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Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2025

Estimated Carrying Amounts and Fair Values of Financial Instruments Not Carried at Fair Value

The estimated carrying value and fair value of the Company's long-term debt, including current portion, is as follows:


	As of December 31,
	2025				2024
(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value



Convertible Senior Notes(a)	$	—	$	—	$	232	$	509
Other long-term debt, including current portion	16,565		16,405		10,648		10,252
Total long-term debt, including current portion(b)	$	16,565	$	16,405	$	10,880	$	10,761

(a)The Company settled all of the outstanding Convertible Senior Notes as of July 8, 2025. For further discussion, see Note 12, Long-term Debt and Finance Leases

(b)Excludes deferred financing costs, which are recorded as a reduction to long-term debt on the Company's consolidated balance sheets

The following table presents the level within the fair value hierarchy for long-term debt, including current portion, as of December 31, 2025 and December 31, 2024:


	December 31, 2025				December 31, 2024
(In millions)	Level 2		Level 3		Level 2		Level 3
Convertible Senior Notes	$	—	$	—	$	509	$	—

Other long-term debt, including current portion	16,033		372		10,252		—
Total long-term debt, including current portion	$	16,033	$	372	$	10,761	$	—

Assets and Liabilities Measured and Recorded at Fair Value Measured on a Recurring Basis

The following tables present assets and liabilities measured and recorded at fair value on the Company's consolidated balance sheets on a recurring basis and their level within the fair value hierarchy:


	As of December 31, 2025
	Fair Value
(In millions)	Total		Level 1		Level 2		Level 3
Investments in securities (classified within other current and non-current assets)	$	33	$	—	$	33	$	—











Derivative assets:
Interest rate contracts	—		—		—		—
Foreign exchange contracts	3		—		3		—
Commodity contracts(a)	3,132		267		2,552		313



Equity securities measured using net asset value practical expedient (classified within other non-current assets)	7
Total assets	$	3,175	$	267	$	2,588	$	313
Derivative liabilities:
Interest rate contracts	$	4	$	—	$	4	$	—
Foreign exchange contracts	3		—		3		—
Commodity contracts(a)	2,932		352		2,377		203
Consumer Financing Program	283		—		—		283
Total liabilities	$	3,222	$	352	$	2,384	$	486

(a)Excludes $622 million of derivative assets and $138 million of derivative liabilities that were elected as NPNS on October 1, 2024 and are no longer valued at fair value on a recurring basis. For further discussion, see Item 15 — Note 6, Accounting for Derivative Instruments and Hedging Activities


	As of December 31, 2024
	Fair Value
(In millions)	Total		Level 1		Level 2		Level 3
Investments in securities (classified within other current and non-current assets)	$	28	$	—	$	28	$	—










Derivative assets:
Interest rate contracts	9		—		9		—
Foreign exchange contracts	22		—		22		—
Commodity contracts(a)	3,368		528		2,645		195

Equity securities measured using net asset value practical expedient (classified within other non-current assets)	6


Total assets	$	3,433	$	528	$	2,704	$	195
Derivative liabilities:
Interest rate contracts	$	3	$	—	$	3	$	—
Foreign exchange contracts	1		—		1		—
Commodity contracts(a)	2,970		432		2,382		156
Consumer Financing Program	203		—		—		203
Total liabilities	$	3,177	$	432	$	2,386	$	359

(a)Excludes $997 million of derivative assets and $227 million of derivative liabilities that were elected as NPNS on October 1, 2024 and are no longer valued at fair value on a recurring basis. For further discussion, see Item 15 — Note 6, Accounting for Derivative Instruments and Hedging Activities

Reconciliation of Beginning and Ending Balances for Financial Instruments that are Recognized at Fair Value using Significant Unobservable Inputs

The following table reconciles, for the years ended December 31, 2025 and 2024, the beginning and ending balances for financial instruments that are recognized at fair value in the consolidated financial statements using significant unobservable inputs, for commodity derivatives:


	Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
	Commodity Derivatives (a)
	For the Year Ended December 31,
(In millions)	2025		2024
Beginning balance	$	39	$	119
Contracts added from Texas Generation Portfolio acquisition	(91)		—
Total gains/(losses) realized/unrealized included in earnings	83		(113)

Purchases	39		42

Transfers into Level 3(b)	40		2
Transfers out of Level 3(b)	—		(11)
Ending balance	$	110	$	39
Gains/(Losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held as of year-end	$	57	$	(55)

(a)Consists of derivatives assets and liabilities, net, excluding derivative liabilities from Consumer Financing Program, which are presented in a separate table below

(b)Transfers into/out of Level 3 within the fair value hierarchy are related to the availability of consensus pricing and external broker quotes, including volatilities, and are valued as of the end of the reporting period. All other transfers into/out of Level 3 are from/to Level 2

Reconciliation of Contractual Obligations of Consumer Financing Program Recognized at Fair Value

The following table reconciles, for the years ended December 31, 2025 and 2024, the beginning and ending balances of the contractual obligations from the Consumer Financing Program that are recognized at fair value in the condensed consolidated financial statements, using significant unobservable inputs:


	Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
	Consumer Financing Program
	For the Year Ended December 31,
(In millions)	2025		2024
Beginning balance	$	(203)	$	(134)

New contractual obligations	(198)		(147)
Settlements	139		92
Total losses included in earnings	(21)		(14)
Ending balance	$	(283)	$	(203)

Schedule of Significant Unobservable Inputs used in Developing Fair Value of Level 3 Positions

The following tables quantify the significant unobservable inputs used in developing the fair value of the Company's Level 3 positions as of December 31, 2025 and 2024:


	Significant Unobservable Inputs
	December 31, 2025
	Fair Value						Input/Range
(in millions, except as noted)	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Low			High			Weighted Average
Natural Gas Contracts	$	47	$	40	Discounted Cash Flow	Forward Market Price ($ per MMBtu)	$	0		$	17		$	5
Power Contracts	168		64		Discounted Cash Flow	Forward Market Price ($ per MWh)	0			125			29
Capacity Contracts	20		18		Discounted Cash Flow	Forward Market Price ($ per MW/Day)	49			577			270
RECs	12		25		Discounted Cash Flow	Forward Market Price ($ per Certificate)	2			370			17
FTRs	22		11		Discounted Cash Flow	Auction Prices ($ per MWh)	(50)			19,100			0
Power Options	44		45		Option Models	Volatilities	22		%	517		%	110		%
Consumer Financing Program	—		283		Discounted Cash Flow	Collateral Default Rates	1.18		%	42.00		%	7.86		%
					Discounted Cash Flow	Collateral Prepayment Rates	2.00		%	3.00		%	2.52		%
					Discounted Cash Flow	Credit Loss Rates	6.40		%	60.00		%	16.94		%
	$	313	$	486


	Significant Unobservable Inputs
	December 31, 2024
	Fair Value						Input/Range
(in millions, except as noted)	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Low			High			Weighted Average
Natural Gas Contracts	$	56	$	15	Discounted Cash Flow	Forward Market Price ($ per MMBtu)	$	2		$	27		$	4
Power Contracts	57		86		Discounted Cash Flow	Forward Market Price ($ per MWh)	0			109			39
Capacity Contracts	34		13		Discounted Cash Flow	Forward Market Price ($ per MW/Day)	16			510			220
RECs	30		14		Discounted Cash Flow	Forward Market Price ($ per Certificate)	2			375			15
FTRs	18		28		Discounted Cash Flow	Auction Prices ($ per MWh)	(50)			16,180			0
Consumer Financing Program	—		203		Discounted Cash Flow	Collateral Default Rates	0.52		%	76.80		%	11.71		%
					Discounted Cash Flow	Collateral Prepayment Rates	2.00		%	3.00		%	2.83		%
					Discounted Cash Flow	Credit Loss Rates	6.00		%	60.00		%	14.22		%
	$	195	$	359

Fair Value Inputs, Sensitivity Analysis

The following table provides sensitivity of fair value measurements to increases/(decreases) in significant unobservable inputs as of December 31, 2025 and 2024:

Significant Unobservable Input

Position

Change In Input

Impact on Fair Value Measurement

Forward Market Price Natural Gas/Power/Capacity/Renewable Energy Certificates

Buy

Increase/(Decrease)

Higher/(Lower)

Forward Market Price Natural Gas/Power/Capacity/Renewable Energy Certificates

Sell

Increase/(Decrease)

Lower/(Higher)

FTR Prices

Buy

Increase/(Decrease)

Higher/(Lower)

FTR Prices

Sell

Increase/(Decrease)

Lower/(Higher)

Volatilities

Buy

Increase/(Decrease)

Higher/(Lower)

Volatilities

Sell

Increase/(Decrease)

Lower/(Higher)

Collateral Default Rates

n/a

Increase/(Decrease)

Higher/(Lower)

Collateral Prepayment Rates

n/a

Increase/(Decrease)

Lower/(Higher)

Credit Loss Rates

n/a

Increase/(Decrease)

Higher/(Lower)

Net Counterparty Credit Exposure by Industry Sector and by Counterparty Credit Quality

The following tables highlight net counterparty credit exposure by industry sector and by counterparty credit quality. Net counterparty credit exposure is defined as the aggregate net asset position for NRG with counterparties where netting is permitted under the enabling agreement and includes all cash flow, mark-to-market and NPNS, and non-derivative transactions. The exposure is shown net of collateral held and includes amounts net of receivables or payables.


Category	Net Exposure (a) (b) (% of Total)
Utilities, energy merchants, marketers and other	74	%
Financial institutions	26


Total	100	%


Category	Net Exposure (a) (b) (% of Total)
Investment grade	67	%
Non-Investment grade/Non-Rated	33

Total	100	%

(a)Counterparty credit exposure excludes coal transportation contracts because of the unavailability of market prices

(b)The figures in the tables above exclude potential counterparty credit exposure related to RTOs, ISOs, registered commodity exchanges and certain long term contracts

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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