Dive Brief:

• After listing a series of financial and regulatory successes during the company's fourth quarter earnings call, NextEra Energy chairman and CEO Jim Robo announced that he will leave his position on March 1.
• John Ketchum, currently president and CEO of NextEra Energy Resources, will succeed Robo, necessitating other changes to the company's senior leadership. Rebecca Kujawa, NextEra Energy's chief financial officer, will take Ketchum's place as the head of NextEra Energy Sources, and Kirk Crews, current vice president of business management for NextEra Energy Resources, will replace Kujawa as CFO.
• Robo told investors that he has been planning his retirement since 2016, aiming to leave the company around 2020. He said he extended his tenure with the company to oversee the resolution of the 2020 rate case at Florida Power & Light, which was resolved via a settlement agreement in October 2021. “We've been very deliberate about the succession plan,” he said, “and I'm very pleased with the team that is leading [NextEra Energy] into the future.”

Dive Insight:

One of the industry's most influential leaders joined the Great Resignation on Tuesday when NextEra CEO Robo closed out his customary fourth-quarter earnings call remarks by announcing his intent to leave the company on March 1.

Robo said he will remain executive chairman to help incoming CEO Ketchum with the leadership transition, but told investors they should think of his remaining time with the company in terms of “months, not years.”

“That's probably all we're ready to say about it today,” he said.

Robo later explained that he'd begun planning his retirement several years prior, informing the company's board of his intent in 2016. However he said he planned to stay through the end of the 2020 rate case at Florida Power & Light, which ran into opposition as customers protested a proposed increase to the company's base electrical rates. A settlement was approved after NextEra agreed to reduce the proposed rate increase. Even so, Robo said the board hadn't made any final decisions about his departure until recently, as they prepared to make the announcement.

"It cannot be overstated how significant an impact Jim Robo has had on the transformation of NextEra Energy,” Sherry Barrat, lead independent director of the NextEra Energy Board of Directors, said in a statement. “Under Jim's stewardship, NextEra Energy has been transformed into a world leader in clean energy and the world's largest electric company by market capitalization.... NextEra Energy was a $29 billion market capitalization company when Jim became CEO and, today, it had surpassed $150 billion in market capitalization – a more than five-fold improvement.”

Ketchum said he plans to remain “intensely focused” on building on the company's existing track record of success. “I believe there is no company better positioned to lead our country's energy transformation than NextEra Energy, and I am humbled by the opportunity to lead this team through such an exciting period for our company.”

Ketchum will take charge of the company just as it marks several major milestones. Robo announced that Florida Power & Light is on track to install 30 million solar panels by 2025 — five years earlier than the 2030 deadline established by the company's 30-by-30 initiative created in 2019. NextEra Energy Resources installed nearly 10,000 MW of renewables and energy storage over the past two years, while NextEra Energy Transmission saw a 20% increase in income last year on account of growing demand for grid modernization to support the energy transition.

“We will be disappointed if we are not able to deliver financial results at or near the top end of our adjusted earnings per share expectations ranges in each of 2022, 2023, 2024, and 2025,” Robo said.

Ketchum later noted during the call that the growth currently anticipated by NextEra does not take potential Build Back Better legislation into account, even though the company does anticipate some form of renewable energy legislation to pass before the end of 2022. Developments such as the rise of environment, social and governance investment funds are getting investor attention and driving more companies to focus on sustainability, resulting in growing demand from commercial and industry customers.

This demand, Ketchum said, has NextEra looking for ways to appeal to new customers — including strategies such as developing proprietary smart energy software, now in use by JPMorgan Chase, that matches energy use with available generation to improve energy efficiency.

NextEra has also made strategic investments in a clean energy technology company building a facility to produce clean hydrogen, and in a liquid fuels company that also plans to work on green hydrogen. NextEra Energy Resources has entered agreements to supply both companies with energy with which to generate green hydrogen, Kujawa said.

“We are at the vanguard of building a sustainable energy era that is both clean and affordable, and we are driving hard to continue to be at the fore front of the disruption that is occurring within the energy sector and broader parts of the U.S. economy,” she said.