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Derivative Instruments (Tables) | 9 Months Ended
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Sep. 30, 2022
Derivative [Line Items] |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The tables below present NEE's and FPL's gross derivative positions at September 30, 2022 and December 31, 2021, as required by disclosure rules. However, the majority of the underlying contracts are subject to master netting agreements and generally would not be contractually settled on a gross basis. Therefore, the tables below also present the derivative positions on a net basis, which reflect the offsetting of positions of certain transactions within the portfolio, the contractual ability to settle contracts under master netting arrangements and the netting of margin cash collateral, as well as the location of the net derivative position on the condensed consolidated balance sheets.
| September 30, 2022
| Level 1 |  | Level 2 |  | Level 3 |  | Netting(a) |  | Total
| (millions)
Assets: |  |  |  |  |  |  |  |  |
NEE: |  |  |  |  |  |  |  |  |
Commodity contracts | $ | 4,477 |  |  | $ | 12,281 |  |  | $ | 2,280 |  |  | $ | (15,990) |  |  | $ | 3,048 |
Interest rate contracts | $ | — |  |  | $ | 533 |  |  | $ | — |  |  | $ | (14) |  |  | 519 |
Foreign currency contracts | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (23) |  |  | (23) |
Total derivative assets |  |  |  |  |  |  |  |  | $ | 3,544 |
FPL – commodity contracts | $ | — |  |  | $ | 13 |  |  | $ | 50 |  |  | $ | (9) |  |  | $ | 54 |
Liabilities: |  |  |  |  |  |  |  |  |
NEE: |  |  |  |  |  |  |  |  |
Commodity contracts | $ | 6,687 |  |  | $ | 11,671 |  |  | $ | 3,956 |  |  | $ | (16,463) |  |  | $ | 5,851 |
Interest rate contracts | $ | — |  |  | $ | 33 |  |  | $ | — |  |  | $ | (14) |  |  | 19 |
Foreign currency contracts | $ | — |  |  | $ | 189 |  |  | $ | — |  |  | $ | (23) |  |  | 166 |
Total derivative liabilities |  |  |  |  |  |  |  |  | $ | 6,036 |
FPL – commodity contracts | $ | — |  |  | $ | 4 |  |  | $ | 29 |  |  | $ | (9) |  |  | $ | 24 |
Net fair value by NEE balance sheet line item: |  |  |  |  |  |  |  |  |
Current derivative assets(b) |  |  |  |  |  |  |  |  | $ | 1,431 |
Noncurrent derivative assets(c) |  |  |  |  |  |  |  |  | 2,113 |
Total derivative assets |  |  |  |  |  |  |  |  | $ | 3,544 |
Current derivative liabilities(d) |  |  |  |  |  |  |  |  | $ | 2,969 |
Noncurrent derivative liabilities(e) |  |  |  |  |  |  |  |  | 3,067 |
Total derivative liabilities |  |  |  |  |  |  |  |  | $ | 6,036 |
Net fair value by FPL balance sheet line item: |  |  |  |  |  |  |  |  |
Current other assets |  |  |  |  |  |  |  |  | $ | 52 |
Noncurrent other assets |  |  |  |  |  |  |  |  | 2 |
Total derivative assets |  |  |  |  |  |  |  |  | $ | 54 |
Current other liabilities |  |  |  |  |  |  |  |  | $ | 20 |
Noncurrent other liabilities |  |  |  |  |  |  |  |  | 4 |
Total derivative liabilities |  |  |  |  |  |  |  |  | $ | 24 |
——————————————— (a)Includes the effect of the contractual ability to settle contracts under master netting arrangements and the netting of margin cash collateral payments and receipts. NEE and FPL also have contract settlement receivable and payable balances that are subject to the master netting arrangements but are not offset within the condensed consolidated balance sheets and are recorded in customer receivables – net and accounts payable, respectively. (b)Reflects the netting of approximately $570 million in margin cash collateral received from counterparties. (c)Reflects the netting of approximately $221 million in margin cash collateral received from counterparties. (d)Reflects the netting of approximately $6 million in margin cash collateral paid to counterparties. (e)Reflects the netting of approximately $1,258 million in margin cash collateral paid to counterparties.
| December 31, 2021
| Level 1 |  | Level 2 |  | Level 3 |  | Netting(a) |  | Total
| (millions)
Assets: |  |  |  |  |  |  |  |  |
NEE: |  |  |  |  |  |  |  |  |
Commodity contracts | $ | 1,896 |  |  | $ | 5,082 |  |  | $ | 1,401 |  |  | $ | (6,622) |  |  | $ | 1,757 |
Interest rate contracts | $ | — |  |  | $ | 106 |  |  | $ | — |  |  | $ | (30) |  |  | 76 |
Foreign currency contracts | $ | — |  |  | $ | 8 |  |  | $ | — |  |  | $ | (17) |  |  | (9) |
Total derivative assets |  |  |  |  |  |  |  |  | $ | 1,824 |
FPL – commodity contracts | $ | — |  |  | $ | 3 |  |  | $ | 13 |  |  | $ | (3) |  |  | $ | 13 |
Liabilities: |  |  |  |  |  |  |  |  |
NEE: |  |  |  |  |  |  |  |  |
Commodity contracts | $ | 2,571 |  |  | $ | 4,990 |  |  | $ | 1,231 |  |  | $ | (6,594) |  |  | $ | 2,198 |
Interest rate contracts | $ | — |  |  | $ | 739 |  |  | $ | — |  |  | $ | (30) |  |  | 709 |
Foreign currency contracts | $ | — |  |  | $ | 86 |  |  | $ | — |  |  | $ | (17) |  |  | 69 |
Total derivative liabilities |  |  |  |  |  |  |  |  | $ | 2,976 |
FPL – commodity contracts | $ | — |  |  | $ | 8 |  |  | $ | 5 |  |  | $ | (3) |  |  | $ | 10 |
Net fair value by NEE balance sheet line item: |  |  |  |  |  |  |  |  |
Current derivative assets(b) |  |  |  |  |  |  |  |  | $ | 689 |
Noncurrent derivative assets(c) |  |  |  |  |  |  |  |  | 1,135 |
Total derivative assets |  |  |  |  |  |  |  |  | $ | 1,824 |
Current derivative liabilities(d) |  |  |  |  |  |  |  |  | $ | 1,263 |
Noncurrent derivative liabilities(e) |  |  |  |  |  |  |  |  | 1,713 |
Total derivative liabilities |  |  |  |  |  |  |  |  | $ | 2,976 |
Net fair value by FPL balance sheet line item: |  |  |  |  |  |  |  |  |
Current other assets |  |  |  |  |  |  |  |  | $ | 13 |
Current other liabilities |  |  |  |  |  |  |  |  | $ | 9 |
Noncurrent other liabilities |  |  |  |  |  |  |  |  | 1 |
Total derivative liabilities |  |  |  |  |  |  |  |  | $ | 10 |
——————————————— (a)Includes the effect of the contractual ability to settle contracts under master netting arrangements and the netting of margin cash collateral payments and receipts. NEE and FPL also have contract settlement receivable and payable balances that are subject to the master netting arrangements but are not offset within the condensed consolidated balance sheets and are recorded in customer receivables – net and accounts payable, respectively. (b)Reflects the netting of approximately $150 million in margin cash collateral received from counterparties. (c)Reflects the netting of approximately $56 million in margin cash collateral received from counterparties. (d)Reflects the netting of approximately $6 million in margin cash collateral paid to counterparties. (e)Reflects the netting of approximately $172 million in margin cash collateral paid to counterparties.
Significant unobservable inputs used in valuation of contracts categorized as Level 3 | The significant unobservable inputs used in the valuation of NEE's commodity contracts categorized as Level 3 of the fair value hierarchy at September 30, 2022 are as follows:
|  | Fair Value at |  | Valuation |  | Significant |  |  |  |  |  | Weighted-
Transaction Type |  | September 30, 2022 |  | Technique(s) |  | Unobservable Inputs |  | Range |  | average(a)
|  | Assets |  | Liabilities |  |  |  |  |  |  |  |  |  |
|  | (millions) |  |  |  |  |  |  |  |  |  |
Forward contracts – power |  | $ | 178 |  |  | $ | 619 |  |  | Discounted cash flow |  | Forward price (per MWh) |  | $(7) | — | $461 |  | $51
Forward contracts – gas |  | 330 |  |  | 323 |  |  | Discounted cash flow |  | Forward price (per MMBtu) |  | $3 | — | $35 |  | $5
Forward contracts – congestion |  | 50 |  |  | 12 |  |  | Discounted cash flow |  | Forward price (per MWh) |  | $(24) | — | $25 |  | $1
Options – power |  | 79 |  |  | 1 |  |  | Option models |  | Implied correlations |  | 42% | — | 89% |  | 56%
|  |  |  |  |  |  |  | Implied volatilities |  | 20% | — | 225% |  | 57%
Options – primarily gas |  | 1,368 |  |  | 1,271 |  |  | Option models |  | Implied correlations |  | 42% | — | 89% |  | 56%
|  |  |  |  |  |  |  | Implied volatilities |  | 24% | — | 192% |  | 63%
Full requirements and unit contingent contracts |  | 129 |  |  | 1,583 |  |  | Discounted cash flow |  | Forward price (per MWh) |  | $12 | — | $512 |  | $99
|  |  |  |  |  |  |  | Customer migration rate(b) |  | —% | — | 122% |  | 6%
Forward contracts – other |  | 146 |  |  | 147 |  |  |  |  |  |  |  |  |  |  |
Total |  | $ | 2,280 |  |  | $ | 3,956 |  |  |  |  |  |  |  |  |  |  |
——————————————— (a)Unobservable inputs were weighted by volume. (b)Applies only to full requirements contracts.
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | The sensitivity of NEE's fair value measurements to increases (decreases) in the significant unobservable inputs is as follows:
Significant Unobservable Input |  | Position |  | Impact on Fair Value Measurement
Forward price |  | Purchase power/gas |  | Increase (decrease)
|  | Sell power/gas |  | Decrease (increase)
Implied correlations |  | Purchase option |  | Decrease (increase)
|  | Sell option |  | Increase (decrease)
Implied volatilities |  | Purchase option |  | Increase (decrease)
|  | Sell option |  | Decrease (increase)
Customer migration rate |  | Sell power(a) |  | Decrease (increase)
——————————————— (a)Assumes the contract is in a gain position.
Reconciliation of changes in the fair value of derivatives measured based on significant unobservable inputs | The reconciliation of changes in the fair value of derivatives that are based on significant unobservable inputs is as follows:
| Three Months Ended September 30,
| 2022 |  | 2021
| NEE |  | FPL |  | NEE |  | FPL
| (millions)
Fair value of net derivatives based on significant unobservable inputs at June 30 | $ | (1,594) |  |  | $ | 83 |  |  | $ | 584 |  |  | $ | — |
Realized and unrealized gains (losses): |  |  |  |  |  |  |
Included in operating revenues | (695) |  |  | — |  |  | (1,138) |  |  | — |
Included in regulatory assets and liabilities | 92 |  |  | 92 |  |  | 1 |  |  | 1 |
Purchases | 90 |  |  | — |  |  | 62 |  |  | — |
Settlements | 482 |  |  | (154) |  |  | 80 |  |  | (2) |
Issuances | (57) |  |  | — |  |  | (52) |  |  | — |
Transfers out(a) | 6 |  |  | — |  |  | 15 |  |  | — |
Fair value of net derivatives based on significant unobservable inputs at September 30 | $ | (1,676) |  |  | $ | 21 |  |  | $ | (448) |  |  | $ | (1) |
Gains (losses) included in operating revenues attributable to the change in unrealized gains (losses) relating to derivatives held at the reporting date | $ | (446) |  |  | $ | — |  |  | $ | (1,107) |  |  | $ | — |
——————————————— (a)Transfers from Level 3 to Level 2 were a result of increased observability of market data.
| Nine Months Ended September 30,
| 2022 |  | 2021
| NEE |  | FPL |  | NEE |  | FPL
| (millions)
Fair value of net derivatives based on significant unobservable inputs at December 31 of prior period | $ | 170 |  |  | $ | 8 |  |  | $ | 1,374 |  |  | $ | (1) |
Realized and unrealized gains (losses): |  |  |  |  |  |  |
Included in operating revenues | (3,215) |  |  | — |  |  | (1,795) |  |  | — |
Included in regulatory assets and liabilities | 161 |  |  | 161 |  |  | 2 |  |  | 2 |
Purchases | 469 |  |  | — |  |  | 153 |  |  | — |
Settlements | 1,043 |  |  | (148) |  |  | (54) |  |  | (2) |
Issuances | (289) |  |  | — |  |  | (116) |  |  | — |
Transfers in(a) | — |  |  | — |  |  | 1 |  |  | — |
Transfers out(a) | (15) |  |  | — |  |  | (13) |  |  | — |
Fair value of net derivatives based on significant unobservable inputs at September 30 | $ | (1,676) |  |  | $ | 21 |  |  | $ | (448) |  |  | $ | (1) |
Gains (losses) included in operating revenues attributable to the change in unrealized gains (losses) relating to derivatives held at the reporting date | $ | (2,081) |  |  | $ | — |  |  | $ | (1,581) |  |  | $ | — |
——————————————— (a)Transfers into Level 3 were a result of decreased observability of market data. Transfers from Level 3 to Level 2 were a result of increased observability of market data.
Net notional volumes | NEE and FPL had derivative commodity contracts for the following net notional volumes:
|  | September 30, 2022 |  | December 31, 2021
Commodity Type |  | NEE |  | FPL |  | NEE |  | FPL
|  | (millions)
Power |  | (660) |  |  | MWh |  | — |  |  |  |  | (103) |  |  | MWh |  | — |  |  |
Natural gas |  | (1,467) |  |  | MMBtu |  | 151 |  |  | MMBtu |  | (1,290) |  |  | MMBtu |  | 91 |  |  | MMBtu
Oil |  | (38) |  |  | barrels |  | — |  |  |  |  | (33) |  |  | barrels |  | — |  |  |
Not Designated as Hedging Instrument |
Derivative [Line Items] |
Derivative instruments, gain (loss) in statement of financial performance | Gains (losses) related to NEE's derivatives are recorded in NEE's condensed consolidated statements of income as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
| (millions)
Commodity contracts(a) – operating revenues (including $10 unrealized losses, $1,236 unrealized losses, $2,942 unrealized losses and $2,563 unrealized losses, respectively) | $ | (122) |  |  | $ | (1,291) |  |  | $ | (3,488) |  |  | $ | (2,708) |
Foreign currency contracts – interest expense (including $32 unrealized losses, $15 unrealized losses, $113 unrealized losses and $69 unrealized losses, respectively) | (36) |  |  | (13) |  |  | (121) |  |  | (69) |
Interest rate contracts – interest expense (including $16 unrealized gains, $23 unrealized gains, $1,131 unrealized gains and $382 unrealized gains, respectively) | 236 |  |  | 7 |  |  | 1,321 |  |  | 340 |
Losses reclassified from AOCI to interest expense: |  |  |  |  |  |  |
Interest rate contracts | — |  |  | (1) |  |  | (5) |  |  | (4) |
Foreign currency contracts | (1) |  |  | (1) |  |  | (2) |  |  | (2) |
Total | $ | 77 |  |  | $ | (1,299) |  |  | $ | (2,295) |  |  | $ | (2,443) |
——————————————— (a)For the three and nine months ended September 30, 2022, FPL recorded gains of approximately $131 million and $110 million, respectively, related to commodity contracts as regulatory liabilities on its condensed consolidated balance sheets. For the three and nine months ended September 30, 2021, FPL recorded gains of approximately $9 million and $13 million, respectively, related to commodity contracts as regulatory liabilities on its condensed consolidated balance sheets.

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