Soliciting Materials

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

SCHEDULE 14A

(RULE 14a-101)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

 

Filed by the Registrant ¨

Filed by a Party other than the Registrant x

Check the appropriate box:

 

¨ Preliminary Proxy Statement.

 

¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)).

 

¨ Definitive Proxy Statement.

 

¨ Definitive Additional Materials.

 

x Soliciting Material Pursuant to §240.14a-12.

 

 

NRG ENERGY, INC.

 

 

(Name of Registrant as Specified in its Charter)

 

 

EXELON CORPORATION

 

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

x No fee required.

 

¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

  (1) Title of each class of securities to which the transaction applies:

 

 

 
  (2) Aggregate number of securities to which the transaction applies:

 

 

 
  (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 
  (4) Proposed maximum aggregate value of the transaction:

 

 

 
  (5) Total fee paid:

 

 

 

 

¨ Fee paid previously with preliminary materials.

 

¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

 

  (1) Amount Previously Paid:

 

 

 
  (2) Form, Schedule or Registration Statement No.:

 

 

 
  (3) Filing Party:

 

 

 
  (4) Date Filed:

 

 

 

 

On February 2, 2009, Exelon began using the following slides at the Credit Suisse 2009 Energy Summit in discussions with investors:

Exelon
+
NRG:
Committed,
Moving
Forward
William A. Von Hoene, Jr.
Executive Vice President and
General Counsel
Credit Suisse 2009 Energy Summit
February 2-3, 2009

Important Information
This presentation relates to the offer (the “Offer”) by Exelon Corporation (“Exelon”) through its direct wholly-owned subsidiary,
Exelon
Xchange
Corporation
(“Xchange”),
to
exchange
each
issued
and
outstanding
share
of
common
stock
(the
“NRG
shares”)
of
NRG
Energy,
Inc.
(“NRG”)
for
0.485
of
a
share
of
Exelon
common
stock.
This
presentation
is
for
informational
purposes
only
and
does
not
constitute an offer to exchange, or a solicitation of an offer to exchange, NRG shares, nor is it a substitute for the Tender Offer
Statement
on
Schedule
TO
or
the
Prospectus/Offer
to
Exchange
included
in
the
Registration
Statement
on
Form
S-4
(Reg.
No.
333-
155278) (including the Letter of Transmittal and related documents and as amended from time to time, the “Exchange Offer
Documents”)
previously
filed
by
Exelon
and
Xchange
with
the
Securities
and
Exchange
Commission
(the
“SEC”).
The
Offer
is
made
only
through
the
Exchange
Offer
Documents.
Investors
and
security
holders
are
urged
to
read
these
documents
and
other
relevant
materials as they become available, because they will contain important information.
Exelon expects to file a proxy statement on Schedule 14A and other relevant documents  with the SEC in connection with the
solicitation of proxies (the “NRG Meeting Proxy Statement”) for the 2009 annual meeting of NRG stockholders (the “NRG Meeting”).
Exelon will also file a proxy statement on Schedule 14A and other relevant documents  with the SEC in connection with its
solicitation of proxies for a meeting of Exelon shareholders (the “Exelon Meeting”) to be called in order to approve the issuance of
shares of Exelon common stock pursuant to the Offer (the “Exelon Meeting Proxy Statement”). Investors and security holders are
urged to read the NRG Meeting Proxy Statement and the Exelon Meeting Proxy Statement and other relevant materials as they
become available, because they will contain important information.
Investors and security holders can obtain copies of the materials described above (and all other related documents filed with the
SEC) at no charge on the SEC’s website: www.sec.gov. Copies can also be obtained at no charge by directing a request for such
materials to Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York, New York 10022, toll free at 1-877-750-9501.
Investors
and
security
holders
may
also
read
and
copy
any
reports,
statements
and
other
information
filed
by
Exelon,
Xchange
or
NRG with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-
0330 or visit the SEC’s website for further information on its public reference room.
Exelon, Xchange and the individuals to be nominated by Exelon for election to NRG’s Board of Directors will be participants in the
solicitation of proxies from NRG stockholders for the NRG Meeting or any adjournment or postponement thereof. Exelon and
Xchange
will
be
participants
in
the
solicitation
of
proxies
from
Exelon
shareholders
for
the
Exelon
Meeting
or
any
adjournment
or
postponement
thereof.
In
addition,
certain
directors
and
executive
officers
of
Exelon
and
Xchange
may
solicit
proxies
for
the
Exelon
Meeting and the NRG Meeting.  Information about Exelon and Exelon’s directors and executive officers is available in Exelon’s proxy
statement, dated March 20, 2008, filed with the SEC in connection with Exelon’s 2008 annual meeting of shareholders. Information
about
Xchange
and
Xchange’s
directors
and
executive
officers
is
available
in
Schedule
II
to
the
Prospectus/Offer
to
Exchange. 
Information
about
any
other
participants
will
be
included
in
the
NRG
Meeting
Proxy
Statement
or
the
Exelon
Meeting
Proxy
Statement, as applicable.
2

Forward-Looking Statements
This presentation includes forward-looking statements. These forward-looking statements include,
for example, statements regarding benefits of the proposed merger, integration plans and
expected synergies.  There are a number of risks and uncertainties that could cause actual results
to differ materially from the forward-looking statements made herein.   The factors that could
cause actual results to differ materially from these forward-looking statements include Exelon’s
ability to achieve the synergies contemplated by the proposed transaction, Exelon’s ability to
promptly and effectively integrate the businesses of NRG and Exelon, and the timing to
consummate the proposed transaction and obtain required regulatory approvals as well as those
discussed in (1) Exelon’s 2007 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c)
ITEM 8. Financial Statements and Supplementary Data: Note 19; (2) Exelon’s Third Quarter 2008
Quarterly Report on Form 10-Q in (a) Part II, Other Information, ITEM 1A. Risk Factors and (b) Part
I,
Financial
Information,
ITEM
1.
Financial
Statements:
Note
12;
(3)
Exelon’s
preliminary
prospectus/offer to exchange that is contained in the Registration Statement on Form S-4 (Reg.
No. 333-155278) that Exelon has filed with the SEC in connection with the offer; and (4) other
factors discussed in Exelon’s filings with the SEC.  Readers are cautioned not to place undue
reliance on these forward-looking statements, which apply only as of the date of this filing.  Exelon
does not undertake any obligation to publicly release any revision to its forward-looking
statements to reflect events or circumstances after the date of this filing, except as required by
law.
Statements made in connection with the exchange offer are not subject to the safe harbor
protections provided to forward-looking statements under the Private Securities Litigation Reform
Act of 1995.
All information in this presentation concerning NRG, including its business, operations, and
financial results, was obtained from public sources.  While Exelon has no knowledge that any such
information is inaccurate or incomplete, Exelon has not had the opportunity to verify any of that
information.
3

Full and Fair Offer
•
On November 12   , Exelon launched an exchange offer
for all of the outstanding shares of NRG common stock
•
Filed Form S-4 with the SEC
•
Fixed exchange ratio of 0.485 Exelon share for each NRG
common share
•
Represents
a
37%
premium
to
the
October
17
NRG
closing
price
4
th
th

5
Committed to Execution
* Notice filing only
Q4 2008
Q2 2009
Q4 2009
Q3 2009
2/25: Exchange
Offer Expires
10/19:
Announce Offer
11/12:
Exchange Offer
Filed
Proxy Solicitation
NRG and Exelon
Shareholder
Meetings
Make Filings and Work to Secure Regulatory Approvals
(FERC, NRC, DOJ/FTC, PUCT, NYPSC, PAPUC, CPUC, ICC*)
Expected
Transaction Close
Q1 2009
Receive Regulatory
Approvals

Strong Initial Exchange Offer Results
6
•
As of January 6  , 45.6% of NRG shares had been
tendered into the exchange offer
•
Many NRG shareholders have informed Exelon they want to
see meaningful discussions, and due diligence, sooner rather
than later
•
NRG board and management appear not to have heard the
message sent by the very large contingent of shareholders
that have already tendered into our exchange offer
•
Exchange offer extended until February 25
•
Seeking highest possible level of NRG shareholder support to
facilitate a negotiated transaction between Exelon and NRG
Initial tender results demonstrate strong support for an
EXC / NRG combination
We remain
committed to and
are moving forward
with the transaction
th
th

Moving Forward with Proxy Solicitation
•
Pursuing, and soliciting proxies for, two
shareholder actions at NRG annual meeting
•
Proposed an expansion of the NRG board from 12 to 19
directors
•
Nominated nine well-qualified, independent candidates who we
believe will act in the best interest of NRG and the NRG
shareholders
•
Encouraging NRG shareholders to support the
proposed slate
•
Materials will be sent to NRG shareholders, including a proxy
and instructions on how to vote for the slate of new directors
•
Vote will take place at the NRG annual shareholder meeting,
likely to occur in May or June
NRG shareholders deserve independent, well-qualified NRG
directors to act in their best interest
7

Making Progress on Regulatory Approvals
•
Initial filings have been made with the following
(1)
:
•
FERC (Docket #EC09-32-000)
•
Hart-Scott-Rodino (DOJ/FTC)
•
Request for additional information was issued by the DOJ on
January 16  , extending HSR waiting period
•
State regulatory commissions, including
•
Texas (Docket #36555)
•
New York (Docket #08 E 1486)
•
Filings will also be made with the following:
•
NRC
•
Pennsylvania and California state regulatory commissions
•
Various state siting
commissions
•
Notice filing in Illinois
1.
As of January 29, 2009
Regulatory hurdles are manageable
8
th

Financing Is Not an Obstacle
•
Believe we can obtain committed financing for the
entire ~$8 billion of NRG debt, if needed, at the
appropriate time
•
Decision to defer commitments allows us to take advantage of
improving credit markets
•
Exelon’s relationships with many of NRG’s banks should facilitate
arrangements for new credit facilities when current conflicts are
eliminated
•
Believe a negotiated combination can be structured in a
way to reduce refinancing requirements to $4B or less
•
We believe that the contemplated structure would not trigger the
change of control provision for NRG’s $4.7B of Senior Notes, and would
substantially improve credit metrics for those bondholders
9
Reflecting our confidence that we can obtain committed
financing at the appropriate time, our offer is not subject to a
financing condition

Appendix
10

•
Full and generous price –
upfront premium of 37%
•
Tax-free opportunity to participate in the future growth
of the largest and most diversified US power company,
with a substantially improved credit profile and access
to liquidity
•
Requisite scope, scale and financial strength
•
Stronger credit metrics and investment grade balance sheet
•
Best-in-class nuclear and fossil operations
•
Low-cost generator, operating in the most attractive markets
•
Exelon 2020 principles will be adapted to the combined fleet
•
Potential for substantial synergies
•
Manageable regulatory hurdles to close
Compelling Value for NRG Shareholders
11

Without
Premium
0
1,000
3,000
2,000
With
Premium
Conservative
DCF Estimate
Replacement
Costs
NRG Stock Value
NRG Long-Term Value
975
1,350
2,050
3,000+
Price per Kilowatt Comparison for Texas Baseload Generation
Even with premium, purchase
price is 66% of conservative
long-term DCF value
$/kW values are for 5,325 MW of Texas baseload which includes Parish coal, Limestone and STP; values implied by NRG stock price
are determined by subtracting value of other NRG assets from NRG
enterprise value based on October 17th close.
Exelon Unlocks NRG Value
Price
($/kilowatt)
12
Less than 45% of
replacement value

Combination Expected to Create
Substantial Synergies
Exelon
Operations & Maintenance:
$4,289
Maintenance & Other Opex:
$950
General & Admin Expenses:
$309
Other COGS:
$454
Pro Forma
Combined Non-fuel Expenses:
$6,002
Estimated Annual Cost Savings:
$180 -
$300
% of Combined Expenses:
3%-5%
Costs to Achieve
$100
NPV of Estimated Synergies:
$1,500-$3,000
13
($ in Millions)
Transaction
expected
to
create
$1.5
–
$3
billion
of
value
through
synergies
–
with
opportunity
for
more
Reflects no revenue or fuel cost synergies.  Excludes transaction and other costs of $654 million and excludes increased interest
expense related to refinancing of NRG debt.
1.  Company 10-K for 2007 and investor presentations.
2.  Based on a preliminary analysis of publicly available information.  Subject to due diligence investigation.
1
2
NRG
1

Market
capitalization as
of 10/17/2008
$5.3 billion
$0.4
Value to NRG
Shareholders
$2.4 billion
$5.1
$2.0
Market cap as of
10/17/08
Premium to NRG
Value of estimated
synergies
Market cap as of
10/17/08
+ premium
+ synergies
Additional upside to
NRG shareholders
Market
capitalization as
of 10/17/2008
$5.3 billion
(1)
(2)
$7.7 billion
(3)
(4)
$12.8 billion
NRG Shareholders Capture Value
14
Value Creation
to NRG
Shareholders
($ billions)
Creates compelling value for NRG shareholders today and allows them to
share in growth of Exelon stock.
Value to NRG
shareholders
44% of market cap
$12.8 billion
= $46.50 per NRG share
> NRG’s 52-week high

Percent Contribution of Free Cash Flow
15
1. NRG’s 12/1/2008 “NRG’s Path to Shareholder Value”
presentation, slide 4.  Implied ownership based on a 0.485x
exchange ratio
2. PECO PPA assumes market prices as of 11/30/2008.  Assumes carbon at $10-20 per tonne.  Not necessarily
representative of either company’s internal forecast or indicative of results for any other year.
•
NRG states they contribute 30% of the free cash flow
while getting 17% ownership of the pro-forma company
based on offer
•
NRG’s position is only a 2008 calculation
•
Ignores PECO PPA roll-off in 2011 and Exelon carbon
uplift
•
Factoring in these two omitted pieces for 2008, NRG’s
free cash flow contribution of the pro-forma company
would be 15-17% for 2008
1
2

Pro Forma
Exelon
16
Combined company expected to
have requisite scope, scale and
financial strength to succeed in an
increasingly volatile energy market
Pro Forma Quick Stats
($s in millions)
Combined assets
1
$68,900
LTM EBITDA
2
$9,400
Market cap (as of 1/27/2009)
$41,800
Enterprise value
3
$62,500
Generating capacity
4
~51,000 MWs
Combination Will Result in Scope, Scale and
Financial Strength
Enterprise
Value
Market Cap
$0
$30
$50
$60
$40
$20
$70
$10
Southern
Dominion
Duke
FPL
First
Energy
Entergy

0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
EXC
D
PEG
PPL
EIX
NRG
MIR
DYN
RRI
10/17/2007
10/17/2008
17
Credit Ratings Are a Valuation Differentiator
1-year
Forward
EV/EBITDA
Investment Grade
Non-Investment Grade
Investment grade
credit ratings
provide access to
capital markets for
growth capital and
minimize collateral
requirements
which maximizes
liquidity and
contributes to
superior
valuations in
difficult markets
Multiples of non-investment grade peers have fallen approximately
40%, whereas multiples of EXC and its investment grade peers have
fallen less than 15%
5.6
9.6
Non-Investment Grade
6.8
7.7
Investment Grade
2008
2007
Average Multiples (x)
Source:
Bloomberg, FactSet as of 10/17/2008

6.0%
8.0%
8.80%
12.10%
Exelon Generation1
NRG
4.0
6.0
8.0
10.0
12.0
10/18/2007
12/30/2007
3/12/2008
5/24/2008
8/5/2008
10/17/2008
NRG
Exelon
18
Stable, Predictable Cash Flow Is Awarded
Premium Valuation
Exelon’s strong,
diversified cash
flow streams have
provided for a
more stable
valuation during
periods of
depressed
commodity
valuations and/or
market turbulence.
4.6x
7.5x
Average EV / LTM EBITDA for last:
Current
1 month
6 months
1 year
NRG
4.6
5.8
8.2
8.3
Exelon
7.5
7.8
9.7
9.8
2
BBB+
B+
7/1/08
10/17/08
7/1/08
10/17/08
We believe the
market will likely
discount NRG’s
standalone growth
prospects given the
potential cost to
finance its
development
projects.
Credit
Rating
Exelon Debt (YTM)
NRG Debt (YTM)
Enterprise Value / LTM EBITDA
Cost of Debt
6.7%
1/27/09
BBB
8.4%
1/27/09
BBB+
Source: Per NRG December 1, 2008 investor presentations, Company filings, Bloomberg
1. Yield to maturity of weighted average of Exelon Generation outstanding publicly traded debt 
2. Yield to maturity of weighted average of NRG outstanding publicly traded debt
Source:  FactSet as of 10/17/2008

World Class Nuclear & Fossil Operations
19
NRG:
High performing nuclear plant
•
Top quartile capacity factor: 94.9%
•
Large, well-maintained, relatively young units
Fossil fleet
•
Half of >500 MW coal units are top quartile
capacity factor
•
90% of coal fleet lower-cost PRB and lignite
Combined Company:
•
Largest U.S. power company in terms of generating
capacity: ~51,000 MW fleet (18,000 MW nuclear)
•
Best-in-class nuclear and fossil operations
•
Second lowest carbon emitting intensity in the industry
•
Geographic and fuel diversification with an improved
dispatch profile
Exelon:
Premier U.S. nuclear fleet
•
Best fleet capacity factor: ~ 94%
•
Lowest fleet production costs: ~ $15 / MWh
•
Shortest fleet average refueling outage duration:
24 days
•
Strong reputation for performance and safety

65
70
75
80
85
90
95
100
Operator (# of Reactors)
Range
5-Year Average
Note: Exelon data prior to 2000 represent ComEd-only nuclear fleet.
Sources:
Platt’s,
Nuclear
News,
Nuclear
Energy
Institute
and
Energy
Information
Administration
(Department
of
Energy).
Sustained production excellence
EXC:  World-Class Nuclear Fleet Operator
Average Capacity Factor
Range of Fleet 2-Yr Avg Capacity Factor (2003-2007)
EXC 93.5%
40%
50%
60%
70%
80%
90%
100%
Exelon
Industry
20

1   Quartile
2    Quartile
3   Quartile
4   Quartile
2006-2007 Average Production Cost for
Major Nuclear Operators
(1)
Average
Among major nuclear plant fleet operators, Exelon is consistently
the lowest-cost producer of electricity in the nation
EXC:  Lowest Cost Nuclear Fleet Operator
1.
Source:
2007
Electric
Utility
Cost
Group
(EUCG)
survey.
Includes
Fuel
Cost
plus
Direct
O&M
divided
by
net
generation.
21
st
nd
rd
th

22
Operating in Most Attractive Markets
•
Geographically complementary generation asset base 
•
Predominantly located in competitive markets
•
Strong presence in PJM (Mid-Atlantic and Midwest) and ERCOT
6,280
Contracted*
51,403
2,085
CAL ISO
13,027
ERCOT
By RTO
Combined¹
PJM
22,812
MISO
1,065
ISO NE
2,174
NYISO
3,960
SERC
2,405
WECC
45
Total
53,853
By Fuel Type
Combined¹
Nuclear
18,144
Coal
8,986
Gas/Oil
18,801
Other
1,642
Contracted
6,280
*Contracted in various RTOs, mainly in PJM and ERCOT
1. Excludes international assets.  Before any divestitures.
Exelon
NRG

<1%
<1%
6%
Coal
Exelon
~150,000 GWh¹
Pro Forma
Exelon
~198,000 GWh¹
Nuclear
PRB & Lignite Coal
Other Coal
Gas/Oil
Hydro/Other
2009 Historical Forward Coal Prices
Combined Entity Will Continue to Benefit
from Low Cost, Low Volatility Fuel Sources
Powder River Basin and lignite coal supply (90%
of NRG’s coal) provides low-sulfur at a relatively
stable price as compared to northern and
central Appalachian coal mines.
0.00
1.00
2.00
3.00
4.00
5.00
6.00
Powder River Basin
Northern Appalachian
Central Appalachian
Production Costs
0
2
4
6
8
10
12
2000
2001
2002
2003
2004
2005
2006
2007
Nuclear
Gas
Coal
Petroleum
Combined fleet will continue to be
predominantly low-cost fuel.
93%
Nuclear
1%
3%
75%
Nuclear
15%
PRB &
Lignite Coal
6%
Other
Coal
1. Based on 2007 data, does not include ~38,000
GWh of Exelon Purchased Power.
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Q1 2008
Q2 2008
Q3 2008
cents/Kwh
$/mmbtu
23

0
50
100
150
50
100
150
200
250
2006 Electricity Generated (GWh, in thousands)
NRG
TVA
AEP
Duke
FPL
Southern
Exelon + NRG
Entergy
Exelon
Dominion
Progress
FirstEnergy
Bubble size represents carbon
intensity, expressed in terms of metric
tons of CO2 per MWh generated
SOURCE: EIA and EPA data as compiled by NRDC
Exelon 2020 principles will be adapted to the combined fleet
CO2 Emissions of Largest US Electricity Generators
2006 CO2 Emissions
from Electricity
Generation
(in million metric tons)
Largest Fleet, 2    Lowest Carbon Intensity
Top Generators by CO2 Intensity
10
9
8
7
6
5
4
3
2
1
AEP
NRG
Southern
Duke
FirstEnergy
TVA
Progress
Dominion
FPL
Exelon + NRG
Entergy
Exelon
0.83
0.80
0.74
0.66
0.64
0.64
0.57
0.50
0.35
0.31
0.26
0.07
24
nd

Exelon 2020 and NRG
Offer more low carbon
electricity in the
marketplace
Reduce emissions from
coal/oil fired generation
Help our customers
and the communities
we serve reduce their
GHG emissions
Reduce or offset our
footprint by greening
our operations
Adapt Elements of
Exelon 2020 to NRG
Expand the 2020 Plan
•
Expand internal energy efficiency, SF6,
vehicle, and supply chain initiatives to NRG
portfolio
•
Offset a portion of NRG’s GHG emissions
•
Expand energy efficiency program offerings
•
Add capacity to existing nuclear units
through uprates
•
Add new renewable generation
•
Add new gas-fired capacity
•
Continue to explore new nuclear
•
Address older/higher emitting coal
and oil units
•
Invest in clean coal technology R&D
25
Taking the next step in Exelon’s
commitment to address climate change
Options to Evaluate:

Exelon Offers Lower Risk Growth Opportunities
26
I/B/E/S ’09-’11 EBITDA¹
I/B/E/S ’09-’11 EPS¹
Growth Drivers
“Cost to Achieve
Growth”
•
Nuclear uprates
•
Utility rate base growth
•
PA POLR roll-off
•
PJM capacity markets
•
Carbon upside
•
Regular-way business
operations expense
•
STP nuclear expansion
•
Other low carbon capital
expenditure programs
•
Heavy capital expenditure
investments
•
Dependence on new build
construction including
new nuclear
5.5%
15.6%
3.2%
7.4%
We believe
Exelon’s near-
term growth
drivers are more
predictable and
have dramatically
less capital at risk
than NRG’s
1. Based solely on I/B/E/S estimates for Exelon and NRG as of 1/27/09.  Not necessarily representative of either company’s internal forecasts.  Provided for
illustration
only.  Not intended as earnings guidance or as a forecast of expected results.

Clear Value under Multiple Scenarios
Value
Gas Prices
New Build Costs
Carbon Year/Price
Recession
$0
$6.50
$1,300
Moderate
2014/$22
$7.30
$1,100
Moderate
2020/$22
$7.10
$1,100
Severe
2014/$22
$7.30
$1,500
Moderate
2012/$12
$8.60
$1,500
Moderate
27
We look at fundamental value creation
under a wide range of future commodity
price scenarios and our analysis suggests
$1-3 billion of value, possibly more.
Gas price is long-term price in 2008 $/MMBtu; coal price is long-term price in 2008 $/ton for PRB8800 excluding transportation; new build cost is long-term
combined cycle cost in PJM in 2008 overnight $/kW; carbon year is year in which national cap and trade starts; carbon price is in 2012 $/tonne assuming 7%
escalation; moderate recession assumes conditions consistent with current forward prices; and severe recession assumes five years of no load growth.
Coal Prices
$11.00
$20.00
$20.00
$20.00
$11.00

28
Exelon More Than Meets the “Five
Imperatives”
Outlined by NRG on May 28, 2008
1.
2.
3.
4.
5.
NRG’s Stated Imperatives
MUST
accumulate
generation
at
competitive
cost
This transaction accomplishes in one step what several transactions
might have accomplished for NRG in these regards.  Given the
current difficulty in accessing capital markets, it is unclear whether
NRG would have the ability to meet this objective without Exelon.
Exelon provides NRG stakeholders with broad trading expertise and
sound power marketing and risk management practices.  Exelon’s
significant experience in markets with locational prices is
particularly relevant since ERCOT is moving to a PJM-type structure.
Exelon’s breadth of operations and depth of service allows
significant access to customers, retail providers, and other sales
channels.
NRG stakeholders become part of the most diversified and
competitive generation portfolio operating in 12 different states
and 6 different regional transmission organizations.
Deal expected to provide NRG stakeholders with significant value
and upside and a share of the largest unregulated generation fleet
in the United States.
MUST
be geographically diversified in multiple markets
MUST
develop and expand our route to market through
contracting with retail load providers, trading, direct sales, etc
MUST
have sophisticated ability to trade, procure, hedge, and
originate for electricity and input fuels
MUST
develop depth and breadth in key markets, particularly
across fuel types, transmission constraints and merit order
Exelon Combination More
than Meets These Imperatives