ATLANTA — Gulf Power, which provides electric service to nearly a half-million customers in 71 Northwest Florida communities, will be sold to NextEra Energy, parent company of Florida Power & Light, in a nearly $6.5 billion deal, according to a Monday announcement from Southern Company, parent company of Gulf Power.
Florida Power & Light, the third-largest electric utility in the United States, currently serves nearly 5 million accounts comprising an estimated 10 million or more people across nearly half the state of Florida. NextEra, a clean-energy company, operates approximately 46,790 megawatts of electrical generating capacity and employs approximately 14,000 people in 33 states and Canada.
Pending federal regulatory approvals, the sale is expected to be completed sometime in the first half of next year. It's not yet clear what the sale might mean for Gulf Power customers or workers.
"Until the transaction closes, normal business operations will continue at Gulf Power," said Rob Gould, vice president and chief communications officer for NextEra Energy and Florida Power and Light. "Beyond that, no decisions have been made."
Gould did say in an email responding to a Monday phone call that, even after the sale is completed, Gulf Power "will remain the customer-facing brand," meaning that its current customers will continue to deal with an entity carrying the Gulf Power name.
"And assuming approval of the transaction," Gould added, "Gulf Power will continue to operate as it does today as a separate electric company."
The typical Florida Power & Light monthly bill for a 1,000-kilowatthour residential customer is $99.37, according to company data. That rate, however, is down somewhat due to the end of a temporary surcharge for power restoration imposed in the wake of 2016's Hurricane Matthew and the use of federal tax savings to avoid a rate increase. The rate does, though, include costs for construction of FPL's four newest solar power plants.
Gould went on to note that "today, FPL’s typical residential customer bill is approximately 20 percent below the other Florida investor-owned utilities and nearly 30 percent below the national average." And, Gould added, "In 2017, FPL delivered its best-ever full-year period of service reliability and was recognized as being the most reliable electric utility in the Southeast."
The sale of Gulf Power is part of a deal that will also include Florida City Gas, a Southern Company subsidiary that provides natural gas to more than 100,000 commercial and residential customers in South Florida. Southern Company's interests in Plant Oleander and Plant Stanton, gas-fired electrical generation plants in Cocoa and Orlando, Florida, are additional parts of the deal.
The purchase price is approximately $6.475 billion, according to the Southern Company announcement. As part of the deal, NextEra Energy will assume approximately $1.4 billion of Gulf Power debt, according to a Monday announcement from the Juno Beach, Florida-headquartered company.
NextEra Energy plans to issue new debt to fund the purchase, according to its own Monday announcement of the deal.
The Gulf Power and Plant Oleander and Plant Stanton transactions will require approval by the Federal Energy Regulatory Commission and the Federal Communications Commission. The target completion date for those transactions is the first half of 2019. The Florida City Gas transaction is slated for completion later this year.
In a Monday conference call, Jim Robo, chairman and chief executive officer of NextEra Energy, said the key rationales for the purchase of Gulf Power and the associated assets are its geographic and strategic fit with NextEra. The acquisitions will make NextEra "an even stronger company, with greater scale," Robo said. The deal also represents NextEra's "opportunitistic and disciplined approach" to expanding its footprint, according to Robo.
"I'm very excited about the opportunities we see" with the Gulf Power acquisition, Robo said.
Meanwhile, Southern Company says proceeds of the sale "will be used to significantly reduce debt" across the company. Also according to Southern, proceeds from the deal "are at the top end of recent M&A (mergers and acquisition) transactions ... ."
In a presentation prepared for the announcement, Southern Company notes that Gulf Power represents a small segment of its business. Gulf Power's "approximately 460,000 customers ... (are) less than 5 percent of Southern's customer base," according to the presentation. Southern's 108,000 Florida City Gas customers represent just 1 percent of the company's customer base, the presentation also notes.
In addition to Gulf Power, Southern Company operates Alabama Power, Georgia Power and Mississippi Power, in addition to natural gas distribution in seven states. Overall, Southern Company currently serves 9 million customers through its electric and gas subsidiaries.