NRG says it lost $750M on freeze

Retailer cites ERCOT’s surge pricing and offline generators for shortfall

NRG Energy, one of the biggest power generators and retailers in Texas, said Wednesday that it lost at least $750 million during February’s winter storm that knocked out generators and electricity across the state.

NRG, which made $510 million in 2020, said it doesn’t yet have a full tally of the winter storm’s costs because of recently proposed regulatory changes, including the repricing of wholesale power trades during 30 hours of the power crisis.

The company, with headquarters in Houston and Princeton, N.J., said it also could be liable for a share of payments still owed to power grid manager ERCOT. If the Electric Reliability Council of Texas

can’t collect, the cost will be shared among buyers and sellers in the market. That outstanding total is estimated to be $3.1 billion, more than twice as large as an earlier estimate of $1.3 billion, NRG president and CEO Mauricio Gutierrez said Wednesday.

During the storms, ERCOT, under an emergency order from the Public Utility Commission, raised the wholesale price of electricity to a maximum allowable $9,000 per megawatt hour to encourage generators to provide as much power as possible and to ease shortages. ERCOT kept that price in place for several days, even as power reserves rebounded and shortages eased.

“We believe our current estimate to be reasonable, but it is still subject to change given continuous resettlements amplified by the crisis at the cost of $9,000 per megawatt hour,” Gutierrez said.

Gutierrez said NRG’s 2021 bottom line could be affected by a number of repricing bills and other efforts by lawmakers and regulators to reduce the financial cost of the crisis. But he seemed to reject attempts to correct the wholesale pricing error worth an estimated $16 billion.

“I believe the integrity of competitive markets are necessary for the long-term benefit of our franchise and consumers as a whole, so I don’t support repricing,” Gutierrez said.

NRG has said that rates will remain stable for its retail customers who have bought power from brands including Reliant Energy, Direct Energy, Green Mountain Energy, Direct Energy, and Cirro

Energy.

NRG joins several power retailers stung by the power crisis.

California-based Griddy Energy filed for bankruptcy protection Monday after losing customers who received bills in the thousands of dollars, incurring debts in the tens of millions dollars and getting hit with a proposed class action lawsuit seeking more than $1 billion.

Texas power company

Vistra Energy said Friday that it expects a hit of up to $1.3 billion to its bottom line. Vistra, which posted a $624 million profit in 2020, said it spent at least $10 million to prepare its power plants, but that natural gas shortages curtailed its electricity production.

Canadian retail energy seller Just Energy Group Inc. has filed for bankruptcy protection in Canada and will seek the same in the U.S. after suffering crushing losses during the blackouts.