v3.20.4
Derivative Instruments (Tables)
 12 Months Ended
Dec. 31, 2020
Derivative [Line Items]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] 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 consolidated balance sheets.
December 31, 2020
Level 1Level 2Level 3
Netting(a)
Total
(millions)
Assets:
NEE:
Commodity contracts$919 $1,881 $1,679 $(2,325)$2,154 
Interest rate contracts$— $81 $— $(41)40 
Foreign currency contracts$— $57 $— $(34)23 
Total derivative assets$2,217 
FPL - commodity contracts$— $1 $2 $— $3 
Liabilities:
NEE:
Commodity contracts$1,004 $1,468 $305 $(2,277)$500 
Interest rate contracts$— $1,042 $— $(41)1,001 
Foreign currency contracts$— $43 $— $(34)9 
Total derivative liabilities$1,510 
FPL - commodity contracts$— $— $3 $— $3 
Net fair value by NEE balance sheet line item:
Current derivative assets$570 
Noncurrent derivative assets(b)
1,647 
Total derivative assets$2,217 
Current derivative liabilities(c)
$311 
Noncurrent derivative liabilities1,199 
Total derivative liabilities$1,510 
Net fair value by FPL balance sheet line item:
Current other assets$3 
Current other liabilities$2 
Noncurrent other liabilities1 
Total derivative liabilities$3 
______________________
(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 consolidated balance sheets and are recorded in customer receivables - net and accounts payable, respectively.
(b)Reflects the netting of approximately $184 million in margin cash collateral received from counterparties.
(c)Reflects the netting of approximately $136 million in margin cash collateral paid to counterparties.
December 31, 2019
Level 1Level 2Level 3
Netting(a)
Total
(millions)
Assets:
NEE:
Commodity contracts$1,229 $2,082 $1,739 $(2,700)$2,350 
Interest rate contracts$— $24 $2 $(17)9 
Foreign currency contracts$— $26 $— $1 27 
Total derivative assets$2,386 
FPL - commodity contracts$— $3 $1 $(1)$3 
Liabilities:
NEE:
Commodity contracts$1,365 $1,446 $390 $(2,625)$576 
Interest rate contracts$— $598 $144 $(17)725 
Foreign currency contracts$— $38 $— $1 39 
Total derivative liabilities$1,340 
FPL - commodity contracts$— $5 $9 $(1)$13 
Net fair value by NEE balance sheet line item:
Current derivative assets(b)
$762 
Noncurrent derivative assets(c)
1,624 
Total derivative assets$2,386 
Current derivative liabilities(d)
$344 
Current other liabilities(e)
133 
Noncurrent derivative liabilities863 
Total derivative liabilities$1,340 
Net fair value by FPL balance sheet line item:
Current other assets$3 
Current other liabilities$12 
Noncurrent other liabilities1 
Total derivative liabilities$13 
______________________
(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 consolidated balance sheets and are recorded in customer receivables - net and accounts payable, respectively.
(b)Reflects the netting of approximately $2 million in margin cash collateral received from counterparties.
(c)Reflects the netting of approximately $139 million in margin cash collateral received from counterparties.
(d)Reflects the netting of approximately $66 million in margin cash collateral paid to counterparties.
(e)See Note 1 - Disposal of Businesses/Assets.
NEE's and FPL's financial assets and other fair value measurements made on a recurring basis by fair value hierarchy level are as follows:
 December 31, 2020
 Level 1Level 2 Level 3Total
 (millions)
Assets:     
Cash equivalents and restricted cash equivalents:(a)
     
NEE - equity securities$742 $—  $— $742 
FPL - equity securities$78 $—  $— $78 
Special use funds:(b)
  
NEE:  
Equity securities$2,237 $2,489 
(c)
$— $4,726 
U.S. Government and municipal bonds$590 $127  $— $717 
Corporate debt securities$1 $870  $— $871 
Mortgage-backed securities$— $422  $— $422 
Other debt securities$— $124  $— $124 
FPL:  
Equity securities$752 $2,260 
(c)
$— $3,012 
U.S. Government and municipal bonds$449 $87  $— $536 
Corporate debt securities$— $627  $— $627 
Mortgage-backed securities$— $335  $— $335 
Other debt securities$— $119  $— $119 
Other investments:(d)
  
NEE:  
Equity securities$62 $—  $— $62 
Debt securities$91 $127  $— $218 
______________________
(a)Includes restricted cash equivalents of approximately $111 million ($56 million for FPL) in current other assets and $42 million ($17 million for FPL) in noncurrent other assets on the consolidated balance sheets.
(b)Excludes investments accounted for under the equity method and loans not measured at fair value on a recurring basis. See Fair Value of Financial Instruments Recorded at Other than Fair Value below.
(c)Primarily invested in commingled funds whose underlying securities would be Level 1 if those securities were held directly by NEE or FPL.
(d)Included in noncurrent other assets on NEE's consolidated balance sheet.

December 31, 2019
Level 1Level 2Level 3Total
(millions)
Assets:     
Cash equivalents and restricted cash equivalents:(a)
     
NEE - equity securities$363 $— $— $363 
FPL - equity securities$156 $— $— $156 
Special use funds:(b)
     
NEE:     
Equity securities$1,875 $2,088 
(c)
$— $3,963 
U.S. Government and municipal bonds$567 $150  $— $717 
Corporate debt securities$— $748  $— $748 
Mortgage-backed securities$— $517  $— $517 
Other debt securities$— $117  $— $117 
FPL:     
Equity securities$596 $1,895 
(c)
$— $2,491 
U.S. Government and municipal bonds$429 $106  $— $535 
Corporate debt securities$— $533  $— $533 
Mortgage-backed securities$— $395  $— $395 
Other debt securities$— $111  $— $111 
Other investments:(d)
     
NEE:     
Equity securities$34 $12 $— $46 
Debt securities$82 $69 $— $151 
______________________
(a)Includes restricted cash equivalents of approximately $60 million ($54 million for FPL) in current other assets and $64 million ($64 million for FPL) in noncurrent other assets on the consolidated balance sheets.
(b)Excludes investments accounted for under the equity method and loans not measured at fair value on a recurring basis. See Fair Value of Financial Instruments Recorded at Other than Fair Value below.
(c)Primarily invested in commingled funds whose underlying securities would be Level 1 if those securities were held directly by NEE or FPL.
(d)Included in noncurrent other assets on NEE's consolidated balance sheet.
Fair Value Inputs, Assets, Quantitative Information
The significant unobservable inputs used in the valuation of NEE's commodity contracts categorized as Level 3 of the fair value hierarchy at December 31, 2020 are as follows:

Transaction TypeFair Value at
December 31, 2020		Valuation
Technique(s)		Significant
Unobservable Inputs		Range
Weighted-average(a)
AssetsLiabilities
(millions)
Forward contracts - power$792 $(1)Discounted cash flowForward price (per MWh)$——$137$29
Forward contracts - gas305 25 Discounted cash flowForward price (per MMBtu)$1—$8$3
Forward contracts - congestion27 7 Discounted cash flowForward price (various)$(6)—$30$—
Options - power35 10 Option modelsImplied correlations40%—84%55%
Implied volatilities5%—357%84%
Options - primarily gas128 131 Option modelsImplied correlations40%—96%55%
Implied volatilities16%—310%36%
Full requirements and unit contingent contracts
363 121 Discounted cash flowForward price (per MWh)$5—$330$46
Customer migration rate(b)
—%—122%2%
Forward contracts - other29 12 
Total$1,679 $305 
______________________
(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 InputPositionImpact on
Fair Value Measurement
Forward pricePurchase power/gasIncrease (decrease)
Sell power/gasDecrease (increase)
Implied correlationsPurchase optionDecrease (increase)
Sell optionIncrease (decrease)
Implied volatilitiesPurchase optionIncrease (decrease)
Sell optionDecrease (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:
Years Ended December 31,
202020192018
NEEFPLNEEFPLNEEFPL
(millions)
Fair value of net derivatives based on significant unobservable inputs at December 31 of prior year
$1,207 $(8)$647 $(36)$566 $— 
Realized and unrealized gains (losses):
Included in earnings(a)
547 — 923 — 35 (1)
Included in other comprehensive income (loss)(b)
1 — 5 — 7 — 
Included in regulatory assets and liabilities
2 2 1 1 (18)(18)
Purchases191 — 141 — 152 (16)
Sales(c)
114 — — — — — 
Settlements(562)6 (356)25 28 (2)
Issuances(123)— (87)— (115)— 
Impact of adoption of revenue standard— — — — (30)— 
Transfers in(d)
18 (1)(5)— — — 
Transfers out(d)
(21)— (62)2 22 1 
Fair value of net derivatives based on significant unobservable inputs at December 31
$1,374 $(1)$1,207 $(8)$647 $(36)
Gains (losses) included in earnings attributable to the change in unrealized gains (losses) relating to derivatives held at the reporting date(e)
$317 $— $611 $— $100 $(1)
______________________
(a)For the years ended December 31, 2020, 2019 and 2018, realized and unrealized gains of approximately $569 million, $956 million and $48 million are included in the consolidated statements of income in operating revenues and the balance is included in interest expense.
(b)Included in net unrealized gains (losses) on foreign currency translation in the consolidated statements of comprehensive income.
(c)See Note 1 - Disposal of Businesses/Assets.
(d)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.
(e)For the years ended December 31, 2020, 2019 and 2018, unrealized gains of approximately $317 million, $638 million and $112 million are included in the consolidated statements of income in operating revenues and the balance is included in interest expense.
Derivative instruments, gain (loss) in statement of financial performance Gains (losses) related to NEE's derivatives are recorded in NEE's consolidated statements of income as follows:
Years Ended December 31,
2020 2019 2018
(millions)
Commodity contracts:(a)
     
Operating revenues$352 $762 $377 
Fuel, purchased power and interchange— — (2)
Foreign currency contracts - interest expense8 (7)19 
Interest rate contracts - interest expense(421)(699)(280)
Losses reclassified from AOCI:
Interest rate contracts(b)
(35)(32)(30)
Foreign currency contracts - interest expense(3)(4)(4)
Total$(99) $20  $80 
______________________
(a)For the years ended December 31, 2020, 2019 and 2018, FPL recorded gains (losses) of approximately $6 million, $9 million and $(31) million, respectively, related to commodity contracts as regulatory liabilities (assets) on its consolidated balance sheets.
Net notional volumes NEE and FPL had derivative commodity contracts for the following net notional volumes:
December 31, 2020December 31, 2019
Commodity TypeNEEFPLNEEFPL
(millions)
Power(90)
MWh(a)
— (81)
MWh(a)
1 
MWh(a)
Natural gas(607)
MMBtu(b)
87 
MMBtu(b)
(1,723)
MMBtu(b)
161 
MMBtu(b)
Oil(6)barrels— (13)barrels— 
______________________
(a)Megawatt-hours
(b)One million British thermal units