NRG Energy (NYSE: NRG), which owns retail electric suppliers Energy Plus and Reliant, will team up with Comcast (NASDAQ: CMCSA) in Pennsylvania.
While neither NRG nor Comcast would comment specifically on the plan, Robert Powelson, chairman of the Pennsylvania Public Utility Commission, said in late January that Comcast was teaming up with a retail electric supplier in the state.
NRG Energy has already been working with Comcast on cross-marketing in Texas for a few years, feeding potential customers to Comcast when they call to set up a new service for electricity, and Comcast was doing the same for NRG’s Texas retailer Reliant. Reliant also supplies electricity to Comcast in the Houston area. Additionally, NRG is an investor in EcoFactor, which provides the energy management platform for Comcast's Xfinity home product.
“We’ve had these partnerships, and we’ve enjoyed the partnerships we’ve had, and we’re working on a new one,” David Knox, spokesperson for NRG Energy, told Greentech Media.
Knox and Comcast would not give the details of the new offering between Energy Plus and the cable and internet giant, but neither party denied the work in Pennsylvania.
NRG’s Energy Plus is a retail electricity supplier in nine states and allows customers to earn rewards when paying for their electricity bills. In the most basic offering, Comcast and Energy Plus could offer a quadruple play of internet, phone, cable and electricity, but the potential bundling options are wide open. A customer might get a few months of HBO for signing up for the electricity plan, for example, or an even better rate on electricity when paired with Comcast's Xfinity Home services.
The core businesses for both NRG and Comcast have struggled in recent years. Comcast had posted straight 26 quarters of pay-TV subscriber losses until Q4 2013, according to Forbes, with the loss stemmed in part by triple-play bundling. NRG, on the other hand, was just downgraded by Zacks Analyst to “underperform” in part due to the fact that about a quarter of its electricity generation business comes from coal, which is under increasing regulation.
But both companies are looking beyond their core offerings. Comcast has its Xfinity home product, which pairs home security and control. Comcast, which is the world's largest media corporation by revenue, is reportedly looking to provide cable company Cox with a white-labeled version of the product for additional revenue. Comcast is also reportedly investing billions in its cloud-based platform that could be leveraged by smaller players for a fee.
NRG, on the other hand, has a utility-scale and residential solar business and a retail electricity business, Green Mountain Energy, which focuses only on renewable energy.
At DistribuTECH in San Antonio in January, many vendors, analysts and even other retail electricity suppliers were enthusiastic about the move by Comcast. Although this is the first example of this type of partnership, nearly every industry insider agreed that this is just the beginning of a wave of new players getting into the retail electricity markets in the most competitive states. The question now is who will be next.