NextEra (NEE) Expands Transmission Operations In California
Zacks Investment Research | Jul 16, 2019 09:34PM ET
NextEra Energy, Inc. (NYSE:NEE) announced that its subsidiary NextEra Energy Transmission, LLC has completed the acquisition of Trans Bay Cable, LLC (TBC) from affiliates of Steelriver Infrastructure Fund North America.
The acquisition led to further expansion of the company’s transmission operations in California. TBC owns a 53-mile, high-voltage direct current underwater transmission cable system that extends from Pittsburg to San Francisco, CA. This underground transmission system, which was developed to increase resiliency of the electric grid in that region, supplies nearly 40% of the electricity used in San Francisco.
Importance of Transmission Lines
Transmission lines are an integral part of the electricity infrastructure. These are wires that are utilized to carry high-voltage electric power produced from plants to substations that ultimately deliver power to customers.
Members of the Edison Electric Institute have invested $20.8 billion in transmission infrastructure in 2016, and expect to invest an additional $90 billion through 2020 to make the transmission system more efficient as well as further increase resiliency of the grid. Transmission lines ensure 24x7 availability of electricity to different customers.
Long-Term Plans
NextEra has plans to invest $50-$55 billion through the 2019-2022 time period to strengthen existing operations. Of this amount, the company aims to invest $11.5-13.5 billion in transmission and distribution projects.
NextEra’s transmission and distribution expenditure is aimed at supporting growth, and improving system reliability and storm resiliency. As miles of transmission lines remain exposed to extreme weather conditions during the hurricane season, it becomes essential for utility operators to keep strengthening transmission and distribution channels.
NextEra, through its subsidiaries, currently owns and maintains more than 7,300 miles of transmission lines between 69 kilovolts and 500 kilovolts, and nearly 800 substations in North America. Courtesy of ongoing investments in acquisitions and organic development, NextEra Energy Transmission is expected to double operations by 2022.
Price Movement
In a year’s time, shares of NextEra have gained 22.7% compared with the Zacks Investment Research
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