NRG Energy has announced that Houston will serve as the company’s sole corporate headquarters. Previously, the company had dual headquarters in Houston (Operations) and Princeton, New Jersey (Corporate).
NRG is an integrated power company that has most of its retail customers in Texas. The dual headquarters arose after NRG bought the retail electricity business of Houston-based Reliant Energy in 2009. It currently has a market capitalization of $8.6 billion.
In January of this year, NRG bought Houston-based Direct Energy from Centrica for $3.6 billion in cash. The company forecast it would achieve $300 million in synergies by 2023 and the corporate office rationalization is part of that plan.
New CFO appointed
NRG also appointed Alberto Fornaro as its new CFO. He replaces Kirkland Andrews who resigned in February to become CFO at Evergy, based in Kansas City.
Mr. Fornaro has a diverse and interesting background. An Italian citizen, he joined Coupang, a Korean e-commerce company in February 2020. However, by December, he had exited that role for reasons unknown. Coupang went on to complete its IPO in March 2021 with a $60 billion valuation (the largest in the US so far this year).
Prior to Coupang, he was CFO for nine years at International Gaming Technology and the CFO of Doosan Infracore Construction Equipment, which is based in Korea. His early career was spent at Fiat and CNH Global, an agricultural equipment business whose majority shareholder is Fiat.
Mr. Fornaro will receive a base salary of $725,000 and a $1 million sign-on bonus (half now, half in June 2022).
Impact of Texas winter storm
NRG also disclosed that the financial impact of Winter Storm URI was $967 million. The main components of this were;
- $393 million from a bilateral hedge in the Direct Energy hedge book with a counterparty that did not perform.
- $95 million due to ERCOT default allocations
- $395 million due to ERCOT’s management of the grid (remember later that week, ERCOT kept the market clearing price at the cap, even though there was 10 gigawatts in reserve)
- customer bad debts of $109 million
In case you were wondering who the winners were from the winter storm, Dallas-based pipeline company Energy Transfer announced a $2.4 billion gain from the event, whilst Kinder Morgan booked a $1 billion gain.
SEC filing – NRG CFO