Vistra(VST) - 2019 Q4 - Annual Report

Glossary This section defines key terms and abbreviations used in the report, covering professional vocabulary related to company operations, finance, regulation, and market, such as Ambit, ARO, CAA, ERCOT, EBITDA, Luminant, PJM, REP, and TXU Energy, to ensure clear understanding of the report content Definitions of Terms This section defines key terms and abbreviations used in the report, covering professional vocabulary related to company operations, finance, regulation, and market, such as Ambit, ARO, CAA, ERCOT, EBITDA, Luminant, PJM, REP, and TXU Energy, to ensure clear understanding of the report content - Key terms defined in the report include: - Ambit: Ambit Holdings, LLC and its subsidiaries - ARO: Asset retirement and mining reclamation obligations - CAA: Clean Air Act - ERCOT: Electric Reliability Council of Texas - EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization - Luminant: Vistra Energy's subsidiary engaged in power generation and wholesale energy sales - PJM: PJM Interconnection, LLC - REP: Retail electricity provider - TXU Energy: Vistra Energy's subsidiary engaged in retail electricity sales in the ERCOT region[16][18][20] PART I Business Overview Vistra Energy is an integrated retail and power generation company operating primarily in the U.S. market, providing electricity production, wholesale energy trading, commodity risk management, and retail electricity and natural gas services to end-users. The company has approximately 38,500 MW of generation capacity, serves about 4.6 million customers, and operates in 20 states and the District of Columbia. Its business strategy revolves around an integrated business model, prudent capital allocation, excellent customer service, efficient operations, and comprehensive hedging and commercial management - Vistra Energy is a holding company primarily operating an integrated retail and power generation business in the U.S. market, including electricity production, wholesale energy sales and procurement, commodity risk management, and retail electricity and natural gas to end-users[23] Company Operations Overview | Metric | Data | | :--- | :--- | | Number of customers served | Approximately 4.6 million | | States/regions of operation | 20 states and District of Columbia | | Total generation capacity | Approximately 38,500 MW | | Generation fuel mix | Natural gas, nuclear, coal, solar, and battery storage facilities | | Reporting segments | Retail, ERCOT, PJM, NY/NE, MISO, Asset Closure | - The company's core business strategy includes: - Integrated Business Model: Combining generation, wholesale, and retail platforms to mitigate commodity price volatility and stabilize earnings and cash flow - Prudent Capital Allocation: Maintaining a strong balance sheet, investing in existing asset maintenance and potential growth acquisitions, and returning capital to shareholders through dividends and share repurchases - Excellent Customer Service: Attracting and retaining customers through multi-brands and innovative products (e.g., TXU Energy's Free Nights and Solar Days plans) - Efficient Operations: Operating facilities safely, reliably, environmentally responsibly, and cost-effectively, optimizing cost structure - Integrated Hedging and Commercial Management: Actively managing wholesale electricity price risk through physical delivery contracts, exchange-traded, and over-the-counter financial contracts[29][30][35] Acquisitions and Merger Vistra Energy completed the acquisitions of Ambit and Crius in 2019 to enhance its retail business and generation load matching. Previously, the company completed its merger with Dynegy in 2018, significantly expanding its scale and market diversification - On November 1, 2019, Vistra Energy completed the acquisition of Ambit, but its financial statements do not include Ambit's financial condition and operating results prior to the acquisition date[26] - On July 15, 2019, Vistra Energy completed the acquisition of Crius, but its financial statements do not include Crius's financial condition and operating results prior to the acquisition date[27] - On April 9, 2018, Vistra Energy completed its merger with Dynegy, with Vistra Energy as the surviving company, and its financial statements do not include Dynegy's financial condition and operating results prior to the merger date[28] Recent Developments In February 2020, the Board of Directors declared a quarterly dividend of $0.135 per share, payable in March 2020 - In February 2020, the Board of Directors declared a quarterly dividend of $0.135 per share, payable in March 2020[32] Market Discussion Vistra Energy's operations are divided into six reporting segments: Retail, ERCOT, PJM, NY/NE, MISO, and Asset Closure. The company operates in RTO and ISO regions that manage electricity transmission and pricing through centralized dispatch and market mechanisms. The retail business serves approximately 4.6 million customers, mostly in the Texas ERCOT market, where the company is a leading retail electricity provider. Each generation segment conducts electricity production, wholesale sales, and commodity risk management in its respective RTO/ISO market - Vistra Energy's operations are divided into six reporting segments: Retail, ERCOT, PJM, NY/NE (including NYISO and ISO-NE), MISO, and Asset Closure[33] - RTOs and ISOs are responsible for managing regional transmission infrastructure and markets, dispatching generation facilities, and managing short-term energy and ancillary services markets, with some also ensuring long-term planning reserves through capacity markets[34] - The retail business serves approximately 4.6 million customers, primarily providing electricity and natural gas services in 19 states and the District of Columbia through brands such as TXU Energy and Ambit Energy[37] - The ERCOT market is an energy-only spot market where resource adequacy primarily relies on energy market price signals, with wholesale electricity prices automatically increasing when operating reserves decline. Vistra Energy owns 20 generation facilities in ERCOT with a total capacity of 18,356 MW, including natural gas, lignite/coal, nuclear, and solar facilities[42][44] - The PJM market manages wholesale electricity through Locational Marginal Pricing (LMP) and features a forward capacity auction mechanism. Vistra Energy owns 17 generation facilities in PJM with a total capacity of 10,769 MW, primarily natural gas and coal facilities[46][47] - The NYISO and ISO-NE markets also use LMP pricing and forward capacity markets. Vistra Energy owns 8 CCGT natural gas generation facilities in NY/NE with a total capacity of 4,730 MW[49][51][52] - The MISO market operates day-ahead and real-time energy markets using the LMP method and conducts one-year forward capacity auctions. Vistra Energy owns 4 generation facilities in MISO with a total capacity of 3,408 MW, primarily coal facilities[54][55][56] - The CAISO market also uses LMP pricing, and its capacity market is a bilateral trading market. Vistra Energy owns 2 generation facilities in CAISO with a total capacity of 1,185 MW and plans to develop battery energy storage systems[58][59] - The wholesale commodity risk management team is responsible for dispatching generation facilities and managing electricity, natural gas, and other commodity derivative contracts through hedging and asset optimization strategies to mitigate price volatility risks[60][61] Seasonality Electricity and natural gas demand and market prices are influenced by weather, leading to seasonal fluctuations in the company's operating results. Extreme temperatures in summer and winter typically drive up electricity and natural gas demand and prices - Electricity and natural gas demand and market prices are influenced by weather, leading to seasonal fluctuations in the company's operating results. Extreme temperatures in summer and winter typically drive up electricity and natural gas demand and prices[62] Competition The company faces intense competition in the electricity market from numerous competitors, including regulated utilities, independent power producers, and retail electricity providers, with competitive factors including electricity and fuel prices, grid congestion, government subsidies, and technological advancements - The company faces intense competition in the electricity market, with competitive factors including electricity and fuel prices, grid congestion, government subsidies, new market entrants, new generation assets, and technological advancements[63] - Key competitors include regulated utilities, industrial companies, non-utility generators, independent power producers, retail electricity providers, and other energy marketers[63] Brand Value The company's TXU Energy brand is a significant intellectual property asset, and through acquisitions, it has gained trade names for several other brands. As of December 31, 2019, the company's balance sheet reported approximately $1.391 billion in trademark intangible assets - The TXU Energy brand is a significant intellectual property asset of the company, and through acquisitions, it has gained trade names such as Ambit Energy, Dynegy Energy Services, Homefield Energy, TriEagle Energy, Public Power, and US Gas & Electric[64] Trademark Intangible Assets | Metric | Amount (billion USD) | | :--- | :--- | | Trademark intangible assets as of December 31, 2019 | 1.391 | Environmental Regulations and Related Considerations The company is subject to extensive environmental regulations, including greenhouse gas emissions, air emissions, coal combustion residuals, and water resource management. The company has taken steps to reduce emissions, such as acquiring CCGTs, retiring coal-fired power plants, and developing solar and battery storage projects. Concurrently, the company actively responds to various federal and state regulations, including the Clean Air Act, regional haze programs, NAAQS, Illinois Multi-Pollutant Standard, and Coal Combustion Residual (CCR) and Effluent Limitation Guidelines (ELGs), and faces risks related to associated litigation and compliance costs - The company is subject to extensive environmental regulations from the U.S. Environmental Protection Agency (EPA) and various state environmental regulatory agencies[65] - The company has taken or announced significant measures to adjust its generation fuel mix and reduce emissions, including: * Acquiring 4,042 MW of CCGTs in 2016-2017 and 15,448 MW of CCGTs through merger in 2018 * Retiring 4,167 MW of lignite/coal-fired generation facilities in Texas in 2018, 2,068 MW of coal-fired generation facilities in Illinois in 2019, and planning to retire an additional 585 MW of coal-fired generation facilities in Illinois by the end of 2022 * Beginning commercial operation of the 180 MW Upton 2 solar facility in 2018 * Bringing the 10 MW Upton 2 Battery Energy Storage System (ESS) into operation in 2018, and planning to develop Moss Landing (300 MW) and Oakland (20 MW) ESS[67][75] - The EPA's Affordable Clean Energy (ACE) rule replaced the Clean Power Plan, requiring states to develop plans to regulate greenhouse gas emissions from existing coal-fired power plants, which could have a significant impact on the company's operations, liquidity, or financial condition[71] - The company's generation facilities in Connecticut, Maine, Massachusetts, and New York emitted approximately 7.8 million tons of CO2 in 2019, requiring the purchase of RGGI allowances for compliance, with expected cost increases in the future[75] - The company's generation facilities in Illinois, Ohio, New Jersey, New York, Pennsylvania, Virginia, and West Virginia are subject to CSAPR's NOx ozone season and SO2/NOx annual cap-and-trade programs[83] - Revisions to Illinois' Multi-Pollutant Standard (MPS) rule reduced allowable SO2 and NOx emissions for the MISO fleet by 48% and 42% respectively, leading the company to retire four coal-fired power plants in 2019[95] - Coal Combustion Residual (CCR) rules impose federal minimum requirements for the construction, operation, and closure of existing and new CCR landfills and surface impoundments, potentially resulting in significant costs for the company[99][100] - The EPA's revised Effluent Limitation Guidelines (ELGs) will impose stricter standards on wastewater streams from steam electric generating facilities, potentially increasing the company's capital expenditures[110][111] - The company stores spent nuclear fuel at its nuclear power plant sites and believes its on-site storage capacity is sufficient for the foreseeable future[112] Risk Factors This section details significant risks faced by the company, including market, financial, and economic risks (e.g., commodity price volatility, fuel costs, ineffective hedging, increased competition, economic downturns, liquidity shortfalls, debt burden, and LIBOR transition risk), regulatory and legislative risks (e.g., environmental regulations, permit compliance, market structure changes, subsidy competition, direct sales model compliance risk), and operational risks (e.g., retail business cost fluctuations, customer attrition, cybersecurity, nuclear plant operations, facility maintenance, extreme weather, and technological changes). These risks could have a material adverse effect on the company's business, operating results, liquidity, financial condition, and stock price - The company's revenues, operating results, and cash flows are affected by wholesale electricity market price fluctuations and other market factors, and capital investments do not guarantee returns[115] - Fluctuations in fuel costs (natural gas, coal, oil, nuclear fuel) could adversely affect the company's costs, revenues, operating results, and cash flows[117][118] - The company's assets or positions cannot be fully hedged against changes in commodity prices and market heat rates, and hedging transactions may be ineffective or counterparties may default[121][122][125] - Competition, changes in market structure, government intervention, and subsidized generation could have a material adverse effect on the company's financial condition, operating results, and cash flows[128][129][131] - An economic downturn could lead to decreased energy demand and increased bad debt, materially adversely affecting the company's business[136] - The company's liquidity needs may be difficult to meet, especially during financial market uncertainty or significant commodity price volatility, and non-investment grade credit ratings could lead to higher financing costs and increased collateral requirements[138][140] - As of December 31, 2019, the company's total debt was approximately $11.2 billion, and net debt was approximately $10.9 billion; high debt levels and the phase-out of LIBOR could increase interest costs and limit future financing capabilities[142][147] - Restrictive covenants and events of default under Vistra Operations' credit agreements could have a material adverse effect on the company[148] - The company may not successfully complete future acquisitions or integrations, leading to unexpected expenses and losses[150] - Impairment of goodwill, intangible assets, or long-lived assets could result in significant charges to earnings for the company[153][154] - Changes in ownership could limit the company's ability to use federal net operating loss carryforwards to offset future taxable income[156] - Recent U.S. tax legislation (TCJA) could have a material adverse effect on the company's financial condition, operating results, and cash flows[157] - The company may incur U.S. federal and state income tax liabilities related to the PrefCo preferred stock sale and spin-off, and payment obligations to TRA rights holders could be substantial[158][162][166] - The company's business is affected by complex government regulations and legislation, and failure to adapt to changes in a timely manner could have a material adverse effect[172][173][175] - Failure to obtain or comply with government permits and approvals, or increased compliance costs, could have a material adverse effect on the company[176][177][178][180] - Federal or state legislation, regulations, or litigation related to climate change could have a material adverse effect on the company[182] - The availability and cost of emission allowances could adversely affect the company's operating costs[184] - Mining operations are subject to RCT regulations, and reclamation activities require significant resources[185][186] - Litigation, legal proceedings, and regulatory investigations could result in significant liabilities and reputational damage for the company[187][188] - The retail business is affected by changes in state regulations, and the direct sales model may not comply with laws and regulations, leading to business restrictions or reputational harm[189][190][191][192] - Fluctuations in electricity supply costs and demand could adversely affect the financial performance of the retail business, and competition could lead to customer attrition[193][194][195] - The retail business relies on the infrastructure of local utilities or independent transmission system operators, and any failures could impact customer satisfaction[196] - Cybersecurity and data integrity risks could lead to significant liabilities, reputational damage, and business interruptions[197][199] - Nuclear power plant operations involve significant risks, including unplanned outages, regulatory risks, and nuclear accident risks, which could result in substantial losses and liabilities[200][201] - The operation and maintenance of generation facilities and mining operations are capital-intensive and involve significant risks, which could adversely affect operating results, liquidity, and financial condition[202][203][204][205][206] - Extreme weather conditions and seasonality could have a material adverse effect on the company[208][209] - Acts of terrorism, natural disasters, cyber intrusions, or other catastrophic events could have a material adverse effect on the company's financial condition, operating results, and cash flows[211] - Technological changes or electricity conservation efforts could reduce the value of generation facilities and have a material adverse effect on the company[212][213][214] - The loss of key management personnel and employees could adversely affect the company's business operations, and strikes or work stoppages could also have a material adverse effect[215][216] - Vistra Energy, as a holding company, its ability to obtain funds from its subsidiaries is subject to the subsidiaries' existing and future indebtedness and preferred stock[217] - The company may not pay any common stock dividends in the future[218] Unresolved Staff Comments The company has no unresolved staff comments - The company has no unresolved staff comments[219] Properties Luminant's generation assets are distributed across six RTO/ISO regions, with a total capacity of 38,448 MW, covering various fuel types such as natural gas, coal, nuclear, solar, and oil. The company also procures renewable energy credits through long-term power purchase agreements to meet growing customer demand for renewable energy. Nuclear fuel, coal/lignite, and natural gas supplies are secured through long-term contracts, spot market purchases, and transportation agreements Luminant Generation Assets Overview (as of December 31, 2019) | RTO/ISO | Technology | Primary Fuel | Net Capacity (MW) | | :--- | :--- | :--- | :--- | | ERCOT | CCGT, ST, CT, Nuclear, Solar | Natural gas, Coal, Nuclear, Solar | 18,356 | | PJM | CCGT, ST, CT | Natural gas, Coal, Oil | 10,769 | | NY/NE | CCGT | Natural gas | 4,730 | | MISO | ST, CT | Coal, Natural gas | 3,408 | | CAISO | CCGT, CT | Natural gas, Oil | 1,185 | | Total Capacity | | | 38,448 | - As of December 31, 2019, Vistra Energy had long-term power purchase agreements to procure approximately 880 MW of renewable energy capacity to support wholesale and retail customer electricity sales[223] - Nuclear Fuel: Comanche Peak Nuclear Power Plant's two units have a total capacity of 2,300 MW, with a capacity factor of 96% in 2019. The company has contracted for nuclear fuel purchases for 2020 and most of 2021[224][225] - Coal/Lignite: 10 coal/lignite-fired generation facilities with a total capacity of 11,115 MW. Fuel for PJM and MISO facilities is procured through multi-supplier contracts, while ERCOT facilities use self-mined lignite and purchased coal[226] - Natural Gas: 24 CCGT and 14 peaking generation facilities with a total capacity of 24,595 MW. Fuel demand is met through spot market and near-term procurement contracts, with natural gas transportation agreements ensuring supply[227] Legal Proceedings This section refers to Note 13 of the financial statements, which discusses litigation matters related to the company's generation facilities and EPA reviews - Details of legal proceedings can be found in Note 13 of the financial statements, which discusses litigation matters related to the company's generation facilities and EPA reviews[228] Mine Safety Disclosures Vistra Energy owns and operates 12 surface lignite mines in Texas and owns or leases 2 waste-to-energy surface facilities in Pennsylvania, with these mining operations supervised by MSHA and other federal and state regulatory agencies. The company undergoes regular MSHA inspections and has disclosed related notices of violation, orders, and proposed penalties - Vistra Energy owns and operates 12 surface lignite mines in Texas and owns or leases 2 waste-to-energy surface facilities in Pennsylvania, with these mining operations supervised by MSHA and other federal and state regulatory agencies[229] - MSHA regularly inspects the company's mines and may issue citations or orders for violations of the Mine Act or health and safety standards, often accompanied by proposed penalties[229] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Vistra Energy's common stock has been listed on the New York Stock Exchange since May 10, 2017, under the ticker symbol "VST". As of February 24, 2020, the company had 487,734,006 shares of common stock outstanding. The company initiated a dividend program in the first quarter of 2019 and declared a quarterly dividend of $0.135 per share in February 2020. Additionally, the company implemented a $1.75 billion stock repurchase program, with $332 million remaining for repurchases as of December 31, 2019 - Vistra Energy's common stock has been listed on the New York Stock Exchange since May 10, 2017, under the ticker symbol "VST"[232] Common Stock Information | Metric | Data | | :--- | :--- | | Shares outstanding as of February 24, 2020 | 487,734,006 shares | | Number of shareholders as of February 24, 2020 | 570 | | Quarterly dividend declared in February 2020 | $0.135 per share | | Total dividends in 2019 | $0.50 per share | | Total dividends in 2018 | None | - The company authorized stock repurchase programs totaling $1.75 billion in June and November 2018. As of December 31, 2019, $332 million remained available for additional repurchases[238] Q4 2019 Stock Repurchase Activity | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased Under Publicly Announced Plans | Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans (million) | | :--- | :--- | :--- | :--- | :--- | | October 1 - October 31, 2019 | 674,438 | $26.86 | 674,438 | $335 | | November 1 - November 30, 2019 | 140,200 | $26.55 | 140,200 | $332 | | December 1 - December 31, 2019 | — | $— | — | $332 | | Total for Q4 2019 | 814,638 | $26.81 | 814,638 | $332 | Selected Financial Data This section provides selected consolidated financial information for Vistra Energy Corp. and its predecessor companies for the years ended December 31, 2019, including operating revenues, net income (loss), cash flow from operating activities, earnings per share, and key balance sheet items. The data shows significant growth in operating revenues and net income in 2019, strong cash flow from operating activities, increased total assets and stockholders' equity, and a decrease in long-term debt Vistra Energy Corp. Selected Consolidated Financial Information (million USD, except per share amounts) | Metric | Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2017 | Period October 3 - December 31, 2016 | Period January 1 - October 2, 2016 | Year Ended December 31, 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Revenues | $11,809 | $9,144 | $5,430 | $1,191 | $3,973 | $5,370 | | Operating Income (Loss) | $1,993 | $491 | $198 | $(161) | $568 | $(4,091) | | Net Income (Loss) Attributable to Vistra Energy/Predecessor | $928 | $(54) | $(254) | $(163) | $22,851 | $(4,677) | | Cash Flow from Operating Activities | $2,736 | $1,471 | $1,386 | $81 | $(238) | $237 | | Basic Net Income (Loss) per Common Share | $1.88 | $(0.11) | $(0.59) | $(0.38) | | | | Diluted Net Income (Loss) per Common Share | $1.86 | $(0.11) | $(0.59) | $(0.38) | | | | Dividends per Common Share | $0.50 | $— | $— | $2.32 | | | | Balance Sheet Information (as of December 31): | | | | | | | | Total Assets | $26,616 | $26,024 | $14,600 | $15,167 | | $15,658 | | Property, Plant and Equipment—Net | $13,914 | $14,612 | $4,820 | $4,443 | | $9,349 | | Goodwill and Intangible Assets | $5,301 | $4,561 | $4,437 | $5,112 | | $1,331 | | Long-Term Debt (including current portion) | $10,379 | $11,065 | $4,423 | $4,623 | | $19 | | Short-Term Borrowings and Accounts Receivable Securitization Program | $800 | $339 | $— | $— | | $— | | Total Stockholders' Equity/Members' Equity | $7,959 | $7,863 | $6,342 | $6,597 | | $(22,884) | - 2019 results reflect the operating results of the Crius and Ambit acquisitions[242] - 2018 results reflect the operating results of the merger acquisition[243] - Net income for the predecessor period from January 1 to October 2, 2016, includes $22.121 billion in net gains related to bankruptcy reorganization[244] Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides a detailed discussion of Vistra Energy's financial condition and results of operations for the year ended December 31, 2019. The company achieved strong operating results in 2019, with significant growth in net income and cash flow from operating activities, primarily driven by operational contributions from mergers and acquisitions, unrealized gains from hedging transactions, and cost control. The company actively refinanced debt, reducing interest costs and extending maturities, and returned capital to shareholders through stock repurchases and dividends. This section also provides an in-depth analysis of key operating risks, application of accounting policies, commodity contracts, and market risk management, and discloses future capital expenditure plans and contractual obligations - Vistra Energy is a holding company primarily operating an integrated electricity business in the U.S. market, including power generation, wholesale energy sales and procurement, commodity risk management, and retail electricity and natural gas to end-users[247] - The company has six reporting segments: Retail, ERCOT, PJM, NY/NE, MISO, and Asset Closure[248] - In 2019, the company completed the acquisitions of Ambit and Crius, continued to implement its dividend program and stock repurchase program, and optimized its capital structure through refinancing[249][250][251][253][254][255] PJM Capacity Market Auction Results (USD/MW-day) | Planning Year | RTO Zone | ComEd Zone | MAAC Zone | EMAAC Zone | ATSI Zone | PPL Zone | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 2019-2020 | $80.00 | $182.77 | $80.00 | $99.77 | $80.00 | $80.00 | | 2020-2021 | $100.00 | $202.77 | $100.00 | $119.77 | $100.00 | $100.00 | | 2021-2022 | $88.32 | $188.12 | $86.04 | $187.87 | $76.53 | $86.04 | | 2022-2023 | $140.00 | $195.55 | $140.00 | $165.73 | $171.33 | $140.00 | PJM Segment Net Capacity Sales (MW) | Planning Year | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | | :--- | :--- | :--- | :--- | :--- | | Base Auction Net Capacity Sales | 837 | — | — | — | | CP Auction Net Capacity Sales | 8,342 | 8,582 | 8,963 | — | | Bilateral Net Capacity Sales | 160 | 200 | 200 | 200 | | Total Segment Net Capacity Sales | 9,339 | 8,782 | 9,163 | 200 | | Average Price (USD/MW-day) | $134.43 | $130.04 | $160.55 | $170.00 | NYISO and ISO-NE Capacity Market Auction Results | Market | Planning Year | Price (USD/kW-month) | | :--- | :--- | :--- | | NYISO Rest-of-State (Summer) | 2019 | $1.30 | | NYISO Rest-of-State (Winter) | 2019-2020 | $0.18 | | ISO-NE Rest-of-Pool | 2019-2020 | $7.03 | | ISO-NE Rest-of-Pool | 2020-2021 | $5.30 | | ISO-NE Rest-of-Pool | 2021-2022 | $4.63 | | ISO-NE Rest-of-Pool | 2022-2023 | $3.80 | | ISO-NE Rest-of-Pool | 2023-2024 | $— | MISO Capacity Market Auction Results (USD/MW-day) | Planning Year | Price | | :--- | :--- | | 2019-2020 | $2.99 | MISO Segment Capacity Sales (MW) | Planning Year | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | | :--- | :--- | :--- | :--- | :--- | | MISO Bilateral Capacity Sales | 2,128 | 1,974 | 786 | 432 | | PJM Base Auction Capacity Sales | 220 | — | — | — | | PJM CP Auction Capacity Sales | 133 | 344 | 415 | 125 | | Total MISO Segment Capacity Sales | 2,481 | 2,318 | 1,201 | 557 | | Average Price (USD/kW-month) | $3.81 | $3.52 | $5.06 | $5.01 | CAISO Moss Landing Bilateral Capacity Sales (Average MW) | Calendar Year | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | | Bilateral Capacity Sales | 1,020 | — | — | - Natural gas price and market heat rate volatility are key operating risks, which the company manages through retail sales and hedging activities[261][264][266] NYMEX Henry Hub Natural Gas Price Trends (USD/MMBtu) | As of December 31 | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Settlement Price | $2.57 | $3.15 | $2.96 | $2.52 | $2.61 | | Three-Year Forward Price | $2.60 | $2.70 | $2.80 | $2.90 | $3.00 | Generation Hedging Levels as of December 31, 2019 | Generation Type | Region | 2020 | 2021 | | :--- | :--- | :--- | :--- | | Coal/Nuclear/Renewables | ERCOT | 95% | 71% | | | PJM | 100% | 91% | | | MISO | 100% | 45% | | Natural Gas | ERCOT | 81% | 10% | | | PJM | 84% | 19% | | | NYISO/ISO-NE | 100% | 45% | | | CAISO | 100% | 34% | - Nuclear asset outage risk: Simultaneous outage of both Comanche Peak nuclear units is estimated to have an adverse impact of approximately $2 million per day on pre-tax earnings[273] - Cyber/data security and infrastructure protection risks: Cyberattacks could lead to business interruptions, reputational damage, and legal claims[276] - Seasonality: Electricity and natural gas demand and market prices are influenced by weather, leading to fluctuations in operating results[279] - Key accounting policies include: acquisition accounting, fresh-start reporting, derivative instruments and mark-to-market accounting, revenue recognition, income tax accounting, tax receivable agreement (TRA) accounting, asset retirement obligations (ARO), and impairment of goodwill and other long-lived assets[280][281][286][287][292][296][299][303] Vistra Energy Consolidated Financial Results (million USD) | Metric | Year Ended December 31, 2019 | Year Ended December 31, 2018 | Change | | :--- | :--- | :--- | :--- | | Operating Revenues | $11,809 | $9,144 | $2,665 | | Fuel, Purchased Power, and Delivery Expenses | $(5,742) | $(5,036) | $(706) | | Operating Costs | $(1,530) | $(1,297) | $(233) | | Depreciation and Amortization | $(1,640) | $(1,394) | $(246) | | Selling, General and Administrative Expenses | $(904) | $(926) | $22 | | Operating Income | $1,993 | $491 | $1,502 | | Other Income | $56 | $47 | $9 | | Other Deductions | $(15) | $(5) | $(10) | | Interest Expense and Related Charges | $(797) | $(572) | $(225) | | Tax Receivable Agreement Impact | $(37) | $(79) | $42 | | Equity in Earnings of Unconsolidated Investments | $16 | $17 | $(1) | | Income (Loss) Before Income Taxes | $1,216 | $(101) | $1,317 | | Income Tax (Expense) Benefit | $(290) | $45 | $(335) | | Net Income (Loss) | $926 | $(56) | $982 | - In 2019, consolidated net income increased by $982 million to $926 million, primarily driven by a $1.076 billion increase in unrealized gains from hedging transactions, $339 million in operating contributions from mergers, $79 million from Crius and Ambit acquisitions, and a $118 million reduction in transition and integration costs[310] Adjusted EBITDA (million USD) | Metric | Year Ended December 31, 2019 | Year Ended December 31, 2018 | Change | | :--- | :--- | :--- | :--- | | Net Income (Loss) | $926 | $(56) | $982 | | Income Tax (Expense) Benefit | $290 | $(45) | $335 | | Interest Expense and Related Charges | $797 | $572 | $225 | | Depreciation and Amortization | $1,713 | $1,472 | $241 | | EBITDA | $3,726 | $1,943 | $1,783 | | Unrealized Net (Gains) Losses (Hedging Transactions) | $(696) | $380 | $(1,076) | | Power Plant Retirement Costs | $54 | $— | $54 | | Fresh Start/Purchase Accounting Impact | $30 | $41 | $(11) | | Tax Receivable Agreement Impact | $37 | $79 | $(42) | | Non-Cash Compensation Expense | $48 | $73 | $(25) | | Transition and Integration Costs | $115 | $233 | $(118) | | Other, Net | $11 | $(7) | $18 | | Adjusted EBITDA | $3,325 | $2,760 | $565 | - Cash flow from operating activities in 2019 was $2.736 billion, an increase of $1.265 billion from $1.471 billion in 2018, primarily due to increased operating cash flow from mergers, strong operating performance in the ERCOT segment, and reduced cash usage for margin deposits[314][349] Cash Flow from Investing Activities for 2019 and 2018 (million USD) | Item | Year Ended December 31, 2019 | Year Ended December 31, 2018 | | :--- | :--- | :--- | | Capital Expenditures (including LTSA prepayments) | $(520) | $(378) | | Nuclear Fuel Purchases | $(89) | $(118) | | Development and Growth Expenditures | $(104) | $(34) | | Ambit Acquisition (net of cash acquired) | $(506) | $— | | Crius Acquisition (net of cash acquired) | $(374) | $— | | Cash Acquired in Merger | $— | $445 | | Proceeds from Sales of Nuclear Decommissioning Trust Securities | $431 | $252 | | Investments in Nuclear Decommissioning Trust Securities | $(453) | $(274) | | Proceeds from Sales of Environmental Allowances | $197 | $1 | | Purchases of Environmental Allowances | $(322) | $(5) | | Other, Net | $23 | $10 | | Total Cash Outflow from Investing Activities | $(1,717) | $(101) | - Cash outflow from financing activities in 2019 was $1.237 billion, a decrease from $2.723 billion in 2018, primarily due to reduced term loan repayments, increased issuance of long-term debt, and stock repurchases and dividend payments[353] Available Liquidity as of December 31, 2019 (million USD) | Metric | December 31, 2019 | December 31, 2018 | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | $300 | $636 | $(336) | | Vistra Operations Credit Facility—Revolving Credit Facility | $1,426 | $1,135 | $291 | | Total Available Liquidity | $1,726 | $1,771 | $(45) | Estimated Capital Expenditures and Nuclear Fuel Purchases for 2020 (million USD) | Item | Amount | | :--- | :--- | | Investments in Generation and Mining Facilities | $532 | | Nuclear Fuel Purchases | $85 | | Information Technology and Other Corporate Investments | $3 | | Growth and Development Expenditures | $315 | | Total | $935 | - The company expects to pay no federal income taxes in the next 12 months, approximately $26 million in state income taxes (offset by $14 million in state tax refunds), and no TRA payments. It expects to receive approximately $100 million in refundable AMT credits[360] Contractual Cash Obligations as of December 31, 2019 (million USD) | Contractual Cash Obligation | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Debt – Principal | $273 | $136 | $2,076 | $7,949 | $10,434 | | Debt – Interest | $502 | $967 | $954 | $912 | $3,335 | | Operating and Finance Leases | $29 | $42 | $36 | $82 | $189 | | Long-Term Service and Maintenance Contracts | $167 | $324 | $313 | $1,975 | $2,779 | | Commodity Purchase and Service Agreement Obligations | $1,378 | $733 | $709 | $974 | $3,794 | | Total Contractual Cash Obligations | $2,349 | $2,202 | $4,088 | $11,892 | $20,531 | Results of Operations In 2019, Vistra Energy's consolidated net income significantly increased to $926 million, primarily due to unrealized gains from hedging transactions, operational contributions from mergers and acquisitions, and reduced transition and integration costs. Retail segment net income decreased, but the ERCOT generation segment saw strong growth, and PJM, NY/NE, and MISO segments also improved due to merged operations. The Asset Closure segment incurred losses due to power plant retirements Vistra Energy Consolidated Financial Results (million USD) | Metric | Year Ended December 31, 2019 | Year Ended December 31, 2018 | Change | | :--- | :--- | :--- | :--- | | Operating Revenues | $11,809 | $9,144 | $2,665 | | Operating Income | $1,993 | $491 | $1,502 | | Net Income (Loss) | $926 | $(56) | $982 | | Cash Flow from Operating Activities | $2,736 | $1,471 | $1,265 | | Adjusted EBITDA | $3,325 | $2,760 | $565 | - In 2019, the company achieved a net income of $926 million, a significant improvement from a net loss of $56 million in 2018, primarily driven by a $1.076 billion increase in unrealized gains from hedging transactions, $339 million in operating contributions from mergers, $79 million from Crius and Ambit acquisitions, and a $118 million reduction in transition and integration costs[310] - Interest expense and related charges increased by $225 million to $797 million, primarily reflecting changes in unrealized mark-to-market losses on interest rate swaps and increased interest expense due to higher debt after the merger[311] - In 2019, the retail segment's net income decreased by $578 million to $134 million, and Adjusted EBITDA decreased by $38 million to $807 million, primarily due to increased electricity costs in the ERCOT market, timing mismatches in multi-year retail contracts, unfavorable weather, and increased bad debt expense[332][333] - The change in ERCOT generation segment performance was primarily driven by a $438 million increase in net generation revenues, reflecting higher realized power prices, lower natural gas fuel costs, and a 1,219 GWh increase in total generation[339] - The change in PJM segment performance was primarily driven by $201 million in operating contributions from the merger acquisition in the first quarter of 2019[340] - The change in NY/NE segment performance was primarily driven by $86 million in operating contributions from the merger acquisition in the first quarter of 2019[341] - The change in MISO segment performance was primarily driven by $52 million in operating contributions from the merger acquisition in the first quarter of 2019 and a $30 million reduction in operating costs, partially offset by a $57 million decrease in net revenues[342] - Asset Closure segment performance reflects the retirement of multiple power plants in 2019 and 2018, with operating costs including ongoing expenses related to these plant closures[343] Quantitative and Qualitative Disclosures About Market Risk This section discloses the market risks faced by the company, including commodity price risk, interest rate risk, and credit risk. The company monitors and manages commodity price risk through risk management policies and VaR methodology, and uses interest rate swaps to hedge against interest rate fluctuations. Credit risk is minimized by evaluating counterparties, monitoring exposures, and using credit enhancement measures. As of December 31, 2019, the company's total credit exposure was $1.407 billion, with $1.024 billion in the retail segment and $383 million in the generation segment, most of which is related to investment-grade customers - The company monitors market risk through a risk management group, which is independent of wholesale commercial operations, using VaR methodology and stress testing scenarios to measure risk[383][386] - The company's business is subject to inherent risks from price fluctuations in electricity, natural gas, and other energy-related products, and manages these risks through hedging, long-term contracts, and proprietary trading[384][385] VaR for Underlying Generation Assets and Energy-Related Contracts (million USD) | Metric | Year Ended December 31, 2019 | Year Ended December 31, 2018 | | :--- | :--- | :--- | | Month-End Average VaR | $263 | $182 | | Month-End High VaR | $520 | $267 | | Month-End Low VaR | $103 | $65 | - The increase in VaR risk metrics in 2019 was primarily driven by increased volatility in the ERCOT market[389] - The company uses interest rate swaps to hedge against interest rate changes on its floating-rate debt[392] Interest Rate Sensitive Financial Instruments as of December 31, 2019 and 2018 (million USD, except percentages) | Debt Type | 2019 Total Carrying Value | 2019 Total Fair Value | 2018 Total Carrying Value | 2018 Total Fair Value | | :--- | :--- | :--- | :--- | :--- | | Floating Rate Debt | $2,700 | $2,717 | $5,813 | $5,599 | | Debt Swapped to Fixed Rate (notional amount) | $6,720 | | $7,717 | | | Debt Swapped to Floating Rate (notional amount) | $2,120 | | $— | | - As of December 31, 2019, a one percentage point increase in floating interest rates could reduce annual pre-tax earnings by approximately $9 million over the next 12 months[392] - Credit Risk: The company minimizes credit risk by evaluating counterparties, monitoring exposures, and using credit enhancement measures such as standardized master agreements, margin deposits, and letters of credit[393] - As of December 31, 2019, the company's resource adequacy contract with PG&E was approved and fully enforceable[396] Total Credit Exposure as of December 31, 2019 (million USD) | Category | Retail Segment | ERCOT, PJM, NY/NE, and MISO Segments | | :--- | :--- | :--- | | Trade Accounts Receivable | $1,008 | $67 | | Derivative Assets | $16 | $316 | | Total Exposure (excluding collateral) | $1,024 | $383 | | Collateral (cash and letters of credit) | $53 | $1 | | Net Exposure | $971 | $382 | - The company has significant credit risk concentration with two counterparties, accounting for 53% of net exposure, but the risk is considered acceptable due to their investment-grade credit ratings and business relationships[402] Financial Statements and Supplementary Data This section contains Vistra Energy Corp.'s consolidated financial statements for the year ended December 31, 2019, including statements of operations, comprehensive income (loss), cash flows, changes in equity, and balance sheets, along with related financial statement notes. The independent registered public accounting firm issued an unqualified opinion on the financial statements and the effectiveness of internal control. The notes provide detailed disclosures on business overview, accounting policies, acquisitions, power plant retirements, revenue, goodwill, income taxes, TRA obligations, earnings per share, accounts receivable securitization, long-term debt, leases, commitments and contingencies, equity, fair value measurements, derivative instruments, pension and OPEB plans, stock-based compensation, related party transactions, segment information, and supplementary financial information - Independent registered public accounting firm Deloitte & Touche LLP issued an unqualified opinion on Vistra Energy Corp.'s consolidated financial statements as of December 31, 2019, and an unqualified opinion on the effectiveness of internal control[412][413] - Key audit matters include: the estimation of Tax Receivable Agreement (TRA) obligations (involving significant judgment regarding future taxable income), fair value measurement of Level 3 derivative assets and liabilities (involving complex models and unobservable inputs), and the estimation of mining land reclamation asset retirement obligations (involving complexity and significant judgment)[417][418][419][420][423][424] Vistra Energy Corp. Consolidated Statements of Operations (million USD, except per share amounts) | Metric | Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2017 | | :--- | :--- | :--- | :--- | | Operating Revenues | $11,809 | $9,144 | $5,430 | | Fuel, Purchased Power, and Delivery Expenses | $(5,742) | $(5,036) | $(2,935) | | Operating Costs | $(1,530) | $(1,297) | $(973) | | Depreciation and Amortization | $(1,640) | $(1,394) | $(699) | | Selling, General and Administrative Expenses | $(904) | $(926) | $(600) | | Operating Income | $1,993 | $491 | $198 | | Net Income (Loss) | $926 | $(56) | $(254) | | Net Income (Loss) Attributable to Vistra Energy | $928 | $(54) | $(254) | | Basic Net Income (Loss) per Common Share | $1.88 | $(0.11) | $(0.59) | | Diluted Net Income (Loss) per Common Share | $1.86 | $(0.11) | $(0.59) | Vistra Energy Corp. Consolidated Statements of Comprehensive Income (Loss) (million USD) | Metric | Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2017 | | :--- | :--- | :--- | :--- | | Net Income (Loss) | $926 | $(56) | $(254) | | Other Comprehensive Income (Loss), Net of Tax | $(8) | $(5) | $(23) | | Comprehensive Income (Loss) | $918 | $(61) | $(277) | | Comprehensive Income (Loss) Attributable to Vistra Energy | $920 | $(59) | $(277) | Vistra Energy Corp. Consolidated Statements of Cash Flows (million USD) | Cash Flow Type | Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2017 | | :--- | :--- | :--- | :--- | | Cash Flow from Operating Activities | $2,736 | $1,471 | $1,386 | | Cash Outflow from Investing Activities | $(1,717) | $(101) | $(727) | | Cash Outflow from Financing Activities | $(1,237) | $(2,723) | $(201) | | Net Change in Cash, Cash Equivalents, and Restricted Cash | $(218) | $(1,353) | $458 | | Cash, Cash Equivalents, and Restricted Cash—End of Period | $475 | $693 | $2,046 | Vistra Energy Corp. Consolidated Balance Sheets (million USD) | Asset | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $300 | $636 | | Trade Accounts Receivable—Net | $1,365 | $1,087 | | Inventory | $469 | $412 | | Commodity and Other Derivative Contractual Assets | $1,469 | $839 | | Property, Plant and Equipment—Net | $13,914 | $14,612 | | Goodwill | $2,553 | $2,068 | | Identifiable Intangible Assets—Net | $2,748 | $2,493 | | Accumulated Deferred Income Tax Assets | $1,066 | $1,336 | | Total Assets | $26,616 | $26,024 | | Liabilities and Equity | | | | Short-Term Borrowings | $350 | $— | | Accounts Receivable Securitization Program | $450 | $339 | | Long-Term Debt (including current portion) | $10,379 | $11,065 | | Commodity and Other Derivative Contractual Liabilities | $1,748 | $1,646 | | Tax Receivable Agreement Obligation | $455 | $420 | | Asset Retirement Obligations | $2,238 | $2,373 | | Total Liabilities | $18,656 | $18,157 | | Total Equity | $7,960 | $7,867 | | Total Liabilities and Equity | $26,616 | $26,024 | Vistra Energy Corp. Consolidated Statements of Changes in Equity (million USD) | Equity Item | Balance December 31, 2016 | Balance December 31, 2017 | Balance December 31, 2018 | Balance December 31, 2019 | | :--- | :--- | :--- | :--- | :--- | | Common Stock | $4 | $4 | $5 | $5 | | Treasury Stock | $— | $— | $(778) | $(973) | | Additional Paid-in Capital | $7,742 | $7,765 | $10,107 | $9,721 | | Accumulated Deficit | $(1,155) | $(1,410) | $(1,449) | $(764) | | Accumulated Other Comprehensive Income (Loss) | $6 | $(17) | $(22) | $(30) | | Total Stockholders' Equity | $6,597 | $6,342 | $7,863 | $7,959 | | Noncontrolling Interests | $— | $— | $4 | $1 | | Total Equity | $6,597 | $6,342 | $7,867 | $7,960 | Note 1. Business and Significant Accounting Policies This note details Vistra Energy's business nature, reporting segments, recent acquisitions (Ambit, Crius, and Dynegy merger), and the basis of financial statement preparation. It also outlines the company's key accounting policies and estimation methods for derivative instruments, revenue recognition, long-lived asset impairment, goodwill, nuclear fuel, major maintenance costs, pension and OPEB plans, stock-based compensation, taxes, TRA obligations, contingencies, cash and cash equivalents, restricted cash, property, plant, and equipment, asset retirement obligations, inventory, investments, unconsolidated investments, noncontrolling interests, treasury stock, and leases. Additionally, it discloses the adoption of new accounting standards and their impact on the financial statements - Vistra Energy is a holding company primarily operating an integrated retail and power generation business in the U.S. market, including electricity production, wholesale energy sales and procurement, commodity risk management, and retail electricity and natural gas to end-users[450] - The company has six reporting segments: Retail, ERCOT, PJM, NY/NE, MISO, and Asset Closure[451] - The acquisitions of Ambit and Crius were completed in 2019, and the merger with Dynegy was completed in 2018, with the financial statement impacts of these transactions beginning after their respective acquisition dates[452][453][454] - Key accounting policies include: derivative instruments and mark-to-market accounting, revenue recognition, impairment of long-lived assets, goodwill and indefinite-lived intangible assets, nuclear fuel, major maintenance costs, pension and OPEB plans, stock-based compensation, sales and use taxes, franchise and gross receipts taxes, income taxes, tax receivable agreement (TRA) accounting, contingencies accounting, cash and cash equivalents, restricted cash, property, plant, and equipment, asset retirement obligations (ARO), inventory, investments, unconsolidated investments, noncontrolling interests, treasury stock, and leases[457][460][463][465][466][467][468][471][472][473][474][477][479][480][481][482][484][485][486][487][488][489][490][491][492][493] - On January 1, 2019, the company adopted the new lease accounting standard (ASU 2016-02), resulting in the recognition of $85 million in right-of-use assets and $123 million in lease liabilities on the balance sheet[494][495] Note 2. Acquisitions, Merger Transaction and Business Combination Accounting This note details Vistra Energy's 2019 acquisitions of Ambit and Crius, and the 2018 merger with Dynegy. The Ambit and Crius acquisitions, totaling $555 million and $400 million respectively, aimed to enhance retail capabilities and generation load matching. The Dynegy merger, valued at approximately $2.3 billion, significantly expanded the company's scale and market diversification. All transactions were accounted for as business combinations, with acquired assets and assumed liabilities measured at fair value, and preliminary purchase price allocations and unaudited pro forma financial information are disclosed - On November 1, 2019, Vistra Energy completed the acquisition of Ambit for a purchase price of $555 million, aimed at enhancing retail marketing capabilities and generation load matching[507][509] - On July 15, 2019, Vistra Energy completed the acquisition of Crius for a purchase price of $400 million, aimed at reducing risk, expanding high-margin channels, and enhancing the integrated value proposition[508][510] Preliminary Purchase Price Allocation for Ambit and Crius Transactions (million USD) | Item | Ambit Transaction | Crius Transaction | | :--- | :--- | :--- | | Cash and Cash Equivalents and Restricted Cash | $49 | $26 | | Net Working Capital | $29 | $(4) | | Identifiable Intangible Assets | $263 | $292 | | Goodwill | $214 | $257 | | Commodity and Other Derivative Contracts Assets | $23 | $18 | | Other Noncurrent Assets | $13 | $18 | | Total Acquired Assets and Net Working Capital | $591 | $607 | | Long-Term Debt (including current portion) | $— | $141 | | Commodity and Other Derivative Contracts Liabilities | $28 | $40 | | Accumulated Deferred Income Taxes | $— | $9 | | Other Noncurrent Liabilities and Deferred Credits | $8 | $17 | | Total Assumed Liabilities | $36 | $207 | | Acquired Identifiable Net Assets | $555 | $400 | - In 2019, the Ambit transaction contributed $193 million in revenue and $2 million in net income; the Crius transaction contributed $453 million in revenue and zero net income[515] - On April 9, 2018, Vistra Energy completed its merger with Dynegy, with a merger consideration of approximately $2.3 billion, aimed at increasing scale, market diversification, rebalancing the asset portfolio, and improving earnings and cash flow[520][522][525] Final Purchase Price Allocation for Dynegy Merger (million USD) | Item | Amount | | :--- | :--- | | Cash and Cash Equivalents | $445 | | Trade Accounts Receivable, Inventory, Prepaid Expenses, and Other Current Assets | $853 | | Property, Plant and Equipment | $10,535 | | Accumulated Deferred Income Taxes | $518 | | Identifiable Intangible Assets | $351 | | Goodwill | $175 | | Other Noncurrent Assets | $419 | | Total Acquired Assets | $13,296 | | Trade Accounts Payable and Other Current Liabilities | $733 | | Commodity and Other Derivative Contracts Assets and Liabilities, Net | $422 | | Asset Retirement Obligations (including current portion) | $475 | | Long-Term Debt (including current portion) | $8,919 | | Other Noncurrent Liabilities | $469 | | Total Assumed Liabilities | $11,018 | | Acquired Identifiable Net Assets | $2,278 | | Noncontrolling Interests | $5 | | Total Purchase Price | $2,273 | - After the merger in 2018, Dynegy operations contributed $3.902 billion in revenue and $224 million in net income[528] Note 3. Acquisition and Development of Generation Facilities Vistra Energy actively invests in battery storage and solar projects, including the operational Upton 2 battery storage system and solar facility, and planned battery storage projects in Oakland and Moss Landing, California. The company also acquired a 1,054 MW CCGT natural gas power plant in Odessa, Texas, in 2017 - The Upton 2 Battery Energy Storage System (ESS) became operational in December 2018, a 10 MW lithium-ion ESS designed to capture excess solar energy and release it during peak demand[532] - A 20 MW battery ESS is planned for development in Oakland, with a 10-year resource adequacy contract signed, pending CPUC approval[533] - A 300 MW battery ESS is planned for development in Moss Landing, with a 20-year resource adequacy contract signed with PG&E, and construction began in 2019, with commercial operation expected in the fourth quarter of 2020[534] - The Upton 2 solar facility, an approximately 180 MW utility-scale solar photovoltaic generation facility, began commercial operation in June 2018, with a total investment of approximately $231 million[535] - In August 2017, the company acquired a 1,054 MW CCGT natural gas power plant in Odessa, Texas, for approximately $355 million, including a five-year earnings-sharing provision[536][537] Note 4. Retirement of Generation Facilities Vistra Energy retired multiple generation facilities in 2018 and 2019 in response to market economics and environmental regulatory changes. In 2019, the company retired four coal-fired power plants in Illinois totaling 2,068 MW and plans to retire the Edwards facility by the end of 2022. In 2018, the company retired the Northeastern waste coal plant in Pennsylvania and two joint venture coal-fired power plants in Ohio. In early 2018, the company retired three lignite/coal-fired power plants in Texas totaling 4,167 MW, incurring approximately $206 million in retirement costs in 2017 - In September 2019, the company announced a settlement in litigation regarding the Edwards generation facility, which will be retired by the end of 2022. In August 2019, the company announced the retirement of four coal-fired power plants in Illinois totaling 2,068 MW to comply with changes to the Illinois Multi-Pollutant Standard rule[538] Illinois Generation Facilities Retired or to be Retired (Total 2,653 MW) | Name | Location | Fuel Type | Net Generation Capacity (MW) | Number of Units | Retirement Date | | :--- | :--- | :--- | :--- | :--- | :--- | | Coffeen | Coffeen, IL | Coal | 915 | 2 | November 1, 2019 | | Duck Creek | Canton, IL | Coal | 425 | 1 | December 15, 2019 | | Havana | Havana, IL | Coal | 434 | 1 | November 1, 2019 | | Hennepin | Hennepin, IL | Coal | 294 | 2 | November 1, 2019 | | Edwards | Bartonville, IL | Coal | 585 | 2 | By end of 2022 | | Total | | | 2,653 | 8 | | - In October 2018, the company retired the 51 MW Northeastern waste coal plant in Pennsylvania due to uneconomic operations[539] Joint Venture Generation Facilities Retired in May 2018 (Total 883 MW) | Name | Location | F