NRG Reports Organic Customer Growth During Q2, Increased Power Margins

In reporting earnings for the quarter ending June 30, 2023 (second quarter), NRG reported 100k organic customer growth in Q2

NRG's reported 7.5 million retail customers as of June 30, 2023. In a presentation, NRG did not specifically identify this metric as reflecting its "Home" customer count as it typically does. NRG had ended the first quarter of 2023 with 7.4 million Home Customers

NRG reported 2Q23 retail volumes as follows:

37 TWh Electricity

     13 TWh Home / Residential 
         (75% of volumes are in Texas)

     24 TWh Business / C&I  
         (42% of volumes are in Texas)


413 MMDth Natural Gas
    19 MMDth Home / Residential 
   394 MMDth Business / C&I

NRG reported Adjusted EBITDA of $819 million for the second quarter of 2023, up from $386 million a year ago. Margin Expansion accounted for $186 million of the increase in Adjusted EBITDA, with Vivint EBITDA contributing $217 million to the increase

In the Texas segment, second quarter 2023 Adjusted EBITDA was $504 million, $241 million higher than the second quarter of 2022. "This increase was primarily driven by lower retail supply costs, including the impact of lower power pricing, the diversified supply strategy, and improved plant performance coupled with the 2022 impact of the W.A. Parish Unit 8 extended outage. This increase was partially offset by a decrease in retail load and higher operating costs due to an increase in planned outages in the second quarter of 2023 compared to the second quarter of 2022," NRG said

"In May 2022, W.A. Parish Unit 8 came offline as a result of damage to the steam turbine/generator. Based on work completed to date, the Company expects to return the unit to service in late August 2023. NRG expects lost revenues and expenditures incurred in 2023 to be offset by insurance recoveries," NRG said

In the East segment, second quarter 2023 Adjusted EBITDA was $77 million, $9 million higher than the second quarter of 2022. This increase was primarily driven by increased retail power margins, partially offset by asset retirements and lower retail natural gas margins, NRG said

In the Vivint Smart Home segment, Adjusted EBITDA was $217 million in the second quarter of 2023.

In disclosing its capital allocation strategy, NRG did not report a change in the amount of capital allocated to small book acquisitions, versus the first quarter of 2023, with $25 million allocated to small book acquisitions (see background here)

NRG reported that a Vivint Home Protection Plan launched April 2023, with 120k plans sold as of August 1.

NRG also said regarding smart home and energy cross selling, "Early pilots showing conversion rates ~6% on qualified leads; improved with DIY system to ~10%."

NRG reported smart home key metrics as follows:

                                       2Q22    2Q23   Change
Subscribers (MM)                        1.9     2.0     +7%
Monthly Recurring Revenue 
    per Subscriber                    $68.04  $72.01    +6%
Monthly Recurring Service Revenue 
    per Subscriber                    $46.97  $47.52    +1%
Monthly Recurring Net Service Cost 
    per Subscriber                    $11.36   $8.83  (-22%)
Monthly Recurring Service Margin 
    per Subscriber                    $35.61  $38.69    +9%
Gross Subscriber Acquisition Cost 
    per New Subscriber [Note 1]       $2,303  $2,448    +6%
Net Subscriber Acquisition Cost 
    per New Subscriber [Note 1]         $661    $753   +14%

Note 1: Last twelve months as of period end