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

During an earnings call this morning, Mauricio Gutierrez, NRG President and Chief Executive Officer, discussed potential summer volatility in the ERCOT market as providing an opportunity to acquire retail customer books

"We expect that higher volatility in the [ERCOT] market creates an opportunity to acquire small to medium-sized customer books and platforms at value," Gutierrez said

Speaking more broadly about retail M&A, outside of the specific market conditions in ERCOT, Gutierrez said that NRG feels good about its current balance of generation and retail, "but there's always an opportunity to perfect it."

Gutierrez said that the company's focus is growing its retail business in the East, which it has been successful in doing organically.

"The way I would characterize the [retail] M&A opportunities, [they] are probably smaller to medium size. And they're limited," Gutierrez said

Gutierrez reiterated that NRG would be "very opportunistic" and "very judicious" about deploying capital to the retail space

Any retail acquisition targets, "have to be businesses that complement our existing platform, " Gutierrez said, adding that any retail M&A would look like a tuck-in acquisition

Gutierrez also reiterated that generation must grow with its retail load. To do so, NRG is executing a "capital-light" PPA strategy to complement its physical generation assets.