NRG Energy Inc Q4 2024 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Julien Dumoulin-Smith - Jefferies - Analyst : Nicely done on the results yet again here. 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 mean how long are we really expecting to wait here to transposes 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? And then I got a follow-up on that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 2:00PM, NRG.N - Q4 2024 NRG Energy Inc Earnings Call

Question: Julien Dumoulin-Smith - Jefferies - Analyst : Got it. Excellent. And then can you expand a little bit on the line of sight, obviously, 5 gigs plus with JV 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 test participation as well? It would seem like a ripe opportunity said but you have further sites and further supply chain already established?

Question: Shahriar Pourreza - Guggenheim Partners - Analyst : Larry, quite an update. Maybe just starting at a high level, can you just confirm the venture to develop the 5.4 gig by 2032. Is your intention for all those to be fully contracted, as they come online? Or will there be some merchant? Just trying to foot 5.4 gig of (inaudible) REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 2:00PM, NRG.N - Q4 2024 NRG Energy Inc Earnings Call

Question: Shahriar Pourreza - Guggenheim Partners - Analyst : Perfect. That was a key question. 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?

Question: Durgesh Chopra - Evercore ISI - Analyst : Great update. And nice to see Bruce continuing to take one for the team. So listen, so two questions. First, can you just clarify the letter of intent with the two developers? This is going to be new megawatts, right, coming to the market? These are all in existing assets. I just want to be clear there.

Question: Durgesh Chopra - Evercore ISI - Analyst : 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 side in Texas, you've seen a couple of bills there. We talk about large loads. How do you see that impacting your discussions? What are your thoughts on what the investors should be focused on there, please? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 2:00PM, NRG.N - Q4 2024 NRG Energy Inc Earnings Call

Question: Agnieszka Storozynski - Seaport Global Holdings LLC - Analyst : So Rob, first, you mentioned long-term revenue rate, $70 to $90 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 10 to 20-year contracts for these new gas plans?

Question: Agnieszka Storozynski - Seaport Global Holdings LLC - Analyst : 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 been 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. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 2:00PM, NRG.N - Q4 2024 NRG Energy Inc Earnings Call

Question: Agnieszka Storozynski - Seaport Global Holdings LLC - Analyst : Okay. And the other question I have is, so if you take a step back, besides a little noise around what is the total demand growth. It seems like regulated utilities are actually progressing much faster on gas rig new build and contracting for data centers than IPP saw and there is this growing concern that there is red tape surrounding both existing and new build assets in competitive power markets. again, it probably varies by market. But how do you see this? I mean, are you competing with regulated utilities? And again, if these are contract-based power plants, does that matter that you have a higher cost of capital to build these assets?

Question: Agnieszka Storozynski - Seaport Global Holdings LLC - Analyst : Okay. Now just the last one on the CDR. So Rob, you mentioned in your prepared remarks, I mean you've seen any of the CDRs, so have we. I mean we went through from a 50% surplus for 10 years to a 30% shortage within six months. And I know there are changes in the calculation here. But we haven't really seen much of a reaction in forward power curves, I think we all have a sense of why that is. And so are you seeing some sort of a reaction, for example, from existing large loads, be it in the Permian or anywhere else in ERCOT that are looking at these projected supply-demand dynamics and are willing to lock in power at currently observable prices because they do expect a step change in those forwards.

Question: Michael Sullivan - Wolfe Research, LLC - Analyst : Kind of appreciate you want to maybe wait on some of the details. But maybe just directionally, can you give us a sense of this JV agreement, the new builds you're going to do there, how the cost compares to the brownfields you're doing in Texas and then maybe how we can square $70 to $90 PPA with ultimately the return that you're targeting on these investments?

Question: Michael Sullivan - Wolfe Research, LLC - Analyst : Okay. And just on the returns you're targeting?

Question: Michael Sullivan - Wolfe Research, LLC - Analyst : Okay. That's helpful. And also just tied to that, the 80-20 framework that holds through this full period like even beyond '29 when you're doing? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 2:00PM, NRG.N - Q4 2024 NRG Energy Inc Earnings Call

Question: Michael Sullivan - Wolfe Research, LLC - Analyst : Okay. Great. And last one, just in Texas, anything else we should be watching beyond SV6 in the legislative session as we sit right now?

Question: David Arcaro - Morgan Stanley - Analyst : I had a question on the high priority and the medium priority sites. Do those have transmission access in place? Can they offer the speed to market for large loads? Or would you still need to deal with grid studies, transmission upgrades, things like that?

Question: David Arcaro - Morgan Stanley - Analyst : Got it. Okay. Great. Yes. And then I just had a clarifying question on the (inaudible) here. That 1.2-gigawatt order or slots for turbine that you've got. Do you have a project specifically connected to that? Do you have an offtaker for that initial 1.2 gigawatts?

Question: David Arcaro - Morgan Stanley - Analyst : Yes. Got it. Makes sense. And then I was just curious, broadly, there's been some concerns in the market or jitters around data center demand and urgency and the pace given some of the industry updates, Deep Seek, et cetera. But are you detecting any hesitation maybe around the legislative session in Texas or concerns with the supply-demand backdrop is the grid getting too tight for data centers to be comfortable in the state. Just any -- any reconsiderations or hesitation among the (inaudible) that you're talking to?