The company's head of Florida utility retired after a probe into whether it violated campaign finance laws in the state, the shares of Bloomberg NextEra Energy Inc. fell the most in nearly three years.
Shares in the biggest US solar and wind company fell 8.8%, the biggest single day drop since April 2020.
In a filing on Wednesday, NextEra disclosed that it had finished a review of news reports that its Florida Power Light unit may have violated state and federal campaign finance statutes. The resignation of the unit's top executive rattled investors as NextEra said it found no evidence of wrongdoing.
The stock action today is driven by the unexpected management change and the update they gave on their review of their political activity, analyst Paul Patterson of Glenrock Associates LLC said in an interview.
The Inflation Reduction Act has made the US utilities more than most of the best at tackling environmental, social and governance issues, and NextEra is poised to benefit from the money that is pouring into the clean-energy industry. But a series of utility scandals have rattled investors, including FirstEnergy Corp.'s $230 million settlement with federal prosecutors in 2021 over corruption charges and Commonwealth Edison Co.'s $200 million settlement to resolve a corruption scandal in 2020.
NextEra s internal investigation was triggered by media reports in 2021 and 2022 that Florida Power Light worked with a political consulting firm to defeat candidates who backed a proposal that would have undermined the utility's business by promoting rooftop solar. It included secretly funneling campaign contributions to ghost candidates who did little actual campaigning and ran third-party tickets to siphon votes from two Democrats the utility wanted to defeat, according to a complaint filed with the Federal Election Commission.
In the filing Wednesday, NextEra said that it found no wrongdoing by company officials. According to the information in our possession, the company believes that FPL would not be liable for any of the Florida campaign finance law violations. NextEra said in a statement that Silagy was retiring after 20 years with the company.
NextEra CEO John Ketchum said when asked if Silagy's retirement was linked to campaign finance allegations, that he was not making a connection.
Andy DeVries, an analyst at CreditSights, said the second senior-level departure since the investigations began creates some uncertainty for investors. With no line-of- sight to any clarity, it becomes a sell, ask questions later in the day. The company plans to submit a response within the next few weeks to the Federal Election Commission.
The CEO said that we do not expect that allegations of federal campaign finance law violations would be material to us.
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