Potential Portfolio Sale: Review of NextEra Energy Canadian Assets

On January 26th, NextEra Energy executives announced that the company is considering the sale of its Canadian assets. John Ketchum, Executive Vice President of Finance and Chief Financial Officer for NextEra Energy, stated during an Q4 and full-year 2017 earnings call that the company is exploring the sale of its Canadian portfolio to recycle capital back into its U.S. assets, which are expected to benefit from recent corporate tax reform. NextEra is continuing to evaluate this opportunity and will provide updates regarding this potential sale in the coming months.

Operating in four provinces, NextEra Energy’s Canadian assets include two solar projects (40 MW) and nine wind projects (675 MW). All but one of these projects have long-term contracts with the respective purchasing entities in each province.

Figure 1: NextEra Energy Canadian Project Locations

nextera canadian assets

NextEra Energy Canadian Portfolio – Solar

solar energy canadian portfolio

NextEra Energy Canadian Portfolio – Wind

wind energy canadian portfolio

It is unclear to what extent there is a tax advantage for NextEra to go ahead with the sale and when it might occur. Interested parties would benefit from taking a detailed look at each of the potentially available assets to evaluate their fit with their existing generation portfolio. In particular, the 7 solar and wind projects located in Ontario may be attractive given the number of years remaining in their contract terms. Any participant in Alberta and Ontario’s wholesale markets must consider the implications of the ongoing market design and evolution processes in these jurisdictions to assess the implications on future revenue opportunities.

With offices in Toronto and Calgary Power Advisory follows Canadian electricity markets closely and would welcome the opportunity to help clients assess this potential project acquisition opportunity and to evaluate other generation assets across North America.

John Dalton, President, Carson Robers, Consultant and Caitlin Laber, Researcher, Power Advisory LLC

A PDF version of this report is available here.