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2014 YEAR REVIEW IN POWER TO BE FREESM A YEAR OF PEOPLE, CHOICE AND A NEW TYPE OF CONSUMER NRG Energy 211 Carnegie Center 1201 Fannin Street Princeton, NJ Houston, TX 08540-6213 77002-6929 t: 609.524.4500 t: 713.537.3000 f: 609.524.4501 nrg.com BROTHERS IN ARMS KINDRED SPIRITS BOOTS ON THE ROOF A story of triumph during How shared values Owning the home the coldest days in America lead to valuable revenue from the top down POWER TO BE FREE | 1 WHERE WE DO BUSINESS SAFETY APPROXIMATELY ALL50 STATES 10,000 80% FULL-TIME EMPLOYEES +D.C. OF OUR FACILITIES WITHOUT INCIDENT OUR COMPETITIVE EDGE 11 FACILITIES MORE THAN WITH VPP STAR RATING 50% CUSTOMER SERVICE OF HOME SOLAR CUSTOMERS IN ELIGIBLE NORTHEAST STATES ALSO PURCHASE AN 22% ENERGY SUBSCRIPTION AHEAD OF INDUSTRY AVERAGE EXPANDING CUSTOMER REACH PUBLIC POWER NRG eVgo DC FAST AND L2 20% CHARGERS HAVE POWERED ALMOST OF RESIDENTIAL CUSTOMERS $15.9B IN TEXAS TOTAL REVENUES 9M BUY >1 PRODUCT ELECTRIC MILES NRG HOME RETAIL SUSTAINABILITY GOALS DIVIDEND GROWTH RD NEARLY 50% CONSECUTIVE 3M CARBON EMISSIONS RECURRING YEAR CUSTOMERS REDUCTION BY 2030 OF DIVIDEND INCREASE 3 .56 ANNUAL 90% DIVIDEND CARBON EMISSIONS PER COMMON SHARE COMPANY REDUCTION BY 2050 GLOBAL GIVING COMMUNITY-MINDED 13,580 ND VOLUNTEER HOURS YEAR IN A ROW 5X BY INCREASE 2 IN WIND CAPACITY HONORED 2,629 BY CIVIC 50 SINCE 2013 EMPLOYEES IN OVER 37+D.C. STATES 10% IN COMPETITIVE#1 GENERATION INCREASE CAPACITY IN THE U.S. IN GENERATION CAPACITY SINCE 2013 #3 IN RENEWABLE GENERATION CAPACITY IN THE U.S. ~150 ASSETS IN AS OF DEC 31, 2014 AS 24 STATES TOTAL GENERATION CAPACITY BY FUEL TYPE - NORTH 8% AMERICA PORTFOLIO* 2% 48% OUR GENERATION 11% CAPACITY CAN SUPPORT NEARLY NRG eVgo * CUSTOMER ACQUISITION 53,478 Gas UP OVER MEGAWATTS Coal ⅓OF THE Oil U.S. 31% Nuclear 2,000% POPULATION Renewables *Before non-controlling interest EXPAND ENHANCE GO OUR RETAIL GENERATION GREEN CULTURE 10 16 14 1 Boots on the Roof Brothers in Arms Sustainable Beauty By the Numbers Owning the home from A story of triumph Driving global change An overview of NRG the top down. during the coldest and looking good doing it. in 2014. days in America. 13 26 2 NRG eVgo NRG and Unilever STRIVE 21 System Power 22 On the Margins The importance of 27 24 fossil fuels in a world Deconstructing Raising Our Voices gone renewable. Convention Partnering with The 30 A conversation about Huffington Post to Boundless sustainability. expand the climate Convenient, reliable, change conversation. affordable power 29 for all. 40 Bridging the Gap Commercial Solar Changing liability to profit. 5 Access Granted 36 32 A letter from our CEO. Kindred Spirits Agents of Change How reflecting a partner’s An innovation lab, an 4 philosophy cements the island and the distributed Company Transformation relationship. energy future. SMART 9 CAPITAL 34 Governance ALLOCATION 44 Wind Generation Investing for Change 20 Safety for All Winning the future of an 35 Welcome to Rutland Safety isn’t just a industry in flux. The energy city company value, it’s a of the future. global commitment. 39 NRG Yield 49 46 Co-Lab 2.0 The Stage is Set Putting clean, sustainable energy on the 50-yard line. This Annual Report was printed on recycled paper. POWER TO BE FREE | 3 No harsh chemicals were used for films or plates during the printing of this book. NRG’s success lies on the corner of our company structure and business strategy. ACCESS GRANTED EMPOWERING THE NEXT GENERATION ow 30 years into the information age, people have a seemingly N insatiable desire for ever more information, interpersonal communication and relentless connectivity. According to the Economist, the number of cellphones this year surpassed the total number A letter from our CEO of people on the earth and we are told that the average American picks up their smart phone 1,500 times per week. We watch, as bystanders, as the colossi of the communication industry — Verizon and AT&T — encroach on, and are encroached upon, by Google and the other young giants of the high tech industry. While this battle royale takes shape, the electricity industry idles nearby smug in the knowledge that whoever wins, the devices that are the instruments of their competition all run on electricity. POWER TO BE FREE | 5 But theirs is a wireless competition. This post-consumer next generation The cord is fading into the past, wants access to those same dooming with it the fixed line phones conveniences of modern life. However, and desktop computers that depended those conveniences have become so on it. Fundamental tools of our existence ubiquitous that owning such things does just a few years ago are now destined not define them and is not a symbol of for museums depicting life in the 20th anything as, for instance, being the first century for the benefit of 21st century on your block to own a color television schoolchildren. was in the mid-60s. Indeed, we believe that the next generation wants to own Yet there is still a cord, as well as a less so they can do more. whole lot of wires leading to a plug and an outlet, in our modern age — the Theirs is an experiential generation and traditional electricity delivery system. Still the best experiences, for many, are had essential to us as the critical “last mile” in on the journey. Modern technology the route to market for our 53,000 gross enables them to do what we could not megawatts of high performing power do — be gone physically and be present generation, and essential to keeping cyberwise simultaneously. We want NRG the lights on for our almost three million to provide the energy that makes that retail customers. But now is not forever experience-driven lifestyle happen. In even though our industry would like to other words, we want not only to be their believe that the wireless revolution of energy provider but also to provide the the 21st century will go on, undisrupted, energy that really matters to them. energized by our aging wire and wooden pole electric distribution system. But it can’t be just any kind of energy, it needs to be clean. Because this next At NRG, we don’t believe we best generation is a purposeful one aware of serve tomorrow’s energy customers the limitations of unabated consumption soley through reliance on Thomas in a finite world. We are seeking, as a first Edison’s system. step, to reach out to the next generation, to make them aware of the possibilities In my generation, people wanted to that they have to put purpose into their own things: homes fitted out with energy consumption and to control their the latest gadgets and appliances, own energy destiny. A few months ago, such as refrigerators, color televisions, I wrote an open letter that appeared in microwave ovens, air conditioners college newspapers, excerpts of which and computers. Things that enhanced are reprinted to the right: life, but importantly for electricity purposes, didn’t move very often, very fast or very far. “We do not inherit the earth from our ancestors. We borrow it from our children.” —Native American proverb 6 | POWER TO BE FREE Dear Students: You don’t know me but, right now, I am deeply affecting your future. There are 120 million Americans I am the CEO of a Fortune 250 company, NRG Energy, which generates under the age of 30. Thanks again to enough electricity to keep the lights on for roughly 40 million American cellphones, children are becoming not homes. That’s a lot and that’s a good thing. Indeed, all of us at NRG are only energy consumers, but personal energy managers, at an increasingly very proud that what we do enables the interconnected lifestyles that define early age. For NRG, being the first energy the human experience in the 21st century. company seeking to serve this next generation of Americans by giving them But we at NRG are concerned that the predominant fuels we and the other what they want — energy which is not companies in our industry are using — and have used since the time of only safe, affordable and reliable but also sustainable and portable — makes good Thomas Edison — to keep you energized are ultimately exhaustible and, business sense. of even greater and more immediate concern, are having a damaging and But as an energy company, this is not potentially irrevocable impact on the world that you are in the process of an easy generation to persuade. They inheriting from us and ultimately will bequeath to your own children. have heard grand “beyond petroleum” type announcements from our kind Whether it be carbon capture, distributed solar, smart thermostats or before. We need to be committed not electric vehicles, the technology exists now to bring about a clean energy only with our thoughts, but in our deeds. In 2014, I think we showed that kind of economy and a sustainable society. But it is always easier in an established commitment. What you read about in society to perpetuate the status quo than it is to effect change. What we these pages — our plethora of solar need is for you to demand control over your own energy choices so that you and wind projects, the clean microgrid on Necker, the build out of our electric can make the choices that are right for you and your generation. vehicle charging network and, perhaps most of all, the ground breaking on the It should be clear to you by now that the political leaders of my generation world’s largest post-combustion carbon will not act to protect your future interest, so you must.

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