FPL's Parent Company Didn't Pay Federal Tax for Eight Years, Got $313 Million in Credits
Florida Power & Light
Since 2016, Florida Power and Light, the monopoly consumers are forced to pay if they want electricity in Miami, has been accused of the following: Leaking radioactive wastewater into Biscayne Bay; trying to trick consumers into giving up their rights to solar power; attempting to stash radioactive waste in an area that could possibly leak into Miami's drinking water; unjustly raising rates on consumers by $811 million; paying off bigoted State Sen. Frank Artiles via $2,000 in Daytona 500 and Disney World trips; and even just straight-up writing their own bills in the state legislature. Despite all this, its parent company's stock price hit an all-time high of $133 per share on Friday.
Not that FPL is paying any of those record profits back to taxpayers. A study last month by the independent Institute on Taxation and Economic Policy found that FPL's parent company, NextEra Energy, did not pay federal income tax in the eight years from 2008 to 2015, and instead received a net credit of $313 million over that time frame.
The company is one of the largest and most politically powerful multibillion-dollar energy conglomerates in America. According to stock data, NextEra is worth $62 billion. Florida Power and Light alone generated $1.6 billion in pure profit in 2016. From 2008 to 2015, NextEra paid significantly less in total federal income taxes than a typical single parent, despite making $21 billion in profit.
Normally, corporate income is taxed at 35 percent. But according to the ITEP, 100 companies received so many tax breaks from the federal government that they paid zero in income taxes for multiple years between 2008 and 2015.
"In the years they paid no income tax, these 100 companies earned $336 billion in pretax U.S. profits," the report says. "But instead of paying $118 billion in federal income taxes, as the 35 percent corporate tax rate requires, these companies generated so many excess tax breaks that they reported negative taxes (often receiving tax rebate checks from the U.S. Treasury), totaling $32.1 billion."
Institute on Taxation and Economic Policy
A spokesperson for NextEra took issue with the findings.
"First of all, NextEra Energy does indeed pay federal taxes – 35 percent of earnings just like other companies," NextEra spokesperson Peter Robbins said via email. "However, in certain years, the company has offset its tax liability with tax credits that have been earned by building billions of dollars of new American infrastructure, including an enormous amount of wind and solar energy. In fact, NextEra Energy is the world’s largest producer of solar and wind energy."
This time, the cozy government benefits can't be blamed on the Juno, Florida-based NextEra's symbiotic relationship with state legislators. NextEra's reach extends far past the Sunshine State: The company also owns wind farms and other property in multiple states, including Oklahoma. In Michigan, NextEra is suing two small towns in order to force the municipalities to let NextEra build wind turbines there.
According to the ITEP, NextEra also received $7.8 billion in tax breaks from 2008 to 2015. This was the 11th-highest rate in the nation, behind massive companies including AT&T, Verizon, JP Morgan, General Electric, and Boeing. (Duke Energy, one of the other private electricity monopolies in Florida, had the 13th-largest tax-break in the nation in that timeframe, while Southern Company, which owns Florida's Gulf Power company, received the 17th-largest.) NextEra received more tax breaks than corporate stalwarts like Comcast, Time Warner, Intel, and Goldman Sachs.
The report said the vast majority of NextEra's tax breaks came in the form of tax deferrals. A New York Times analysis of the data said that most of the energy companies on the list qualified thanks to "accelerated depreciation," which allows companies to write off costs from equipment and machinery upgrades. Companies such as Apple and Microsoft instead stashed profits overseas.
NextEra defends those write offs, arguing they reflect important infrastructure improvements.
"NextEra Energy’s infrastructure investments have created tens of thousands of jobs and power millions of Americans with affordable, clean energy," Robbins said via email. "These investments include billions of dollars in clean energy infrastructure in Florida, which is why FPL is one of the cleanest electric utilities in the nation, with customer bills that are approximately 25 percent lower than the national average. To encourage infrastructure improvements that are good for the economy and benefit Americans in multiple ways, the federal government has provided for accelerated depreciation, which enables greater deductions in the earlier years of an asset, so more money can be injected into the economy sooner."
Robbins added that NextEra companies do pay local and state taxes, and that FPL is the largest taxpayer in Palm Beach, Broward, and Miami-Dade Counties, as well as the state.
But huge tax subsidies also perhaps helped NextEra's stock price hit a historic peak Friday, after the company released an extremely sunny first-quarter earnings report on Friday.
According to a press release the company sent out, NextEra's Q1 revenues doubled this year: NextEra reported first-quarter net income of $1.5 billion, up from just $653 million in 2016. (Adjusted earnings jumped from $732 million in 2016 to $820 million in 2017.)
FPL's revenue, specifically, rose from $393 million in 2016 to $445 million this year.
"FPL consistently ranks as one of the cleanest, most reliable energy providers in the nation, and the price that FPL's typical 1,000-kWh residential customer pays for electricity continues to be less than it was more than 10 years ago," NextEra bragged in its press release.
According to that statement, NextEra says FPL gained approximately 65,000 customers in the last 12 months. The company also boasted about building new, fossil-fuel burning plants, especially its 1,750-megawatt Okeechobee Clean Energy Center, which will burn the demonstrably-not-clean natural gas in order to generate power.
The company said the project "remains on budget and on schedule to achieve commercial operation in mid-2019."
To the company's credit, NextEra announced that it recently bought out contracts at two coal-fired power plants, and is also building a solar energy farm in Miami-Dade County. But the vast majority of the company's energy still comes from fossil fuels and nuclear energy, which both harm the environment. The release did not include a thank you to the federal government.
"FPL consistently ranks as one of the cleanest, most reliable energy providers in the nation, and the price that FPL's typical 1,000-kWh residential customer pays for electricity continues to be less than it was more than 10 years ago," the release said. In response, the company's stock price shot to the sky.