NRG · 10-Q · 2026Q3 · Full report
Gross Margin Drivers
NRG ENERGY, INC. · 2026-11-09 · Importance 44 · Surprise 24 · In source text
For the nine months ended September 30, 2026, gross margin increased $987 million and economic gross margin increased $1.1 billion compared with 2025. Texas economic gross margin rose from $3.067 billion to $3.087 billion, while East rose from $1.498 billion to $2.401 billion; East benefited from higher electric net revenue rates of $582 million and higher capacity and demand-response contributions, partly offset by $767 million of higher natural-gas supply costs. Vivint Smart Home economic gross margin increased from $1.436 billion to $1.602 billion, including $109 million from customer growth and $35 million from higher monthly revenue. Gross margin also reflected $406 million of higher depreciation and amortization, including the LSP Portfolio acquisition.
Key facts
- A $0.50 per MMBtu increase in natural gas prices across derivative contract terms would increase NRG's net derivative value by approximately $804 million as of September 30, 2026. source
- A $0.50 per MMBtu decrease in natural gas prices across derivative contract terms would decrease NRG's net derivative value by approximately $805 million as of September 30, 2026. source
- In the East segment, natural gas supply costs increased $767 million in the nine months ended September 30, 2026, partly offset by $656 million higher net revenue rates; supply costs include transportation and storage contract optimization. source
- Vivint Smart Home gross margin increased in the nine months ended September 30, 2026, primarily due to customer growth contributing $109 million and higher monthly revenue contributing $35 million. source
- In the East segment, electric retail-load cost to serve increased 12%, or $460 million, in the nine months ended September 30, 2026, driven by higher realized power prices associated with NRG’s diversified supply strategy, including the LSP Portfolio assets. source
- In the Texas segment, cost to serve retail load decreased 16%, or $150 million, in the three months ended September 30, 2026, driven by lower realized power prices associated with NRG’s diversified supply strategy, including assets acquired from the LSP Portfolio. source
- In the Texas segment, net revenue rates increased $147 million in the nine months ended September 30, 2026, primarily due to changes in customer term, product and mix. source
- In the Texas segment, retail-load cost to serve increased 1%, or $27 million, in the nine months ended September 30, 2026, driven by higher realized power prices associated with NRG’s diversified supply strategy, including the LSP Portfolio assets. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| assets | positive | contingent | +0.3% | A $0.50 per MMBtu increase in natural gas prices across derivative contract terms would increase NRG's net derivative value by… |
| assets | negative | contingent | -0.3% | A $0.50 per MMBtu decrease in natural gas prices across derivative contract terms would decrease NRG's net derivative value by… |