“How can you possibly pull the rug out from under the industry?”
The spaces between John Ketchum’s words were punctuated by a thump of his hand on the table as the president and CEO of NextEra Energy Inc. voiced his displeasure at a recent U.S. Department of Commerce move to review a California company’s claim that solar panels made in four Southeast Asian countries are circumventing tariffs on Chinese competitors’ products.
Speaking to analysts and investors on a conference call discussing NextEra’s first-quarter results, Ketchum and CFO Kirk Crews said the Commerce Department move – which goes against three of its own rulings affirming a tariff decision first made in 2012 – stands to create a high level of uncertainty in the solar panel market for several years, hampering needed investment. On top of that, they said, some suppliers are holding onto shipments from Cambodia, Malaysia, Thailand and Vietnam until the government issues a preliminary ruling this summer, which could push into 2023 a number of NextEra solar and storage projects originally projected to be completed this year.
“Our hope is that they look at the information [and] rely on the prior four decisions from 2012, 2014, 2020 and 2021 to follow a consistent trade practice rather than retroactively changing the rules for an industry that has been playing by the rules for the last decade,” said Ketchum, who last month took over the top job at NextEra from Jim Robo. “That would make absolutely no sense in an environment where you have inflation, increasing commodity prices and the only deflationary product and source of generation that also achieves clean energy goals and creates a ton of American jobs. You’re stymieing rather than helping.”
The NextEra projects likely to be delayed by the government’s review will generate between 2.1GW and 2.8 GW. Ketchum said delays caused by the Commerce Department would “perversely” force solar industry firms to return to Chinese suppliers whose products come with tariffs that are already known.
During the first quarter, Florida-based NextEra posted a net loss of $451 million after booking a one-time loss of nearly $1.8 billion on some of its hedges and wrote down about $600 million to account for its investment in the troubled Mountain Valley Pipeline project. Adjusted for those items, profits climbed 9% to nearly $1.5 billion and earnings per share rose more than 10%.
Other items from NextEra’s conference call April 21 included:
• Word that retail sales at Florida Power & Light Co., which now includes Gulf Power Co., rose 1.9%, helped by average number of customers rising 1.6%
• FPL placed into service 450MW of solar projects during the quarter, growing its solar portfolio to 3,600MW.
Shares of NextEra (Ticker: NEE) fell nearly 3% to $73.95 April 22, when the broader market also was down about that much. Year to date, they have lost about 20% of their value.