An energy company that received billions of dollars in green subsidies reported Monday it lost $6.4 billion this fiscal quarter, forcing the company to drop its renewable energy projects.
As a result of the downturn, which was due in large part to the company’s laser focus on unprofitable green initiatives, New Jersey-based NRG Energy will slash its dividends by nearly 80 percent.
The company’s CEO David Crane was shoved out of his executive position in December after investors claimed the company was mired in complexity and focused too intently on producing electric charging stations and solar panels.
“I am here to tell you the simplification of our business is an imperative,” Mauricio Gutierrez, NRG’s new CEO, said Monday. He added that the company would now refocus efforts on its more successful retail electricity business.
Overall, NRG suffered a $6.4 billion loss in 2015, compared to 2014 when the company saw a $132 million net gain. Executives say the energy company’s losses were a result of $5 billion in charges from writing off charitable giving.
Gutierrez assured investors and stockholders the company would not completely abandon renewable energy following the massive losses. Still, NRG will aim to unload large sections of its renewable energy businesses in the second quarter, Gutierrez told reporters.
The company is slashing its dividends from 58 cents to 12 cents per share in hopes of readjusting its $145 million in debt and capital spending.
The energy sector has taken it on the chin recently, with depressed prices due to an increase in natural gas production and a glut in the coal market.
Along with the complexity of its green energy initiatives, the company also noted big Texas coal companies — the WA Parish coal plant near Houston and the Limestone plant — were partially to blame for the downward spiral. Upgrade costs might render the Limestone plant an artifact, according to The Electric Reliability Council.
The Department of Energy gave NRG a $967 million loan in September 2011 to help pay for the company’s solar generation program — the Agua Caliente.
The company also received a $1.2 billion loan to help pay for the California Solar Valley Ranch, another solar project. The California Valley Solar Valley Ranch generated 350 temporary jobs, and 11 permanent jobs.