Utilizing Strategic Performance Measurement and Benchmarking to Improve Overall Processes

1. Utilizing Strategic Performance Measurement and Benchmarking to Improve Overall Processes Teri Ivaniszyn & Debra Shultz Robinson Florida Power & Light Company October 12, 2012

2. Agenda • About us - Florida Power & Light & NextEra Energy • A culture and buy-in of continuous improvement • Benchmarking in Simple Terms • NextEra Energy’s Quest to be the Best • Let’s try some Benchmarking • Wrap-Up

4. FPL is the largest electric utility in Florida 4.6 million customer accounts Operating in 35 counties FPLs typical customer bill is the lowest of Florida’s 55 electric utilities Typical customer saves an average of $31 a month compared to other Floridians 24.2 percent lower than latest national average FPLs CO2 emissions rate is 36 percent lower than the industry average FPL has three solar facilities in DeSoto, Brevard and Martin Counties FPL is one of the nation’s largest regulated utilities Florida Power & Light Company

5. Energy Resources is a successful wholesale generator with a concentration of clean energy assets under long-term contracts Energy Resources Portfolio(1) • Successful wholesale generator • U.S. leader in renewable generation • With nearly 10,000 MW of wind by the end of 2012 • 16,607 MW in operation • Would be a Top 15 utility on a standalone basis • $4.5 billion in operating revenues • $23.5 billion in total assets 1) All data as of December 31, 2011; operating revenues for the 12 months ended December 31, 2011; map indicates Energy Resources presence as of March 31, 2012

6. NextEra Energy’s accomplishments have earned the company widespread recognition Recent Awards And Recognitions In 2012, NextEra Energy was named No. 1 in its sector for an unprecedented sixth straight year on Fortune magazine's listing of the "World's Most Admired Companies." In that same Fortune survey, the company was named one of the top 10 most socially responsible companies in the world in 2011, and one of the top 10 most innovative companies in the world in 2010.NextEra Energy was named in 2011, 2010 and 2009 to the Dow Jones Sustainability Index (DJSI) of the leading companies in North America for corporate sustainability. The DJSI North America selects the top 20 percent of companies in sustainability performance from the 600 largest companies in North America.In 2011, Florida Power & Light again earned the ServiceOne Award for exceptional customer service FPL is the only utility to win this award eight consecutive years. NextEra Energy in 2011 was named one of the World's Most Ethical Companies by the Ethisphere Institute. Of the 110 firms named to the World's Most Ethical Companies list in 2011, only two were from the U.S. energy and utility sector. FPL received Edison Electric Institute's 2011 National Key Accounts Award for Outstanding Customer Service. The award is given to companies that provide service to national account organizations above and beyond normal expectations by truly recognizing and responding to the account's "uniqueness." CARBON DISCOSURE PROJECT

7. Agenda • About us…Florida Power & Light & NextEra Energy • A culture of continuous improvement • NextEra Energy’s Quest to be the Best • Let’s try some Benchmarking • Wrap-Up

8. Operational Excellence is the product of a long evolution of quality and business improvement initiatives The Evolution of Operational Excellence Post WWII Deming’s Total Quality First American Company wins Deming 1980’s Six Sigma in Services 1990’s Lean 1970’s Operational Excellence (Lean, Six Sigma, QI Story, Kaizen, Just Do It) Six Sigma tied to Financials 1990’s SPC 1920’s Lean Six Sigma 2000’s TQM 1970’s Six Sigma in Manufacturing 1980’s

9. Our commitment to quality improvement began with the Deming Prize. Today, quality and the notion of continuously managing operating performance is a key area of focus at NextEra Energy • Customer Orientation • Cost • Quality • Speed and Flexibility • Safety • Reliability

10. Company culture is key to determining the right approach to a quality mind-set Keys to Success • Top-down approach • CEO drives behavior • Change management • Train management • Right project, right tool • Demonstrate accountability • Engage employees • In setting metrics and making improvements • Publicize significant gains • Reward & Recognition

11. Our corporate values also demonstrate our commitment to quality We Are Committed to Excellence By establishing high standards of quality, driving continuous improvement, making fact-based decisions, working safely, and holding ourselves accountable, we cultivate the expertise and passion to deliver the best for our shareholders, customers, employees, and stakeholders. We Do the Right Thing By acting with integrity and humility in everything we do, living up to our commitments, and being forthright and honest in our communications, we create an environment of openness and trust. We Treat People With Respect By leading respectfully, promoting teamwork, building a diverse and inclusive team, and investing in development, we strengthen and engage our greatest asset – our people.

12. Embed quality into your culture through training your key talent to drive the change Six Sigma Journey Must be nominated by Manager & QDL Director approval of project required Lean Black Belt DMAIC Must be nominated by Manager & QDL Director approval of project required Lean Green Belt DMAIC Design for Six Sigma Benchmarking Analytical Problem Solving Six Sigma DMAIC Basics Process Management 3 Day Lean Recommended for Senior Professional Roles, Managers, Supervisors and key support individuals such as Team Members but available to all Introduction to Quality Part of onboard training SCHOOL OF OPERATIONAL EXCELLENCE

13. What are the levels of Six Sigma belts at NextEra Energy? Yellow Belt Yellow Belt training is designed to help participants grasp the concepts and tools needed to successfully learn the basics of six sigma, process management, lean, etc… The certification will prepare you to be a valuable team member assisting Green Belts and Black Belts. This is also an excellent pre-cursor for future Green and Black Belts. Green Belt Green Belt training is an excellent way to enhance the effectiveness of both process owners and team members as they learn to apply the tools and methods used in the Six Sigma methodology. Participants will learn about and use a process called DMAIC, which stands for Define-Measure-Analyze-Improve-Control. Black Belt A Black Belt is an employee possessing the training, skills, desire, and sponsorship to serve in the capacity of an internal consultant in the area of six sigma advanced tools and techniques. The skills and services delivered by a Black Belt are primarily for the application of advanced statistical tools & techniques.

14. Increasing your belt size can be healthy

15. Advanced & Leader Quality Curriculum Nominated Blackbelt & Master Blackbelt Candidate Curriculum Organizational Leaders

16. There are currently 950 certified belts and 300 additional candidates in the final stage of certification training. This brings NextEra Energy efficiency expert totals to well over 1000. GB / BB Certification Program Total Savings $140MM

17. COE enhances the culture of quality through major corporate events, recognition, and a dedicated website James L. Broadhead Award COE Website Quality & Safety Expo Quarterly GB / BB Certification Ceremony

18. Agenda • About us…Florida Power & Light & NextEra Energy • A culture and buy-in of continuous improvement • Benchmarking in simple terms • NextEra Energy’s Quest to be the Best • Let’s try some Benchmarking… • Wrap-Up

19. What is Benchmarking? Benchmarking is the process of measuring the performance of your business against the products, services and practices of your toughest competitors (or those regarded as leaders in your area of business).

20. Why Benchmark? • To see how you compare in a variety of areas and/or metrics • To give you information before setting your goals and strategy • To identify your gaps in comparison to your competitors and/or best in class institutions • To help you identify your strengths and areas of opportunity • Provides your team a target to strive toward being the best-in-class!

21. What are the steps to Benchmarking? • 6 Easy Steps • What do you want to Benchmark? • Who do you want to Benchmark? • What do I compare? • What do I prepare? • Will the new process work? • How did we do?

22. Benchmarking supports NextEra Energy’s Continuous Improvement • Customer Requirements • External Focus • Gap • Target • Recalibrate • Lessons Learned • What’s next? • Quest never ends! • Celebrate & Reward • Compare performance identifies the gaps and the causes • Achieve benchmark? • Achieve CTQs? • Achieve employee needs? • Standardize • Replicate • Shift paradigms • Get innovative • Adopt, adapt and combine best practices • Monitor, track, make adjustments

23. What NextEra Energy Benchmarks • Areas of our business we would like to improve • Look at current measurement systems (a must have) • What is in need of the most improvement • Strategic Plan Competitive Environment • Prioritize and pick most important area(s) • Review internal practices • Where to excel • financial management • human resources, expenses, delivery (speed of service), customer complaints, sales performance or client services • Form team (involve stakeholders) • Get your CTQ’s (customers & employees) • Determine your top 2 or 3 improvement areas • Create a project plan

24. Tools and Techniques for Benchmarking • Organization & departmental strategic plans • Quality indicators/metrics • Customer feedback (CTQ’s) • Surveys, interviews, questionnaires • Employee feedback • Determine strengths & weaknesses • Problem solving process • Identify top priorities • Isolate process used to analyze problems and determine solutions • Process flowcharts • Identifies stakeholders • Prioritization matrix “Sample Prioritization Matrix”

25. Who NextEra Energy Benchmarks • Top organizations • Competitors • Similar organizations, functions • Inside your organization • Outside your organization • Companies in different industries • Leaders • Employees • Surveys • Encourage employees to be on the lookout for winning ideas and organizations succeeding in particular practices

26. What NextEra Energy Compares • Apples to apples, oranges to oranges • Analyze how our business compares • Pick 3-4 key areas/metrics • Know current performance • Design targeted questions • What processes are similar – how • What processes are not similar – why not • Number of people involved, steps, etc. • Be willing to reciprocate • Identify any areas where you see an opportunity to make improvements • Pinpoint the techniques and business practices necessary to get results

27. What NextEra Energy Prepares • A specific set of questions that relate to both quantitative and qualitative • Quantitative: How the process performs • Effectiveness measures • Efficiency measures • Qualitative: How the process IS performed. What drives the performance? • Practices • Techniques • Structures • Resources • Culture • Environment • Ask the exact same questions of each benchmarking company to obtain a clear and consistent picture

28. Will the new process work? • Create an action plan on how to proceed • what to use • Implement the new process • Improve on it • Make it your own • Perform pilot before changing entire business model • Keep employees and stakeholders informed and supported throughout process change • Train on the new technique(s) • If problems arise, make sure you act on them immediately. • Measure the effectiveness • Monitor the key success factors • Reward & Recognize

29. Agenda • About us…Florida Power & Light & NextEra Energy • A culture and buy-in of continuous improvement • NextEra Energy’s Quest to be the Best • Let’s try some Benchmarking • Wrap-Up

30. Executive Summary: Station Battery Systems Project Description Over the last 2.5 years we found 62 station battery systems outside critical operating parameters (COP) that could cause SAIDI if called upon and fail. In addition, catastrophic failures have occurred that are believed to be linked to battery failures resulting in significant cost and revenue losses indicating that the current battery system reliability is insufficient & needs improvement. COE Approach • Supported Weibull Distribution Reliability Analysis of CC, DCU & MTX batteries in environments with & without A/C. • Defined battery reliability defect & Improved process capability to satisfy project goals. • Identified reliability improvement methodology with reduced cost implementation mode. • Benchmarked internal performance across our own transmission & distribution group for best internal processes. Results Install a Continuous Battery Monitoring System: • Tracks battery performance • Predictive Health Analytics • Provides sensing & control capability for Smart Grid solutions.

31. Implementation of Continuous Monitoring Solution to drive improvements in reliability & reduce operating costs Benefits: • Increased performance reliability • Maximizes useful life • Eliminates or minimizes testing & maintenance requirements • Facilitates planned maintenance • Tracking to support warranty claims and inventory management Reduced Operating cost • Developed Cost Neutral Strategy to fund monitoring system installation with cost savings • At entitlement battery systems operating cost will be reduced over 50% while maintaining improved reliability

32. Executive Summary – Dispatch Optimization Problem Description • Problem Statement: Current queue time shows a significant staffing optimization opportunity as Restoration Specialist queue time represents ~20% of SAIDI. • Opportunity Statement: Optimized dispatch methodology will provide the technology and tools to better balance trouble tickets with restoration resources. COE’s Approach • Estimate opportunity of changing the methodology by which RS’s (restoration specialists) are dispatched. Process Improvements • Pilot improved dispatch methodology in target service area. Strong results so far showing reduction in Queue + Travel time for lower level tickets as expected by simulation. • Ticket have been more balanced to resources. • Need to consider risk of moving all resources to one area. • Need process to move/spread resources when low ticket volume. • Local area expertise needs to be addressed

33. Utilized advanced Simulation & Modeling techniques to create innovative Restoration Specialist Dispatch Algorithm which results in 25% reduction in Queue + Travel time applied to SAIDI Monte Carlo Simulation & Modeling New Algorithm Development and Results

34. Agenda • About us…Florida Power & Light & NextEra Energy • A culture and buy-in of continuous improvement • Benchmarking in simple terms • NextEra Energy’s Quest to be the Best • Let’s try some Benchmarking • Wrap-Up

35. Benchmarking Tips • Think creatively • Ask team for input • Involve stakeholders • Study other “similar” businesses and how their processes work • Study other “not similar” businesses and how their processes work • Implement changes based on keen observations, analysis, asking the right questions, organized implementation (action plans, etc.) • Evaluate the results of implemented changes and ask for feedback • When you have the appropriate indicators and metrics for comparisons, here are a few ideas: • Compare your company to companies of a similar size, culture and strategies. Seek out any local peer benchmarking groups or professional organizations. • Access benchmarking studies via Internet across various industries • Join a formal benchmarking study

36. Let’s Benchmark • Let’s try it ourselves! • Work either with a peer from your own organization or by yourself. • Brainstorm 2 areas to benchmark – template one) • Write questions to ask (template two) • Find a benchmarking partner • Compare metrics, processes, etc. • Get back together with your team mate, or on your own and create a quick action plan (template three) • Use the following template to complete this exercise • You have a total of 45 minutes to complete the entire process • Your facilitator will help you manage your time

37. Template One - Benchmark Data

38. Template Two - Benchmarking Questions

39. Template Three - Action Plan

40. Agenda • About us…Florida Power & Light & NextEra Energy • A culture and buy-in of continuous improvement • Benchmarking in simple terms • What has continuous improvement done for us? • Let’s try some Benchmarking… • Wrap-Up