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SEC Filing Details

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

Retail gross margin and economic gross margin
The following is a discussion of gross margin and economic gross margin for Retail.
 
Years ended December 31,
(In millions except otherwise noted)
2017
 
2016
Retail revenue
$
6,115

 
$
6,100

Supply management revenue
187

 
154

Capacity revenues
83

 
82

Customer mark-to-market
(4
)
 

Contract amortization
(1
)
 
(1
)
Other

 

Operating revenue (a)
6,380

 
6,335

Cost of sales (b)
(4,768
)
 
(4,687
)
Mark-to-market for economic hedging activities
181

 
365

Contract amortization

 
(6
)
Gross margin
$
1,793

 
$
2,007

Less: Mark-to-market for economic hedging activities, net
177

 
365

Less: Contract and emission credit amortization
(1
)
 
(7
)
Economic gross margin
$
1,617

 
$
1,649

Business Metrics
 
 
 
Mass electricity sales volume (GWh) - Gulf Coast
36,169

 
35,102

Mass electricity sales volume (GWh) - All other regions
6,221

 
6,764

C&I electricity sales volume (GWh) All regions (c)
20,400

 
18,906

Natural gas sales volumes (MDth)
3,212

 
2,199

Average Retail Mass customer count (in thousands)
2,863

 
2,778

Ending Retail Mass customer count (in thousands)
2,876

 
2,818

(a)
Includes intercompany sales of $5 million and $4 million in 2017 and 2016, respectively, representing sales from Retail to the Gulf Coast region.
(b)
Includes intercompany purchases of $1,035 million and $850 million in 2017 and 2016, respectively.
(c)
Includes volumes for 2017 for one customer that self-supplied their volumes for all of 2016 versus only two months in 2017.
 
Retail gross margin decreased $214 million and economic gross margin decreased $32 million for the year ended December 31, 2017, compared to the same period in 2016, due to:
 
(In millions)
Lower gross margin due to lower rates to customers driven by customer product, term, and mix of $103 million or approximately $1.60 per MWh, partially offset by lower supply costs of $28 million or approximately $0.50 per MWh driven primarily by a decrease in power prices at the time of procurement
$
(75
)
Lower gross margin due to milder weather conditions in 2017 as compared to 2016 resulting in a reduction in load of 350,000 MWh
(11
)
Lower gross margin related to the impact of Hurricane Harvey in 2017, driven by $9 million due to a reduction in load of 200,000 MWh, and the unfavorable impact of selling back excess supply along with $7 million of customer relief
(16
)
Higher gross margin driven by higher average customer counts of 85,000 along with higher average usage due to customer mix
70

Decrease in economic gross margin
$
(32
)
Decrease in mark-to-market for economic hedging primarily due to net unrealized gains/losses on open positions related to economic hedges
(188
)
Increase in contract and emission credit amortization
6

Decrease in gross margin
$
(214
)

Renewables gross margin and economic gross margin
Renewables gross margin increased $17 million and economic gross margin increased $22 million for the year ended December 31, 2017, compared to the same period in 2016, primarily driven by new distributed generation solar projects placed in service, increased margin in operations and maintenance agreements which focus on servicing NRG Yield assets and receipt of insurance proceeds offsetting lower volume at the Ivanpah solar plant.

73