NextEra Energy Inc. (NEE), the biggest U.S. operator of wind turbines, rose to a record after saying it plans to sell shares in a so-called yield vehicle for its renewable power plants.
NextEra filed plans with the U.S. Securities and Exchange Commission for a proposed initial public offering of the yieldco, Chief Executive Officer Jim Robo said today during a call with investors. The number of securities to be sold and the price range haven’t yet been decided, according to a filing.
NextEra is one of at least a dozen developers in North America and Europe, including NRG Energy Inc. and Abengoa SA, that are considering yieldcos or have already formed them. A yield company is a separate business that owns and operates power plants. It reduces capital costs and raises liquidity for developers, offering investors long-term contracted cashflows.
NextEra’s Chief Financial Officer Moray Dewhurst said in November the company was considering a yieldco to own as much as 2,000 megawatts of plants with long-term power contracts. Most of those are solar plants or wind farms that are entitled to tax breaks, so the unit may reap higher returns than the corporation, he said at the time.
The yieldco won’t have a negative impact on NextEra’s credit, Robo said today.
NextEra rose as much as 3.6 percent to a record. The stock, which has rallied 18 percent this year, was up 2.5 percent at $100.46 at 10:40 a.m. in New York.
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