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Tony Vorlicek Nick Wijnberg Pete O’Hanlon

Tony Vorlicek Nick Wijnberg Pete O’Hanlon

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Tony Vorlicek Nick Wijnberg Pete O’Hanlon

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  1. Tony Vorlicek Nick Wijnberg Pete O’Hanlon

  2. Locational Advantages • Most of NRG’s assets are located in densely populated areas, such as New York City, southwestern Connecticut, Houston and the Los Angeles and San Diego load basins • This allows NRG to benefit from high energy prices in these areas by offering power at market prices during peak demand • Theses facilities also have an ideal location and existing infrastructure, giving them significant advantages over newly developed sites in their regions

  3. Scale and Diversity of Assets • NRG has one of the largest and most diversified power generation portfolios in the United States • 22,880MW of generation capacity in 175 active generating units at 43 plants as of December 31, 2007 • NRG’s power generation assets are diversified by fuel-type, dispatch level and region • NRG’s U.S. baseloadfacilities consist of approximately 8,700 MW of generation capacity • Examples of baseload plants using nonrenewable fuels include nuclear and coal-fired plants. Among the renewable energy sources, hydroelectric, geothermal[3] and OTEC can provide baseload power. • NRG’s intermediate and peaking facilities consist of approximately 14,180 MW of generation capacity • Intermediate and peaking facilities are power plants that generally run only when there is a high demand, known as peak demand, for electricity. Peaker plants are generally gas turbines that burn natural gas. As well as diesel and petroleum. l but this is much more expensive than natural gas.

  4. Reliability of Future Cash Flows • Hedged a significant portion of its expected baseload generation capacity through 2013 • As of December 31st, 2007, NRG has purchased under fixed contracts for 59% of its baseload coal generation output from 2008 to 2013 • This allows NRG to provide a stable and reliable source of cash flows, while preserving a portion of its generation portfolio to take advantage of market opportunities

  5. Revenue Breakdown

  6. Coal • NRG is largely hedged for its coal consumption over the next few years. • As of December 31, 2007, NRG had purchased forward contracts to provide fuel for approximately 59% of the Company’s requirement from 2008 through 2013. • NRG purchased 38 million tons of coal in 2007 making them one of the largest purchasers in the U.S. • NRG arranges for the purchase, transportation and delivery of coal and currently has a fleet of 7600 privately owned railcars.

  7. Natural Gas • NRG operates natural gas plants in the Northeast and Southern regions which are primarily comprised of peaking assets that run in times of high power demand. • Fuel needs are managed on a spot basis and there is minimal forward purchasing. • NRG contracts natural gas storage and transportation services to ensure precise delivery.

  8. Nuclear Fuel • NRG owns two nuclear power plants at the South Texas Project (STP). • STP acquires uranium concentrates, contract for enrichment, and contracts for fabrication of nuclear fuel assemblies. • NRG is in many forward purchasing contracts with the companies that supply and service their uranium processes through as long as the next decade.

  9. Income

  10. Income

  11. Year To Date 3 Year

  12. Rapidly Growing Operating Income

  13. Where we’re at. • Calpine Corp. on Friday shot down NRG Energy Inc.'s proposed all-stock merger, valued at $9.56 billion, as "inadequate," while holding out the possibility of a deal down the road between the two power-generating giants. • What this means? NRG has a huge cash position right now. I believe that while Calpine Corp. spurned NRG’s offer, there are always more opportunity to make capital investments to provide future revenue in an energy market (Electricity!) that will continue to grow. •