NRG Talks Retail Margins, M&A in Discussing Earnings

NRG Energy saw relatively stable overall retail portfolio unit margins for the year 2013, executives said in discussing earnings on Friday.

In Texas, NRG was able to hold retail margins around $23 per megawatt-hour, "driven by continued effective marketing, selling and service execution as well as the introduction of innovative products which are driving a 5% to 20% improvement in retention rates," executives said.

In the fourth quarter of 2013, NRG said that retail margins expanded, as heating degree days were significantly higher than last year, while power prices remained moderate. "This out-performance was also the result of reduced cost per customer served," executives said.

"On the C&I front, competition remains fierce and we don't expect that to change any time soon. As we mentioned in the last call, to avoid just competing on price we're intensifying our efforts to provide advisory services and comprehensive solutions to our customers beyond system power, including backup generation, solar, and demand response," said Mauricio Gutierrez, NRG Energy COO.

Regarding retail results to date in 2014, NRG CEO David Crane reported that the Texas book is on a positive track from weather-driven volume.

In the northeast, while retail results year-to-date have not been positive due to extreme weather, "the scale of it relative to the positive side on the wholesale [business], it's sort of a rounding error," Crane said.

Asked about opportunities to acquire retail assets given the challenges facing the industry, Crane said, "On the retail side, clearly we have a fantastic market-leading position in Texas, it could always be better. We're interested in more retail in the northeast, but in the northeast it's sort of market to market, and some markets are good, some are less good. So we look at everything and we'll see what happens over the next six months."