|NRG ENERGY, INC. filed this Form 10-K on 02/29/2016|
The following table summarizes NRG's global generation portfolio as of December 31, 2015:
(a) Includes 90 active fossil fuel and nuclear plants, 16 Utility Scale Solar facilities, 36 wind farms and multiple Distributed Solar facilities. All Utility Scale Solar and Distributed Solar facilities are described in MW on an alternating current basis. MW figures provided represent nominal summer net MW capacity of power generated as adjusted for the Company's owned or leased interest excluding capacity from inactive/mothballed units.
(b) Includes the aggregate production capacity of installed and activated residential solar energy systems. Also includes capacity from operating portfolios of residential solar assets held by RPV Holdco, a partnership between NRG Home Solar and NRG Yield, Inc.
(c) Includes Distributed Solar capacity from assets held by DGPV Holdco, a partnership between NRG Renew and NRG Yield, Inc.
(d) Does not include NRG Yield, Inc.'s thermal converted (MWt) capacity, which is part of the NRG Yield operating segment.
(e) Natural gas generation portfolio does not include: 463 MW related to Osceola, which was mothballed on January 1, 2015; 636 MW related to Coolwater, which was retired on January 1, 2015; 16 MW related to SD Jets Kearny 1, which was deactivated in March 2015; 160 MW related to Glen Gardner, which was retired on May 1, 2015; 98 MW related to Gilbert, which was retired on May 1, 2015; 335 MW related to El Segundo 4, which was deactivated on December 31, 2015; and 60 MW related to SD Jets Kearny 2A-2D, which were deactivated on December 31, 2015.
(f) Coal generation portfolio does not include: 251 MW related to Will County Unit 3, which was retired on April 15, 2015; 597 MW related to Shawville, which was mothballed on May 31, 2015; 575 MW related to Big Cajun Unit 2, which was converted to natural gas in July 2015; 401 MW related to Portland, which was deactivated on December 1, 2015; and 75 MW related to Dunkirk 2, which was mothballed on December 31, 2015.
(g) Oil generation portfolio does not include 212 MW related to Werner, which was retired on May 1, 2015.
NRG's portfolio diversification and commercial operations hedging strategy provides the Company with reliable future cash flows. NRG has hedged a portion of its coal and nuclear capacity with decreasing hedge levels through 2020. The majority of the Company's generation is in markets with forward capacity markets that extend three years into the future. These capacity revenues not only enhance the reliability of future cash flows but are not correlated to natural gas prices. NRG also has cooperative load contract obligations in the Gulf Coast region expiring at various dates through 2025, which largely hedges a portion of the Company's generation in this region. In addition, as of December 31, 2015, the Company had purchased fuel forward under fixed price contracts, with contractually-specified price escalators, for approximately 38% of its expected coal requirement from 2016 to 2020, excluding inventory. The Company enters into additional hedges when it deems market conditions to be favorable.
The Company also has the advantage of being able to supply its retail businesses with its own generation, which can reduce the need to sell and buy power from other institutions and intermediaries, resulting in lower transaction costs and credit exposures. This combination of generation and retail allows for a reduction in actual and contingent collateral, through offsetting transactions and by reducing the need to hedge the retail power supply through third parties.
The generation and retail combination also provides stability in cash flows, as changes in commodity prices generally have offsetting impacts between the two businesses. The offsetting nature of generation and retail, in relation to changes in market prices, is an integral part of NRG's goal of providing a reliable source of future cash flow for the Company.
When developing new renewable and conventional power generation facilities, NRG typically secures long-term PPAs, which insulate the Company from commodity market volatility and provide future cash flow stability. These PPAs are typically contracted with high credit quality local utilities and have durations from 10 years to as much as 25 years.