NRG Energy, Inc. (NRG) entered into an agreement with Dominion Resources, Inc. (D), an electric utility operator, to acquire the retail electricity segment of the latter. The value of the deal has not been disclosed. This deal is expected to be completed by the end of first-quarter 2014.
Dominion’s retail business currently serves customers in Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York, Ohio, Pennsylvania and Texas. NRG’s decision to add Dominion’s retail business was made with an objective to expand its operations in the lucrative Northeast and Texas regions.
With an existing base of over two million retail electric customers, this acquisition will entitle the company to an additional 600,000 new customer accounts. The current retail electric providers of NRG Energy include Reliant, Green Mountain Energy Company and Energy Plus.
NRG Energy is currently focused on expanding its retail business via strategic acquisitions besides boosting the generation capacity of its wholesale segment.
NRG Energy entered into retail competition by acquiring Reliant Energy’s retail operation in 2005, which marked its entry in Texas.
It steadily extended its footprint in the retail electric business with additional acquisitions of Green Mountain in 2010 and Energy plus in 2011, having primary operations in New York and Texas.
NRG Energy’s core competency lies in production and sale of safe, reliable and affordable power to its customers. The company has resorted to a more environment friendly way of generating power and initiated efforts in reducing greenhouse gases.
NRG Energy’s imminent acquisition of Edison Mission Energy’s assets, a bankrupt division of Edison International’s (EIX), will add 1,700 MW of wind capacity to the company’s portfolio.
We believe NRG will create value for its shareholders through acquisitions and production of innovative and energy efficient retail products.
NRG Energy currently holds a Zacks Rank #3 (Hold). However, Exelon Corp. (EXC), a better ranked stock in utility space, sports a Zacks Rank #1 (Strong Buy).