SEC Filings

10-K
NRG ENERGY, INC. filed this Form 10-K on 02/29/2016
Entire Document
 
                

The following table summarizes NRG's U.S. coal capacity and the corresponding revenues and average natural gas prices and positions resulting from coal hedge agreements extending beyond December 31, 2015, and through 2019 for the East region:
East
 
2016
 
2017
 
2018
 
2019
 
Annual
Average for
2016-2019
 
 
(Dollars in millions unless otherwise stated)
Net Coal Capacity (MW) (a)
 
8,295

 
7,472

 
7,472

 
6,256

 
7,374

Forecasted Coal Capacity (MW) (b)
 
4,250

 
3,568

 
2,873

 
2,235

 
3,232

Total Coal Sales (MW) (c)
 
4,056

 
2,021

 
422

 
5

 
1,626

Percentage Coal Capacity Sold Forward (d)
 
95
%
 
57
%
 
15
%
 
%
 
42
%
Total Forward Hedged Revenues (e)
 
$
1,554

 
$
726

 
$
117

 
$
2

 
 
Weighted Average Hedged Price ($ per MWh) (e)
 
$
43.63

 
$
41.01

 
$
31.58

 
$
41.03

 
 
Average Equivalent Natural Gas Price ($ per MMBtu) (e)
 
$
3.03

 
$
3.02

 
$
2.87

 
$
3.27

 
 
Gas Price Sensitivity Up $0.50/MMBtu on Coal Units
 
$
93

 
$
200

 
$
264

 
$
220

 
 
Gas Price Sensitivity Down $0.50/MMBtu on Coal Units
 
$
(38
)
 
$
(140
)
 
$
(183
)
 
$
(149
)
 
 
Heat Rate Sensitivity Up 1 MMBtu/MWh on Coal Units
 
$
41

 
$
88

 
$
128

 
$
121

 
 
Heat Rate Sensitivity Down 1 MMBtu/MWh on Coal Units
 
$
(31
)
 
$
(73
)
 
$
(94
)
 
$
(88
)
 
 
(a)
Net coal capacity represents nominal summer net MW capacity of power generated as adjusted for the Company's ownership position excluding capacity from inactive/mothballed units, see Item 2 - Properties for units scheduled to be deactivated.
(b)
Forecasted generation dispatch output (MWh) based on forward price curves as of December 31, 2015, which is then divided by number of hours in a given year to arrive at MW capacity. The dispatch takes into account planned and unplanned outage assumptions.
(c)
Includes amounts under power sales contracts and natural gas hedges. The forward natural gas quantities are reflected in equivalent MWh based on forward market implied heat rate as of December 31, 2015, and then combined with power sales to arrive at equivalent MWh hedged which is then divided by number of hours in a given year to arrive at MW hedged. The coal sales include swaps and delta of options sold which is subject to change. For detailed information on the Company's hedging methodology through use of derivative instruments, see discussion in Item 15 - Note 5, Accounting for Derivative Instruments and Hedging Activities, to the Consolidated Financial Statements. Includes inter-segment sales from the Company's wholesale power generation business to the retail business.
(d)
Percentage hedged is based on total coal sales as described in (c) above divided by the forecasted coal capacity.
(e)
Represents U.S. coal sales, including energy revenue and demand charges, excluding revenues derived from capacity auctions.
Capacity and Other Contracted Revenue Sources
NRG's revenues and cash flows benefit from capacity/demand payments and other contracted revenue sources, originating from market clearing capacity prices, Resource Adequacy contracts, tolling arrangements, PPAs and other long-term contractual arrangements:
Capacity auctions — The Company's largest sources of capacity revenues are capacity auctions in PJM, ISO-NE, and NYISO. Both ISO-NE and PJM operate a pay-for-performance model where capacity payments are modified based on real-time performance, where NRG's actual revenues will be the combination of revenues based on the cleared auction MWs plus the net of any over- and under-performance of NRG's fleet. PJM integrated a new Capacity Performance product into the market in 2015, as further described in Regulatory Matters. In addition, MISO has an annual auction, known as the Planning Resource Auction, or PRA. The Gulf Coast assets situated in the MISO market may participate in this auction.  In certain circumstances, capacity from the Gulf Coast region may be sold into the PJM market.
Resource Adequacy and bilateral contracts — In California, there is a resource adequacy requirement mandated by law that is satisfied through bilateral contracts. The Company's newer generation in California is contracted under long-term tolling agreements. Certain other sites in California have short-term tolling agreements or resource adequacy contracts. In addition, NRG earns demand payments from its long-term full-requirements load contracts with nine Louisiana distribution cooperatives, which expire in 2025.  Demand payments from the current long-term contracts are tied to summer peak demand and provide a mechanism for recovering a portion of the costs associated with new or changed environmental laws or regulations. In Texas, capacity and contracted revenues are through bilateral contracts with load serving entities.
Long-term PPAs — Output from the majority of renewable energy assets and certain conventional energy plants is sold through long-term PPAs and tolling agreements to a single counterparty, which is often a utility or commercial customer.


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