FPL Group - External

1
Edison Electric Institute Conference November
5-8, 2006
2
Cautionary Statements And Risk Factors That May
Affect Future Results

• Any statements made herein about future operating
  results or other future events are
  forward-looking statements under the Safe Harbor
  Provisions of the Private Securities Litigation
  Reform Act of 1995. These forward-looking
  statements may include, for example, statements
  regarding anticipated future financial and
  operating performance and results, including
  estimates for growth. Actual results may differ
  materially from such forward-looking statements.
  A discussion of factors that could cause actual
  results or events to vary is contained in the
  Appendix herein and in our SEC filings.

3
FPL Group Fall 2006 Overview

• Regulatory clarity and positive outlook at FPL
• positioned for continued success
• sound fundamentals
• storm cost securitization in progress
• Favorable environment for FPL Energy
• continued wind development
• roll-off of hedges at incrementally higher prices
• recent portfolio additions (e.g., solar, nuclear)
• growing retail and wholesale businesses
• Expect compound annual EPS growth of 9-10
  through end of decade1
• composition of growth is transparent
• assumes reasonable wind development and no
  incremental asset acquisitions
• Financial strength and flexibility

1 Assumes normal weather and excludes the effect
of adopting new accounting standards and the
mark-to-market effect of non-qualifying hedges
neither of which can be determined at this time.
2005 is used as base in expected growth rate.
4
FPL Group2006 Adjusted EPS Expectations
As of 10/05 Current View
FPL 2.05 - 2.10 lower end of range storm cost disallowance
FPL Energy 0.90 - 1.00 1.10 - 1.15
Corp. Other (0.15) - (0.20) (0.20) (0.25) incremental capex non-recourse debt
FPL Group 2.80 - 2.90 2.90
Note The current view of 2006 adjusted earnings
expectations are valid as of October 30, 2006 and
should be viewed in conjunction with the
Companys Cautionary Statements contained in the
Appendix to this presentation. Assumes normal
weather and excludes the effect of adopting new
accounting standards as well as the
mark-to-market effect of non-qualifying hedges
neither of which can be determined at this time.
5
FPL Group Adjusted Earnings Per Share
Expectations
2007P1
2008P1
2.15 - 2.25
FPL
2.10 - 2.15
1.65 - 1.85
FPL Energy
1.45 - 1.55
(0.20) - (0.25)
(0.20) - (0.25)
Corporate Other
3.60 - 3.80
3.35 - 3.45
FPL Group
Note The 2007 and 2008 adjusted earnings
expectations are valid as of October 30, 2006 and
should be viewed in conjunction with the
Companys Cautionary Statements contained in the
Appendix to this presentation. 1 Assumes normal
weather and excludes the effect of adopting new
accounting standards as well as the
mark-to-market effect of non-qualifying hedges
neither of which can be determined at this time.
6

• One of the largest U.S. electric utilities
• Vertically integrated, retail rate-
• regulated utility
• 20,777 mw in operation
• 4.4 million customers
• 9.5 billion operating revenue

• Successful competitive energy supplier, operating
  in 24 states
• U.S. market leader in
• wind-generation
• 13,158 mw in operation
• 2.2 billion operating revenue

A Growing, Diversified Company
Operating revenues as of December 31, 2005 all
other data as of September 30, 2006
7
26.1
18.4
12.1
Dividends are reinvested
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9
Florida Power Light Focus on 2007

• 2007 fuel filing
• filed September 1, revised downward in October,
• expect November decision
• modest positive impact on retail prices (down
  4-5)
• Revenue outlook
• expect continued, moderate customer growth
• return to positive usage growth
• Cost outlook
• primary driver will be Storm SecureSM
• productivity initiatives elsewhere
• Turkey Point 5
• on schedule, on budget
• positive impact for customers and shareholders
• Glades coal project
• Two 980 MW super critical pulverized plants
• Operation expected in 2012 / 2013
• Need certificate and site permits expected to be
  filed by January

10
FPL On of the best electric utilities in the U.S.

• Attractive customer mix
• Exceptional growth
• Operational excellence
• Proven cost management
• Superior environmental performance
• Good regulatory climate with clarity through 2009

11
FPL Demonstrated Ability to Grow Earnings
Steady customer growth translates to steady
earnings growth
Delivered Sales Adj. Earnings
FPL Delivered Sales1 CAGR 2.9
Adjusted Earnings2 CAGR 2.8
U.S. Delivered Sales CAGR 1.9 3
1 Delivered sales adjusted for the impact of the
2004 and 2005 hurricane seasons 2 See Appendix
for reconciliation of GAAP to adjusted amounts 3
CAGR calculated from 1995 to 2005
12
Florida ranks 1st in growth among most populous
states
State
of Population
CAGR
CAGR
of Population
in 20301
in 20041
2000-2030
2000-2004
5.9
2.1
Florida
2.0
7.9
1.6
9.2
7.7
1.9
Texas
1.1
12.8
12.2
1.5
California
0.3
3.7
4.3
0.6
Illinois
0.1
5.4
6.5
0.3
New York
0.9
1.1
United States
1 Estimated population by state as a percentage
of total U.S. population figures for 2030 are
based on estimated population Source U.S. Census
Bureau
13
Diversified Fuel Sources
FPL Projected 2015 Fuel Sources (mWh produced)
FPL 2005 Fuel Sources (mWh produced)
Further hedged through its use of multiple
energy sources at FPL
Source FPL Ten Year Power Plant Site Plan, 2006
- 2015
14
Managing Extraordinary Growth at FPL
Steady customer growth requires significant
system expansion
Total Generation Capability(mw)
Average Customer Accounts (mm)
Glades or PPAs
Glades or PPAs
West County
West County
Turkey Point 5
Source FPL Ten Year Power Plant Site Plan, 2006
- 2015
15
Proposed New Plant Additions
In Service Exp. Cost
Plant Name Date MW ( millions) / KW
Turkey Point 2007 1,144 580 507
Unsited CT 2008 160 84 522
West County 1 2009 1,219 689 565
West County 2 2010 1,219 633 519
Unsited CTs, 2 units 2011 320 180 562
Glades 1 2012 850 2,002 2,355
Glades 2 2013 850 1,472 1,732
Unsited CT 2014 160 110 689
Unsited CT 2015 160 114 710
Unsited CC 2015 553 674 1,218
TOTALS 6,635 6,538 985
Per 10 year site plan filed in Spring 2006
Glades project formally announced September 2006
with two 980 MW units, total expected costs not
yet finalized
16
FPL Investing Capital to Support Growing Energy
Demand
Steady customer growth translates into increased
investment

• Capital Expenditures(billions)

2007-2009 cumulativeCapEx of 6.2B1
1 Projections as of September 30, 2006
17
ROE Trends - Regulatory and Financial
Florida Power Light Return on Equity
1
Downside Protection of 10.0 Continued
1 Financial ROE is calculated by using a rolling
12-month GAAP net income before cumulative effect
adjustments and any extraordinary items divided
by simple average of beginning and ending equity.

18
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19
FPL Energy

• Well diversified by fuel source and by region
• Wind and nuclear continue to build substantial
  value
• PTC extension supports continued and consistent
  wind development
• acquisition of 70 interest in Duane Arnold
  completed January 2006
• Seabrook uprate
• Commodity market remains robust
• expiring contracts renewing at higher margins
• Growing retail and wholesale businesses
• Potential new portfolio additions
• Strengthening outlook for 2007 and beyond

20
Strong Track Record of Growth at FPL Energy
655-7352
Adjusted Earnings1 ( millions)
575-6152
435-4552
48 Compound Annual Growth Rate
1 See Appendix for reconciliation of GAAP to
adjusted amounts 2 FPL Energys 2006, 2007 and
2008 figures are based upon FPL Energy EPS
expectations provided on Slides 4 and 5 and are
believed to be appropriate for this point in
time. As a result, they should only be read in
conjunction with the Companys standard earnings
expectations, which is usually delivered upon the
release of quarterly earnings or in another Reg
FD forum.
21
FPL Energys diverse portfolio
Asset Type
Regional Breakdown
Central 42
Northeast 22
West 15
Mid-Atlantic 21
13,158 Net mw in Operation
As of 9/30/06
22
FPL Energy has an attractive portfolio mix with
unique strength in wind
FPL Energy 2006P Portfolio Mix
Segment MW Capital Employed Economic Value Proposition
Wind 4,016 30 3,202 40 Primarily long-term contract, plus terminal value
QF/Contract 2,461 18 1,229 15 Long-term contract with variable merchant tail
New England 2,671 20 1,540 19 Actively managed hedged positions, plus modest full requirements short positions
Texas 2,700 20 1,074 13 As New England, plus modest retail short position
Other 1,472 12 1,017 13 Minor assets and full requirements positions
TOTAL 13,320 8,082
Note Based on June 2006 forecast. Capital
employed is calculated as follows Consolidated
projects equity debt non-consolidated
projects investment balance. Texas includes
Gexa. All figures in millions.
23
U.S. leader in wind energy
Wind Generation Market Share
FPL Energy Wind Generation
?
1
1
1 Assumes approximately 750 MW of new wind
development in 2006 and 2007
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25
Wind 101 Economics

• Production Tax Credit available for every kWh
  produced
• 1.9 in 2005, escalating with inflation, for
  first 10 years of operation
• credit available for new projects that achieve
  COD by 12/31/07
• MACRS depreciation over 5 years
• PPA market in U.S. typically 15-25 years, 3-6
  /kWh
• All-in construction costs in 2006/2007 will
  likely range from 1,300 - 1,700/kw, depending
  upon size of project, region, interconnection
  requirements
• Typical production cost less than 5 /kWh
• Typical wind project size 50-150 MW
• Typical capacity factor 25-40
• Typical cash-on-cash returns Mid-teens

26
Wind Energy Pricing
150
/ mWh w/ PTCs
100
50
2000
2003
2005
2007
2008
Year
27
Wind projects conservatively create 15 to 40
cents of value per dollar invested
Typical Wind Project Valuation - Value created
per dollar invested -
Duration (yrs) Duration (yrs) Duration (yrs)
20 25 30
2 0.15 0.18 0.19
4 0.31 0.36 0.40
Spread over Cost of Capital
Assumptions Annuity cash flow streams zero
terminal value base discount rate of 8
28
The risk profile of wind is also attractive
Wind Risk Characteristics
Financing 1 ( billions)
Wind Rest of Portfolio Total
Capital Employed 3.240 4.960 8.1
Non- or limited recourse debt 2.0 83 0.417 2.4

• Short development and construction cycles
• Front-loaded cash flow profile
• Tolerant operational risk
• Customer credit
• Resource variability

1 2006P forecast
29
The wind business contributes disproportionately
to the FPL Energy portfolio
36 40
34 37
31 33
Wind
Wind vs. All Other
Allocation of adjusted earnings includes GA
allocation based upon MWs and interest expense
based on 50/50 debt/equity structure. 2006P based
on a range of 435-455 million. 1 See Appendix
for reconciliation of GAAP to adjusted earnings.
2006 (P) through 2008 (P) assumes normal weather
and excludes the effect of adopting new
accounting standards and the mark-to-market
effect of non-qualifying hedges, none of which
can be determined at this time.
30
Where does wind rank in the valuation scale?
August 1, 2006 Lehman Research Report/KW
QUARTILE QUARTILE QUARTILE QUARTILE
1st 2nd 3rd 4th
Nuclear 2,126 1,961 1,811 1,582
Hydro 2,023 1,508 977 293
Coal 1,627 1,489 1,041 227
Gas CC 741 196 155 NM
Gas Peakers 319 42 NM NM
Wind 2,000 1,600 1,200 800
Lehman Brothers
FPL Group view
August 1, 2006 Lehman research report entitled
The Cheaper IPP by Dan Ford and team. Used with
permission.
31
What is FPL Energy worth? An end of 2006 view.
FPL Energy Valuation Analysis Year-end 2006P
Portfolio Element Quartile MW /KW Implied Enterprise Value
Wind 1 934 2,023 1,888
Wind 2 2,669 1,508 4,025
Wind 3 328 977 320
Wind 4 86 293 25
Nuclear 1 1,519 2,126 3,229
Hydro 1 361 2,023 730
Gas CC 1 4,997 741 3,702
Gas CC 2 556 196 109
Peakers 1 949 319 303
Peakers 2 50 196 10
All other 872 435 380
TOTAL 13,320 14,271
Based on Lehman Brothers August 1 report, The
Cheaper IPP, with hydro values applied to wind
projects. MW figures may not total due to
rounding. All figures in millions unless noted
otherwise.
32
FPL Energys growth profile supports an
attractive value proposition for FPL Group
shareholders
FPL Group Implied Valuation - 12/06 Basis -
Enterprise Value
FPL Energy (from prior slide, pg. 31) 14 15
FPL _at_ 15-16x 2006 earnings 17 19
Less net debt (12)
Implied equity value 19 22
/ share 48 56
All figures shown in billions, except per share
amounts
33
Our view of the FPL Group risk-reward profile
High
New England
Wind
QF/ Contract
Texas
Florida Power Light
1.0
Reward
Other
Low
1.0
Risk
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35
FPL Group2006 Adjusted EPS Expectations
As of 10/05 Current View
FPL 2.05 - 2.10 lower end of range storm cost disallowance
FPL Energy 0.90 - 1.00 1.05 - 1.15
Corp. Other (0.15) - (0.20) (0.20) (0.25) incremental capex non-recourse debt
FPL Group 2.80 - 2.90 2.90
Note The current view of 2006 adjusted earnings
expectations are valid as of October 30, 2006 and
should be viewed in conjunction with the
Companys Cautionary Statements contained in the
Appendix to this presentation. Assumes normal
weather and excludes the effect of adopting new
accounting standards as well as the
mark-to-market effect of non-qualifying hedges
neither of which can be determined at this time.
36
FPL Group Adjusted Earnings Per Share
Expectations
2007P1
2008P1
2.15 - 2.25
FPL
2.10 - 2.15
1.65 - 1.85
FPL Energy
1.45 - 1.55
(0.20) - (0.25)
(0.20) - (0.25)
Corporate Other
3.60 - 3.80
3.35 - 3.45
FPL Group
Note The 2007 and 2008 adjusted earnings
expectations are valid as of October 30, 2006 and
should be viewed in conjunction with the
Companys Cautionary Statements contained in the
Appendix to this presentation. 1 Assumes normal
weather and excludes the effect of adopting new
accounting standards as well as the
mark-to-market effect of non-qualifying hedges
neither of which can be determined at this time.
37
Drivers of Florida Power and Light Growth
2006-20071

Expected 2006 EPS Range 2.05 2.10
05 storm write-off 0.07
Revenue 0.25 0.35
OM expense (0.10) (0.15)
Depreciation expense (0.06) (0.08)
Interest and AFUDC (0.04) (0.06)
All Other (0.06) (0.08)
Expected 2007 EPS Range 2.10 2.15
1 Assumes normal weather and excludes the effect
of adopting new accounting standards which cannot
be determined at this time.
38
Drivers of Florida Power and Light Growth
2007-20081

Expected 2007 EPS Range 2.10 2.15
Revenue 0.25 0.35
OM expense (0.02) (0.06)
Depreciation expense (0.06) (0.08)
Interest and AFUDC (0.02) (0.05)
All Other (0.04) (0.06)
Expected 2008 EPS Range 2.15 2.25
1 Assumes normal weather and excludes the effect
of adopting new accounting standards which cannot
be determined at this time.
39
Drivers of FPL Energy Earnings Growth 2006-20071

Expected 2006 EPS Range 1.10 1.15
New investments 0.18 0.20
Existing portfolio 0.24 0.27
Asset restructuring, marketing and trading 0.02 0.03
Interest (0.05) (0.04)
All other (0.05) (0.04)
Expected 2007 EPS Range 1.45 1.55
1 Assumes normal weather and excludes the effect
of adopting new accounting standards as well as
the mark-to-market effect of non-qualifying
hedges neither of which can be determined at this
time.
40
Drivers of FPL Energy Earnings Growth 2007-20081

Expected 2007 EPS Range 1.45 1.55
New investments 0.18 0.23
Existing portfolio 0.01 0.05
Asset restructuring, marketing and trading (0.01) 0.01
Interest (0.01) 0.01
All other (0.01) 0.01
Expected 2008 EPS Range 1.65 1.85
1 Assumes normal weather and excludes the effect
of adopting new accounting standards as well as
the mark-to-market effect of non-qualifying
hedges neither of which can be determined at this
time.
41
Florida Power Light Potential Drivers of 2007
Earnings Variability
Issue Variability Potential Impact 2007
Weather variability At 80 probability 7-8
Revenue growth 10 20 bps 1-2
OM expenses sensitivity 2 4
Interest rates 1 1
See Companys Cautionary Statements contained in
the Appendix and the Companys filings for full
discussion of risks
42
FPL Energy Potential Drivers of 2007 Earnings
Variability
Issue Sensitivity Variability Potential Impact 2007
Weather Wind portfolio Maine hydro wind resource rainfall, snowpack 1 wind index1 202 2.5 3.0 3.0
Market Risk commodity prices 2/mmbtu3 2.0 3.0
Oper. Performance EFOR4 1 1.0 3.0
New growth Wind Timing of in-service One month 1.0
Asset restructuring lt 1 FPL Energy earnings
1 Based on wind MW installed as of 12/31/06 2
From historic mean 3 FPL Energys portfolio
including the retail energy business is a net
short gas position in 2007 4 Impact based on
merchant assets See Companys Cautionary
Statements contained in the Appendix and the
Companys filings for full discussion of risks
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44
Sound Credit Profile Reflected On Balance Sheet
And Credit Ratings
SP Moodys Fitch
FPL Group, Inc. Issuer FPL Group, Inc. Issuer FPL Group, Inc. Issuer A/ Stable A2/Stable A/Stable
FPL First Mortgage Bonds FPL First Mortgage Bonds A/Stable Aa3/Stable AA-/Stable
FPL Group Capital Debentures FPL Group Capital Debentures FPL Group Capital Debentures A-/ Stable A2/ Stable A/Stable
Total Debt toTotal Capitalization 1
2
1 GAAP Basis. Industry data as of June 30, 2006,
FPL Group as of September 30, 2006 2 Adjusted
TD/TC is 46, as of September 30, 2006 Source
Company reports, EEI June 2006 Quarterly Update.
45
Credit Facilities and Liquidityas of September
30, 2006 ( millions)
FPL FPL Group Capital FPL Group
Bank revolving LOCs (1) 2,000 (2) 2,500 4,500 (2)
Less LOC 190 216 406
1,810 2,284 4,094
Revolving term loan facility 250 0 250
Less borrowings 250 0 250
0 0 0
Cash equivalents 65 94 159
Net Available Liquidity 1,875 2,378 4,253
1 Maturity date for FPL and FPL Group Capital are
both November 2010. Provide for the issuance of
letters of credit up to 4.5 billion and are
available to support the companies commercial
paper programs and to provide additional
liquidity in the event of a loss to the
companies or the subsidiaries operating
facilities (including, in the case of FPL, a
transmission and distribution property loss), as
well as for general corporate purposes. 2
Excludes 300 mm in sr. secured revolving credit
facilities of an entity consolidated by FPL under
FIN46R, as revised (the variable interest entity
(VIE)) that leases nuclear fuel to FPL which
credit facilities are available only to the VIE
46
Growing, stable dividend 1
Dividend Payout
2
2
1 Annualized split-adjusted quarterly dividend 2
Dividend payout is based on annualized dividend
and 2006 First Call EPS estimate as of
9/30/06 Source Edison Electric Institute Third
Quarter 2006 statistics
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48
Additional Wind Information
49
Winds Future in the U.S. Promising

• 2006 another great year for U.S. wind development
• Many challenges and opportunities exist
• Boom/bust cycle still with us
• 2006 - 2007 even greater challenge for U.S.
  market
• Upwards of 5,000 - 6,000 MW may be added 2006/
  2007 combined
• Total U.S. capacity may approach 15,000 MW by Dec
  2007

50
2007 And Beyond Our View

• PTC renewals will continue (2 year cycle?) 200
  mm/yr subsidy per year (3.500B _at_ 32 NCF)
• Wind resource analysis and risk will be better
  understood
• Transmission/ interconnection
• Significant (upward) supplier price quality
  pressures on turbines/ towers/ components
• Global market forces will impact U.S. (5,000
  6,000 MW/year may be added in 2006/ 2007
  combined)
• 25,000 MW U.S. market size by end of 2010 is
  realistic goal

51
Appendix
52
FPL - Reconciliation GAAP to Adjusted Earnings
1999
2000
2001
( millions, except per share amounts)
576


607


679


Net Income
Adjustments, net of income taxes
42


Settlement of litigation
38


16


Merger-related expenses
618


645


695


Adjusted Earnings
There were no adjustments to GAAP earnings from
1994 to 1998 and from 2002 to 2005
53
FPL Energy - Reconciliation GAAP to Adjusted
Earnings
There were no adjustments to GAAP earnings in
1997 and 1998 Totals may not add due to rounding
54
Cautionary Statements And Risk Factors That May
Affect Future Results

• In connection with the safe harbor provisions of
  the Private Securities Litigation Reform Act of
  1995 (Reform Act), FPL Group, Inc. (FPL Group)
  and Florida Power Light Company (FPL) are
  hereby providing cautionary statements
  identifying important factors that could cause
  FPL Group's or FPL's actual results to differ
  materially from those projected in
  forward-looking statements (as such term is
  defined in the Reform Act) made by or on behalf
  of FPL Group and FPL in this presentation, on
  their respective websites, in response to
  questions or otherwise. Any statements that
  express, or involve discussions as to,
  expectations, beliefs, plans, objectives,
  assumptions or future events or performance
  (often, but not always, through the use of words
  or phrases such as will likely result, are
  expected to, will continue, is anticipated,
  believe, could, estimated, may, plan, potential,
  projection, target, outlook) are not statements
  of historical facts and may be forward-looking.
  Forward-looking statements involve estimates,
  assumptions and uncertainties. Accordingly, any
  such statements are qualified in their entirety
  by reference to, and are accompanied by, the
  following important factors (in addition to any
  assumptions and other factors referred to
  specifically in connection with such
  forward-looking statements) that could cause FPL
  Group's or FPL's actual results to differ
  materially from those contained in
  forward-looking statements made by or on behalf
  of FPL Group and FPL.
• Any forward-looking statement speaks only as of
  the date on which such statement is made, and FPL
  Group and FPL undertake no obligation to update
  any forward-looking statement to reflect events
  or circumstances, including unanticipated events,
  after the date on which such statement is made.
  New factors emerge from time to time and it is
  not possible for management to predict all of
  such factors, nor can it assess the impact of
  each such factor on the business or the extent to
  which any factor, or combination of factors, may
  cause actual results to differ materially from
  those contained in any forward-looking statement.
• The following are some important factors that
  could have a significant impact on FPL Group's
  and FPL's operations and financial results, and
  could cause FPL Group's and FPL's actual results
  or outcomes to differ materially from those
  discussed in the forward-looking statements
• FPL Group and FPL are subject to complex laws
  and regulations and to changes in laws and
  regulations as well as changing governmental
  policies and regulatory actions, including
  initiatives regarding deregulation and
  restructuring of the energy industry and
  environmental matters.  FPL holds franchise
  agreements with local municipalities and
  counties, and must renegotiate expiring
  agreements.  These factors may have a negative
  impact on the business and results of operations
  of FPL Group and FPL.
• FPL Group and FPL are subject to complex laws and
  regulations, and to changes in laws or
  regulations, including the Public Utility
  Regulatory Policies Act of 1978, as amended, the
  Public Utility Holding Company Act of 2005, the
  Federal Power Act, the Atomic Energy Act of 1954,
  as amended, the Energy Policy Act of 2005 (2005
  Energy Act) and certain sections of the Florida
  statutes relating to public utilities, changing
  governmental policies and regulatory actions,
  including those of the Federal Energy Regulatory
  Commission (FERC), the Florida Public Service
  Commission (FPSC) and the legislatures and
  utility commissions of other states in which FPL
  Group has operations, and the Nuclear Regulatory
  Commission (NRC), with respect to, among other
  things, allowed rates of return, industry and
  rate structure, operation of nuclear power
  facilities, operation and construction of plant
  facilities, operation and construction of
  transmission facilities, acquisition, disposal,
  depreciation and amortization of assets and
  facilities, recovery of fuel and purchased power
  costs, decommissioning costs, return on common
  equity and equity ratio limits, and present or
  prospective wholesale and retail competition
  (including but not limited to retail wheeling and
  transmission costs).  The FPSC has the authority
  to disallow recovery by FPL of any and all costs
  that it considers excessive or imprudently
  incurred.  The regulatory process generally
  restricts FPL's ability to grow earnings and does
  not provide any assurance as to achievement of
  earnings levels.
• FPL Group and FPL are subject to extensive
  federal, state and local environmental statutes
  as well as the effect of changes in or additions
  to applicable statutes, rules and regulations
  relating to air quality, water quality, waste
  management, wildlife mortality, natural resources
  and health and safety that could, among other
  things, restrict or limit the output of certain
  facilities or the use of certain fuels required
  for the production of electricity and/or require
  additional pollution control equipment and
  otherwise increase costs.  There are significant
  capital, operating and other costs associated
  with compliance with these environmental
  statutes, rules and regulations, and those costs
  could be even more significant in the future.

55

• FPL Group and FPL operate in a changing market
  environment influenced by various legislative and
  regulatory initiatives regarding deregulation,
  regulation or restructuring of the energy
  industry, including deregulation or restructuring
  of the production and sale of electricity.  FPL
  Group and its subsidiaries will need to adapt to
  these changes and may face increasing competitive
  pressure.
• FPL Group's and FPL's results of operations could
  be affected by FPL's ability to renegotiate
  franchise agreements with municipalities and
  counties in Florida.
• The operation and maintenance of power generation
  facilities, including nuclear facilities, involve
  significant risks that could adversely affect the
  results of operations and financial condition of
  FPL Group and FPL.
• The operation and maintenance of power generation
  facilities involve many risks, including, but not
  limited to, start up risks, breakdown or failure
  of equipment, transmission lines or pipelines,
  the inability to properly manage or mitigate
  known equipment defects throughout our generation
  fleets unless and until such defects are
  remediated, use of new technology, the dependence
  on a specific fuel source, including the supply
  and transportation of fuel, or the impact of
  unusual or adverse weather conditions (including
  natural disasters such as hurricanes), as well as
  the risk of performance below expected or
  contracted levels of output or efficiency. This
  could result in lost revenues and/or increased
  expenses, including, but not limited to, the
  requirement to purchase power in the market at
  potentially higher prices to meet contractual
  obligations. Insurance, warranties or
  performance guarantees may not cover any or all
  of the lost revenues or increased expenses,
  including the cost of replacement power. In
  addition to these risks, FPL Group's and FPL's
  nuclear units face certain risks that are unique
  to the nuclear industry including, but not
  limited to, the ability to store and/or dispose
  of spent nuclear fuel, the potential payment of
  significant retrospective insurance premiums, as
  well as additional regulatory actions up to and
  including shutdown of the units stemming from
  public safety concerns, whether at FPL Group's
  and FPL's plants, or at the plants of other
  nuclear operators. Breakdown or failure of an
  operating facility of FPL Energy may prevent the
  facility from performing under applicable power
  sales agreements which, in certain situations,
  could result in termination of the agreement or
  incurring a liability for liquidated damages.
• The construction of, and capital improvements to,
  power generation facilities involve substantial
  risks.  Should construction or capital
  improvement efforts be unsuccessful, the results
  of operations and financial condition of FPL
  Group and FPL could be adversely affected.
• FPL Group's and FPL's ability to successfully and
  timely complete their power generation facilities
  currently under construction, those projects yet
  to begin construction or capital improvements to
  existing facilities within established budgets is
  contingent upon many variables and subject to
  substantial risks.  Should any such efforts be
  unsuccessful, FPL Group and FPL could be subject
  to additional costs, termination payments under
  committed contracts, and/or the write-off of
  their investment in the project or improvement.
• The use of derivative contracts by FPL Group and
  FPL in the normal course of business could result
  in financial losses that negatively impact the
  results of operations of FPL Group and FPL.
• FPL Group and FPL use derivative instruments,
  such as swaps, options and forwards to manage
  their commodity and financial market risks, and
  to a lesser extent, engage in limited trading
  activities.  FPL Group could recognize financial
  losses as a result of volatility in the market
  values of these contracts, or if a counterparty
  fails to perform.  In the absence of actively
  quoted market prices and pricing information from
  external sources, the valuation of these
  derivative instruments involves management's
  judgment or use of estimates.  As a result,
  changes in the underlying assumptions or use of
  alternative valuation methods could affect the
  reported fair value of these contracts.  In
  addition, FPL's use of such instruments could be
  subject to prudency challenges and if found
  imprudent, cost recovery could be disallowed by
  the FPSC.
• FPL Group's competitive energy business is
  subject to risks, many of which are beyond the
  control of FPL Group, that may reduce the
  revenues and adversely impact the results of
  operations and financial condition of FPL Group.

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• There are other risks associated with FPL Group's
  competitive energy business.  In addition to
  risks discussed elsewhere, risk factors
  specifically affecting FPL Energy's success in
  competitive wholesale markets include the ability
  to efficiently develop and operate generating
  assets, the successful and timely completion of
  project restructuring activities, maintenance of
  the qualifying facility status of certain
  projects, the price and supply of fuel (including
  transportation), transmission constraints,
  competition from new sources of generation,
  excess generation capacity and demand for
  power.  There can be significant volatility in
  market prices for fuel and electricity, and there
  are other financial, counterparty and market
  risks that are beyond the control of FPL
  Energy.  FPL Energy's inability or failure to
  effectively hedge its assets or positions against
  changes in commodity prices, interest rates,
  counterparty credit risk or other risk measures
  could significantly impair FPL Group's future
  financial results.  In keeping with industry
  trends, a portion of FPL Energy's power
  generation facilities operate wholly or partially
  without long-term power purchase agreements.  As
  a result, power from these facilities is sold on
  the spot market or on a short-term contractual
  basis, which may affect the volatility of FPL
  Group's financial results.  In addition, FPL
  Energy's business depends upon transmission
  facilities owned and operated by others if
  transmission is disrupted or capacity is
  inadequate or unavailable, FPL Energy's ability
  to sell and deliver its wholesale power may be
  limited.
• FPL Group's ability to successfully identify,
  complete and integrate acquisitions is subject to
  significant risks, including the effect of
  increased competition for acquisitions resulting
  from the consolidation of the power industry.
• FPL Group is likely to encounter significant
  competition for acquisition opportunities that
  may become available as a result of the
  consolidation of the power industry, in general,
  as well as the passage of the 2005 Energy Act.
  In addition, FPL Group may be unable to identify
  attractive acquisition opportunities at favorable
  prices and to successfully and timely complete
  and integrate them.
• Because FPL Group and FPL rely on access to
  capital markets, the inability to maintain
  current credit ratings and access capital markets
  on favorable terms may limit the ability of FPL
  Group and FPL to grow their businesses and would
  likely increase interest costs.
• FPL Group and FPL rely on access to capital
  markets as a significant source of liquidity for
  capital requirements not satisfied by operating
  cash flows.  The inability of FPL Group, FPL
  Group Capital Inc and FPL to maintain their
  current credit ratings could affect their ability
  to raise capital on favorable terms, particularly
  during times of uncertainty in the capital
  markets, which, in turn, could impact FPL Group's
  and FPL's ability to grow their businesses and
  would likely increase their interest costs.
• Customer growth in FPL's service area affects FPL
  Group's results of operations.
• FPL Group's results of operations are affected by
  the growth in customer accounts in FPL's service
  area.  Customer growth can be affected by
  population growth as well as economic factors in
  Florida, including job and income growth, housing
  starts and new home prices.  Customer growth
  directly influences the demand for electricity
  and the need for additional power generation and
  power delivery facilities at FPL.
• Weather affects FPL Group's and FPL's results of
  operations.
• FPL Group's and FPL's results of operations are
  affected by changes in the weather.  Weather
  conditions directly influence the demand for
  electricity and natural gas and affect the price
  of energy commodities, and can affect the
  production of electricity at wind and
  hydro-powered facilities.  FPL Group's and FPL's
  results of operations can be affected by the
  impact of severe weather which can be
  destructive, causing outages and/or property
  damage, may affect fuel supply, and could require
  additional costs to be incurred.  At FPL,
  recovery of these costs is subject to FPSC
  approval.

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• Threats of terrorism and catastrophic events that
  could result from terrorism may impact the
  operations of FPL Group and FPL in unpredictable
  ways.
• FPL Group and FPL are subject to direct and
  indirect effects of terrorist threats and
  activities.  Generation and transmission
  facilities, in general, have been identified as
  potential targets.  The effects of terrorist
  threats and activities include, among other
  things, terrorist actions or responses to such
  actions or threats, the inability to generate,
  purchase or transmit power, the risk of a
  significant slowdown in growth or a decline in
  the U.S. economy, delay in economic recovery in
  the U.S., and the increased cost and adequacy of
  security and insurance.
• The ability of FPL Group and FPL to obtain
  insurance and the terms of any available
  insurance coverage could be affected by national,
  state or local events and company-specific
  events.
• FPL Group's and FPL's ability to obtain
  insurance, and the cost of and coverage provided
  by such insurance, could be affected by national,
  state or local events as well as company-specific
  events.
• FPL Group and FPL are subject to employee
  workforce factors that could affect the
  businesses and financial condition of FPL Group
  and FPL.
• FPL Group and FPL are subject to employee
  workforce factors, including loss or retirement
  of key executives, availability of qualified
  personnel, collective bargaining agreements with
  union employees and work stoppage that could
  affect the businesses and financial condition of
  FPL Group and FPL.
• The risks described herein are not the only risks
  facing FPL Group and FPL.  Additional risks and
  uncertainties not currently known to FPL Group or
  FPL, or that are currently deemed to be
  immaterial, also may materially adversely affect
  FPL Group's or FPL's business, financial
  condition and/or future operating results.

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