(Reuters) - U.S. power company NRG Energy Inc (NRG.N) wants to boost the size of its retail business as it sheds more than half of its power plants, Chief Executive Mauricio Gutierrez told Reuters.
“NRG started as a generation company that moved into retail and some people still think of NRG in terms of (power plants),” Gutierrez said.
“But when you think about NRG in the future, I invite you to think about the company in terms of the number of customers we serve,” he said. NRG serves around three million homes and businesses.
In the past, NRG racked up billions of dollars of debt by diving into the renewable energy business at the same time U.S. power prices sank as cheap and abundant natural gas from shale formations flooded the market.
Concern about those debts, among other things, led NRG to replace its former CEO David Crane in 2015 and to ultimately agree to sell most of its renewable portfolio, held by its stake in NRG Yield Inc (NYLDa.N), to Global Infrastructure Partners in February.
That deal, along with the sale of some coal and gas plants in Louisiana and Texas and other assets will provide the company with about $3 billion in proceeds and remove around $7 billion in debt, NRG said.
In addition to the asset sales, NRG’s GenOn unit is working through bankruptcy proceedings that will see the unit separated from NRG, taking with it much of the company’s coal-fired plants.
Gutierrez said he expects the sale of NRG Yield and separation of GenOn to occur in the fourth quarter.
Those transactions will cut NRG’s generation portfolio from over 50,000 megawatts in 2015, before Gutierrez started transforming the company, to around 24,000 MW. One megawatt can power about 1,000 homes.
“When I became CEO, it was clear we were trying to be too many things to too many people,” Gutierrez said in a letter to shareholders on Wednesday.
He wants to grow the retail business, especially in the Northeast where NRG still has more generation than it needs to serve customers.
Gutierrez said he wants to increase the size of the retail business through organic growth, but will consider acquisitions if the right opportunity presents itself, like its purchase of retail provider Xoom Energy earlier this year.
“Our retail business is going to inform the size of our generation business,” Gutierrez said.
NRG shares are up about 18 percent so far this year, after surging 132 percent last year.
Reporting by Scott DiSavino; Editing by Bernadette Baum