NRG Energy Inc. on Friday unveiled plans to separate its expensive clean-energy businesses, as part of a series of moves by the power producer to simplify its structure and cut down on expenses and debt.
In an investor presentation, NRG said it would form a “GreenCo” consisting of its money-losing home solar business, its renewable assets and its electric vehicle charging business. NRG said it plans to limit its financial commitment to the business to $125 million starting Jan. 1, with hopes of the business being self-sufficient.
The announcement came as NRG also said it would sell a 75 percent stake in its portfolio of wind farms to another majority-owned affiliate company, NRG Yield Inc., for $210 million. NRG has been able to “drop down” projects with long-term, predictable cash flows to NRG Yield.
NRG Yield in February said it would buy a majority interest in Invenergy’s Spring Canyon II and II windfarms north of Sterling. The power generated by the two farms is sold to Platte River Power Authority.
NRG, the nation’s largest independent power producer, has moved to adopt a greener business model in recent years. Once known for coal and nuclear generation, it has become a leader in the development of renewable power ranging from gigantic wind farms to rooftop solar panels on individual suburban homes.
But the company’s corporate structure has grown complex and its balance sheet bloated, while its “green” businesses have been expensive.
NRG said it plans to spend $1.3 billion on reducing debt and buying back shares through 2016, including $250 million in share repurchases this year.
At the end of its 2014 year, NRG’s long-term had grown to $19.9 billion from $15.8 billion a year earlier.
The company also plans to cut $150 million in costs starting next year.
