NEW YORK (TheStreet) -- Shares of NRG Energy (NRG - Get Report) fell 5.8% to $23.73 in afternoon trading Wednesday after the Federal Energy Regulatory Commission (FERC) decided not to approve a Capacity Performance Plan submitted by PJM Interconnection.
The commission issued a deficiency letter in response to PJM's application on Wednesday and requested that the organization answer further questions about the initiative. The FERC is not expected to decide on the application before PJM answers the questions.
PJM operates a wholesale electricity market in the Eastern U.S., and a small portion of NRG's capacity is within PJM.
The Capacity Performance Plan would "provide stronger performance incentives and more operational availability and diversity during peak power system conditions," according to PJM.
PJM also announced it created the plan in response to questions regarding the performance of its generation fleet in recent years, especially during cold weather.
Insight from TheStreet's Research Team
James Stafford commented on NRG Energy in a recent post on RealMoney.com. Here's what Stafford had to say about the stock:
NRG is another utility getting in on the game. Through its subsidiary NRG eVgo, NRG is building a network of fast-charging EV stations, capable of charging a car in 30 minutes. It has a presence in California, Texas, Washington DC, Maryland, and Virginia, and hopes to expand in major cities across the U.S.
And this offers a new path forward for utilities. Some will fight a losing battle against solar power, while others will pivot to new markets (not that those two choices are mutually exclusive). Utilities can play a big role in building out EV infrastructure because they can factor it into the rate that it charges customers. PG&E's plan for 25,000 charging stations may only cost its customer base $0.70 per month.
"Everyone talks about the utility death spiral but it is largely exaggerated," Brett Hauser, the CEO of EV builder Greenlots, told UtilityDive. "Just like everybody else, utilities have to evolve and find better ways to communicate and interact with their customers."
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Separately, TheStreet Ratings team rates NRG ENERGY INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate NRG ENERGY INC (NRG) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and weak operating cash flow."
You can view the full analysis from the report here: NRG Ratings Report