intensive, commodity-driven business
with numerous industry participants. NEER primarily competes on the basis of
price, but believes the green attributes of NEER's generating assets, its creditworthiness
and its ability to offer and manage customized risk solutions to wholesale customers
are competitive advantages. Wholesale power generation is a regional business
that is highly fragmented relative to many other commodity industries and diverse
in terms of industry structure. As such, there is a wide variation in terms
of the capabilities, resources, nature and identity of the companies NEER competes
with depending on the market. In wholesale markets, customers' needs are met
through a variety of means, including long-term bilateral contracts, standardized
bilateral products such as full requirements service and customized supply and
risk management services.
In general, U.S. electricity markets encompass three classes of product: energy,
capacity and ancillary services. Energy services relate to the physical delivery
of power; capacity services relate to the availability of MW capacity of a power
generation asset; and ancillary services are other services related to power
generation assets, such as load regulation and spinning and non-spinning reserves.
The exact nature of these classes of product is defined in part by regional
tariffs. Not all regions have a capacity product class, and the specific definitions
of ancillary services vary from region to region.
RTOs and ISOs exist in a number of regions within which NEER operates to coordinate
generation and transmission across wide geographic areas and to run markets.
NEER also has operations that fall within the Western Electricity Coordinating
Council reliability region that are not under the jurisdiction of an established
RTO or ISO. Although each RTO and ISO may have differing objectives and structures,
some benefits of these entities include regional planning, managing transmission
congestion, developing larger wholesale markets for energy and capacity, maintaining
reliability and facilitating competition among wholesale electricity providers.
NEER has operations that fall within the following RTOs and ISOs:
Alberta Electric System Operator
California Independent System Operator
ERCOT
Independent Electricity System Operator (in Ontario)
ISO New England (ISO-NE)
Midcontinent Independent System Operator, Inc. (MISO)
New York Independent System Operator (NYISO)
PJM
Southwest Power Pool
NEER competes in different regions to different degrees, but in general it
seeks to enter into long-term bilateral contracts for the full output of its
generating facilities, and, approximately 62% of NEER's generating capacity
is fully committed under long-term contracts. Where long-term contracts are
not in effect, NEER sells the output of its facilities into daily spot markets.
In such cases, NEER will frequently enter into shorter term bilateral contracts,
typically but not always of one to three years duration, to hedge the price
risk associated with selling into a daily spot market. Such bilateral contracts,
which may be hedges either for physical delivery or for financial (pricing)
offset, may only protect a portion of the revenue that NEER expects to derive
from the associated generation facility and may not qualify for hedge accounting
under GAAP.
Overall company Market Share Q4 2020 |
*Market share calculated with total revenue.
NEE's vs. Competition, Data
(Revenue and Income for Trailing 12 Months, in Millions of $, except Employees)
COMPANY NAME |
MARKET CAP |
REVENUES |
INCOME |
EMPLOYEES |
Nextera Energy Inc |
17,997 |
516,662 |
2,369 |
13,400 |
The Aes Corporation |
9,660 |
17,814 |
152 |
18,500 |
American Electric Power Co Inc |
14,919 |
44,845 |
2,197 |
1,859 |
Centerpoint Energy Inc |
7,418 |
13,302 |
-773 |
8,540 |
Consolidated Edison Inc |
12,246 |
26,804 |
1,144 |
14,601 |
Dominion Energy Inc |
14,172 |
29,865 |
-550 |
14,400 |
Dte Energy Co |
12,177 |
27,626 |
1,371 |
10,000 |
Edison International |
13,578 |
23,255 |
871 |
13,690 |
Entergy Corporation |
10,114 |
21,761 |
1,407 |
13,393 |
Firstenergy Corp |
10,790 |
19,700 |
1,079 |
15,557 |
NextEra Energy, Inc. |
0 |
0 |
0 |
0 |
Nisource Inc |
9,363 |
10,126 |
-14 |
8,982 |
PEOPLES ENERGY CORPORATION |
0 |
0 |
0 |
0 |
Pg and e Corp |
18,469 |
22,434 |
-1,304 |
22,581 |
Pinnacle West Capital Corporation |
3,587 |
9,718 |
570 |
6,366 |
Ppl Corporation |
7,607 |
22,322 |
1,469 |
17,391 |
Paragon Offshore Plc |
231 |
0 |
605 |
0 |
Public Service Enterprise Group Incorporated |
9,611 |
32,271 |
1,739 |
12,689 |
The Southern Company |
20,375 |
70,452 |
3,103 |
26,369 |
TXU CORP |
0 |
0 |
0 |
0 |
Williams Companies Inc |
7,719 |
28,556 |
198 |
6,742 |
Xcel Energy Inc |
21,328 |
37,922 |
1,473 |
11,589 |
Kinder Morgan Inc |
11,700 |
37,469 |
180 |
11,535 |
Anadarko Petroleum Corp |
13,706 |
35,730 |
-288 |
6,100 |
Scana Corporation |
3,531 |
6,833 |
-115 |
5,989 |
Chesapeake Energy Corporation |
5,963 |
30 |
-9,658 |
0 |
NORTHEAST UTILITIES |
0 |
0 |
0 |
8,248 |
Teco Energy Inc |
5,014 |
0 |
198 |
4,400 |
Questar Gas Co |
957 |
0 |
74 |
1,745 |
Pepco Holdings Inc |
4,340 |
0 |
-212 |
2,374 |
Sempra Energy |
11,370 |
40,415 |
4,105 |
17,046 |
Oneok Inc |
8,542 |
22,589 |
613 |
2,269 |
Nrg Energy Inc |
9,261 |
9,273 |
4,068 |
9,806 |
Exelon Corporation |
33,039 |
44,838 |
1,954 |
0 |
Berkshire Hathaway Inc |
246,497 |
539,579 |
36,353 |
0 |
Qep Resources Inc |
734 |
990 |
3 |
765 |
Eversource Energy |
8,904 |
31,170 |
1,213 |
8,248 |
Sprague Resources Lp |
2,708 |
546 |
35 |
600 |
SUBTOTAL |
587,627 |
1,744,895 |
55,628 |
315,774 |
|