After di­vest­ing re­new­ables, NRG gets back in the busi­ness

Houston Chronicle - - BUSINESS - By L.M. Sixel

NRG En­ergy got out of the re­new­ables busi­ness ear­lier this year when it sold its wind and so­lar op­er­a­tions for $1.8 bil­lion to sat­isfy share­hold­ers seek­ing bet­ter re­turns. But now NRG, the big­gest elec­tric­ity seller in Hous­ton, is get­ting back into the so­lar power busi­ness with a new ap­proach.

The com­pany has teamed up with an in­de­pen­dent so­lar power provider to de­velop 25 megawatts of so­lar projects that NRG hopes will at­tract en­vi­ron­men­tally sen­si­tive com­mer­cial and in­dus­trial cus­tomers.

NRG is bet­ting that so­lar in­stal­la­tions pro­vided by Cy­press

Creek Re­new­ables of Santa Mon­ica, Calif., will serve as the foun­da­tion for NRG to sell re­new­able en­ergy plans to large busi­nesses. The so­lar sites are ex­pected to re­duce about 37,000 tons of car­bon diox­ide emis­sions each year, the equiv­a­lent of tak­ing 7,000 cars off the road.

Last week, NRG an­nounced its first so­lar cus­tomer, Sysco, the Hous­ton food dis­tri­bu­tion com­pany. Sysco signed a 10-year re­new­able en­ergy agree­ment with NRG. Three so­lar in­stal­la­tions — in­clud­ing one near Hous­ton and two near Dal­las — are ex­pected to meet most of Sysco’s power needs in Texas.

NRG is try­ing to ful­fill a grow­ing de­sire among im­age-con­scious com­pa­nies to show their com­mit­ment to the en­vi­ron­ment, en­ergy spe­cial­ists say.

“There are a lot of cor­po­ra­tions that want to en­hance their green pro­file, and one of the ways to do that is to part­ner with a green en­ergy provider,” said Travis Miller, a strate­gist who fol­lows NRG for in­vest­ment re­search com­pany Morn­ingstar in Chicago. “There is cer­tainly a large mar­ket there.”

The deal be­tween Cy­press Creek and NRG comes just months after NRG un­loaded its re­new­ables busi­ness as part of a cor­po­rate strat­egy to re­fo­cus on coal and nat­u­ral gas-fired power pro­duc­tion. The util­ity had in­vested in pro­duc­tion of wind and so­lar power un­der the lead­er­ship of its one-time CEO David Crane.

Crane, how­ever, was pushed out of the job by ma­jor share­hold­ers, un­happy with the strat­egy and re­turns it was de­liv­er­ing.

This time around, NRG will es­sen­tially out­source the pro­duc­tion of so­lar power. Cy­press Creek was once a com­peti­tor of NRG, but now Cy­press Creek will buy the land, build the so­lar in­stal­la­tions and sell the power to NRG.

NRG will pack­age it as green en­ergy to cus­tomers seek­ing to build their sus­tain­abil­ity cre­den­tials, said Robert Gaudette, pres­i­dent of busi­ness so­lu­tions at NRG En­ergy. “They get mar­ket­ing op­por­tu­ni­ties and point­ing op­por­tu­ni­ties to the so­lar farm,” he said.

Cy­press Creek will own and op­er­ate the so­lar in­stal­la­tions and de­liver the elec­tric­ity to NRG and its cus­tomers un­der power pur­chase agree­ments. Cus­tomers can ob­tain fix-priced mul­ti­year con­tracts and re­ceive nam­ing rights to des­ig­nated so­lar fa­cil­i­ties.

NRG is based in Hous­ton and Prince­ton, N.J., and owns sev­eral re­tail elec­tric­ity com­pa­nies in­clud­ing Re­liant En­ergy, Cirro En­ergy, Green Moun­tain En­ergy Co. and Pen­ny­wise Power.

Cy­press Creek was founded four years ago. It has 2,300 megawatts of so­lar projects op­er­at­ing in a dozen states (One megawatt can power about 200 Texas homes on the hottest sum­mer days). The com­pany has raised $2 bil­lion for project de­vel­op­ment, ac­cord­ing to its web­site. lynn.sixel@chron.com twit­ter.com/lm­sixel

Nati Harnik / As­so­ci­ated Press file

NRG will part­ner on so­lar with Cal­i­for­nia green en­ergy provider Cy­press Creek Re­new­ables.

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