Despite US Govt Apathy,NRG Energy follows Exelon snapping Renewable Utility Green Mountain Energy

NRG Energy is one of the largest utilities in the US with around 22 GW of Installed Capacity.However like Exelon,the share of Renewables is relatively low at just 2% of its overall Energy Capacity.Though the US Administration has all but given up on an Energy and Climate Legislation,Big Utilities recognize the need to generate low carbon electricity.Some sort of Carbon Emissions Restraint will be imposed on Utilities sometime in the future with EPA itching for action in restricting CO2 Emissions.Green Sector Stocks have fallen like a rock in 2010 due to the Copenhagen Disaster and lack of movement on a Climate Bill by the US government.Therefore it makes sense for US utilities to buy Renewable Energy Assets on the Cheap.Exelon bought Deere Energy Wind Farms at a dirt cheap price.NRG Energy which has around 550 MW of Wind and Solar Capacity bought Relaint Energy last year for $300 mm.It has augmented its Renewable Energy Portfolio with another $350mm buy of Green Mountain Energy.

Green Mountain Energy is involved in the generation,purchase,tranmission and selling of Green Energy.Like Reliant Energy,it is mainly concentrated in Texas with some operations in New York as well.Green Mountain Energy is not publicly listed but the deal does not seem expensive considering the accretion of $70 million EBITDA per year.This acquisition further enhances NRG Energy’s Green Efforts.The company is already partnering to build large scale CSP plants in California>If a 20% RPS is implemented by 2020,NRG will have to build a lot of Renewable Energy Capacity in a hurry.This buy will help in hedging that potential scenario a bit.

NRG to buy Green Mountain Energy for $350 million – Reuters

Power company NRG Energy Inc agreed to buy privately held Green Mountain Energy for $350 million in cash in a bet that a growing percentage of Americans will buy carbon-free electricity and are willing to pay more for it.The purchase adds more than 300,000 “green” customers to NRG which last year paid less than $300 million to acquire the 1.6 million Texas customers of Reliant Energy which was distressed at the time and losing business.

Currently, NRG’s Reliant Energy unit offers a “100-percent Texas wind” product at 9 cents per kilowatt-hour vs 10.9 cents per kwh for Green Mountain’s cheapest product, according to a state-run website.NRG sees the deal adding about $70 million to its earnings before interest, taxes, depreciation and amortization annually.