NRG Energy, Inc.
) inked a partnership agreement with Green Mountain Power
Corporation (GMP) to introduce new products and services for
Vermont customers. Per the deal, the companies will jointly develop
a wide array of clean energy solutions for the Vermonters.
Vermont-based GMP is an electric utility engaged in providing
reliable, affordable, smart, and clean power to its customers
through clean energy sources. The firm caters to customers'
increasing preference to shift towards clean energy sources and
The main focus of the partnership is to convert the primitive
distribution grid to a market-based platform. NRG Energy and GMP
will jointly construct an advanced distribution grid in Rutland,
VT. This initiative will help to distribute energy solutions
through renewable mechanisms and energy storage, besides improving
In addition, they will develop a wide array of new clean energy
products and services, including Personal Energy Management, NRG
Portable Power, Electric Vehicle Infrastructure and Community
Solar. These sustainable and novel energy saving solutions will be
available from early 2015.
NRG Energy and GMP have been tying up for energy solutions. In May
2014, NRG Energy's unit NRG Residential Solar Solutions constructed
a community solar array in Rutland, VT, under its Vermont Community
Solar Project. The company will be selling the output from the
150-kilowatt solar farm to 50 GMP customers.
Both NRG Energy and GMP are eager to set up Rutland as the Energy
City of the Future and establish the state of Vermont as a leader
in promoting sustainable energy solutions at a cost-effective
NRG Energy has steadily expanded its renewable energy asset base.
In the first half of 2014, the company invested around $0.2 billion
in renewable ventures and intends to invest roughly $0.4 billion in
Recently, NRG Energy completed two acquisitions - Goal Zero, a
personal solar products manufacturer, and a 4-megawatt (MW ac)
Spanish Town Estate Solar project, located in the island of St.
Croix in the U.S. Virgin Islands, from Toshiba International
In Jun 2014, the Obama administration rolled out its plan to
curtail carbon emissions from coal-fired power plants by 30% by
2030 from 2005 levels. The rule is expected to come into effect
next year. The aforesaid initiatives will allow NRG Energy to meet
government environmental mandates.
Apart from NRG Energy, other utility providers like ALLETE, Inc. (
), DTE Energy Company (
) and Exelon Corporation (
) are investing significantly in renewable utility infrastructure
to achieve regulatory compliance.
However, we are concerned about NRG Energy's rising cost of
operations, which is continuously eating into margins. The company
reported a loss in second-quarter 2014 primarily due to higher
expenses. In the second quarter, its total operating expenses
increased 33.7% year over year to approximately $3.53 billion. The
company's failure to control rising expenses will once again impact
its financial performance.
NRG Energy currently holds a Zacks Rank #5 (Strong Sell).
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