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Updated: NRG Reports Retail Volumes, Drivers Of Economic Gross Margin Decrease

May 3, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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A 10-Q for NRG disclosed further details concerning earnings for the quarter ending March 31, 2019 (Q1 2019).

See yesterday's stories on NRG's earnings for a review of Retail earnings and outlook

NRG Reports Lower Retail Adjusted EBITDA On Higher Supply Costs

NRG Expects Higher ERCOT Volatility To Create Opportunity To Acquire Small, Mid-Sized Customer Books "At Value"

Regarding the previously reported $4 million decline in economic gross margin for NRG's Retail segment during Q1 2019, versus the year-ago, NRG detailed the decline as follows (versus the year-ago):

$ in millions

• Lower gross margin due to higher supply costs driven by an increase in power prices of approximately $3.25 per MWh or $46 million, partially offset by higher revenue driven by the effect of the margin enhancement initiatives of approximately $1.50 per MWh or $20 million: $(26)

• Lower gross margin due to the unfavorable weather impact from a decrease in load of 185,000 MWh: $(8)

• Higher gross margin primarily driven by higher volumes from XOOM and other customer acquisitions in 2018: $30

NRG reported volumes for the three months ended March 31, 2019 as:

Mass electricity sales volume — GWh - Texas: 7,990

Mass electricity sales volume — GWh - All other regions: 2,494

C&I electricity sales volume — GWh - All regions: 4,831

Natural gas sales volumes (MDth): 10,547

NRG also reported the following increases (decreases) in selling, general and administrative expenses in Q1 2019, versus the year ago

$ in millions

• Increase in selling and marketing expenses associated with costs incurred for margin enhancement initiatives: $15

• Increase in bad debt expense primarily due to higher customer attrition: $10

• Increase in selling expense due to the acquisition of XOOM in June 2018: $9

• Decrease in general and administrative expense from cost initiatives for the Transformation Plan: $(17)

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