NRG Reports Decline In Total Mass Market Retail Customer Count Versus June 30, 2020, But Again Sees Growth In Texas

November 6, 2020

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Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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In a 10-Q for the quarter ending September 30, 2020, NRG reported a decline in mass market customer count versus June 30, 2020

As of September 30, 2020, NRG was serving a total of 3.599 million mass market customers, versus 3.618 million as of June 30, 2020, and 3.697 million as of a year ago.

The net loss of 19,000 mass market customers from June 30, 2020 to September 30, 2020 compares to a net loss of 33,000 mass market customers from March 31, 2020 to June 30, 2020

However, NRG grew its Texas mass market customer count by 13,000 customers from June 30, 2020 to September 30, 2020, versus an increase of 8,000 Texas mass market customers from March 31, 2020 to June 30, 2020. As previously reported, earlier in 2020, NRG purchased two small retail books in Texas (story here)

NRG's mass market customer count by region was as follows:

Mass Market
  Thousands Of Customers (000)
       9/30/19   6/30/20   9/30/20
Texas    2,466     2,447     2,460
East     1,231     1,171     1,139
Total    3,697     3,618     3,599

For the quarter ending September 30, 2020, NRG retail sales volumes were as follows:

Retail Sales Volumes, Quarter Ending 9/30/20
                     Texas    East    Total
Electricity
  Mass Market (GWh) 12,849   3,028   15,877
  C&I  (GWh)         4,886     439    5,325

Natural gas (MDth)    ---    1,850    1,850

Retail revenue for NRG was $2.302 billion for the quarter ending September 30, 2020, versus $2.488 billion a year ago.

For the quarter ending September 30, 2020, retail revenue was broken down as follows:

NRG Retail Revenues 
  (In millions) 

                   Texas    East    Total
Retail revenue:
Mass Market        $1,633   $354   $1,987
Business Solutions    288     27      315
Total retail        1,921    381    2,302

NRG no longer reports gross margin for a retail segment, but discussed retail as an overall driver for its gross margin in its new reporting segments (Texas, East, etc.)

The Texas segment saw economic gross margin decrease by $31 million in the quarter ending September 30, 2020, versus the year ago, driven, in part, by the following notable drivers:

Texas
Economic Gross Margin Change        $ In Millions

Lower fuel and supply costs                  276
   primarily due to lower costs to 
   serve the retail load, driven by 
   lower power prices of $35 per MWh 
   from purchasing incremental supply 
   in 2019 at escalated prices above 
   $1,000/MWh during periods of 
   extreme weather, partially offset 
   by sell back of excess supply 

Lower gross margin due to a decrease in      (142)
   net sales of generation to third 
   parties, as the supply was fully 
   utilized to serve the Company's retail 
   load following the integration of the 
   wholesale generation and retail 
   businesses with a geographical focus 
  in 2020 

Lower net revenue rates driven by customer   (146)
   term, product, mix and the impact from 
   COVID-19 of $4.25 per MWh or $74 million, 
   lower net revenue from decreased load of 
   735,000 MWhs from unfavorable weather of 
   $59 million and attrition and customer mix 
   of $67 million, partially offset by higher 
   retail net revenue due to increased volumes 
   from the acquisition of Stream in August 2019 
   of $54 million 

The East segment saw economic gross margin increase by $7 million in the quarter ending September 30, 2020, versus the year ago, driven, in part, by the following notable drivers with respect to retail (offsetting factors not listed here largely related to generation and/or capacity prices):

East
Economic Gross Margin Change        $ In Millions

Higher gross margin due to increased           7
   sales of portable solar and power 
   products 

Higher gross margin from higher                5
   revenue rates of $4 million, or 
   $2 per MWh, and a favorable impact 
   from weather of $1 million 5 

Higher gross margin from lower supply          3
   costs on load contracts 

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