What changed in this filing

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Item 1A. Risk Factors

2026-02-24 compared with 2025-02-26 · 109 added, 92 removed, 381 unchanged (35% of the section changed)

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NRG's risk factors are grouped into the following categories:

(i) Risks Related to the Operation of NRG's Business;

(ii) Risks Related to Governmental Regulation and Laws;

and (iii) Risks Related to Economic and Financial Market Conditions and the Company's Indebtedness.

(i) Risks Related to the Acquisition of the LSP Portfolio;

(ii) Risks Related to the Operation of NRG's Business;

(iii) Risks Related to Governmental Regulation and Laws;

and (iv) Risks Related to Economic and Financial Market Conditions and the Company's Indebtedness.

Risks Related to the Acquisition of the LSP Portfolio

The integration of NRG and the LSP Portfolio may disrupt or have a negative impact on the Company’s business.

The LSP Portfolio is comprised of 13 GW of natural gas-fired generation and dual fuel assets and a demand response platform.

The acquisition significantly increases NRG’s owned generation capacity and operational footprint.

The acquisition is large and complex, and the Company will need to devote significant time and resources to integrating the plants, equipment, personnel, operations, and fuel arrangements with NRG’s existing generation, retail and commercial businesses.

Any difficulties encountered in the transition and integration process could adversely affect the Company’s business, results of operations and financial condition.

Risks that could impact the Company negatively include:

• the difficulty of managing and integrating the LSP Portfolio and its plants, pipelines, interconnection, operations, fuel contracts, and hedging arrangements;

• the potential disruption of the ongoing businesses and distraction of management;

• difficulties in implementing and maintaining uniform processes, systems, standards, controls, procedures, practices, and policies pertaining to commercial, operational, financial, legal, regulatory, and/or accounting matters;

• risks associated with the assumption of power purchase agreements, tolling arrangements, O&M contracts and demand response agreements;

• the inability to timely implement and enact effective internal control over financial reporting for the acquired assets, including harmonizing the LSP Portfolio’s accounting policies and internal controls with the Company’s;

• unanticipated issues in integrating information technology, communications, and other systems;

• the potential impairment of relationships with employees and partners, including the potential loss of valuable employees and difficulty in retaining and integrating personnel;

• unforeseen expenses, unknown liabilities, or adverse changes arising from events, conditions, or actions occurring prior to or in connection with the acquisition, as well as unanticipated capital investments, environmental upgrades, or decommissioning liabilities;

• difficulty addressing any possible differences in corporate cultures and management philosophies;

• unanticipated changes in federal or state laws or regulations, including those pertaining to thermal generation, emissions standards, capacity market rules, permitting, or otherwise relating to the assets acquired;

• changes to NRG’s risk profile due to the geographic concentration of the generation assets in the LSP Portfolio and increased exposure to regional fuel, weather and market events;

• the risk that the Company may not realize all the expected benefits of the acquisition, including enhanced generation capabilities, if the assets and businesses cannot be integrated in an efficient and effective manner, which could result in increased costs or lower-than-expected revenues.

If the Company is not successful in addressing these risks effectively, the business could be impacted.

Many of these factors will be outside of the Company’s control, and any one of them could result in delays, increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy, which could materially affect NRG’s business, results of operations and financial condition.

Similar risks may apply to any future acquisitions or dispositions the Company may undertake.

Risks Related to the Operation of NRG's Business

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• changes in generation capacity in the Company’s markets, including the addition of new supplies of power as a result of the development of new plants, expansion of existing plants, the continued operation of uneconomic power plants due to state subsidies, retirement of existing plants or addition of new transmission capacity;

• economic and political conditions, including the impact of changing U.S.

trade policies and potential additional tariffs that may be imposed;

• electric supply disruptions, including plant outages and transmission disruptions;

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• transportation capacity constraints or inefficiencies;

• changes in law, including judicial decisions, environmental regulations and environmental legislation;

• federal, state and provincial power regulations and legislation, and regulations and actions of the ISO and RTOs;

• weather conditions, including extreme weather conditions and seasonal fluctuations, including the effects of climate change;

• a public health crisis, epidemic or pandemic;

• changes in commodity prices and the supply of commodities, including but not limited to natural gas, coal and oil;

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• development of new fuels, new technologies and new forms of competition for the production of power;

• economic and political conditions, including the impact of changing U.S.

trade policies and potential additional tariffs that may be imposed;

• changes in law, including judicial decisions, environmental regulations and environmental legislation;

• federal, state and provincial power regulations and legislation, and regulations and actions of the ISO and RTOs.

• a public health crisis, epidemic or pandemic.

While retail rates are generally designed to allow retail sellers of electricity and natural gas to pass through price fluctuations and other changes to costs, the Company may not be able to pass through all such changes to customers.

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The Company’s expectations regarding load growth may not materialize.

The electricity industry is expected to experience a surge in demand driven primarily by new manufacturing, industrial and data center facilities (inclusive of generative AI (“GenAI”)).

The electricity industry is expected to experience a surge in demand driven primarily by new manufacturing, industrial and data center facilities (including to support the expected increase in demand for AI and generative AI (“GenAI”)).

Energy Information Administration's 2023 Annual Energy Outlook, combined with external forecasts, shows the potential for 500 TWh of incremental load across the U.S.

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In order to hedge these obligations, the Company may enter into long-term and short-term contracts for the purchase and delivery of fuel.

forward power sales contracts do not allow the Company to pass through changes in fuel costs or discharge the power sale obligations in the case of a disruption in fuel supply due to force majeure events or the default of a fuel supplier or transporter.

Many of the forward power sales contracts do not allow the Company to pass through changes in fuel costs or discharge the power sale obligations in the case of a disruption in fuel supply due to force majeure events or the default of a fuel supplier or transporter.

Disruptions in the Company's fuel supplies or power supply arrangements may therefore require it to supply replacement power either by running its other, higher cost power plants or by obtaining power from third-party sources at market prices that could substantially exceed the contract price, or to pay damages to counterparties for failure to deliver power or sell electricity or natural gas as contracted.

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NRG's plant operating characteristics and equipment, particularly at its coal-fired plants, often dictate the specific fuel quality to be combusted.

The availability and price of specific fuel qualities may vary due to supplier financial or operational disruptions, transportation disruptions and force majeure.

The availability and price of specific fuel qualities may vary due to supplier financial or operational

disruptions, transportation disruptions and force majeure.

At times, coal of specific quality may not be available at any price or the Company may not be able to transport such coal to its facilities on a timely basis.

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This could have a material adverse impact on the financial results of specific plants and on the Company's results of operations.

Inflation and customer affordability concerns may limit the Company’s ability to recover costs, constrain its pricing and reduce market demand for its products and services.

The Company’s electricity, natural gas, and smart home businesses are exposed to the risk that sustained inflation, commodity price volatility and other macroeconomic pressures will increase its costs and adversely affect the affordability of its products and services.

The cost of fuel, natural gas, purchased power, labor, construction materials, equipment and financing have risen in recent years and may continue to rise.

Such cost increases may continue to put upward pressure on the overall affordability of the Company’s products and services for its residential, commercial and industrial customers, which may impair the Company’s customers’ ability to pay their bills and/or subscriptions, cause some customers to reduce usage, and increase disconnections and bad debt expenses, all of which could negatively impact the Company.

In the markets in which the Company operates, the Company’s retail electric providers charge end-use customers a price for electricity that includes pass through charges assessed by the local utility.

Capital intensive transmission and distribution projects by utility companies recently approved by certain state utility commissions have resulted in increases to such pass-through charges and raised public concerns about overall consumer affordability.

If these concerns persist, the Company could be subject to heightened political and regulatory scrutiny, increased participation by consumer advocates and other stakeholders in regulatory proceedings, and create reputational risks associated with a perceived lack of affordability.

Therefore, the Company’s financial performance could be negatively affected if it is unable to recover increased costs or if cost recovery is limited by regulation or market conditions.

NRG relies on storage, transportation assets and suppliers, which it does not own or control, to deliver natural gas.

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Any unexpected failure, including failure associated with breakdowns, forced outages, or any unanticipated capital expenditures could result in reduced profitability.

NRG cannot be certain of the level of capital expenditures that will be required due to changing environmental and safety laws (including changes in the interpretation or enforcement thereof), needed facility repairs and unexpected events (such as natural disasters or terrorist attacks).

NRG cannot be

certain of the level of capital expenditures that will be required due to changing environmental and safety laws (including changes in the interpretation or enforcement thereof), needed facility repairs and unexpected events (such as natural disasters or terrorist attacks).

The unexpected requirement of large capital expenditures could have a material adverse effect on the Company's liquidity and financial condition.

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NRG’s development and construction of new generation facilities involve many risks, including:

• inability to receive governmental or other third-party funding;

• unanticipated cost overruns and schedule delays;

• delays or inability in obtaining necessary permits and licenses;

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• unforeseen engineering, environmental and geological problems;

• unanticipated cost overruns;

• failure of various third parties to perform under contracts.

Any of these risks could cause NRG's financial returns on such new investments to be lower than expected, or could cause the Company to operate below expected capacity or availability levels, which could result in loss of revenues, increase in expenses, higher maintenance costs and penalties.

To protect against these risks, insurance is maintained, warranties are generally obtained for limited periods relating to the construction of each project and its equipment in varying degrees, and contractors and equipment suppliers are obligated to meet certain performance levels.

The insurance, warranties or performance guarantees, however, may not be adequate to cover increased expenses.

Furthermore, the risk of significant cost overruns may be exacerbated in the current environment of elevated inflation, supply chain disruption and changing tariff and trade policies, which may cause actual construction costs to be significantly higher than initial estimates, and the Company may be unable to pass these increased costs through to its customers.

To protect against certain risks, the Company obtains insurance and warranties for limited periods relating to the construction of each project and its equipment, and obligates its contractors and suppliers to meet certain performance levels.

However, such insurance, warranties or performance guarantees may not be adequate to cover increased expenses.

As a result, a project may cost more than projected and the Company may be unable to fund principal and interest payments under construction financing obligations, if any.

In addition, the Company’s failure to meet project-specific financing requirements under its TEF Loans could result in default or acceleration of debt repayment.

Furthermore, where the Company has partnering relationships with a third party, the Company is subject to the viability and performance of the third party.

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Furthermore, if construction projects are not completed according to specification, the Company may incur liabilities and suffer reduced plant efficiency, higher operating costs and reduced net income.

Because NRG owns less than a majority of the ownership interests of some of its project investments, the Company cannot exercise complete control over their operations.

NRG has limited control over the operation of some project investments and joint ventures because the Company's investments are in projects where it beneficially owns less than a majority of the ownership interests.

NRG seeks to exert a degree of influence with respect to the management and operation of projects in which it owns less than a majority of the ownership interests by negotiating to obtain positions on management committees or to receive certain limited governance rights, such as rights to veto significant actions.

However, the Company may not always succeed in such negotiations.

NRG may be dependent on its co-venturers to operate such projects.

The Company's co-venturers may not have the level of experience, technical expertise, human resources management or other attributes necessary to operate these projects optimally.

The approval of co-venturers also may be required for NRG to receive distributions of funds from projects or to transfer the Company's interest in projects.

NRG's trading operations and use of hedging agreements could result in financial losses that negatively impact its results of operations , and NRG's hedging activities may increase the volatility in the Company's quarterly and annual financial results.

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These trading activities take place in volatile markets and some of these trades could be characterized as speculative.

This trading activity may expose the Company to the risk of significant financial losses which could have a material adverse effect on its business and financial condition.

This trading activity may expose the

Company to the risk of significant financial losses which could have a material adverse effect on its business and financial condition.

NRG generally attempts to balance its fixed-price physical and financial purchases and sales commitments in terms of contract volumes and the timing of performance and delivery obligations through the use of financial and physical derivative contracts.

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These customers are not obligated to, and may not, renew their contracts or subscriptions after the expiration of their original commitments.

If customers terminate or

do not renew their contracts or do not expand their use of NRG’s products and services, the Company’s growth strategy may not be successful and its expected results of operations may be adversely affected.

The Company has made investments focused on consumer products that may not be successful, may not achieve the intended financial results or may result in product liability and reputational risk that could adversely affect the Company.

If customers terminate or do not renew their contracts or do not expand their use of NRG’s products and services, the Company’s growth strategy may not be successful and its expected results of operations may be adversely affected.

The Company’s consumer product and home services offerings expose it to installation-related damage claims, product liability, insurance limitations, and reputational risk.

The Company may be liable to customers for any damage caused to customers’ homes, facilities, belongings or property during the installation of Company products and systems, such as smart home systems.

Where such work is performed by independent contractors, such as repairs performed under the Company's home protection plan products, the Company may nonetheless face claims and costs for damage.

Where such work is performed by the Company’s employees and independent contractors, such as repairs performed under the Company's home protection plan products, the Company may nonetheless face claims and costs for damage.

In addition, shortages of skilled labor for Company projects could significantly delay a project or otherwise increase its costs.

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Further, any product liability claims or damage caused by the Company could significantly impair the Company’s brand and reputation, which may result in a failure to maintain customers and achieve the Company’s desired growth initiatives in these new businesses.

Changes in technology may impair the value of, and the attractiveness of, NRG’s retail products, smart home services and generation facilities.

Changes in technology may impair the value of, and the attractiveness of, NRG’s retail products, smart home products or services, and generation facilities.

Research and development activities are ongoing in the industry to provide alternative and more efficient technologies to produce power, including wind, photovoltaic (solar) cells, hydrogen, energy storage, and improvements in traditional technologies and equipment, such as more efficient gas turbines.

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While the Company has controls in place designed to protect its infrastructure, such breaches and threats are becoming increasingly sophisticated and complex, requiring continuing evolution and constant improvements in security programs and technology.

Any such breach, disruption or similar event that impairs NRG's information technology infrastructure could disrupt normal business operations and affect the Company's ability to control its generation assets, provide smart home services, maintain confidentiality, availability and integrity of restricted data, access retail customer information and limit communication with customers and third parties, which could have a material adverse effect on the Company.

Furthermore, NRG’s operations can be additionally impaired by disruptions or security failures of third-party vendors and suppliers over which NRG lacks direct control or oversight.

Any breach, disruption or similar event that impairs NRG's information technology infrastructure could disrupt normal business operations and affect the Company's ability to control its generation assets, provide smart home services, maintain confidentiality, availability and integrity of restricted data, access retail customer information and limit communication with customers and third parties, which could have a material adverse effect on the Company.

As part of the continuing development of new and modified reliability standards, the FERC has approved changes to its Critical Infrastructure Protection reliability standards and has established standards for assets identified as "critical cyber assets." Under the Energy Policy Act of 2005, the FERC can impose penalties, up to $1 million per day, per violation, for failure to comply with mandatory electric reliability standards, including standards to protect the power system against potential disruptions from cyber/data and physical security breaches.

Further, the Company's retail and Home businesses, as well as Vivint Smart Home's smart home platform, require accessing, collecting, storing and transmitting sensitive customer data in the ordinary course of business.

Concerns about data privacy have led to increased regulation and other actions that could impact NRG's businesses and changes in data privacy and data protection laws and regulations or any failure to comply with such laws and regulations could adversely affect the Company's business and financial results.

Changes in data privacy and data protection laws and regulations, or any failure to comply with such laws and regulations, could adversely affect the Company’s business and financial results.

NRG's retail, Home and smart home businesses access and store sensitive customer data.

Additionally, NRG relies on vendors and service providers, such as call centers, that may require access to sensitive data, which increase the risk of data breaches through third-party action or errors.

The services and the networks and information systems utilized by the Company may be at risk for breaches as a result of third-party actions, employee or vendor error, malfeasance or other factors.

Although the Company takes precautions to protect its infrastructure, it has been, and will likely continue to be, subject to attempts at phishing and other cybersecurity intrusions.

International conflict increases the risk of state-sponsored cyber threats and escalated use of cybercriminal and cyber-espionage activities.

The services, networks and information systems utilized by the Company may be at risk for breaches as a result of third-party actions, employee or vendor error, malfeasance or other factors.

Although the Company takes precautions and has adopted procedures to protect its infrastructure, the effectiveness of such measures may be limited by insufficient employee awareness or their noncompliance with established protocols.

Furthermore, despite such precautions, the Company has been, and will likely continue to be, subject to attempts at phishing, social engineering, identity-based attacks, and other cybersecurity intrusions.

International conflict increases the risk of state-sponsored or ideologically motivated cyber threats and escalated use of cybercriminal and cyber-espionage activities.

In particular, the current geopolitical climate has further escalated cybersecurity risk, with various government agencies, including the U.S.

Cybersecurity & Infrastructure Security Agency, issuing warnings of increased cyber threats, particularly for U.S.

critical infrastructure.

critical infrastructure companies such as the Company.

Additionally, the rapid advancement and integration of AI and machine learning technologies present new and evolving risks.

These technologies can be exploited by malicious actors to enhance the sophistication and scale of cyberattacks, making it more challenging to detect and mitigate such threats.

While the Company has not experienced a cyber/data breach or event causing any material operational, reputational or financial harm, it recognizes the growing threat within the general marketplace and the industry, and there is no assurance that NRG will be able to prevent any such harm in the future.

While the Company has not experienced a cyber/data breach or event causing any material operational, reputational or financial harm, it recognizes the growing threat within the general marketplace and the industry in which it operates, and there is no assurance that NRG will be able to prevent any such harm in the future.

If a material breach of the Company's information technology systems were to occur, the critical operational capabilities and reputation of its business may be adversely affected, customer confidence may be diminished, and NRG may be subject to substantial legal or regulatory scrutiny and claims, any of which may contribute to potential legal or regulatory actions against the Company, loss of customers, fines, penalties or other sanctions and otherwise have a material adverse effect.

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NRG cannot provide any assurance that such events and impacts will not be material in the future, and the Company's efforts to deter, identify and mitigate future breaches may require additional significant capital and may not be successful.

The Company’s growing use of AI systems in its operations, services and products poses inherent risks, which may cause operational and reputational harm.

The Company has incorporated and intends to continue to incorporate AI technologies, such as GenAI, in its operations.

As a result, the Company could incur substantial losses in connection with a cybersecurity incident.

The Company’s use of, or failure to effectively adopt, AI systems in its operations, services and products poses operational, competitive, cybersecurity, legal and compliance risks that could adversely affect the Company.

The Company has used and expects to expand the use of AI technologies, including GenAI, in its operations.

services and products.

Because GenAI is an emerging technology, ineffective or inadequate AI development, governance, or deployment practices by NRG or third-party vendors could result in unintended consequences, and the desired efficiencies and other intended benefits could fail to materialize.

Due to its non-deterministic nature, GenAI technologies can create accuracy

issues, unintended biases and discriminatory outcomes, or may create content that appears correct but is actually inaccurate or flawed.

If the recommendations, content, or analyses that AI applications produce are or are alleged to be deficient or inaccurate, NRG could be subjected to potential legal liability and business harm, including brand or reputational harm and operational interruptions and ultimately have a material adverse effect on NRG’s results of operations.

In addition, the evolving nature of AI may cause new laws and regulations to be enacted which may require significant resources and costs to modify and maintain business practices in order to comply with these new laws and regulations.

Future acquisition or disposition activities could involve unknown risks and may have materially adverse effects and NRG may be subject to trailing liabilities from businesses that it disposes of or that are inactive.

NRG may in the future acquire or dispose of businesses or assets, acquire or sell books of retail customers, or pursue other business activities, directly or indirectly, through subsidiaries that involve a number of risks.

The acquisition of companies and assets, and their integration, is subject to substantial risks, including the failure to identify material problems during due diligence, the risk of over-paying for assets or customers, the inability to retain customers and the inability to arrange financing for an acquisition as may be required or desired.

Further, the integration and consolidation of acquisitions requires substantial human, financial and other resources and, ultimately, the Company's acquisitions may not be successfully integrated.

In the case of dispositions, such risks may relate to employment matters, counterparties, regulators and other stakeholders in the disposed business, the separation of disposed assets from NRG’s business, the management of NRG’s ongoing business, and other financial, legal and operational matters related to such disposition, which may be unknown to NRG at the time.

In addition, NRG may be subject to material trailing liabilities from disposed businesses.

Any such risk may result in one or more costly disputes or litigation.

There can be no assurances that any future acquisitions will perform as expected or that the returns from such acquisitions will support the indebtedness incurred to acquire them or the capital expenditures needed to develop them.

There can also be no assurances that NRG will realize the anticipated benefits from any such dispositions.

The failure to realize the anticipated returns or benefits from an acquisition or disposition could adversely affect NRG's results of operations, cash flows and financial condition.

Because GenAI is an emerging technology, deficient AI development, governance, or deployment practices by NRG or third-party vendors and service providers could result in unintended consequences, and the intended benefits may fail to materialize.

Due to its non-deterministic nature, GenAI technologies can create inaccurate, offensive, incomplete, or misleading outputs;

reflect or exacerbate biases and discriminatory outcomes;

or operate outside intended parameters due to model drift, deficient training data, and incorrect prompting.

The Company’s usage of third-party AI models, platforms, or cloud services introduces additional risks, including performance failures, service outages, and insufficient indemnities.

The Company may also face claims that training data or model outputs infringe intellectual property rights or misappropriate trade secrets, and AI use may increase the risk of inadvertent disclosure or improper processing of confidential, personal, or commercially sensitive information.

Conversely, any failure by the Company to effectively and timely develop and implement AI technologies, or to attract and retain AI talent, could impair the Company’s ability to compete, particularly if competitors incorporate AI more quickly or more successfully to lower costs, improve customer experience, and accelerate innovation.

The regulatory landscape surrounding AI, including GenAI, is evolving, and the use of such technologies may become subject to regulation under new laws or new applications of existing laws.

If the Company’s use of the recommendations, content, or analyses that AI applications produce is, or is alleged to be, deficient or inaccurate, or involve breaches of licenses, tort claims, violations of privacy, consumer protection, or other laws, NRG could be subjected to legal liability, brand or reputational harm and operational interruptions that ultimately have a material adverse effect on NRG’s results of operations.

Compliance with applicable AI laws and regulations may also require the Company to incur significant costs to modify and maintain its business practices.

Competition may have a material adverse effect on NRG's results of operations, cash flows and the market value of its assets.

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The Company may also experience criticism or backlash from media, customers, employees, government entities, advocacy groups and other stakeholders that disagree with positions taken by the Company or its executives.

If the Company’s brands or reputation are damaged, it could negatively impact the Company’s business, financial condition, results of operations, and ability to attract and retain highly qualified employees.

Negative publicity may result in changes in consumer preferences, increased costs in countering the narrative, or undue scrutiny.

As a result, if the Company’s brands or reputation are damaged, it could negatively impact the Company’s business, financial condition, results of operations, and ability to attract and retain highly qualified employees.

NRG's business, financial condition and results of operations could be adversely impacted by strikes or work stoppages by its unionized employees or inability to replace employees as they retire.

As of December 31, 2024, approximately 4% of NRG's employees were covered by collective bargaining agreements.

As of December 31, 2025, approximately 4% of NRG's employees were covered by U.S collective bargaining agreements.

In the event that the Company's union employees strike, participate in a work stoppage or slowdown or engage in other forms of labor strife or disruption, NRG would be responsible for procuring replacement labor or the Company could experience reduced power generation or outages.

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The failure to successfully transition and assimilate key employees, the effectiveness of the Company’s leaders, and any further transition, could adversely affect the Company’s financial condition and results of operations.

Risks that are beyond NRG's control, including but not limited to acts of terrorism or related acts of war, natural disaster or other catastrophic events could have a material adverse effect on NRG's financial condition, results of operations and cash flows.

NRG's generation facilities and the facilities of third parties on which they rely may be targets of terrorist activities, as well as events occurring in response to or in connection with such activities, all of which could cause environmental repercussions and/or result in full or partial disruption of the facilities ability to generate, transmit, transport or distribute electricity or natural gas.

Strategic targets, such as energy-related facilities, may be at greater risk of future terrorist activities than other domestic targets.

Any such environmental repercussions or disruption could result in a significant decrease in revenues or significant reconstruction or remediation costs beyond what could be recovered through insurance policies, which could have a material adverse effect on the Company's financial condition, results of operations and cash flows.

In addition, significant weather events or terrorist actions could damage or shut down the power or gas transmission and distribution

facilities upon which the Company is dependent, which may reduce retail volume for extended periods of time.

Power or gas supply may be sold at a loss if these events cause a significant loss of retail customer demand.

Risks Related to Governmental Regulation and Laws

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Compliance with, or changes to, the requirements under these legal regimes may cause the Company to incur significant additional costs, reduce the Company's ability to hedge exposure or to sell retail power within certain states or to certain classes of retail customers, or restrict the Company’s marketing practices, its ability to pass through costs to retail customers, or its ability to compete on favorable terms with competitors, including the incumbent utility.

Retail competition and home protection services are regulated on a state-by-state or at the province-by-province level and are highly dependent on state and provincial laws, regulations and policies, which could change at any moment.

could change at any moment.

Failure to comply with such requirements could result in the shutdown of a non-complying facility or line of business, the imposition of liens, fines, penalties and/or civil or criminal liability.

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These out-of-market subsidies to existing or new generation undermine the competitive wholesale marketplace, which can lead to premature retirement of existing facilities, including those owned by the Company.

measures continue, capacity and energy prices may be suppressed, and the Company may not be successful in its efforts to insulate the competitive market from this interference.

If these measures continue, capacity and energy prices may be suppressed, and the Company may not be successful in its efforts to insulate the competitive market from this interference.

The Company's retail operations may be materially impacted by rules or regulations that allow regulated utilities to participate in competitive retail markets or own and operate facilities that could be provided by competitive market participants.

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Any additions or changes to tax legislation, or their interpretation and application, including those with retroactive effect, could have a material adverse effect on NRG’s financial condition and results of operations, including income tax provision and accruals reflected in the consolidated financial statements.

The Company is subject to a 15% corporate alternative minimum tax as a result of the Inflation Reduction Act.

The CAMT may lead to volatility in the Company’s cash tax payment obligations, particularly in periods of significant commodity or currency variability resulting from potential changes in the fair value of derivative instruments.

For example, in July 2025, the One Big Beautiful Bill Act was signed into law.

To date, the law has not had a materially adverse effect on the Company’s operations;

however, revisions or new interpretations of the law may impact its future financial condition.

Further, the Company is subject to a 15% corporate alternative minimum tax as a result of the Inflation Reduction Act.

The CAMT may lead to volatility in the

Company’s cash tax payment obligations, particularly if final Treasury regulations substantially depart from proposed regulations and interim guidance, especially with regard to the treatment of commodity or currency variability resulting from potential changes in the fair value of derivative instruments.

The Company continuously monitors and assesses proposed tax legislation that could negatively impact its business.

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Further, demand for NRG's energy-related services could be similarly impacted by consumers’ preferences or market or regulatory factors favoring energy efficiency, lower carbon energy sources or reduced electricity or natural gas usage.

NRG's GHG emissions reduction targets can be found in Item 1, Business —Environmental Regulatory Matters .

The Company's ability to achieve these targets depends on many factors, including the ability to retire high emitting assets, ability to reduce emissions based on technological advances and innovation, and ability to source energy from less carbon intense resources.

The Company's ability to achieve its GHG emissions reduction targets depends on many factors, including the ability to retire high emitting assets, ability to reduce emissions based on technological advances and innovation, and ability to source energy from less carbon intense resources.

In addition, any future decarbonization efforts may increase costs, or NRG may otherwise be limited in its ability to apply them.

The cost associated with NRG's GHG emissions reduction goals could be significant.

Failure to achieve the

Company's emissions targets could result in a negative impact on access to and cost of capital, changing investor sentiment regarding investment in the Company or reputation harm.

Failure to achieve the Company's emissions targets could result in a negative impact on access to and cost of capital, changing investor sentiment regarding investment in the Company or reputation harm.

Enhanced data privacy and data protection laws and regulations, or any non-compliance with such laws and regulations, could adversely affect NRG’s business and financial results.

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The development and evolving nature of domestic and international privacy regulation and enforcement could impact and potentially limit how NRG collects, processes, discloses and stores personally identifiable information.

California residents have increased access rights (including the right to limit the use, right of data deletion and correction and right of non-disclosure of sensitive personal information), which are enforced by a new state privacy regulator, resulting in more scrutiny of business practices and disclosures.

enforced by a new state privacy regulator, resulting in more scrutiny of business practices and disclosures.

Additional states including Virginia, Utah, Connecticut, Colorado, Nevada, Texas, New Hampshire, Nebraska and Maryland have similarly adopted enhanced data privacy legislation and patterned after the standards set forth by CCPA, including broader data access rights, with several states going a step further requiring businesses to perform data protection assessments for a variety of processing activities.

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Additionally, state, federal or provincial imposition of net metering or RPS programs can make it more or less expensive for retail customers to supplement or replace their reliance on grid power.

The Company’s smart home services focus on transactions with residential customers, subjecting it to a variety of laws, regulations and licensing requirements governing interactions with residential consumers, including those pertaining to privacy and data security, consumer financial and credit transactions, home improvements, warranties and door-to-door solicitation.

The Company’s retail and smart home services focus on transactions with residential customers, subjecting them to a variety of laws, regulations and licensing requirements governing interactions with residential consumers, including those pertaining to privacy and data security, telemarketing, in-person solicitations, online marketing, consumer financial and credit transactions, home improvements, warranties and door-to-door solicitation.

In certain jurisdictions, the Company is required to obtain licenses or permits to comply with standards governing marketing and sales efforts, installation of equipment or servicing of customers and monitoring station employee selection and training.

Increased regulation of matters relating to interactions with residential consumers could require modification to the Company’s home services operations and the incurrence of additional expenses.

Increased regulation of matters relating to interactions with residential consumers could require modification to the Company’s retail and smart home services operations and the incurrence of additional expenses.

Further, any expansion of the scope of products or services into new markets may require additional licenses and expenditures to otherwise maintain compliance with additional laws, regulations or licensing requirements.

These laws and regulations, as well as their interpretation, and any new laws, regulations or licensing requirements could negatively affect the Company’s ability to acquire new residential customers.

Any of these measures could increase costs for providing, or reduce customer satisfaction with respect to, smart home services.

Any of these measures could increase costs for providing, or reduce customer satisfaction with respect to, retail and smart home services.

The Federal Trade Commission ("FTC") and the Federal Communications Commission have issued regulations that restrict direct-to-home marketing, telemarketing, email marketing and other sales practices, including limitations on methods of communication, requirements to maintain a “do not call” list, cancellation rights and required training for personnel to comply with these restrictions.

home services could result in private rights of actions or enforcement actions for civil or criminal penalties.

Changes in regulations or interpretations that further restrict lead generating activities also could result in a reduction in the number of new smart home services customers.

The Company’s smart home business exposes it to risks of liability for the acts or omissions of its employees, including with respect to sales practices.

Activities in connection with sales efforts by employees, independent contractors, and other agents, including predatory door-to-door sales tactics and fraudulent misrepresentations, have in the past subjected it to, and could in the future subject the Company to, governmental investigations and class action lawsuits for, among others, false advertising and deceptive trade practice damage claims.

Any noncompliance, or alleged noncompliance, of applicable regulations by the Company, third-party vendors used for marketing, telemarketing or lead generation activities or independent, third-party authorized dealers of retail or smart home services could result in private rights of actions or enforcement actions for civil or criminal penalties.

Changes in regulations or interpretations that further restrict lead generating activities also could result in a reduction in the number of new retail or smart home services customers.

The Company’s retail and smart home businesses expose it to risks of liability for the acts or omissions of its employees, including with respect to sales practices.

practice damage claims.

Any litigation or regulatory proceedings resulting from such activities could adversely impact the Company’s business, financial condition, results of operations, and cash flows.

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In 2021, Vivint Smart Home entered into a settlement with the FTC where Vivint Smart Home agreed to implement various compliance-related measures and pay a penalty or fine.

The settlement requires an initial assessment and thereafter biennial assessments by an independent third-party assessor of Vivint Smart Home’s compliance programs and for the assessor to provide a report to the FTC staff on ongoing compliance with the settlement.

The settlement required an initial assessment and thereafter biennial assessments by an independent third-party assessor of Vivint Smart Home’s compliance programs and for the assessor to provide a report to the FTC staff on ongoing compliance with the settlement.

Although Vivint Smart Home took action to enhance its compliance programs, these and other measures that the Company may take in the future may not be successful.

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Whenever dividends on any shares of Series A Preferred Stock have not been declared and paid for the equivalent of three or more dividend payments, whether or not for consecutive dividend periods, the number of directors on the Company's Board of Directors will be increased by two, and the holders of Series A Preferred Stock will have the right to elect two members of the Company's Board of Directors to fill such newly created openings.

Adverse economic conditions could adversely affect NRG’s business, financial condition, results of operations and cash flows.

Adverse economic conditions, including inflation, and declines in wholesale energy prices, partially resulting from adverse economic conditions, may impact NRG's results of operations, including by reducing the demand for energy commodities.

In general, economic and commodity market conditions will continue to impact NRG’s unhedged future energy margins, liquidity, earnings growth and overall financial condition.

Macroeconomic factors may also impact consumer spending, which could adversely affect the Company’s smart home services, and increase the Company’s costs for such products and services, which it may not be able to pass on to customers.

In addition, adverse economic conditions, declines in wholesale energy prices, reduced demand for energy and other factors may negatively impact the trading price of NRG’s common stock and impact forecasted cash flows, which may require NRG to evaluate its goodwill and other long-lived assets for impairment.

Any such impairment could have a material impact on NRG’s financial condition.

Goodwill and other intangible assets that NRG has recorded in connection with its acquisitions are subject to impairment evaluations and, as a result, the Company could be required to write off some or all of this goodwill and other intangible assets, which may adversely affect the Company's financial condition and results of operations.

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This Annual Report on Form 10-K of NRG Energy, Inc., or NRG or the Company, includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act.

The words "believes," "projects," "anticipates," "plans," "expects," "intends," "estimates," "should," "forecasts," and similar expressions are intended to identify forward-looking statements.

The words "believes," "projects," "anticipates," "plans," "expects," "intends," "estimates," "should," "forecasts," “targets,” and similar expressions are intended to identify forward-looking statements.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause NRG's actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

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• Volatile power and gas supply costs and demand for power and gas, including the impacts of weather;

• Hazards customary to the power production industry and power generation operations, such as fuel and electricity price volatility, unusual weather conditions, catastrophic weather-related or other damage to facilities, unscheduled generation outages, maintenance or repairs, unanticipated changes to fuel supply costs or availability due to higher demand, shortages, transportation problems or other developments, environmental incidents, or electric transmission or gas pipeline system constraints and the possibility that NRG may not have adequate insurance to cover losses as a result of such hazards;

• The imposition of tariffs and escalation of international trade disputes, and any inflationary impacts resulting therefrom;

• The inability of the Company to realize expected benefits from the integration of LSP Portfolio’s assets and businesses;

• Hazards customary to the power production industry and power generation operations, such as fuel and electricity price volatility, unusual weather conditions, catastrophic weather-related or other damage to facilities, unscheduled or forced generation outages, maintenance or repairs, unanticipated changes to fuel supply costs or availability due to higher demand, shortages, transportation problems or other developments, environmental incidents, or electric transmission or gas pipeline system constraints and the possibility that NRG may not have adequate insurance to cover losses as a result of such hazards;

• The effectiveness of NRG's risk management policies and procedures and the ability of NRG's counterparties to satisfy their financial commitments;

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• NRG's ability to engage in successful acquisitions and divestitures, as well as other mergers and acquisitions activity;

• NRG’s ability to successfully complete the development and construction new generation projects in a timely and cost effective manner;

• NRG’s, and its counterparties’, ability to successfully complete the development and construction of new generation facilities and projects in a timely and cost effective manner;

• Cyber terrorism and cybersecurity risks, data breaches or the occurrence of a catastrophic loss and the possibility that NRG may not have sufficient insurance to cover losses resulting from such hazards or the inability of NRG's insurers to provide coverage;

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• Price mitigation strategies and other market structures employed by ISOs or RTOs that result in a failure to adequately and fairly compensate NRG's generation units;

• NRG's ability to mitigate forced outage risk;

• NRG's ability to borrow funds and access capital markets, as well as NRG's substantial indebtedness and the possibility that NRG may incur additional indebtedness in the future;

• Operating and financial restrictions placed on NRG and its subsidiaries that are contained in NRG's corporate credit agreements, and in debt and other agreements of certain of NRG subsidiaries and project affiliates generally;

• The ability of NRG and its counterparties to develop and build new power generation facilities;

• NRG's ability to implement its strategy of finding ways to meet the challenges of climate change, clean air and protecting natural resources, while taking advantage of business opportunities;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors