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Reliant Sees Drop in Number of Mass Market Customers

February 29, 2012

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Copyright 2010-12 Energy Choice Matters

Reliant Energy saw a net loss of 4,000 mass market customers from September 30, 2011 to December 31, 2011, NRG Energy disclosed in a 10-K.

While the decline is marginal, it is more notable because Reliant had been experiencing net growth of mass market customers during the prior three quarters of 2011, ranging from net mass market growth of 7,000 to 16,000 customers per quarter.

As of December 31, 2011, Reliant was serving 1.489 million mass market customers, versus 1.493 million as of September 30, 2011, and 1.459 million as of December 30, 2010.

Reliant's commercial and industrial customer count as of December 31, 2011 was up at 66,000 customers, versus 63,000 as of September 30, 2011, and 62,000 a year ago.

As reported yesterday, Reliant's total customer count as of the end of 2011 was 1.555 million, versus 1.556 million as of September 30, 2011, and 1.521 million a year ago.

NRG also said in its 10-K that Reliant has the largest market share in ERCOT based on volume sales.

Reliant's retail gross margin for the year 2011 was $1.055 billion in 2011, versus $1.190 billion in 2010.

The $135 million decline in gross margin was driven by:

- A $50 million negative impact from weather, reflecting the August extreme heat partially offset by favorable weather for the first six months of 2011;

- A $42 million negative impact from an 8% decrease in retail margins, due to lower pricing on acquisitions and renewals consistent with competitive offers

- The absence of a year-ago favorable impact totaling $68 million from the termination of out−of−market supply contracts

- A $25 million benefit from the favorable volume impact on gross margin from higher average customer usage, offset in part by fewer customers and a change in customer mix

Reliant's full-year 2011 adjusted EBITDA totaled $593 million, $118 million lower than in 2010, driven by the lower gross margin. Full year net income was $400 million, versus $358 million a year ago.

Fourth-quarter adjusted EBITDA was $131 million, $14 million higher than the fourth quarter 2010. The results benefited from a $16 million improvement in gross margin as a 2% increase in mass volumes sold was driven by a change in customer mix. Also contributing to the results was a year-over-year improvement in the average customer count in both the mass and commercial and industrial segments of 2% and 5%, respectively. Fourth-quarter net income was $32 million, versus $289 million a year ago.

Green Mountain Energy
Green Mountain Energy retail gross margin was $174 million for the year 2011.

Green Mountain Energy's total metered customer count, including utility partner customers, was approximately 411,000 and increased approximately 15%, or 55,000 in the twelve months ended December 31, 2011.

Revenues were generated 63% and 37% from residential and commercial customers, respectively.

Energy Plus
Energy Plus' retail gross margin was $25 million for the year 2011.

Energy Plus' total metered customer count was 188,000 and increased approximately 13%, or 22,000 in the three months ended December 31, 2011.

NRG said that across its retail businesses, it served over 57 TWhs in 2011.

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