Hot summer boosts NRG, CenterPoint

High prices, record power demand lift quarterly earnings

A long, hot summer marked by several days of triple-digit temperatures and hefty electricity bills didn’t make a lot of people happy. Unless you invested in a power company.

The extreme temperatures, record power demand and soaring wholesale prices boosted the profits of NRG Energy and the Houston utility Centerpoint Energy in the third quarter. NRG, headquatered in Houston and

Princeton, N.J., said it swung to a $372 million profit in the three months from July to September after losing $72 million during the same period a year earlier.

CenterPoint said its profit jumped 60 percent from the third quarter of 2018, which executives attributed to record electricity usage .

“The summer in Texas was particularly challenging given the extreme weather,” NRG CEO Mauricio Gutierrez said during a third quarter earnings call. “I’m very proud of our generation and retail teams for their ability to generate strong financial performance during a period of extreme price volatility.”

NRG, in addition to being a

major generator, is the biggest electricity seller in Texas and controls the largest share of the state’s retail electricity market. It owns several retail brands, including Reliant Energy, Green Mountain Energy and Discount Power.

NRG’s power generation business captured higher prices for power as extreme temperatures

strained capacity and triggered price adders that were approved by Texas regulators earlier this year.

One measure of financial performance, known was EBITDA, or earnings before interest, taxes, depreciation and amortization, shows the contributions the hot Texas summer made to NRG. Higher power prices in Texas accounted for $213 million, or about 40 percent of the company’s generation business’ adjusted EBITDA of $524 million.

An unplanned outage at WA Parish Unit 6, at NRG’s coal-fired power plant southwest of Houston, limited NRG’s ability to take full advantage of the higher prices, since the unit was offline for most of August and September, Gutierrez said.

The company also announced it would increase its 2020 annual dividend from $0.12 per share to $1.20 per share. NRG stock rose about 1 percent to close at $40.04 a share.

CenterPoint earnings

CenterPoint Energy reported third quarter profits of $241 million up from $153 million a year earlier, which executives attributed to hot weather driving more electricity usage, reduced maintenance costs and higher customer rates. CenterPoint’s revenues jumped nearly 25 percent to $2.7 billion from $2.2 billion in the third quarter of 2018,

CenterPoint now has electric and natural gas businesses in eight states, but the vast majority

of its earnings still come from its core position as the regulated transmission utility for most of the Greater Houston area.

“Our utilities delivered another strong performance this quarter, driven by solid customer growth, disciplined cost management and favorable weather,” said Chief Executive Scott Prochazka.

CenterPoint’s stock rose about 1 percent to $29 a share.