Florida

NextEra slips as Florida executive departs after probing campaign donation

(Bloomberg) – Shares of NextEra Energy Inc. fell the most in nearly three years after the head of its Florida utility company retired following an internal investigation into whether the company had violated state campaign finance laws.

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Shares of the largest U.S. solar and wind company fell 8.8%, its biggest one-day loss since April 2020.

NextEra announced in a filing Wednesday that the company had completed a review of news reports that its Florida Power & Light unit may have violated state and federal campaign finance laws. While NextEra said it found no evidence of wrongdoing, the departure of the unit’s top executive unsettled investors.

“Today’s stock action is significantly driven by the unexpected management change and the update they provided in their review of their policy activities,” Glenrock Associates LLC analyst Paul Patterson said in an interview.

U.S. utilities have posed as darlings on environmental, social, and governance issues, and NextEra is poised to benefit more than most from the money flowing into the clean energy industry from the Inflation Reduction Act. But a series of utility scandals have rocked investors, including FirstEnergy Corp’s $230 million settlement. with federal prosecutors in 2021 over corruption allegations; and Commonwealth Edison Co.’s $200 million settlement to settle an investigation into a bribery scheme in 2020.

NextEra’s internal investigation was sparked by media reports in 2021 and 2022 that Florida Power & Light had worked with a political consulting firm to defeat candidates who backed a proposal that would boost the utility’s business by promoting solar panels would have undermined the roof. According to a complaint filed with the Federal Elections Commission, it involved secretly forwarding campaign funds to “ghost candidates” who did little actual campaigning and sold third-party tickets to siphon votes from two Democrats the utility wanted to defeat.

A report by the Orlando Sentinel and nonprofit news organization Floodlight cited a leaked email allegedly written by Florida Power & Light CEO Eric Silagy, saying he wanted to “make the candidate’s life a living hell.”

In Wednesday’s filing, NextEra said its review found no wrongdoing by company officials. “Based on information in our possession, we believe that FPL would not be held liable for violations of the Florida campaign finance law,” the company wrote. NextEra said in a separate statement that Silagy would be retiring after 20 years with the company.

“We are not affiliated,” NextEra CEO John Ketchum said when asked during a phone call with analysts if Silagy’s resignation was related to campaign finance allegations.

“The second top-level departure since the investigation began creates some uncertainty for investors,” said Andy DeVries, a supply analyst at CreditSights, referring to last year’s departure of CEO Jim Robo. Without line of sight to any clarity, “it becomes a ‘sell now, ask questions later’ scenario.”

The company plans to file a response to the dismissal of a complaint with the Federal Elections Commission within the next few weeks.

“We do not expect allegations of federal campaign finance law violations to be significant to us as a whole,” the CEO said.

–Assisted by Mark Chediak.

(Adds context in the first and sixth through eighth paragraphs.)

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