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SEC Filing Details

10-K
NRG ENERGY, INC. filed this Form 10-K on 03/01/2018
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, 2017 and through 2021 for the East/West region:
East/West
 
2018
 
2019
 
2020
 
2021
 
Annual
Average for
2018-2021
 
 
(Dollars in millions unless otherwise stated)
Net Coal Capacity (MW) (a)
 
3,267

 
3,267

 
3,267

 
3,267

 
3,267

Forecasted Coal Capacity (MW) (b)
 
1,579

 
1,456

 
1,258

 
881

 
1,294

Total Coal Sales (GWh) (c)
 
12,520

 
1,521

 
644

 
46

 
3,683

Percentage Coal Capacity Sold Forward (d)
 
91
%
 
12
%
 
6
%
 
1
%
 
27
%
Total Forward Hedged Revenues (e)
 
$
408

 
$
46

 
$
20

 
$
1

 
$

Weighted Average Hedged Price ($ per MWh) (e)
 
$
32.60

 
$
30.57

 
$
30.68

 
$

 
$

Average Equivalent Natural Gas Price ($ per MMBtu) (e)
 
$
2.76

 
$
2.84

 
$
2.73

 
$

 
$

Gross Margin Sensitivities
 
 
 
 
 
 
 
 
 
 
Gas Price Sensitivity Up $0.50/MMBtu on Coal Units
 
$
47

 
$
113

 
$
114

 
$
118

 
$

Gas Price Sensitivity Down $0.50/MMBtu on Coal Units
 
$
(36
)
 
$
(96
)
 
$
(91
)
 
$
(71
)
 
$

Heat Rate Sensitivity Up 1 MMBtu/MWh on Coal Units
 
$
31

 
$
66

 
$
64

 
$
66

 
$

Heat Rate Sensitivity Down 1 MMBtu/MWh on Coal Units
 
$
(23
)
 
$
(59
)
 
$
(56
)
 
$
(49
)
 
$

(a)
Net coal capacity represents nominal summer net MW capacity of power generated as adjusted for the Company's current 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, 2017, 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 GWh based on forward market implied heat rate as of December 31, 2017, and then combined with power sales to arrive at equivalent GWh 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. 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. 
Resource adequacy and bilateral contracts — In California, there is a resource adequacy requirement that is primarily satisfied through bilateral contracts. Such bilateral contracts are typically short-term resource adequacy contracts. When bilateral contracting does not satisfy the resource adequacy need, such shortfalls can be addressed through procurement tools administered by the CAISO, including the capacity procurement mechanism or reliability must-run 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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