NRG Energy (NRG) 8 Nov 242024 Q3 Earnings call transcript

Good day. Thank you for standing by. Welcome to NRG Energy's Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note that today's conference is being recorded.

I will now hand the conference over to your speaker host, Kevin Cole, Head of Treasury and Investor Relations. ahead. go Please

the morning, our XXXX Good XX to Energy's and the live NRG in can webcast, Thank located Webcasts. at be call. and www.nrg.com This quarter in over broadcast being earnings and section be and morning's third via length which of you. Investors is welcome phone website call minutes Presentations will under

as safe required are of as undertake that factors no in the discussion law. by future date. everyone as to may as We in update based to which the on of today's these statements statements, believe urge harbor assumptions note may risk today's presentation Please be obligation results a forward-looking reasonable filings. this Actual as We our except differ we that SEC result well events, contain materially. review to

we In will both financial non-GAAP to measures. addition, GAAP refer and

financial directly please reconciliations regarding and to our information most to non-GAAP refer the For measures, measures today's GAAP comparable presentation.

I'll that, call Coben, Chair now the with And Larry and over NRG's CEO. to turn

initiative. on our Bruce and Virtual and on available will Thank by joined share today questions. Consumer, Rasesh our exciting call of CFO; everyone. management and an team update I'm are Kevin, good Patel, Plant who of morning, Power Head you, Other the Chung, members NRG our also to answer

on X. as Slide with start shown key X Let's messages today's

guidance by and earnings for this have in reaffirming performance year we strong target. for raise million this XXXX led $XXX strong outlook XXXX we're our financial September, to elevated Today, First, original XXXX. consecutive guidance the us late our surpassed year initiating second our

needs Plant Home Virtual marks a supported the of VPP. strategic we're platform, Google's efforts This ability evolving strengthens Google, our beginnings Second, and our Power partnership to customer scale meet by accelerate to to partnership to with and AI announce Renew our efforts. excited

growth program our those drive outlook, by to opportunities and also We're organic exceed enhancing shareholder a presenting highlighting introducing targets by guidance value. supported we're a multiyear new additional Finally, framework and adjusted EPS. further

our and review let's X, XXXX Slide guidance. XXXX performance On

guidance Our in summer, all business underscore margin and plant strong exceptionally Home. segments operations, of success well the continued These management us increased across year-to-date by strength of results results model and are effective our and throughout Smart risk supply business the the growth driven for position future. our

disclosures also feedback, we now the including I'd and response of to investor amortization Energy Smart depreciation Bruce line the that all cash Home noncash clear costs change, note like impact to simplifies and or and on Home amortization and transparency is to and shareholders. our reporting in This adjusted Vivint no Retail update related in statement. income are and details this on more enhances which financial provide for has our will flow modeling metrics EPS.

our and EPS usual including alongside XXXX cash before We're growth. adjusted free of now EBITDA adjusted initiating flow guidance, metrics

guidance. our XXXX, XX% For increase of and $X.XX EPS billion and adjusted free our EBITDA from cash in a expect reflects increase XXXX guidance growth adjusted we EPS from before billion. of This of $X.X raised XX% adjusted initial a flow XXXX $X.XX,

million Our before flow the free rate incorporates per reaching XXXX commitments, Day achieving growth. growth synergies, our Investor of share credit XX% cash and $XXX in guidance achievement delivering metrics XXXX key investment-grade run

our and Starting are of growth adjusted conditions will this our an remain announcing and we introduction XXXX synergy would has are Slide XXXX the XXXX less are half presenting June growth exciting superb original XXXX been we the It's also and billion. stayed share that significant, cash time outlook, guidance. on multiyear achieved with share even trading to This EPS, stronger. XXXX or based in $XX, better. Market our NRG. On excellence, part by than never authorization through have price short, additional and and X, per opportunities accelerated year, be this projection least outstanding be targeting growth favorable, to of $X outlook we're and highly has operations repurchase was our increasing target. Today, achievement improvement reflecting our is been achievement, we operational an on as In flow share an from raise business. at XXXX approach free growth price. our today's a XX%, XX% guidance, extraordinary Through a before XXXX raised XX% CAGR XX% of operations of our our based on

The growth provide EPS plans core a such divided value the earnings our this into shortly. as Texas with opportunities organic I capital growth or these businesses, portion will the clear allocation. tightening business only to drivers, we've incorporates power of our centers. no To added opportunities return data and earnings view outlook organic the categories, business market for of X additional of

customer commercial adjusted outlook and in organic driven Key include energy million long-term Our an $XXX includes home our in growth We're and Virtual by increase to Home, Smart strategically XXXX, wallet Power footprint. industrial energy businesses. services in also EBITDA annualized initiatives drivers our growth our consumer share expanding advancements through largely Plant.

In return terms $X.X to $X.X of dedicated capital repurchases. share allocation, shareholders with billion billion we to plan to

Texas tightening Looking at held at despite demand. opportunities XXXX, from rise through significantly we market to growing power expected outlook, not prices, have which factored this in $XX potential exceed in any we've

allow your sensitize for into gearing additional investors our provided on expectations. our We their to and sensitivities reflect growth to have and visibility

baseline these site brownfield for I'll the depth portfolio selected X greater projections slides. projects also expectations. from over Fund. were that development in explore contributions shovel-ready growth our X our Each not next of additional and represents elements these Texas XX Energy to Texas the Our include upside

opportunities that our of to emphasizes outlook long-term in positioned platform the we're and well Our emerging capture our shows sector. strength

Moving to Slide X.

growth disciplined Let's break plan, $XXX in down million our initiatives. high-value investments by driven

our XX% leveraging strong expected on and of share and each Texas from industrial energy, energy, in market we're from expand home our Our XX% primary with our Home Around growth XX% home customers. Smart to is businesses. from focused commercial energy. In wallet

our Essentials Virtual energy value, increasing provides scale testing also ability encouraging. to and Plant results been while offering. added Power have customers that and very This have margin our enhances been retention, bundle the a initiative We Home

details provide will on initiatives of the later We in presentation. these

growth For have customer base Smart Home, achieving we of by expansion, historically. which strong a driven is continued primarily record

service our and such increase and and segment AI through attract We broader markets customer as in less costs. We're expanding carbon products which new enhancing a management care, of expensive sales also and our and will improve both quality offering NRG will we're existing customers and incorporating business, by also advanced bundles. In options. load energy platform commercial by industrial into speed, reduce reduced

strategic $X.X services incrementally electric both gas natural meet XX%. That's annualized client for unit investments to our margins. To we X Additionally, the million customers, in and target, over resulting next approaching invest we're successful EBITDA billion investment, to on years. broadening the our total implying up plan higher highly return $XXX

growth convert these to flow before at cash free a expect approximately initiatives of We to XX%. rate

of align that growth. exceed will keeping initiatives base look very progress. our with These we capital to meet allocation forward confident to on and I XX/XX disciplined our you commitment likely high-return framework, our I'm updated you reinforcing these targets.

Slide our let's Now some of at other X. opportunities on look

gas power Texas On various margin weather open price natural conditions. prices generation to gross assumes and the our stable we left, scenarios. normal around-the-clock XXXX This analysis show sensitivity

value on scenarios. under our different For please multiple potential Texas of scenarios, price the the refer further details substantial hedging generation highlights to appendix. This

demand tighten due can most to table not attractive markets to highlights market, uneconomic driving gearing fluctuations. Texas price highly of profitable. economic growth. only power become remains but nature generation previously As the demand, the also major asymmetrical The rising our power country's

from the instance, data in that. a total Houston demonstrates XXX% Virginia, the base increase largest of For recently load the of transmission case. that an reported Northern around X-gigawatt This kind company levels. By installed structural of data largest market, U.S. pre-summer our beyond queue comparison, significant demand, could capacity value center drive growth Texas a center half has

use Energy of the Slide X, of portfolio expectations. On On ideal asset plants, former sites the the right, directing current substantial gigawatts prioritize tangible Since that opportunities in not options represent in competitive to many them offer for the we our allocation, as X projects, and them these flexibility for outline the Texas located at making attributes explore we baseline or Texas, the sites were high-quality X all Funds such capacity. per key to path power additional to shovel-ready value we other they this developer to also market. In infrastructure, these projects X our beyond well Together, evaluate value-enhancing coming continue what XX for These projects development the speed feature X.X hyperscalers. total that markets. to in have we generation means brownfield anticipate desirable we years. best selected our under creating for cash

the future. disciplined returns balances Our to sustained capital drive value into with growth capital substantial well plan allocation

value. Our hurdle and where see growth we initiatives exceed invest our we rates, only exceptional

return currently teens implied stock, these extraordinary repurchasing Importantly, trades the investments flow value, is That free cash of an yield. our exceed view. own in at my low also a which

let that, me Head on exciting Virtual our Power Patel, will to Consumer, NRG of initiatives. it Rasesh Plant update turn With the over provide an who

Thank you, Larry.

brings announce develop Turning in customers. partnership This with solution strategic for to or residential and consumer together technology management am XX. to innovative Home energy Google industries and VPP, I Plant, partnership NRG Slide and to X-gigawatt across develop to our Texas. Power thrilled Virtual energy Renew an leaders the a our

Google's with advanced enhancing will Renew money, the flexibility supply supply Homes' of combine technology. while AI to This and to us that is deploy grid. will energy and their and and and allow customers our residential use intention demand to Our NRG's our stability smart expertise capabilities Texas devices other consumer thermostats strategy the optimize and enable response save reach management

On our will key of components find the Slide you XX, partnership.

fraction a of capacity platform plant. of cost near compelling personalized management at a provides realtime dispatch will develop that of generation the energy a We

will portion outlay. Google NRG collaboration acquisition partner capital also relationship, will fund NRG's the the capabilities for new manage response experience NRG all dispatch VPP This a VPP provide enrollments Home Texas. demand costs, in significant events. and of customer and as Nest will minimizing positions of the Renew customer

economically in metrics supplementing than investment higher efficiency peaker while is portfolio. alternatives. The our is bottom at plant, an upfront left the significantly of generation As approach traditional the a to XX%, roughly capital which illustrated new this X/XX is VPP greater slide, the of than an IRR attractive delivering

of reaching page, by XXXX. by side the dispatchable megawatts scale right-hand plan On XXXX XXX a of the you capacity to with gigawatt goal and can this of program see the our

which as a strategy Virtual Power turn our the includes in market an NRG with remain accelerate where VPP customer. Texas, smart thermostat, plan we cost no let's the XX, new they VPP Energy To offering. installation, to exciting introducing Vivint and bringing to an program outline enrolled long Now at a customers Home to doorbell provided Essentials professional bundle, all in camera as Slide we're our Plant for efforts

to receive our they their to they to experience. services fee of the a in of benefits for Should investment leave, can allowing Smart choose while monthly enjoying continue $XX.XX, Smart Home customers the protecting continue Home,

with have a select step in tested seeing Home and generate products have encouraging. this and the app than proposition been per customers with engagement, offer have Smart these of strong XXXx purchase energy this revenue. adoption and in new XX% the customers In more services Home of our We that results value using our recurring we're household pilot, Smart opted Moreover, very change incremental to average customer month. Texas, additional

Home see deliver and encourage Smart that build a explore bundle for customers point to will value we VPP powerful suite to becoming scale services. broader this time, entry of a customers, Over enhanced

in up share to We Home customer share to market are our costs leveraging acquisition wallet our of through of with expand partnership. strong $XXX co-funding Renew customers Texas with VPP our

and that strategy solutions valuable they experiences, accessible, focuses with making energy engaging. take and energy their go-to-market relationship smart strengthening where their NRG. are empower deeply meeting solutions control on customers of home with our them while We're to This

make XXXX. will broadly Texas, essentials spring available We home-based in

closer Moving Virtual look at generates a strong our to value Slide and supply. streams, Power consumer Plant deliver XX, value how let's X and distinct economics through take

revenue for for uplift expect essentials On the additional from well the recurring customers increased consumer services. as as Home customers tenure home-based side, margin where benefits, we economic of opting in we bundle adopting the retain XXX% Smart incremental

value, industry services customer offering. this consumer engagement energy other initiative this to home to from elevated relative customer and savings enhanced improve retention and integrated we The churn, the due expect has to

implied opportunity an we've in-the-money On the that side, per illustrative summer half of we the economic over events the the margin breakdown benefit, creates number VPP how provided where supply on of price. shows based retain power and

in VPP, annual mitigation, direct value, from $XX we asset our approximately further million anticipate supply this risk critical $XX value million XXX-megawatt Beyond supply during million value. volatility. At scale recurring $XXX from dispatch us periods to allowing VPP also stabilize a portfolio NRG, the of provides margin for to for and consumer

ahead more coming keeping project increase. highly only you value customers total the execute $XXX to that our If becomes annual strengthens asset as Texas supply I a our million, the NRG many VPP years, the and in expect, will and forward constrained Looking margin as our on both X gigawatt incremental to updated resilience. VPP, operational flexible and we a to plan. progress exceed this look profitable to making we financial

With that, I over the turn financial provide it Bruce to to will review.

you, Thank Rasesh.

discuss I on and to our like performance I'd financial a third updates our Before valuation quarter results, key metrics. few provide

driven and our adjusted capital growth framework. impact capturing net well as see reporting introducing These program. investments can are the you our context robust NRG's as underlying part additional profitability As both of per income and adjusted by business offer allocation platform on as slide, metrics our the into of we growth, earnings share for

are to a original XXXX, income, guidance, business of midpoint EPS. per deliver increase billion share of the over we of XX% midpoint EPS to net $X.X The the reflecting adjusted adjusted For track adjusted performance. on of guidance strong our represents our $X.XX raised equivalent

merits as tools We new metrics, NRG's investors of free these continue coupled before evaluation provide such use preexisting flow investment to their on our to will believe with cash in valuation. for spotlight these are a NRG. pleased growth additional metrics, share We shine per attractive the to of

free the provide future. X alongside before cash adjusted will foreseeable growth these for We continue disclosures and new to EBITDA flow

item. and given addresses today's feedback a of depreciation the from third confusion have operations been and line quarter direct of amortization recast forward results, that EBITDA adjusted us all capitalized point SG&A of customer updated has acquisition This Going including investors costs to common on. cost and change into amortization

as the ongoing process. this tables the to this commitment our details of morning's provide More and presentation This modeling available XX-Q well is in visibility our simplify in Reg better our G businesses are into part to and as release. press appended

see change million this you As billion billion. an slide, of to results the right-hand our the the by guidance on XXXX of to $XXX adjustment from $X.XX in can midpoint $X.XX side upward

change and for historical therefore, free periods comparison adjusted noncash of accordingly for periods. no methodology conform items before EBITDA results We is outlook. EPS have metrics any geography of adjusted flow our recast to and a with or allow and, impact across has to reporting cash of this This reported direct growth simply on our

adjusted Turning $XX third financial QX of of to million adjusted than the million delivered prior quarter Slide EBITDA XX. $X.XXX Texas EBITDA $XXX NRG increase the delivered another quarter strong higher of an of over the and quarter, operational for XXXX. $XX million of performance, of with year. billion,

temperatures. a last lower This asset for the by executed our was adjusted warm sales marked improvement power and lack resilience of reflects strength despite $XX in and our million. platform. XXXX, of integrated Unlike When generally outperformance pricing, volatility Texas approximately price was year,

strategy retail of maximize market supply units we and periods off to of margins the plants ability as is confidence our financial load. supply us ability cycle integrated to variety during served pricing our low enabled on of delivering a gives and strategy our through us what in results Our consistent conditions. as off turn part The overall to

was $XX an customer year-over-year prior million, Our quarter X%. power in driven expansion segments increase and East, resulting primarily counts margin and the This gas also Adjusted costs, EBITDA year. outperformance. of demonstrated lower million representing for and was the from improved an in natural $XXX Services average supply West by increase improvement

base by growth the expansion count $XX Home grow. of business quarter, our operating Finally, EBITDA year. the subscriber net continued of as our Smart was to prior reflecting million service from million X%, mid-single-digit and This increase subscriber $XXX the in the driven of adjusted margin segment an delivered for leverage embedded continues the

As we disclosures you adjusted added can on adjusted the and have table, EPS. see income for net

equivalent income, primarily share XX% over of million QX XXXX This produced driven gross the increase per quarter, adjusted NRG earnings a of and For represents $XXX higher $X.XX by third repurchases. net margin share. results, to

million, the completion quarter and the increase Parish CapEx, flow working $XXX Free growth XXXX. of was restoration work in favorable $XXX for a gross lower XXXX. capital reflects over the million QX cash margin, higher This before given

reaffirming metrics, revised have ranges are EPS. and we reporting guidance our the including across adjusted financial XXXX our income guidance Lastly, key and adjusted provided all net

Turning to XXXX capital allocation on Slide XX.

deliver quarter few second continue waterfall to earnings allocation on changes are We from our allocation There priorities. capital to the call. a capital our only minor

call, late earnings an announced to agreement HVAC in business. closed last sell our transaction On That our September. we Airtron

million. Airtron updating to we are net $XXX the cash sale proceeds the As a approximately result, from

are by increasing before growth million. free We also cash flow $XXX

management reduced million XXXX our $XXX million. allocation we've and dividends, to liability preferred from For $XXX

Our few originally metrics by improved the coupled years, year aggressive a debt in target financial intended. reduction over end our performance, the of will XXXX, with achieving credit past full than result earlier

amount As the a had liability pursue CAFA. in have remaining to and reduced of to result, management our that we unallocated have we cash reallocated XXXX intended

total from $XXX increase We XX, $XXX guidance. complete expect have the October share to our increased Through $XXX we of which repurchase FCFbG million million to reflects our million, XXXX share of over XXXX, our we nearly and representing completed $XX repurchases, in Inclusive repurchases billion by at of repurchases year-end. in remaining activity, our average the XX% an outstanding. have shares since of executed price around year-to-date we $X.X

with growth, build In other new our $XXX allocated project. million ERCOT including we updated have investments, for associated spend our other

towards programs. rolled million XXXX capital, to have approximately into for Finally, we which unallocated expect $XXX application buyback continued of end XXXX we with share

next Turning slide. to the

for excited financial guidance our introduce to We are XXXX.

from $X.XX billion EBITDA a guiding $X.XXX of guidance or midpoint. are billion, a XXXX an representing year original XXXX of full to billion to increase X% range our We midpoint adjusted $X.XXX

of announced at the from growth chart expansion partly synergy programs, our completion the As lost margin from of previously EBITDA you Airtron. higher and driven and bottom, by is the from by power prices cost this the offset the can see sale

We before free the range growth full representing to a midpoint billion a -- original midpoint are also increase $X.XXX guidance. X% cash flow of billion also $X.XX of year over $X.X an billion, guiding XXXX to $X.XXX XXXX of billion, our

EBITDA In for share. are we flow addition and to guidance earnings adjusted adjusted growth, income free and cash net per initiating before adjusted

a to income guidance of of For $X.XX full range to we net EPS, a $X.XX representing of initiating midpoint a XXXX, $X.XX $X.XX share. per billion, of billion a adjusted midpoint representing billion, adjusted on range and year are to $X.XX for $X.XX

the slide. next to Moving

providing are map with our free road investment on per share major cash X-year We EPS and outlook a the growth of drivers flow adjusted a before basis.

you As share per targeting are long-term on XX%. EPS than slide, can growth adjusted FCFbG see of the and greater we

rates recently against growth be presentation. These are of More our can disclosures guidance. pegged the XXXX today's in modeling appendix increased found

Our program organic growth, underpinned earlier. and of opportunities visible $XXX and million run to in over not outlook does incremental return pricing rate of robust XXXX I'd this period. $X the Larry on EBITDA is X-year resulting X-year power upside include touched a flat by nearly assumes capital highlight outlook also XXXX the any billion additional adjusted of that

that you is taxes share repurchases Offsetting see and this growth organic can plan NOL expire nearly generate balance. FCFbG NRG credits strong of growth an As growth. increase tax per share utilize available its on as in of in the $X.XX EPS and to and earnings XXXX slide, $X as our continues growth comprise nearly

the growth flow taxes, earnings rates. of maturing we projecting is to refinanced costs impact as cash debt interest and low-cost at addition higher free higher In are on

approximately allocation, next billion are Turning the $X.X starting from allocation side left the XXXX. the includes and on the cash to on of amounts for of showing which available chart, XXXX we carryover capital slide

such, in selling target As dividends. credit forecasted. liability of I originally noted, And will hedge convertible earlier metrics we management as our note will program XXXX preferred the comprised already and than our be have stock achieve

about X% and Together continue you to the share, planned with XX% the can share is per after to of focus with CAFA be integration planned of will repurchases our primary As in the of $X.XX capital XXXX increase our see, return dividend total to currently common expected $X.XX for allocation costs. management capital activity billion XXXX. liability be

scorecard, return from the than with for shared on a Importantly, we more $X.X keeping to exceed to commitment billion significantly are be XXXX our those XXXX Investor returned track of Day, through capital of as XXXX. original part

in to performance outstanding relative Directors to XXXX Given billion. our $X.X for an Board our billion authorization repurchases total Day plan, the Investor from approved $X.X increase of

October to under total in As $X near-term includes program related to remaining the which have increase. In organic approximately of on other is of this XX, plan. actionable authorization, long-term investments, we continued initiatives newbuild investment growth our progress XXXX, our million billion ERCOT inclusive $XXX and allocated

showing that, are you, we we of course capital, back to I'll $XXX over the Finally, million XXXX. With it of which unallocated allocate turn will Larry.

Bruce. Thank you,

Turning insights compelling to financial view X-year XX. Slide growth our and enhanced disclosures with a today outlook our you clear earnings for additional We've into provided detailed trajectory. of

cash XX, growth of another organization a across simple, per of exceptionally balance significantly strong before Slide strong all allocation is well opportunities XX% where employees ahead our delivered in growth these of XX,XXX on guidance results and year capital plan by who work flow goals. In been and flows we targets backed transparent and achieving the Our at these recurring numerous results. least our financial free to share, have of I'm and closing, and of durable We're operation long-term proud in our of expectations. adjusted execution cash with confident exceed EPS has XXXX have driven sheet.

forward I'm creating additional deeply to to value. committed NRG shareholder significant driving

change long-term across step a in improvement seeing are platform. fundamentals our We

a prudent You can our continued on capital. good of stewards investors' heightened operational being expect excellence, focus and and remaining growth

line open questions. I potential the than am your interest. Operator, ready about today. of have continued for and excited I we're the more NRG for time to Thank now you never been

our of question [Operator from Instructions] Partners. from Shar the line Guggenheim Pourreza coming first And

Larry, an quite update, Quite an update.

touch the sites. just just the Let process want to I around on start, me

mentioned Some of deals. to portfolio hyperscaler week peers this approaches your

it to in are you more still are X Street And units. ability other? provide region your interest you You have of seeing in update degree how -- the gas versus plan seeing sort the of the Is January? the a additionality to with

sorry, sorry. -- and Yes, no, yes

to You mentioned it before, the by way. me

It worked.

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updating So And when done still as lot the see time site we can here. We've a excited. to more appendix comes. super that of look forward analysis, in you you

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Yes.

-- numbers in. think them as I we know are, what will the layer we

because that may things before, remember never an be some ever and want then may we X those this disclosed events tied extra of we're want of to may or the comes together. some megs about decide and hyperscalers going we talked Now we build someone and not to they plant, X,XXX something, how us

see it. kind you all our So a than sudden the is this that CAGR, of where you'll one-off things either doing but that's estimates, those of see go Could our of may rather raising announcements. that one all ways we're of way, raising

component the segments then Appreciate, sort the obviously, identified plan. coming the And lastly, between breakdowns of of just back through to 'XX. the Perfect. right. All growth

investors, Some cost And C&I customer kind the X these color some verticals? of like obviously any do room Where variability aren't. these to counts, to margin, within are of see but then most you on familiar the achieve? for

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cost the to that's achieve. So

question next Julien Jefferies. our the of And Dumoulin-Smith coming line with from

Larry, done. guys. on you on just a Shar just good. on -- up Maybe what bit good, little little Nicely first bit here. good, a up following Pleasure, following picked

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think I it's both.

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to I need We'll see to able be don't for that double the to wait what we you'll additionality. looking very to dip. have make know double attractive somebody but dip to those don't and are, rules who's

Yes.

million it I VPP, much the the Excellent. you think kilowatt, of do like it's And $X.X billion, think, that so how a Okay. VPP? X to you said out years... $XX $XXX cost did I for

customers things to don't work. have actually and Yes. is We one unique the about wait we value. the to realize start the benefit the get Julien, as of VPP to acquire we to put assets

we think And to gain stays assets. we us up of for million the deployed start $XX it ramp benefits from because so it and as below investment,

question next of Storozynski our line from And with Angie the coming Seaport.

It's focused does these the what that are kind funny else still was do of you even entire and on call though to enough. say good questions have all

Angie. said, Well

really is bar The set high, yes.

So Plant. Power Virtual VPP, my question is about the

that seeing arbitrage rely So eats batteries in off the that in cannibalize There's existing batteries cooling into we're that battery Texas, are these pricing and investments prices realization some this peak right? on. power to starting on

is basically component profitability VPP? why that this shouldn't same And understand customer I of true the the of business so the the so is be energy component And relatively retention, small. for the biggest

your be that, true energy and benefit shouldn't that flatter additional capture actually gets ability the a sort curve in lower? of sense, to why But is this

our because does back on that called we're remind right? energy and options the you portfolio, end. What right, insurance, observation. would we're that, building it's great I tell the always consumer is is and serve I've provides you component Rob, self it we Angie, that VPP customers, or What including

the it we as beauty So VPP for of perfect that ensure against we we is hedge the how think is exposure. of event, think as and kind about customer extreme an about the

over of as out when dropping does So a I curve it the peakers and to party time, risks the portfolio building the VPP we're meet go a helps me money to without business look consumer that obligation. lot massive to is manage build energy third to having a what or of same

book. Does the that risk good that here. this absolutely home-based really a perspective, long-term far feel to the manage the got is I as So help? energy And best of economics the as about tool we've

Okay.

it's peaks, and announcements, question a Not hard Texas spikes of cost-effective said believe basically, my that it, incredible XX can that that we've almost So to straight face, in most hearing super they right? gig even from keep with way that's is against the enCore. right, load we to in seen other hedge be those gains

reacting even And response can almost reconcile is if yet, curve we're this in not load that's as power Texas? it how 'XX in and lack seeing or actually that of again, forward at response? not why 'XX, is impact and curves to any the Or not the could just all. going be It's you --

Yes.

in that or And I expect would this look what at supply-demand load both we that I of expect with that things. So would the I reflects curve you. we I don't believe the those is future. picture tell you am the

pricing XX kind honestly, gigs. But year. how of like As think last going we don't load warm last little we curve, that remember, a This of viewing the coming. far price as just less believe real need of show I know reaction could And didn't lost the happen. sight XX everybody whether looking shortsighted summer little then about We or into I is pretty what than it's it's bit year. history. in was part formation did of And have a or and we is any inside not if gigs. don't the it up, to

and If the you the about, okay, you incremental look market. add into look, of you ERCOT into just future a load little think bit

just call profile a and to have renewables formation. really You weather a opportunity price real abnormal get giving it

And to 'XX, that curves reality. excited managing we'll and It's through it. seen think 'XX these I and everybody go it. be curves be -- just beyond this don't will all you've seen the the and reflect before. We've in then will again, moon,

Okay. last And the both actually Larry. question, so and to maybe Bruce

So maybe capital there think that you some free unwarranted flow other and way buybacks or or of there is yield change? that a strategy below share are is other M&A the some just which cash return

anywhere we're still to close Angie, We're the double don't one, it. in there digits. is think I but

get look mid-single opportunities on have world the of maybe again, So in what digits, the to a when we kind we looks that the depending can like.

stock given and the you high day, sure trading forward for is the look for But now, still question us. pretty so the we us. right that, undervaluation hurdle it's high the do, a to when I'm real of all becomes that too, stock, a rate But that

Wolfe from Michael next our line with of the question coming And Sullivan Research.

all here. on Congrats the announcements

just vary so XX% And it in I be vary? and -- can plus below it some you or -- every know that XX% said this better clarify, how does Just below years to in go gave just XX% to going year-to-year. can better much or But year? you mean it's can --

generally some be is going there might I that term. above. might long think visibility a there to long-term to around XX% over may are years Yes. go be we Mike, go where But be going some There see the below. reality speaking, plus on basis, the where it -- years it's

in in lower just should you being specifically of that does tax back we kind year And fall so the if go 'XX with 'XX? Okay. out that, as of Slide think again up on XX the all So we to away then a year? impact, like catch and

Yes. There after in of increase tax because expiring 'XX the credits. tax is an incremental rate

see way I a an some rate, about a drag. tax as growth we the drag that is probably extent offsetting the that and that incrementally there that business think business higher of we is to performance growth result think

the million Great. fair good as And And and announcement, broke stable of $XX of it VPP you kind more then, just okay. as to out it maybe kind Okay, the locked to in? see being then there. -- is component yes, bifurcate

get we $XX that. if fair? then maybe that it that that like And component, looks level? got million have around this been in lot like have Is a been summer if wouldn't 'XX summer, And then would you a better

and is of a going this stable color Rasesh. be value think market. supply more can way it. that customer to can tiger that's very The higher little Rob to on, be in significantly Michael, about good a which years add is Yes, sustainable. value, The

right And about think so it. I that's to way think the

add Rob, you anything? would

Yes.

page think of the part from the So the lieu On what have the right? I would about top of cost remember supply perspective, values thing would the you form So on that it in me, of we're represent the insurance right? some this using having -- that, by and would what slide, call replace not is rate different the representation the is about or to the like this at heat go bottom this this with save years. talk we we what something we where down a have option

insurance how But been So with it long you to insurance, portfolio, valuable build think NRG year have formation. this the have real where that buy value any term in 'XX, in I'm the considerably that price it would about say, when we and than, we more didn't of going regardless.

So book business. out. protect insurance our XX I'm We're the months to the building to XX putting in

that the the And bought going the that, at so at That's And capture I values to top. really bottom. the we're this just in was bought insurance me examples I from, year, right? So it. bottom insurance and the the at need representation value then valuable. is the up 'XX. didn't protected I It

insurance protect that around value -- portfolio that I'm the is the the because of regardless VPP Does every So that we see year make buy anyway. circumstances sense? to year, to consistent going

It does. That's helpful. really

out a big in how just overall that of Can other one, there you any pretty us were looking does Or to round you market to there maybe just what do last sense doing? there, of then It's are or And people too. get Texas it out this? competitors Okay. outside sizable. VPP give

almost we positioned demand customer NRG are of North give the Texas. partnering exclusivity Home the NRG the and you And context with Nest to a which deployed great management reasons that, supply demand us a platform around It's question. America. The we're XXX,XXX the is in so have is skilled partnered are And thermostats Nest with in base. response overlapped million uniquely X And new Google, with partnership also think Renew to all I one expertise. thermostat into largest we enrollments have customer response of now gives there already ERCOT, in base,

opportunity And so a for very is this unique NRG.

that And electric platform today will where resources this showing our vehicles, platform. but you be leverage two, can already with deployed tie-in to outlined working we've the we is we everything into onto partners other things the opportunity, batteries, thermostat

very I scale. anybody at so, And else think this replicate Michael, hard be it would for to

Morgan of line comes question the from final our David Stanley. Arcaro with And

I of I we're EBITDA retail center all of data components the Texas the growth maybe was if over really of wondering potential the opportunity. growth residential plus energy of opportunity in called the business C&I see an seems seeing in load. is there? It time, organic there's didn't at potential How good one from new could that that be incorporated kind growth clearly from as pretty here. upside that growth like out

that. about thinking you're how wondering So

Yes.

in this nearly So strong is it's very residential market about would XX% a we think The of I side the have great Texas, way the question. on energy share really right, market. share

through essentials, Home services relationship the the lot customers opportunity incremental from we've new see summer actually And of that already so them Smart value. in giving this where do the is customer that XX% we're bundle, attractive. larger bought provided the us, seen And over that's home-based we've expand have of trial of very incremental and leverage launch share skilled we household of how we base existing a wallet customers. And to with our

So growth, energy. wallet, I home have NRG of be with expand market the the obviously, in but opportunity, share modest share near XX% that opportunity characterize just household will we would larger for there is to as the leveraging

Yes. Absolutely. terms coming retail side on you. and growth business sense. center data growth? territory Got opportunities your industrial that maybe boost the to And and in the service Makes side, of that would contract is there of retail commercial

Are coming retail contracting with a seeing show up centers that you opportunities? in -- business to data in you multiyear energy the

Short answer yes. is

where that requirements. rest with C&I there's affects amongst of want seeing their to service, those tightness contract side the they way occurs that megawatts. I've there's quality And competition of are for a in they said it and data a then about the where it large about flight marketplace want other contracts. and the the it, before centers is on to we skilled customers, there's think and additional definitely growing market We talked long-term how commercial operators coming industrials

in ERCOT And uplift so an see opportunity as trend we this our honestly, we set and, continue into see PJM. in

call the Coben now remarks. turn queue in showing back to any this I'm the time. Mr. over at further will closing for no I And Larry questions

I to want in your for you thank NRG. interest all

in going it great up-to-date presentation, As Have forward our business, super to tell forward. from we we our you our excited day about you slides can weekend. a are a on our great all and look have releases, and keeping

conference. for in thank Ladies This now the concludes today's and you your disconnect. and may program, you participation gentlemen,