NRG Energy (NYSE:NRG) reaffirmed its 2026 financial guidance and capital allocation plans after reporting lower first-quarter adjusted earnings, with management saying mild Texas weather and the timing of its LS Power portfolio acquisition weighed on year-over-year comparisons.
On the company’s first-quarter 2026 earnings call, newly appointed President and Chief Executive Officer Robert Gaudette said the business is “tracking to plan” and that NRG’s base outlook does not depend on incremental contributions from large-load customers or new development projects.
“Our job is to execute, allocate capital effectively, and convert the opportunity in front of us into results,” Gaudette said. He also acknowledged the company’s CEO transition, thanked Larry Coben for his leadership and said NRG would continue to focus on disciplined capital allocation, efficient operations and long-term shareholder returns.
First-quarter results pressured by weather and storm timing
NRG reported first-quarter 2026 adjusted EBITDA of $1.08 billion, adjusted net income of $308 million and adjusted earnings per share of $1.49. Chief Financial Officer Bruce Chung said adjusted EBITDA was down $46 million from the prior year, reflecting milder Texas weather and higher supply costs in the East during Winter Storm Fern, partly offset by earnings from the newly acquired LS Power portfolio.
Chung noted that first-quarter 2025 had been a record first quarter for NRG, helped by favorable weather, creating a difficult comparison. Adjusted EPS and adjusted net income also declined year over year due to higher interest expense and depreciation and amortization associated with the LS Power acquisition, as well as only a partial-quarter contribution from the acquired assets.
In Texas, NRG saw lower home energy volumes, lower average power prices and limited market volatility. Houston on-peak prices averaged $29 per megawatt-hour, down about 13% from a year earlier. In the East, PJM West Hub on-peak prices averaged $103 per megawatt-hour, up about 72% from last year. Chung said that was helpful for generation dispatch but increased retail supply costs because NRG had not yet closed the LS Power acquisition for most of Winter Storm Fern.
The LS Power transaction closed on Jan. 30, after most of the storm had passed, Gaudette said. As a result, those assets were not part of NRG’s fleet during most of the event.
Guidance and capital plan reaffirmed
Management reaffirmed NRG’s 2026 guidance ranges and said the company remains on track for the year. Chung said the business is seasonally weighted toward the final three quarters and that working capital items are expected to unwind during the remainder of the year, supporting confidence in free cash flow.
NRG’s capital allocation plan remains unchanged. Chung said the company has $3.05 billion of capital available for allocation, based on the midpoint of its free cash flow before growth guidance range. The company expects to direct about $1 billion toward debt repayments during the year and return at least $1.4 billion to shareholders through share repurchases and common dividends.
Through April 30, NRG had completed $817 million in share repurchases, including a negotiated repurchase of 1.83 million shares from LS Power. Chung said the company’s buybacks were accelerated in part because management “didn’t like where our stock was trading” during parts of the first quarter, adding that the average repurchase price was below what was assumed in guidance.
NRG also closed $3.5 billion of new financing on April 28, retiring $1.5 billion of Lightning Power, LLC senior secured notes and reducing revolver borrowings. Chung said the action supports post-acquisition deleveraging, aligns with the company’s 3x net leverage target and is expected to generate more than $10 million of annual net interest savings.
Power demand outlook remains a central theme
Gaudette said NRG continues to see a “sustained shift” in power demand expectations, particularly tied to artificial intelligence infrastructure and large-load customers. In ERCOT, he said the system’s all-time peak demand is more than 85 gigawatts, while the preliminary long-term load forecast filed this month shows large-load requests totaling more than 367 gigawatts by 2033.
“Not all of that materializes, but even if a fraction of what is in that pipeline arrives on those timelines, this market looks fundamentally different from the one we’re operating in today,” Gaudette said.
He said NRG supports Texas Senate Bill 6 and ERCOT’s Large Load Batch Process, including support for “Bring Your Own Generation” in the initial batch process. In PJM, Gaudette called the Reliability Backstop Procurement an important step to bring new capacity forward.
NRG now sees up to 2 gigawatts of upgrade and conversion opportunities within its existing PJM fleet, including an incremental 1 gigawatt beyond the previously disclosed combustion turbine-to-combined-cycle opportunity. Gaudette said the company would pursue those projects selectively, only where structures, returns and long-term commitments support investment.
Development projects and large-load discussions
NRG’s first Texas Energy Fund project, T.H. Wharton, is expected to come online in May, on time and on budget, Gaudette said. The company’s remaining TEF projects, Cedar Bayou and Greens Bayou, are expected to reach commercial operation in 2028. Matthew Pistner, President of NRG Wholesale, said T.H. Wharton’s remaining steps include syncing units to the grid and receiving ERCOT clearance, while the other two projects are progressing as expected.
Gaudette said the three TEF projects total 1.5 gigawatts and will power roughly 300,000 Texas homes at peak demand. He said NRG developed the projects below current new-build costs because it had identified opportunities and prepared sites before the TEF program existed.
On data center and large-load opportunities, Gaudette said discussions are active and progressing, but complex. In response to analyst questions, he said NRG remains primarily focused on front-of-the-meter generation and front-of-the-meter data center structures, although it will evaluate behind-the-meter options. To meet a 2029 commercial operation date, he said NRG would need to complete a deal in 2026.
Gaudette said the remaining work is less about economics and more about infrastructure, including generation and load interconnections, site considerations and gas infrastructure. He also said NRG’s gas platform and relationships with midstream and upstream companies position it to help secure fuel supply if customers want long-term gas arrangements.
Retail, Smart Home and flexible load
NRG also highlighted its retail, Smart Home and flexible load capabilities. Chung said Smart Home ended the quarter with about 2.37 million customers, up 9% year over year and ahead of the 5% to 6% net customer growth embedded in the company’s long-term plan.
Brad Bentley, Executive Vice President and President of NRG Consumer, said the residential business has emphasized customer quality in Texas, contributing to improved bad debt and churn. He said Vivint ended 2025 with record growth and continued that momentum into 2026, with strong retention, margin growth and controlled acquisition costs.
Gaudette said the acquisition of CPower adds commercial and industrial demand response capabilities, while NRG’s Texas residential virtual power plant is targeting 1 gigawatt of capacity. He said the combination of retail electricity, Smart Home technology, demand response and generation gives NRG a platform to manage load and support grid needs.
Closing the call, Gaudette said NRG’s priorities are safety, reliability, customer value, disciplined capital allocation and shareholder returns. He said the company remains on track to deliver at least 14% adjusted EPS and free cash flow per share growth over the next five years before any contribution from large load or incremental development.
About NRG Energy (NYSE:NRG)
NRG Energy (NYSE: NRG) is a U.S.-based integrated power company headquartered in Houston, Texas. The company develops, owns and operates a diversified portfolio of power generation assets and participates in wholesale and retail energy markets. NRG supplies electricity to utilities, commercial and industrial customers, and retail consumers, while also providing energy-related products and services designed to manage consumption and support reliability.
NRG's generation mix includes conventional thermal plants as well as renewable and distributed energy resources.
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