FPL's Issuer Default Rating (IDR) of 'A' is based upon the combined sources of cash flow available to the group from FP&L, a large and robust electric utility, and from a profitable business as a developer and owner/operator of generation assets through indirect subsidiary NextEra. Group Capital is an intermediate holding company that owns NextEra and also a financing vehicle that issues debt to fund activities of NextEra and other subsidiaries. Group Capital's ratings reflect the unconditional and irrevocable guarantee by FPL of the debt obligations of Group Capital, and thus they carry the same ratings as FPL. FP&L (IDR affirmed at 'A') has been the core or anchor of the consolidated group, but growth of NextEra accelerated over the past five years. NextEra's share of FPL net income is estimated at approximately half of consolidated 2008 and 2009 net income, up from roughly 20% in 2004.

The rating affirmations and Stable Outlook of FPL and Group Capital are based on Fitch's assumption that FPL will continue to fund its utility and non-utility capital expenditures with a balanced capital mix and will maintain its investment focus on relatively low-risk assets with long-term power purchase arrangements. Longer term, NextEra's nuclear and renewable assets are favorably positioned to benefit if the U.S. implements limits on carbon emissions and renewable portfolio standards, developments that would benefit FPL more than it would competing generation companies. The Stable Outlook also assumes that the outcome of FP&L's pending electric base rate case (filed early in 2009; a final order is expected on Jan. 29, 2010) will be balanced. Due to the debt leverage borne at FPL Group, the group's consolidated credit measures are vulnerable to erosion if the FP&L base rate order were more adverse than our current expectation.

The affirmation of FP&L's IDR of 'A' reflects the integrated electric utility's low debt leverage and strong financial profile and large service territory. It also reflects Florida Public Service Commission (FPSC) policies and procedures that permit timely recovery of volatile cost components such as fuel and purchased power and storm-related expenses via tracker clauses which tend to stabilize cash flow.