The longtime leader of Florida Power & Light Co. said Jan. 25 he will retire from the utility and its parent company, NextEra Energy Inc., in May and will next month step into a transitional role.
Eric Silagy has been president of FPL since late 2011, was named CEO in May 2014 and added the chairman title to his business card nearly a year ago. As part of the 57-year-old’s decision to step down, the NextEra board has agreed to pay Silagy his 2022 incentive payments as well as a portion of his stock and option awards in return for him releasing possible claims against the company and committing to two-year non-compete and non-solicitation agreements.
Stepping into Silagy’s seat next month will be Armando Pimentel Jr., the former head of NextEra Energy Resources, the company’s clean-energy projects developer and operator, as well as NextEra’s CFO from mid-2008 to the fall of 2011.
Silagy’s pending departure comes after the politically connected executive—he has, among other things, helped the Florida Chamber of Commerce, the State University System of Florida and the Florida Council of 100, which advises the state’s governor—and FPL were shown to have worked with political consultants, with reports saying the company had paid more than $10 million to dark-money groups looking to sway Florida elections and news coverage.
Speaking to analysts on a conference call discussing NextEra’s fourth-quarter earnings, Silagy said he didn’t have a firm timeline to step down but had told NextEra Chairman, President and CEO John Ketchum in early 2022 he was committed for at least a year.
“This is the kind of job that you have to plan ahead and we're getting ready to go in another rate case cycle,” Silagy said. “That’s a multi-year type of approach. And so to go forward longer means I'm really committing through 2026.”
Both Silagy and Ketchum acknowledged that 2022 was a challenging year for FPL, which in addition to the campaign-finance scrutiny also had to handle two hurricanes and wrestle with inflation and supply chain pressures. But when asked whether there is a link between Silagy’s planned exit and a possible Federal Election Commission investigation, Ketchum said his team is “not making a connection.”
The FEC claims against FPL, Ketchum outlined, involve at most $1.3 million in contributions. He added that he doesn’t think FPL would be held liable for a separate set of allegations under Florida law and noted that the FEC has up to 18 months to decide whether to launch a formal inquiry.
“We think that a claim like this, that’s based solely on media reports and allegations, is not the type of a claim the FEC should take up,” Ketchum said. “We do not believe that the federal allegations, taken as a whole, would have a material impact on our business.”
Despite those explanations, investors were skeptical about the risk to NextEra. Shares of the company (Ticker: NEE) fell nearly 9% Jan. 25 to $76.59 on trading volume of more than four times their daily average. The drop took NextEra’s stock below where it was trading six months ago.
The Silagy news overshadowed NextEra’s Q4 numbers, which showed a profit of more than $1.5 billion on revenues of nearly $6.2 billion, increases from $1.2 billion and $5.0 billion, respectively, in late 2021. FPL’s bottom line grew to $763 million during the quarter versus $620 million the prior year thanks in part to 1.3% growth in its customer count and business mix. At NextEra Energy Resources, profits climbed to $996 million from $851 million in the last three months of 2021.
Ketchum and his team are upbeat about their ability to add to that growth. They have extended their main financial targets by a year through the end of 2026 and said passage of the Inflation Reduction Act has given them much better visibility into growth beyond that. Their expectations for NextEra Energy Resources development of wind, solar and storage projects through the end of 2026 now stand at between 32.7 GW and 41.8 GW.
For context, Ketchum pointed out the FPL’s total generation capacity totals 27 GW and that merely hitting the bottom end of the 2026 range would more than double NextEra’s portfolio, which took more than two decades to build out.