With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

America's Most Innovative Companies

Energy sector dominated this year for the first time since 2008, with 28 companies featured on the list.

100 Fastest-Growing Companies

Industries included in the sector are mining, oil and gas exploration and services, pipelines, refining, and utilities.

Fortune Sector Leaders: Energy

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

Fortune Global 500

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s group delivered stellar revenue and profit growth, but it underperformed the broader stock market.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-333-NRG Energy

The energy company produces and distributes electricity and other utility services to a variety of clients, both residential and commercial, across the country. In May, NRG Energy announced it relocated its headquarters from New Jersey to Houston, and the city has committed to purchasing 100% renewable energy.

This year's Fortune 500 marks the 66th running of the list.

F500 2020 324 NRG Energy

With headquarters in both Princeton, N.J. and Houston, this energy company serves about 3.7 million residential, small business, commercial, and industrial customers.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

World's Most Admired Companies

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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NRG Energy has grown into a top power, electricity, and smart home corporation in Texas, the Northeast, the Midwest, and parts of California. With headquarters in Houston, NRG focuses on power generation from natural gas and coal, but the gas side of the business is rapidly growing. In May, NRG agreed to pay $10 billion for 18 natural-gas-fired power plants from LS Power, not including debt, in a move designed to prepare NRG for a domestic power market that’s set to soar. NRG also is focusing more on smart home and security offerings since acquiring Vivint Smart Home in 2023, rather than just selling retail electricity.

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NRG Energy (NRG): Company Profile, Stock Price, News, Rankings

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NRG Energy

nrg energy

Thank you for standing by, and welcome to NRG Energy Inc. Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. At this time, all participants are in a listen only mode. I would now like to hand the call over to Kevin Cole, Head of Treasury and Investor Relations to read the safe harbor and introduce the call.

Thank you. Good morning and welcome to NRG Energy's fourth quarter and full year twenty twenty four earnings guidance. This morning's call is being broadcast live, over the phone and via webcast. The webcast and presentation and earnings release can be located in the Investors section of our website at www.nrg.com under Presentations and Webcasts. Please note that today's discussion may contain forward looking statements, which are based upon assumptions that we believe to be reasonable as of this date.

Actual results may differ materially. We urge everyone to review the Safe Harbor in today's presentation as well as the risk factors in our SEC filings. We undertake no obligation to update these statements as a result of future events, except as required by law. In addition, we will refer to both GAAP and non GAAP financial measures. For information regarding our non GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today's presentation and earnings release.

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

Thank you, Kevin, and good morning, everyone. Joining me today are Bruce Chung, our CFO Rishish Patel, Head of NRG Consumer and Rob Gaudette, Head of NRG Business, who will provide an update on our large load and data center strategy. Other members of our team are also on the call and available for questions. 2024 was a defining year for NRG. Every part of our business performed at a high level and the momentum behind our strategy continues to build.

We exceeded the high end of our raised EPS guidance range and delivered record financial and operational results. This marks our second consecutive year of outperformance, reinforcing the strength of our platform and the power of our disciplined execution. We are well positioned to deliver at least 10% EPS CAGR growth through 2029 by the base plan that we provided you on our last earnings call. Beyond that plan, we see significant upside from power market trends, slight monetization and our data center and other large load strategy. We are unlocking these upside opportunities on multiple fronts by establishing an integrated partnership to accelerate new natural gas generation development, by signing multiple letters of intent with data center developers and by advancing our 1.5 gigawatts of brownfield development projects in Texas.

These initiatives strengthen our platform and create significant long term value. Turning to Slide five and our 2024 results, we delivered record financial performance, while advancing key strategic priorities. Our adjusted EPS of $6.83 per share exceeded the midpoint of our increased guidance range by 8% and was 45% higher than 2023. We exceeded targets across all key financial metrics, achieving the highest adjusted EBITDA and free cash flow before growth in our company's history. Kudos to everyone on the team that made that happen.

Strong execution across the business drove these results, supported by expanded Power and Natural Gas margins in the East and West, customer growth in the East and customer growth and expanded margins in Smart Home. Texas also delivered with earnings approximately $150,000,000 per year higher year over year when adjusted for asset sales and planned maintenance despite much milder weather. This reflects the strength of our integrated platform and the expertise of our commercial operations team in capturing value and driving results. For the ninth consecutive year, we achieved top decile safety performance. We also strengthened our reporting disclosures, achieved our synergy targets and introduced a five year growth plan.

We also continued to advance major strategic initiatives. Our Home Based Essentials pilot delivered strong results, supporting the announcement of a one gigawatt virtual power plant partnership in Texas. We also made considerable progress on our 1.5 gigawatts of shovel ready brownfield development projects in Texas with two of those in TEF due diligence. T. H.

Wharton remains in due diligence and is on track for completion in 2026. Cedar Bayou '5, a six eighty nine megawatt combined cycle project was recently selected for TEF review. Our third site, Greens Bayou 6 is eligible for TES and remains a viable capacity option. Notably, turbines are either on-site or manufacturing slots are secured for all three of these projects, making them the most advanced in the state. We remain laser focused on operational excellence.

You can see this across the board from our plant availability statistics to our leveraging of AI to enhance operations and improve customer service across our business and consumer segments. We also successfully entered the Lubbock, Texas retail market and have already become its largest provider. Disciplined capital allocation remains a cornerstone of our strategy. In 2024, we returned $1,300,000,000 to shareholders, increased our dividend by 8% and achieved investment grade credit metrics a year ahead of schedule. Turning to Slide six, we are building on two consecutive years of strong execution.

We are reaffirming our 2025 guidance and we're well positioned to continue delivering on our long term growth plan. Our business is stronger than ever and the opportunities have never been greater. As discussed in our November's earnings call, we are targeting at least 10% EPS CAGR through 2029 before considering additional upside opportunities. Our base plan is primarily driven by $750,000,000 in run rate adjusted EBITDA growth and $8,800,000,000 of capital returned to shareholders over the next five years. Beyond this base plan, we have multiple levers to increase additional value that are not included in that plan.

These include premium data center power purchase agreements, execution of our data center site strategy, exposure to rising power prices and expansion of our supply portfolio. Our priorities for 2025 are clear. We will execute our organic growth plan, launch our virtual power plant program, return capital to shareholders and advance these key upside opportunities. With a strong foundation in place, we are positioned to drive exceptional shareholder value and close the gap to our fair valuation. With that, I'll hand it over to Rob Gaudette, Head of NRG Business, for an update on our large load and data center strategy.

Thank you, Larry. Turning to Slide seven. The power sector is undergoing a structural shift, driven by accelerating electrification, industrial expansion and the rapid scaling of AI and data centers. This transformation is exciting, it's real and it's fueling what we believe to be the start of a power demand super cycle. NRG is uniquely positioned to capture this value.

Our commercial natural gas and power platform and our development team are unlocking significant opportunities. We're pairing these capabilities with strategic partnerships to further solidify our leadership. Over the next few slides, I'll take you through the state of the power markets, the advancement of our data center and large load strategy, and how our portfolio is geared to benefit significantly from market tightening. Beginning on Slide eight, it is clear we've entered a new era of power demand growth. Markets that once saw only modest growth or even declines are now experiencing significant and sustained increases.

All indicators point to continued acceleration in the years ahead. This surge is being driven by large scale industrial onshoring, oil and gas expansion, the electrification of transportation in the home, and an unprecedented wave of data center development. ERCOT and PJM are at the forefront of load growth. Since November, ERCOT's large load interconnection forecast has expanded by 30%, reinforcing Texas as the nation's fastest growing power market. With low energy costs, a business friendly regulatory framework and the ability to bring projects online quickly, Texas is uniquely positioned to capture this demand at scale.

PJM is also a key market, home to some of the most established data center hubs in the country, with the signs of the market tightening now and into the future. The impact on supply is clear. Reserve capacity is tightening as new load comes online. While not every new project will move forward as planned, even a fraction of this growth would significantly impact supplydemand dynamics. The structural forces driving market tightening are still taking shape, and we remain in the early stages of this transformation.

The companies that scale efficiently, optimize supply and act decisively will be best positioned to capture the opportunities ahead. We like where we stand. Turning to Slide nine. Power demand is rising as the grid becomes increasingly dependent on intermittent resources. In competitive markets, over 90% of the planned capacity additions consist of solar, wind or battery storage, while only 26 gigawatts of natural gas capacity is queued in ERCOT and eight gigawatts of PJM.

At current growth projections, this falls well short of what is needed to keep pace with accelerating demand. Compounding the issue, a large share of the projects in the queue historically never reach completion. This is a structural challenge that will not be resolved quickly. The primary constraint is the limited availability of two essential parts of building thermal generation. First, critical components, turbines and other key equipment for new flexible natural gas generation remain in short supply with no meaningful relief expected for years to come.

Second, the human components, experienced thermal development teams and EPC firms are at capacity already. While other technologies such as small modular reactors are in the new cycle, they're still in early development and unlikely to be commercially viable before 02/1935 at the earliest. With constraints on new dispatchable capacity and shrinking reserve margins, the value of existing flexible generation continues to grow. Turning to Slide 10. Last year, we discussed this with you, this trend and its challenges.

We formed a dedicated team spanning commercial, engineering and operations to maximize the value of our site portfolio, and we've made significant progress since then. Until now, we've discussed these sites at a high level. Today, we're very excited to break down how we're prioritizing them for near term development. They fall into three categories. First, we have top tier premium locations that are our highest priority.

These are ideally positioned for front of the meter and behind the meter solutions. And many can incorporate on-site generation, making them highly attractive for premium long term power premiums. Within this top tier group, some sites stand out as Superhosts. Large scale locations capable of supporting multiple gigawatts of data center demand, gigawatts of new dispatchable capacity and large scale renewable resources. These are ideal for hyperscalers offering the scale, infrastructure and market access required for major projects.

We are actively engaged in discussions and they remain our primary focus for near term execution. We believe there are over 7.5 gigawatts of opportunity across this first category of sites. Beyond this, we believe we can support another 7.5 gigawatts of capacity. We have eight sites and are exploring greenfield options. This group offers strong opportunities, but have specific constraints that will take additional time to resolve.

These are typically best suited for medium to small data centers. In total, we see at least 15 gigawatts of potential capacity, an incredible opportunity that cements us as a leader in this space. We're already advancing the first projects and as evidenced by the announcements today, we're taking the next step to accelerate development at a speed and scale no one else can match. Turning to Slide 11. We're announcing a landmark fully integrated collaboration with GE Vernova and KeyWitt through its subsidiary TIC, bringing together world class turbine manufacturing, development, engineering and construction expertise and energy markets leadership to create the most advanced end to end joint development platform for large load energy solutions.

NRG, which will own and operate the plants, brings deep energy expertise, prime development locations and a proven track record of development execution, while GE Vernova provides best in class turbine technology and KeyWitt delivers industry leading engineering and construction capabilities. With planned turbine access, coordinated EP support, ready to build sites and a fully integrated development approach, we can deliver power faster, more efficiently and with greater certainty than anyone else in the market. Speed to market wins. The platform is already delivering results. We have secured two slot reservation agreements with GEV for their seven gas turbines, supporting 1.2 gigawatts of new capacity online in 2029.

This is in addition to our already announced 1.5 gigawatts of shovel ready capacity. We are actively working with several premium data center operators for this initial capacity and of course the additional value of our related sites. We are initially targeting 5.4 gigawatts of capacity by 02/1932. Turning to Slide 12, we're also advancing our go to market strategy through multiple LOIs with data center developers to bring their facilities to our sites and supply power to their sites. They recognize the strategic value of our locations and our capabilities.

We are strategically positioned to not only meet their long term power needs, but also develop, build and operate on-site generation where needed. We can move with speed and certainty. Our capabilities position us to capture strong premiums on our power agreements. This premium is driven both by the strategic value of our sites and the strength, breadth and flexibility of our supply portfolio. To quantify this, we're seeing long term revenue rates ranging from $70 to $90 per megawatt hour depending on-site location, structure and project attributes.

We are very proud of what we announced today. Not only have we performed incredibly as a company this past year, we have moved from talking about a data center strategy to executing on it. The key takeaway is clear, we have the team, the strategy and the partnerships to lead this energy revolution. With unmatched speed, execution and market positioning, NRG will create long term value. And this is just the beginning.

Today's announcements set the stage and we look forward to sharing more as we continue to execute. As we turn to Slide 13, I want to highlight again another key advantage of our platform, the embedded value in our Texas generation fleet and the opportunity it presents as market conditions evolve. Our upside extends path site optimization and premium contracts. Rising power prices benefit our existing portfolio. The latest ERCOT capacity demand and reserves report confirms what we've been tracking.

Market conditions are tightening rapidly. As this unfolds, our generation will create additional earnings. Our multiyear outlook previously provided you assumed a conservative $47 per megawatt hour for around the clock Texas pricing through 2029. Yet, forward market pricing is already trading in the low 50s, signaling early benefits to our platform and more potential. As an example, at $60 per megawatt hour around the clock, our generation portfolio would produce $590,000,000 in additional margin on an open basis.

We positioned our portfolio to benefit from the Power Demand Super Cycle. NRG is bringing the capabilities of our commercial platform and the benefits of our generation portfolio, the go to market strategy with data center partners and the structural supply solution with GE Vernova and KeyWitt to solve customers' challenges and capture the value of the opportunities in front of us. With that, thank you for your time. I'll now turn the call over to Bruce for the financial review.

Thank you, Rob. Turning to Slide 15, I'm pleased to share that NRG had another outstanding year in 2024, executing at exceptionally high levels, both operationally and financially across the company. Our 2024 adjusted earnings per share of $6.83 came in above the raised guidance range, beating the midpoint by nearly $0.5 This represents an increase of $2.11 per share or 45 percent year over year growth from the $4.72 per share delivered in 2023. Strong performance by our businesses accounted for $1.46 per share of the year over year growth, while the remaining $0.65 per share came from the execution of our share repurchase program in 2024. We repurchased close to 11,000,000 shares at an average price of $87.57 representing 5% of our shares outstanding at the beginning of 2024.

As a reminder, we introduced adjusted EPS to provide you with additional insight into our profitability and growth and the strong results we are reporting today highlight the strength of NRG's earnings profile and the power of our capital allocation framework. NRG's full year 2024 adjusted EBITDA was $3,800,000,000 an increase of $470,000,000 over 2023 results. We also delivered $1,400,000,000 in adjusted net income and $2,100,000,000 in free cash flow before growth. Each of these key financial metrics exceeded the midpoint of our raised guidance ranges, marking the second consecutive year of such outperformance. Our East and West segments benefited from expanded Power and Natural Gas margins, driven by lower supply costs and our East segment also benefited from increased customer counts.

In Texas, year over year results were lower due to the impact of asset sales closed in 2023 and additional opportunistic preventative maintenance taken at our plants. After adjusting for these items, Texas' EBITDA was higher by approximately $150,000,000 compared to 2023. Our ability to deliver higher year over year results in Texas despite the milder weather in 2024 is a real testament to the expertise of our commercial operations team and the strength of our integrated platform. As you know, we have invested significantly in our plants over the past few years and these investments have made a real impact on our financial results. Our in the money availability factor, which now stands close to 90% across NRG's full portfolio is the highest it has been since 2019.

Our diversified generation and supply strategy continues to be one of our core operating advantages and gives us confidence that NRG can deliver consistent financial results through a variety of market conditions. Turning to our Smart Home segment. The business generated excellent results with a 5% increase in net subscriber count and improved recurring monthly service margin of 83% and nearly 90% customer retention, which marks an all time high for the business. In 2024, Smart Home achieved its first full year financial results under NRG's ownership and the business continues to perform and add value across our consumer portfolio. From a free cash flow perspective, 2024 free cash flow before growth exceeded the midpoint of our revised guidance, resulting in $10.36 of free cash flow before growth per share.

Our 2024 free cash flow before growth per share represents 12% growth over 2023 actuals and over 20% growth over the midpoint of our original 2023 guidance. Lastly, we are reaffirming our 2025 financial guidance across all financial metrics. Our detailed guidance, including target ranges for adjusted EPS, adjusted net income, adjusted EBITDA and free cash flow before growth can be found in the Regulation G tables in the appendix. Turning to the next slide for an update on our 2025 capital allocation. We ended 2024 with $525,000,000 in unallocated excess cash, largely driven by the Air Tron divestiture that closed late in the year, bringing our starting point for capital available for allocation in 2025 fiscal year to $2,600,000,000 In 2024, we maintained focus on executing against our liability management and capital allocation programs, yielding impressive results, including the early achievement of our targeted credit metrics and the return of approximately 1,300,000,000 in capital to our shareholders through our common dividend and share repurchase program.

The 2025 capital allocation plan maintains our commitments to a strong balance sheet, robust return of capital and strategic actionable growth investments. Moving from left to right on the page, three sixty five million dollars will be allocated for ongoing liability management, including the expected retirement of the convertible note, which we fully hedged and capped last year. We have approximately $110,000,000 in remaining integration costs related to prior acquisitions and cost synergy programs. After these commitments and consistent with our eightytwenty capital allocation framework, we are planning on $1,300,000,000 of share repurchases in 2025, of which over $170,000,000 have already been executed year to date. Notwithstanding the strong performance of our stock over the last year, we still see our shares as an incredibly compelling use of our excess capital.

Together with our common dividend of $1.76 per share, which represents 8% growth over our 2024 dividend per share, our total return of capital in 2025 is currently expected to be over $1,600,000,000 or about 83% of excess cash after liability management and integration costs. Turning to growth investments, we plan to allocate $130,000,000 toward the completion of the revenue synergy plan we announced at our twenty twenty three Investor Day. In addition, we are allocating $215,000,000 to other growth investments, which includes continued development of our ERCOT new build projects. Finally, we are showing $105,000,000 of unallocated capital, which we will allocate over the course of twenty twenty five. I look forward to providing you with updates as we continue to execute our plan into 2025.

With that, I'll turn it back to you, Larry.

Thank you, Bruce. On Slide 18, to reiterate, NRG delivered record earnings in 2024, marking two consecutive years of exceptional execution. The opportunities ahead have never been better or stronger. Our growth plan is well underway, our platform continues to expand and we are creating meaningful long term value for our shareholders. Even before considering any contribution from the significant upside opportunities such as those discussed today.

We are making strong progress on several of these opportunities. Today's announcements showcase our ability to serve the growing needs of both existing and new large load customers at scale. Our strategic agreements with the leading turbine manufacturer EPC and data center developers position us to meet large load demand with unmatched speed and execution. I am thrilled to share these updates on our data center strategy with you. And as we move forward, we will remain laser focused on maximizing shareholder value.

I must tell you that each of these transactions is unique, shaped by site specific attributes and customer priorities. This is a competitive space that may not lend itself to regular quarterly updates, so we expect to share progress when there is meaningful news or milestones, either through formal announcements or through our overall growth trajectory. In other words, as excited as I am about these opportunities, you may have to wait for some of the details. Thank you for your time and continued interest. Operator, please open the lines for questions.

Our first question comes from the line of Julien Dumoulin Smith of Jefferies. Your question please Julien.

Hey, good morning team. Thank you, operator. Appreciate it. Nicely done on the

Good morning to you guys. Look, key question here. How does the latest announcement position and signal on future opportunities on data centers? And specifically, you've announced a series of LOIs here. Given the timing that you're talking about, literally 2026 is around the corner, you've got the supply chain lined up.

I mean, how long are we really expecting to wait here to transpose those LOIs into firmer arrangements? I mean, just given the practical need to execute, I would imagine that when you talk about patients here, could this be intra quarter? Can you speak to that a little bit?

Happy to, Jillian. Look, what I don't want to do is have every quarter sit there and try to give people a step by step of development and tell people this one is 10%, this one is 20%, this one is 30%, it doesn't really make any sense. You've been in the business long enough on the power plant side to know what development is like and development is done when development is done. Having said that, we've talked about having plants in service in 'twenty six, 'twenty eight and 'twenty nine. And so, you can expect that working back from those timeframes, it's not going to be three or five years before you get these updates.

But what I don't want people to do is expect they're going to get an update on the May call six weeks from now that we've moved this forward X, Y and Z. I think also, Julian, quite frankly, when we have things to say, something we haven't done historically, we'll put stuff out between quarters as well. We've always historically kind of waited for the quarterly calls to do this, but I don't think we need to do that anymore.

Got it. Excellent. Thank you. And then can you expand

of sight, obviously, five gig plus with GV here this morning. What kind of line of sight do you have on LOIs there? I mean, certainly, it's a big and specific number here. Can you elaborate there? And then also, I think one of the comments from your prepared remarks was on TAF.

To what extent could you seek to expand your TAF participation as well? Would seem like a ripe opportunity in which you have further sites and further supply chain already established?

Let me take the TEP part first and then I'll go back to the GE, if I may. We do have two of the three shovel ready projects are in TEF today. The third one is certainly TEF ready, if TEF comes to us and do that. You might recall that initially it was one per customer and then we were able to enter our second project in that. And if they come for the third one, we'll certainly consider that very, very seriously.

So I think from a TEP point of view, we're extremely well positioned with the shovel ready 1.5 gigs to go forward. On GE, look, we've already got the two slots. I think that probably tells you that that's where the best line of sight is today. But we are we've been working over the past year on a series of development projects. And as we continue to get slots, we'll continue to give you more information about when those projects will be coming online as well.

But our goal, as you can see from this update, is to have a significant amount of new capacity online well before 02/1930.

Yes, absolutely guys. Nicely done. Speak to you soon. Thank you.

Thank you. Our next question comes from Shahriar Pourreza of Guggenheim Partners. Your line is open, Shar.

Good, Larry. Quite an update. Maybe just starting at a high level, can you just confirm the venture to develop the 5.4 gigs by 02/1932? Is it your intention for all those to be fully contracted as they come online or will they be some merchant? Just trying to foot the 5.4 gigs

Absolutely. I think the vast majority, Shar, will be. I won't tell you today what's going to happen for sure over the next five years, but the intention would be for that to be contracted. You know that we're not in the business of taking significant amounts of merchant risk. We've always got our C and I book, our retail book and now our data center clientele.

So I would expect that all to be contracted or the vast majority of it to be contracted.

And then just, I guess, how are you thinking about funding the project? It's kind of a substantial check-in the short period of time. How should we,

I guess, think about the ramp up of the growth CapEx CapEx?

Yes. As we look at it, Shar, between leverage of contracts with the kinds of people that we're talking about plus our internally generated cash flow, we think we'll be able to pay for all of it out of that. Obviously, there's a lot of people who want to be in this business now. And if we can take on some accretive partner capital, we would consider that. And if worst comes to worst, Bruce has agreed to forego his bonus.

You may start to buy back stock at that point.

I'm going to leave it at that and then I'll tell you, Larry, I'm glad

to see that Bruce is still very busy at work. I was

Always willing to take one for the team, Jarod.

Thank you. Our next question comes from Durgesh Chopra of Evercore ISI. Please go ahead, Durgesh.

Hey, team. Good morning. Thanks for taking my questions.

Very great, great, great and a great update. And nice to see Bruce taking continuing to take one for the team. So listen, so two questions. First, can you just clarify these letter of intents with the two developers? This is going to be new megawatts, right, coming to the market?

These are on existing assets. Just want to be clear there.

Yes. Tay, this is Rob. So the way to think about them is these developers are out securing agreements for two kinds of structures. One is they get a data center, build it on our site, so a new demand and those sites don't have power plants on them. So we're not going to build a plant there.

The second piece is the way you alluded, which is, we'll build a they will build a data center, we'll build a power plant to support it. So, everything you should think about is additional, nothing sticking behind existing generation that we currently run for our fleet. Does that answer your question?

It does, exactly. So, these are additional megawatts coming to the market, not the existing. Okay, perfect. And then, maybe in that context, can you speak to the legislative session in Texas? You've seen a couple of bills there.

We've talked about large loads. How do you see that impact in your discussions? And what are your thoughts on what the investors should be focused on there, please?

Look, we actually think bills like SB6 are positive as it provides real clarification in the market. It shines a light on what the actual additional costs are of being a data center person starting to work towards allocating the cost in the system properly, so that people who build data centers pay their fair share and it doesn't fall entirely on retail customers. So, this

to be done without retail rate shock for the consumers of Texas. We obviously are huge proponents of that as the biggest supplier in Texas. And we think this bill will actually provide for a fair allocation of cost across it. So, we think the actions that the legislator are taking are generally quite positive and we look forward to working with them to try to get a bill that makes sense for the entire system.

Thank you. Our next question comes from Angie Storozynski of Seaport. Your question please Angie.

Thank you. Lots of details. So Rob, first, you mentioned long term revenue rates, dollars 70.9 for those new gas plants. Lots of questions there. So how would you structure these contracts?

Are these going to be spark spreads driven contracts when you build? Are we going to be more mimicking the tolling agreements that we saw in California? How do you manage the collaterals and like commodity price volatility over probably like ten to twenty year contracts for these new gas plants?

Sure. So to start with, every structure will be slightly different depending on the customer. Some will want to lock up for ten years, some will probably want to lock up meaning lock their price, but keep the capacity for twenty and then we reset. But the way to think about it is, ultimately, if you have a power plant serving one of these loads, your exposure is gas, not power, right? It's a heat rate locked in.

So we know what we're doing from the heat rate perspective because we have the facility backing it up. We know what our revenue rates would be. And 70 to 90 is just the energy side to be clear. There's other adders that would go on. And if you did it somewhere in PJM, it would be plus capacity.

But so that leaves you with gas exposure, which is the ultimate question you're asking. And you know this and I'll just say it out loud, we've got the biggest gas platform in the country. We've got an incredible team of people who work both physical and financial gas out the term. And so, we feel very confident that we'll be able to lock up whatever kinds of exposures that the customer may want to do. And remember, Angie, we do this for large C and I customers already.

So it's not like every plant will have to come with its own LC. I mean, I've heard that that was one of the reasons why we haven't really had a contract for existing gas plants because there are some credit issues associated, collateral postings on both the power side and gas side given the duration of these contracts. So again, that's something that you can deal with within the current business?

NRG Energy (NRG) Q4 2024 Earnings Call Transcript

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