Normalized power is best for showing you how "hard" a workout was. It is the basis for your Training Stress Score, which leads to chronic and acute training load calculations. All this helps you track how hard you're training.
For 60 minute NP, it can potentially let you know that it's time to re-test FTP (if you see a big jump), but it's not intended to be a means of estimating FTP on its own.
You have to watch it when your NP is much higher than your average:
- For my last 5' test, my AP/NP were 452W/446W (yes, NP was lower because of a hard start).
- For my last 1' test, and the following 4 minutes of coasting, my AP/NP was 177W/475W.