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NRG Energy Flags Major Earnings Upside as Texas, PJM Power Prices Climb

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-- NRG Energy (NRG) reported Q1 earnings on Wednesday, forecasting that its generation fleet is positioned to capture significant gains, as rising power prices, tighter market conditions and a leveraged generation position boosted its outlook.

The utility said its Texas generation-only portfolio could deliver gross margins exceeding $3 billion at $100 per megawatt-hour power prices under low-hedge levels, compared with losses at prices below $50/MWh.

The company's current guidance assumes about $52/MWh, with hedge coverage ranging from 95% to less than 25%.

NRG projected similar upside for its PJM fleet, at $100/MWh, with gross margins projected to reach about $1.5 billion in 2026.

NRG's base assumptions include weather-normal conditions and benchmark natural gas prices of about $3.75/MMBtu at Henry Hub and about $3.25/MMBtu at the Houston Ship Channel.

For PJM, projections include $3.75/MMBtu Henry Hub pricing and about $3.60/MMBtu at Tetco M3.

The company's Texas fleet currently includes about 45 terawatt-hours of economic generation and 40 TWh of uneconomic capacity, while PJM comprises about 25 TWh of economic and 15 TWh of uneconomic capacity.

Price: $152.24, Change: $-5.19, Percent Change: -3.30%

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