NRG Energy Inc. President and CEO Mauricio Gutierrez contends that Texas is moving in the right direction to avoid another "systemic failure" similar to the grid and market problems experienced in February.

"I am very optimistic and encouraged after the Texas Legislature voted [to approve] some new legislation to improve and address specifically some of the shortcomings that we all experienced during Winter Storm Uri," Gutierrez told S&P Global Market Intelligence in a June 17 interview following NRG's virtual investor day. "They are looking at market design to make sure that we don't have the type of outcomes we had that week."

On June 8, Texas Gov. Greg Abbott signed Senate Bill 2 and Senate Bill 3, which reform the Electric Reliability Council Of Texas Inc. and the grid operator's board of directors, create a power alert system and adopt more stringent standards for the weatherization of power and natural gas infrastructure.

The February arctic blast, which stretched across the central U.S., cost American and European power companies more than $10 billion.

NRG on May 6 reported a $967 million financial impact from the deadly storm, which caused a near grid collapse in ERCOT. During the storm, the Public Utility Commission of Texas ordered electricity prices to the $9,000/MWh cap after load shedding artificially reduced power demand.

As a fully integrated power provider, NRG also owns large retail electricity companies in Texas and voiced its concerns about the storm response to state lawmakers.

"I am very encouraged about what they've done and I think they addressed pretty significant issues to ensure that this doesn't happen again in the future," Gutierrez said.

The CEO also has been vocal about his opposition to outside interference in the market including proposals to build out-of-market generation backed by billions of dollars in guaranteed profits.

"One thing that we're for certain is that the competitive market even with some of the shortcomings that we all experienced worked a lot better than public power. I mean, public power was impacted significantly and they are going to pass the costs to their consumers," Gutierrez said. "Consumers in the competitive space didn't have any impact specifically on prices and I think that worked as expected."

Gutierrez added that some proposals from outside ERCOT are "inefficient in that I think they compromise the reliability of the system more than they do in fixing [the issues]."

"I mean, certainly we need to do things to improve the Texas competitive market and I think the Texas Legislature is on the right track in addressing some of these things," the CEO said. "But we have to keep in mind that this was a systemic failure, not just in electric but also natural gas and the delivery system. I mean everybody across the value chain from wellhead to light bulb, there were shortcomings.

"I know that the changes that they are making [are] going to make the market stronger, which in turn is going to make our business stronger."

Gutierrez also weighed in on the future of the merchant generation sector, as NRG invests heavily in its strategy, on which management provided updates during the June 17 investor presentation, to offer more products to consumers.

"We saw more value [in] going toward the customer and we made a very decisive pivot a couple of years ago. We got our financials in order. We simplified our company and now we have an opportunity to really capitalize on this market opportunity," Gutierrez said. "Whether other companies will evolve to this or not, it's hard for me to say. I think you are going to have some that will focus on power generation and I don't think they are going to be public companies. They will be in private hands."