|NRG ENERGY, INC. filed this Form 10-K on 02/29/2016|
Wholesale power generation is a regional business that is currently highly fragmented and diverse in terms of industry structure. As such, there is a wide variation in terms of the capabilities, resources, nature and identities of the companies the Company competes with depending on the market. Competitors include regulated utilities, municipalities, cooperatives and other independent power producers, and power marketers or trading companies, including those owned by financial institutions. Many of the Company's generation assets, however, are located within densely populated areas that tend to have more robust wholesale pricing as a result of relatively favorable local supply-demand balance. The Company has generation assets located in or near Houston, New York City, Chicago, Washington D.C., New Jersey, southwestern Connecticut, Pittsburgh, Cleveland, and the Los Angeles, San Diego, and San Francisco metropolitan areas. These facilities, some of which are aging, are often ideally situated for repowering or the addition of new capacity because their location and existing infrastructure give them significant advantages over undeveloped sites. The Company believes that its extensive generation portfolio provides many asset optimization opportunities. To that end, the Company currently has approximately 3,397 MW targeted for Repowering and conversion initiatives, all of which is under development or construction.
In addition, the Company continuously evaluates opportunities for development of new generation, on both a merchant and contracted basis. As such, the majority of the Company's current developments are in response to RFPs for new generation and/or generating capacity backed by contracts with credit-worthy counterparties. Many RFPs are issued by regulated utilities or electric system operators in response to reliability or renewable power mandates. The Company competes against other power plant developers when responding to these RFPs. The number and type of competitors vary based on the location, generation type, project size and counterparty specified in the RFP. Bids are awarded based on many factors including price, location of existing generation, prior experience developing generation resources similar to that specified in the RFP, and creditworthiness.
The Company's B2B solutions focus on providing distributed products and services as businesses seek greater reliability, cleaner power or other benefits that they cannot obtain from the grid. These solutions include system power, distributed generation, solar and wind products, carbon management and specialty services, backup generation, storage and distributed solar, demand response and energy efficiency and electric vehicle charging stations. In providing on-site energy solutions, the Company often benefits from its ability to supply energy products from its wholesale generation portfolio to commercial and industrial retail customers.
The Company also provides energy services including operations, maintenance, technical, development and asset management services to its own facilities and to external customers.
The Company's retail business provides home energy and related services as well as personal power to consumers through various brands and channels across the U.S. In 2015, the retail business delivered approximately 43 TWhs and had approximately 2.77 million Recurring customers, plus approximately 624,000 Discrete customers of products and services. The results of the Company's retail business make it the largest competitive retail energy provider in the U.S. and Texas, and one of the top six competitive retail energy providers in the East. The majority of the Company's retail business sales come in the competitive retail energy markets of Connecticut, Delaware, Illinois, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Ohio and Texas, as well as the District of Columbia.
Retail customers make purchase decisions based on a variety of factors, including price, customer service, brand, product choices, bundles or value-added features. Customers purchase products through a variety of sales channels including direct sales, call centers, websites, brokers and brick-and-mortar stores. Through its broad range of service offerings and value propositions, NRG's retail business is able to attract, retain, and increase the value of its customer relationships. NRG's retailers are recognized for exemplary customer service, innovative smart energy and technology product offerings and environmentally friendly solutions.
The Company’s renewables business consists primarily of the Company’s wind and solar generation facilities that are not owned by NRG Yield, Inc. as well as the Company’s business-to-business distributed solar business. A substantial portion of the wind and solar generation facilities contained within the Company’s renewables business are subject to the ROFO Agreement between the Company and NRG Yield, Inc. In addition, the asset management and operation and maintenance groups within the renewables business manage a portfolio of wind and solar assets across 27 states, and provide a full range of solar energy solutions for utilities, schools, municipalities and businesses.