HOUSTON – NRG Energy Thursday reported a $97 million loss for the second quarter, as it outlined plans to reorganize.
The power company’s challenges stemmed, in part, to an unusually mild summer so far in much of the country, executives said. Profits were down in each of its three regional power generation units, and its retail units suffered a net loss of $112 million in the quarter.
“Never before in my 11 years at NRG do I recall a first half of the year where we were so whipsawed by the weather,” CEO David Crane said in a call with analysts Thursday morning. “A severely cold winter followed by a summer — which to date, through the second quarter and so far into the third quarter — has been completely devoid of extreme weather in any of our core markets.”
Though the company’s revenues were up nearly $692 million or 24 percent in the quarter, its operating costs were up $890 million or 34 percent.
Executives noted that Houston hasn’t had a single day above 100 degrees in Houston — but they’re optimistic that hotter weather will soon benefit the company.
“The weather forecast for next week looks better as temperatures will move into a normal range, pushing 100 degrees in several Texas cities,” said Mauricio Gutierrez, chief operating officer and executive vice president of NRG.
Crane also unveiled a plan to reorganize the company, focusing on three new divisions — NRG Home, NRG Busines and NRG Renew.
Currently, the company has a retail division, several regional power generation units, a renewable unit and NRG Yield, a spin-off through which NRG acquires, owns and operates power generation facilities that already have existing sales contracts.
Going forward, the company will retool that makeup. NRG Home will include the company’s retail business as well as its residential solar company and other burgeoning businesses that Crane only hinted at. “NRG Home will also be focused, as Reliant already has begun to do, on bringing mobile and clean energy solutions to the end-use energy consumer with the ultimate goal for us being wherever you are, whatever you are doing, for however how long you are doing it,” Crane said on the call.
NRG Business will contain the company’s wholesale generation portfolio as well as services for commercial customers. NRG Renew will focus on solar and other green initiatives. The company would also keep Petra Nova, its carbon capture business, as well as NRG eVgo, its electric car infrastructure business.
Crane said each business has “exciting growth opportunities of its own” and could be “a candidate for value recognition on Wall Street in the same manner as NRG Yield.”