QUOTE AND NEWS
Forbes  Sep 29  Comment 
In afternoon trading on Monday, Utilities stocks are the best performing sector, up 0.4%. Within the sector, NiSource  (NYSE: NI) and NRG Energy (NYSE: NRG) are two of the day's stand-outs, showing a gain of 6.0% and 1.5%, respectively. Among...
StreetInsider.com  Sep 29  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Management+Changes/FuelCell+Energy+%28FCEL%29+Adds+NRG+Energy%27s+%28NRG%29+Sotos+as+Director/9866271.html for the full story.
DailyFinance  Sep 17  Comment 
NRG Energy Services, a wholly owned subsidiary of NRG Energy, Inc. (NYSE:NRG), is strengthening its portfolio of customizable, site-specific plant services available to plant owners and operators by adding the Turbine Services...
Motley Fool  Sep 14  Comment 
Products with solar cells built into them are becoming more common and may soon be a common household item.
Forbes  Sep 9  Comment 
In a study of analyst recommendations at the major brokerages, for the underlying components of the S&P 500, NRG Energy Inc (NYSE: NRG) has taken over the #4 spot from Priceline Group Inc. (NASD: PCLN), according to ETF Channel. Below is a chart...
Benzinga  Sep 9  Comment 
MaxLinear (NYSE: MXL) shares dipped 14.60% to $7.49 after the company lowered its Q3 revenue forecast. FuelCell Energy (NASDAQ: FCEL) fell 9.74% to $2.41 after the company reported downbeat quarterly revenue. However, the company reported...
Benzinga  Sep 9  Comment 
FuelCell Energy, Inc. (Nasdaq: FCEL), a global leader in the design, manufacture, operation and service of ultra-clean, efficient and reliable fuel cell power plants, today announced an agreement to sell its previously announced 1.4 megawatt fuel...
Forbes  Sep 8  Comment 
As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy -- they expect to make money.  So let's look at two noteworthy recent insider buys.
Forbes  Sep 5  Comment 
Looking at the sectors faring best as of midday Friday, shares of Utilities companies are outperforming other sectors, higher by 1.2%. Within the sector, NRG Energy (NYSE: NRG) and Xcel Energy (NYSE: XEL) are two of the day's stand-outs, showing a...
Market Intelligence Center  Sep 5  Comment 
NRG Energy Inc (NRG) is an excellent choice for either a diagonal spread or a covered call expiring in Dec. '14 at the $30.00 level according to MarketIntelligenceCenter.com’s patented algorithms.A covered call on NRG Energy for a net debit of...




 

NRG Energy (NYSE: NRG) is an independent power producer with generation operations in three countries. The company engages in the ownership, development, construction and operation of power generation facilities; the trading fuel and transportation services; trading of energy related products; and the supply of electricity to retail electricity customers in deregulated markets through its retail subsidiaries Reliant Energy and Green Mountain Energy. A majority of the company's revenues come from North America. As an energy producer, the company's earnings are susceptible to commodity prices and electricity demand.


Business Growth

The company earned $477 million on 2010 revenues of $8.84 billion, compared to $942 million on 2009 revenues of $8.95 billion. Contributing factors to the decline in net income are the sustained drop in natural gas prices and overall electricity demand. Also as a result of low gas prices, some of NRG's hedging positions that have hurt margins. NRG has acquired several companies in the renewable energy industry, which have the potential providing sources of future growth and of diversifying operations away from natural gas dependence.

Trends and Forces

Operations Are Tied Directly to Fuel Prices

NRG Energy's operations benefit from low, stable fuel prices (coal, oil, natural gas, nuclear fuel).[1] Because NRG's power station portfolio possess a fleet of diverse fuel sources,[2] price fluctuations in one of any of the above fuels affects NRG operating costs. Some specific trends to track include rising coal prices,[3] and rising oil prices.

To offset volatile natural gas prices and declines in electricity demand, NRG has several hedge positions on commodity prices.[4] When commodity prices fell rapidly in 2008, NRG reported record earnings partially as a result of their hedges.[5] However, these hedges have the potential of straining cash flows when commodity prices remain stable at historical lows.[6]

Additionally, NRG has acquired several renewable energy companies.[7] By diversify its operations, NRG's revenues become less dependent on commodity prices.[8]

Governmental Regulation Incurs Costs and Affects Revenue

Base rates on long-term electricity sales contracts directly impact NRG Energy's revenue.[9] The company's ability to maximize sale prices on contracts especially in California, Texas, and New England depends on local government demand and negotiation for the company's electricity.[10] NRG's competitiveness in these areas of high population density rests in its ability to sustain efficient, consistent operations relative to other area electric utilities.[11]

Additionally, environmental restrictions affect several aspects of NRG's (and the rest of the industry's) operations.[12] Regulation on coal, oil, and natural gas production and sales raises fuel prices.[13]Carbon emission regulation raises NRG's operating costs by forcing expenditures to clean up fossil fuel emissions from coal and oil-based power stations.[14]

Competition

Since NRG is a utility, the company has little competition. Utilities are typically monopolies that are regulated to ensure they are charging fair prices. Income comes from the utility company's contractual sales agreements with local and state governments. NRG competes with the following companies for contracts:



References

  1. 2007 10K, NRG Energy, Part 1, Item 2
  2. 2007 10K, NRG Energy, Part 1, Item 1A
  3. Coal prices seen rising 3 fold, to hit record; Reuters Business News
  4. Foxbusiness.com: S&P Lowers NRG Energy Outlook On Hedges, Low Prices
  5. Foxbusiness.com: S&P Lowers NRG Energy Outlook On Hedges, Low Prices
  6. Foxbusiness.com: S&P Lowers NRG Energy Outlook On Hedges, Low Prices
  7. renewableenergyworld.com: NRG Energy To Develop 500 MW of Solar Thermal
  8. renewableenergyworld.com: NRG Energy To Develop 500 MW of Solar Thermal
  9. NRG 10K SEC Filings 2010
  10. NRG 10K SEC Filings 2010
  11. NRG 10K SEC Filings 2010
  12. Seekingalpha.com:NRG Energy Testifies Before the Senate Committee on Energy and Natural Resources on Reducing Oil Consumption through Electric Vehicle Adoption
  13. Seekingalpha.com:NRG Energy Testifies Before the Senate Committee on Energy and Natural Resources on Reducing Oil Consumption through Electric Vehicle Adoption
  14. Seekingalpha.com:NRG Energy Testifies Before the Senate Committee on Energy and Natural Resources on Reducing Oil Consumption through Electric Vehicle Adoption
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