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SEC Filing Details

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

Natural gas prices are a primary driver of coal demand.  The low priced commodity environment has stressed coal equities, leading coal suppliers to file for bankruptcy protection, launch debt exchanges, rationalize assets, and cut production.  If multiple parties withdraw from the market, liquidity could be challenged in the short term.  Inventory overhang will be utilized to offset production losses. Coal prices are typically affected by the price of natural gas. 
Electricity Prices — The price of electricity is a key determinant of the profitability of the Company. Many variables such as the price of different fuels, weather, load growth and unit availability all coalesce to impact the final price for electricity and the Company's profitability. The following table summarizes average on-peak power prices for each of the major markets in which NRG operates for the years ended December 31, 2017, 2016, and 2015. For the year ended December 31, 2017 as compared to the same period in 2016, the average on-peak power prices increased primarily due to the increase in natural gas prices. For the year ended December 31, 2016 as compared to the same period in 2015 the average on-peak power prices decreased primarily due to the decrease in natural gas prices.
 
Average on Peak Power Price ($/MWh)
 
Year Ended December 31
 
2017 vs 2016
 
2016 vs 2015
Region
2017
 
2016
 
2015
 
Change %
 
Change %
Gulf Coast (a)
 
 
 
 
 
 
 
 
 
ERCOT - Houston(b)
$
33.95

 
$
26.91

 
$
28.15

 
26
%
 
(4
)%
ERCOT - North(b)
25.86

 
24.53

 
27.61

 
5
%
 
(11
)%
MISO - Louisiana Hub(c)
40.02

 
34.30

 
34.55

 
17
%
 
(1
)%
East/West
 
 
 
 
 
 
 
 

NY J/NYC(c)
38.34

 
35.29

 
46.42

 
9
%
 
(24
)%
NEPOOL(c)
37.18

 
35.05

 
48.25

 
6
%
 
(27
)%
COMED (PJM)(c)
32.46

 
32.11

 
34.13

 
1
%
 
(6
)%
PJM West Hub(c)
34.14

 
33.79

 
41.97

 
1
%
 
(19
)%
CAISO - NP15(c)
35.68

 
31.73

 
35.50

 
12
%
 
(11
)%
CAISO - SP15(c)
36.48

 
31.17

 
32.45

 
17
%
 
(4
)%
(a) Gulf Coast region also transacts in PJM - West Hub.
(b) Average on-peak power prices based on real time settlement prices as published by the respective ISOs.
(c) Average on-peak power prices based on day ahead settlement prices as published by the respective ISOs.

The following table summarizes average realized power prices for each region in which NRG operates for the years ended December 31, 2017, 2016, and 2015, which reflects the impact of settled hedges.
 
Average Realized Power Price ($/MWh)
 
Year Ended December 31
 
2017 vs 2016
 
2016 vs 2015
Region
2017
 
2016
 
2015
 
Change %
 
Change %
Gulf Coast
$
36.43

 
$
43.34

 
$
42.89

 
(16
)%
 
1
 %
East/West
62.07

 
64.16

 
68.79

 
(3
)%

(7
)%
Though the average on peak power prices have increased on average by 9% for the year ended December 31, 2017 as compared to the same period in 2016, and decreased on average by 15% for the year ended December 31, 2016 as compared to the same period in 2015, average realized prices by region for the Company were driven by the Company's multi-year hedging program and the success of the Company's commercial operations team in optimizing the value of the Company's assets on a daily basis.

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