The Obama administration’s clean power stimulus spending is already lifting the earnings of utilities companies. Florida utility FPL Group thanked clean power and stimulus funds today for its solid first-quarter results, which investors responded to by pushing FPL’s stock up 6 percent.
In a conference call with analysts, FPL CEO Lewis Hay said that clean technologies drove much of the firm’s earnings growth in the quarter. NextEra Energy Resources, the company’s recently renamed energy generation unit, saw adjusted earnings per share grow 13 percent from the same quarter last year, thanks to new wind projects and the federal stimulus package passed in February.
FPL’s revenue grew 8 percent to $3.7 billion despite the recession reducing demand for power. In comparison, revenue at NextEra grew 28 percent, to $1.09 billion.
Hay praised the controversial stimulus package as beneficial on several fronts. By extending a wind production tax credit for three years, the package has already encouraged FPL to add more than a gigawatt of new wind capacity this year alone and allowed it to lay plans to finance longer-term wind projects.
CFO Armando Pimental added that the stimulus bill’s “new tax credit policy has created valuable options for us and has enhanced our ability to provide earnings growth.” The stimulus spending, he said, would provide incentives for wind, solar and other renewable energies through 2016, not just through tax credits but also with loan guarantees and grants to modernize the grid.
As the economy has worsened, FPL has maintained a steady push into cleantech. In December, it broke ground on a 75-megawatt solar thermal plant. Earlier this month, it announced a $300 million solar plant to power Florida’s Cleantech City project. And it generated a lot of buzz last week by partnering with GE, Cisco and Silver Spring Networks to roll out a million smart meters in Miami.
Even before today’s gains, FPL’s stock had risen 14 percent in the last six months, compared with a 13 percent drop in the Dow Jones Utilities Average. With Tuesday’s gains, FPL is up 9 percent this year.
At one point in the call, Hay gushed openly about the stimulus as if it were the cure for a few current ills.
“We believe this legislation makes a significant downpayment on helping the country transition to clean energy economy of the future while creating much needed jobs this year and next. We expect that the public policy support it provides for renewable energy and a smarter grid will transform the industry, reduce emissions and help lead our country out of this recession.”
Of course the chief executive is praising government spending when his company is benefiting from its largesse. Still, it is encouraging to see companies that have scrutinized the bill seeing ways to move toward cleaner energies while growing earnings. It’s even more encouraging to see even a little of that earnings growth this early.
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