Through The Fly's Eyes: FPL Group
from Larry Ramer of Theflyonthewall.com
FPL: America’s Wind Power Leader
Long-term investors looking for a play on the growth of wind energy might want to take a look at FPL Group (FPL). The company’s subsidiary, electricity producer FPL Energy, is the U.S. leader in wind energy production, according to the American Wind Energy Association, or AWEA. FPL Energy-owned and operated wind energy installations generated more than 9.4 billion kWh of electricity in 2006. That is enough energy to power about 850,000 American households.
As of the end of 2006, FPL reported that it was operating 47 wind installations in 15 states. Wind energy accounts for about 30% of FPL Energy’s total generation. In addition, FPL continues to actively build wind energy installations, adding 777 new megawatts of wind-based power in 2006 and continuing to build more wind turbines this year. The company’s new wind power systems built in 2006 accounted for 33% of the new wind energy that came on line last year. FPL has recently asked regulators in Texas for permission to build new wind energy facilities there.
As more states and possibly even the federal government require that utilities derive more of their power from non-fossil fuel sources, it would seem logical that more utilities may look to FPL to build new wind energy systems. Its wealth of experience in this area would seem to be potentially useful to many utilities looking to reduce their dependence on fossil fuels. Mainly by virtue of its wind power prowess, FPL Group, was named as one of the top two leading generators of renewable energy in the world, according to rankings released July 11 from Emerging Energy Research, an advisory and consulting firm tracking global investment in clean and renewable energy. The other leading company named is Spanish utility Iberdrol.
FPL also has some experience in other alterative energy areas. In California, the company operates seven solar energy facilities that actively generate electricity. It has a hydroelectric plant in Maine and nuclear energy plants in New Hampshire and Iowa. FPL recently announced that it was going to build a plant that would convert citrus waste into ethanol for use as automobile fuel.
FPL’s other core business is Florida Power and Light Company, which is an electric utility serving 8.5 million people on the east and lower west coasts of Florida. The company is trading at a reasonable 17 times its expected 2007 profits, and Credit Suisse recently upgraded the company from "neutral" to "outperform," mainly on valuation, with a price target of $65.