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SEC Filing Details

10-K
NRG ENERGY, INC. filed this Form 10-K on 03/01/2018
Entire Document
 

NRG's trading and hedging activities are subject to limits within the Company's Risk Management Policy. These contracts are recognized on the balance sheet at fair value and changes in the fair value of these derivative financial instruments are recognized in earnings.
As of December 31, 2017, NRG's derivative assets and liabilities consisted primarily of the following:
Forward and financial contracts for the purchase/sale of electricity and related products economically hedging NRG's generation assets' forecasted output or NRG's retail load obligations through 2031;
Forward and financial contracts for the purchase of fuel commodities relating to the forecasted usage of NRG's generation assets through 2019; and
Other energy derivatives instruments extending through 2024.
Also, as of December 31, 2017, NRG had other energy-related contracts that did not meet the definition of a derivative instrument or qualified for the NPNS exception and were therefore exempt from fair value accounting treatment as follows:
Load-following forward electric sale contracts extending through 2026;
Power tolling contracts through 2043;
Coal purchase contracts through 2021;
Power transmission contracts through 2025;
Natural gas transportation contracts and storage agreements through 2030; and
Coal transportation contracts through 2029.
Interest Rate Swaps
NRG is exposed to changes in interest rates through the Company's issuance of variable rate debt. In order to manage the Company's interest rate risk, NRG enters into interest rate swap agreements. As of December 31, 2017, NRG had interest rate derivative instruments on recourse debt extending through 2021 and non-recourse debt extending through 2041, some of which are designated as cash flow hedges.
Volumetric Underlying Derivative Transactions
The following table summarizes the net notional volume buy/(sell) of NRG's open derivative transactions broken out by commodity, excluding those derivatives that qualified for the NPNS exception as of December 31, 2017 and 2016. Option contracts are reflected using delta volume. Delta volume equals the notional volume of an option adjusted for the probability that the option will be in-the-money at its expiration date.
 
 
Total Volume
Commodity
Units
December 31, 2017
 
December 31, 2016
 
 
(In millions)
Emissions
Short Ton
1

 

Coal
Short Ton
21

 
35

Natural Gas
MMBtu
(17
)
 
(53
)
Oil
Barrel

 
1

Power
MWh
14

 
7

Capacity
MW/Day
(1
)
 
(1
)
Interest
Dollars
$
3,876

 
$
3,429

Equity
Shares
1

 
1

The decrease in the natural gas position was primarily the result of the settlement of generation hedge positions. The increase in the interest rate position was primarily the result of entering into new interest rate swaps to hedge additional non-recourse project level debt.

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