Vistra Continues to Pare Coal-Fired Assets, Adopt Newer Technology After Transformative 2018

Researched by Industrial Info Resources (Sugar Land, Texas)--Vistra Energy Corporation (NYSE:VST) (Irving, Texas), the parent company of retail electricity provider TXU Energy and utility Luminant, capped off a transitional 2018 with stronger revenues and reduced net loss, compared with 2017. The company continued to embrace natural gas, renewable and alternative forms of energy as it reduced its presence in the coal-fired market. Industrial Info is tracking nearly $2.2 billion in active projects involving Vistra.

Click on the image at right for a graph detailing Vistra's active projects, by fuel type. The numbers for "coal" include plant and pond closures.

One of the biggest challenges facing Vistra is its aging coal-fired power plants, which have become increasingly difficult to justify economically amid consistently lower prices for natural gas and renewable energy sources. This trend is seen most prominently in Illinois, where a newly elected governor and the state's Environmental Protection Agency are pushing hard for more renewable sources. But even before last year's elections, Vistra had announced plans to close a series of ash ponds at coal-fired power plants across the state. They include:

• $120 million closure of East Fly Ash Pond at the Baldwin Energy Complex in Baldwin, Illinois; see project report
• $70 million closure of East Ash Pond at the Joppa Generating Station in Joppa, Illinois; see project report
• $50 million ash pond closure the Havana Power Station in Havana, Illinois; see project report
• $40 million bottom-ash pond closure at the E.D. Edwards Energy Center in Peoria; see project report
• $30 million bottom-ash pond closure at the Coffeen Power Station in Coffeen; see project report

All values cited are estimates. The ash pond closures are in their early design phases and, if implemented, would not wrap up until mid-2022 at the earliest. Although Vistra has been asking the state to help it find ways to make its coal-fired plants more affordable, one executive seemed to acknowledge that doing so would only amount to buying time.

"I have been very open about the fact that we've got an older, an aging fleet [in Illinois] and the capacity market design is horrid," said Curt Morgan, the chief executive officer of Vistra, in an earnings-related conference call. "It's just not a very good market, and we've got to challenge the assets. So we're trying to build something where we can have a sustainable business. And I think part of that is making some hard decisions, like we did in Texas, to retire plants."

Vistra already has ceased operations at what once was New England's largest fossil-fuel power plant, the Brayton Point Power Station in Somerset, Massachusetts, which also was frequently cited as one of the region's biggest polluters. Vistra is preparing to undergo a $12 million dismantlement and demolishing of the plant, which it sold to Commercial Development Company Incorporated (St. Louis, Missouri) early last year. For more information, see Industrial Info's project report.

Vistra's efforts in emerging technologies include its estimated $500 million addition of a battery energy-storage unit at the Moss Landing Power Station in Monterey County, California, which is owned by subsidiary Dynegy. The 300-megawatt (MW) project is one part of Pacific Gas & Electric's (PG&E) proposal to build the world's two largest battery systems in the Golden State. In November, the California Public Utilities Commission (CPUC) approved Vistra's 20-year resource adequacy contract with PG&E for the Moss Landing addition. For more information, see Industrial Info's project report.

Vistra is eager to branch out in new directions. In February, it agreed to add $50 million to its initial $328 million offer to purchase Crius Energy Trust, following an unexpected rival offer from a third party. An acquisition of Crius would make Vistra the largest U.S. seller of electricity; although centered in the U.S. northeast, Crius sells power in Texas under several brand names, including TriEagle Energy, Energy Rewards and Viridian Energy.

Dynegy is considering an estimated $28 million steam-turbine refurbishment at the Ontelaunee Energy Center in Reading, Pennsylvania. The project, scheduled to kick off in the fourth quarter, would clean up and repair a 200-MW turbine built by Siemens AG. For more information, see Industrial Info's project report.

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