Daily Brief Utilities: NextEra Energy Partners LP and more

• NextEra Energy Partners (NEP) is a growth-oriented limited partnership formed by NextEra Energy, Inc. (NEE) to own and operate a portfolio of contracted clean energy projects, primarily wind and solar, as well as natural gas pipelines.
• The company’s business model has been significantly challenged by the high interest rate environment, which has increased its cost of capital and forced a reduction in its distribution growth targets, impacting its ability to act as a primary funding vehicle for NEE.
• While NEP benefits from a strong sponsor relationship with NEE, providing a pipeline for growth, and stable cash flows from long-term contracts, its high leverage and dependence on capital markets for acquisitions create significant risks for investors.

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