Since 2000, NextEra has quietly expanded to become the nation's No. 1 producer of green energy from both wind and solar. It has invested $8 billion in wind alone. But what may be most interesting about NextEra, a national independent power producer, is how differently it behaves from its very own sister, Florida Power & Light Co., a more conventional regulated utility serving 10 million people across half the Sunshine State. Both are owned by FPL Group, a $20 billion public company, yet their respective performances illustrate how ground rules can drive an industry toward innovation–or reinforce the status quo.

NextEra operates in 25 deregulated states and Canada, wherever it has the right to compete. Where the existing utilities have sunk large costs in fossil-fuel plants, NextEra can invest shareholder capital in renewables to help states meet increasingly stringent green-energy quotas. Its projects include the world's largest wind farm, the 735-megawatt Horse Hollow in Texas, and the world's largest solar-thermal plant, the 310-megawatt Solar Electric Generating System in California's Mojave Desert. It buys more wind turbines from both GE and Siemens than anybody else. Even after bowing to the economy by cutting costs and shelving some expansion plans, NextEra still grew earnings 18%, to $650 million, in the first three quarters of 2008, and plans to add 1,100 megawatts of wind power in 2009, compared to 1,000 added in 2007.

Jay Apt, director of the Carnegie Mellon Electricity Industry Center, calls the staff "alpha geeks" whose wind-control center in Juno Beach, Florida, is "state of the art," as good as anything he has seen in Europe. "It's the most data-driven utility I think I've seen, and I've seen some very good ones," he says. In 2006, NextEra bought one of the industry's leading consulting firms, WindLogics; there, a staff of PhDs uses the latest National Weather Service data to figure out the optimal placement for turbines and forecast their likely output. O'Sullivan calls them "our rocket scientists."

Florida Power & Light Co., meanwhile, looks a lot more like business as usual. The regulated utility has clashed with activists -several times in recent years over plans to build fossil-fuel power plants on environmentally sensitive land in and near the Everglades; its power mix includes 52% natural gas, 19% nuclear, and 6% coal; and it is proposing new coal and nuclear plants. "Coal is a four-letter word to us," says O'Sullivan. Eric Silagy, an FPL Co. VP, counters, "For certain folks, coal is an important resource."

Why the split between the two subsidiaries? "Follow the money!" says Stephen Smith, executive director of the Southern Alliance for Clean Energy, who watches the overall company closely. "These guys love to go into somebody else's service territory and compete with clean energy. But when they've got a monopoly, a captive customer base, they revert to the business-as-usual rate-base paradigm: large nukes and coal."

Lately, with Governor Charlie Crist pushing for a renewable portfolio standard in Florida, FPL Co. has been moved to follow its sister's lead. In December, the utility broke ground on the world's first hybrid solar plant, using solar thermal to boost natural gas, the first of 110 megawatts of planned solar plants that represent $729 million in new investments and, when completed around 2010, will make Florida the second-biggest sun-power state in the country after California.

If the nation's objective is to see more power companies behave as innovatively as NextEra does, the solution is clear: Introduce real competition across the country, create strong portfolio standards, and allow better price signals into the market through a carbon tax or a 100% auction-based cap-and-trade system for greenhouse gases. Even Smith gives FPL Group credit for advocating the latter. "It is one of the most forward-looking utilities on climate and global-warming policy," he says. "One-hundred-percent auction is the position of the president, and it's the right position."