About Vistra

Vistra Corp., through its subsidiaries (Vistra), operates an integrated retail and electric power generation business primarily in markets throughout the U.S. The company engages in competitive energy market activities including electricity generation, wholesale energy sales and purchases, commodity risk management and retail sales of electricity and natural gas to end users. The company serves approximately 3.5 million customers and operate in 20 states and the District of Columbia. The company’s generation fleet totals approximately 37,000 megawatts (MW) of generation capacity with a portfolio of natural gas, nuclear, coal, solar and battery energy storage facilities. Segments The company operates through six segments: Retail, Texas, East, West, Sunset and Asset Closure. The Retail segment represents Vistra's retail sales of electricity and natural gas to residential, small business and commercial and industrial customers. The Texas segment represents Vistra's electricity generation operations in the Electric Reliability Council of Texas, Inc. (ERCOT) market, other than assets that are part of the Sunset or Asset Closure segments, respectively. The East segment represents Vistra's electricity generation operations in the Eastern Interconnection of the U.S. electric grid, other than assets that are part of the Sunset or Asset Closure segments, respectively, and includes operations in the PJM Interconnection, LLC (PJM), ISO New England Inc. (ISO-NE) and New York Independent System Operator, Inc. (NYISO) markets. The West segment represents Vistra's electricity generation operations in the California Independent System Operator (CAISO) market, including its development of battery ESS projects at the company’s Moss Landing power plant site. The Sunset segment represents generation plants with announced retirement dates after December 31, 2022. Separately reporting the Sunset segment differentiates operating plants with announced retirement plans from the company’s other operating plants in the Texas, East and West segments. The Asset Closure segment is engaged in the decommissioning and reclamation of retired plants and mines. The Asset Closure segment also includes results from generation plants the company retired in the year ended December 31, 2022. Business Strategy The company is a leader in the clean power transition. With a strong zero-carbon generation portfolio and a deliberate and responsible strategy to decarbonize, the company is focused on delivering healthy returns and value for all stakeholders. The company’s strategy is to responsibly and reliably grow its businesses through economically attractive investments, including in retail business and renewable, energy storage and other assets that assist in reducing its carbon footprint and create a more sustainable and resilient company well positioned to generate long-term value for all of its stakeholders. The company’s integrated business model is an important component of its business strategy. This element of the company’s business provides long-term sustainable solutions enabled by its diversified portfolio. Through its retail brands, including TXU Energy, Ambit Energy, Value Based Brands, Dynegy Energy Services, Homefield Energy, TriEagle Energy, Public Power and U.S. Gas & Electric, the company serves the retail electricity and natural gas needs of end-use residential, small business and commercial and industrial electricity customers through multiple sales and marketing channels. Retail The Retail segment is engaged in retail sales of electricity, natural gas and related services to approximately 3.5 million customers. Substantially all of these activities are conducted by TXU Energy, Ambit Energy, Value Based Brands, Dynegy Energy Services, Homefield Energy, TriEagle Energy, Public Power and U.S. Gas & Electric across 19 U.S. states and the District of Columbia. The largest portion of the company’s retail operations are in Texas, where it provides retail electricity to approximately 2.4 million customers in ERCOT. The company is an active participant in the competitive ERCOT retail market and continue to be a market leader, which is driven by, among other things, strong brands, innovative products and services and excellent customer service. As of December 31, 2022, the company provided electricity to approximately 30% of the residential customers in ERCOT and for approximately 16% of business customers' demand. The company’s retail business also offers a comprehensive suite of green products and services, including 100% wind and solar options, as well as thermostats, dashboards and other programs designed to encourage reduced consumption and increased energy efficiency. The company’s integrated power generation and wholesale operation allows it to efficiently obtain the electricity needed to serve its customers at the lowest cost. The integrated model enables the company to structure products and contracts in a way that offers significant value compared to stand-alone retail electric providers. Additionally, the company’s wholesale commodity risk management operations help increase the profitability of its retail business by allowing it to bypass bid-ask spread in the market (particularly for illiquid products and time periods) and achieve lower collateral costs as compared to other, non-integrated retail electric providers. Outside of ERCOT, the company also serves residential, municipal, commercial and industrial customers substantially through its Homefield Energy, Dynegy Energy Services, Public Power, U.S. Gas & Electric and Ambit Energy retail businesses, through which it provides retail electricity, natural gas and related services to approximately 1.1 million customers in 18 states and the District of Columbia. Texas Texas segment consists of 21 power generation facilities totaling 18,141 MW of generation capacity in ERCOT. The company has announced the potential for additional development of solar photovoltaic power generation facilities and battery ESS in Texas, with estimated commercial operation dates for these facilities beginning in 2024. ERCOT — Electric Reliability Council of Texas, Inc. (ERCOT) is an independent system operator (ISO) that manages the flow of electricity from approximately 98,000 MW of expected Summer 2023 peak generation capacity to approximately 26 million Texas customers, representing approximately 90% of the state's electric load. East East segment consists of 21 power generation facilities in 10 states totaling 12,093 MW of generating capacity in PJM, ISO-NE and NYISO. The company plans to develop up to 300 MW of solar photovoltaic power generation facilities and up to 150 MW of battery ESS at retired or to-be-retired plant sites in Illinois with estimated commercial operation dates for these facilities ranging from 2024 to 2025. PJM — PJM is an RTO that manages the flow of electricity from approximately 185,000 MW of generation capacity to approximately 65 million customers in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. Like ERCOT, PJM administers markets for wholesale electricity and provides transmission planning for the region, utilizing a locational marginal pricing (LMP) methodology which calculates a price for every generator and load point within PJM. PJM operates day-ahead and real-time markets into which generators can bid to provide energy and ancillary services. PJM also administers a forward capacity auction, the Reliability Pricing Model (RPM), which establishes a long-term market for capacity. The company has participated in RPM auctions for years up to and including PJM's planning year 2024-2025, which ends May 31, 2025. The company also enters into bilateral capacity transactions. PJM's Capacity Performance (CP) rules were designed to improve system reliability and include penalties for under-performing units and reward for over-performing units during shortage events. Full transition of the capacity market to CP rules occurred in planning year 2020-2021. An independent market monitor continually monitors PJM markets to ensure a robust, competitive market and to identify improper behavior by any entity. ISO-NE — ISO-NE is an ISO that manages the flow of electricity from approximately 32,600 MW of winter generation capacity to approximately 15 million customers in the states of Vermont, New Hampshire, Massachusetts, Connecticut, Rhode Island and Maine. ISO-NE dispatches power plants to meet system energy and reliability needs and settles physical power deliveries at LMPs. Its energy markets allow market participants to buy and sell energy and ancillary services at prices established through real-time and day-ahead auctions. Energy prices vary among the locations in ISO-NE and are largely influenced by transmission constraints and fuel supply. ISO-NE offers a forward capacity market where capacity prices are determined through auctions. Performance incentive rules have the potential to increase capacity payments for those resources that are providing excess energy or reserves during a shortage event, while penalizing those that produce less than the required level. NYISO — NYISO is an ISO that manages the flow of electricity from approximately 37,500 MW of installed summer generation capacity to approximately 20 million New York customers. NYISO dispatches power plants to meet system energy and reliability needs and settles physical power deliveries at LMPs. Its energy markets allow market participants to buy and sell energy and ancillary services at prices established through real-time and day-ahead auctions. Energy prices vary among the regional zones and locations in the NYISO and are largely influenced by transmission constraints and fuel supply. NYISO offers a forward capacity market where capacity prices are determined through auctions. Strip auctions occur one to two months prior to the commencement of a six-month seasonal planning period. Subsequent auctions provide an opportunity to sell excess capacity for the balance of the seasonal planning period or the upcoming month. Due to the short-term nature of the NYISO-operated capacity auctions and a relatively liquid bilateral market for NYISO capacity products, the company’s Independence facility sells a significant portion of its capacity through bilateral transactions. The balance is cleared through the seasonal and monthly capacity auctions. West West segment consists of two power generation facilities totaling 1,130 MW of generation capacity and the first two phases of a battery ESS facility totaling 400 MW in CAISO, all of which are located in California. The company plans to develop an additional 350 MW in the third phase of its battery ESS at the company’s Moss Landing Power Plant site with an estimated commercial operation date in the summer of 2023. CAISO — CAISO is an ISO that manages the flow of electricity to approximately 32 million customers primarily in California, representing approximately 80% percent of the state's electric load. Sunset Sunset segment consists of six power generation facilities totaling 5,163 MW of generating capacity in MISO, PJM and ERCOT. The Sunset segment represents plants with announced retirement plans between 2022 and 2027 that were previously reported in the ERCOT, PJM and MISO segments. MISO — MISO is an RTO that manages the flow of electricity from approximately 190,000 MW of installed generation capacity to approximately 45 million customers in all or parts of Iowa, Minnesota, North Dakota, Wisconsin, Michigan, Kentucky, Indiana, Illinois, Missouri, Arkansas, Mississippi, Texas, Louisiana, Montana, South Dakota and Manitoba, Canada. MISO dispatches power plants to meet system energy and reliability needs and settles physical power deliveries at LMPs. Its energy markets allow market participants to buy and sell energy and ancillary services at prices established through real-time and day-ahead auctions. Energy prices vary among the regional zones and locations in MISO and are largely influenced by transmission constraints and fuel supply. An independent market monitor is responsible for evaluating the performance of the markets and identifying conduct by market participants or MISO that may compromise the efficiency or distort the outcome of the markets. MISO administers a one-year Planning Resource Auction for the next planning year from June 1st of the year to May 31st of the following year. In 2022, FERC approved MISO's proposal to change the annual Planning Resource Auction into a seasonal auction, effective for the 2023-2024 planning year. The company participates in these auctions with open capacity that has not been committed through bilateral or retail transactions. The company also participates in the MISO annual and monthly financial transmission rights auctions to manage the cost of its transmission congestion, as measured by the congestion component of the LMP price differential between two points on the transmission grid across the market area. Wholesale Operations The company’s wholesale commodity risk management group is responsible for dispatching its generation fleet in response to market needs after implementing portfolio optimization strategies, thus linking and integrating the generation fleet production with its retail customer and wholesale sales opportunities. Market demand, also known as load, faced by electric power systems, such as those the company operates in, varies from moment to moment as a result of changes in business and residential demand, which is often driven by weather. Unlike most other commodities, the production and consumption of electricity must remain balanced on an instantaneous basis. Seasonality The demand for and market prices of electricity and natural gas are affected by weather. As a result, the company’s operating results are impacted by extreme or sustained weather conditions. Typically, demand for and the price of electricity is higher in the summer and winter seasons, when the temperatures are more extreme, and the demand for and price of natural gas is also generally higher in the winter. Brand Value The company’s TXU Energy brand, which has been used to sell electricity to customers in the competitive retail electricity market in Texas for approximately 20 years, is registered and protected by trademark law and is the only material intellectual property asset that it owns. The company has also acquired the trade names for Ambit Energy, Dynegy Energy Services, Homefield Energy, TriEagle Energy, Public Power and U.S. Gas & Electric through the Ambit Transaction, Crius Transaction and the Merger, as the case may be. Environmental Regulations and Related Considerations The company is subject to extensive environmental regulation by governmental authorities, including the U.S. Environmental Protection Agency (EPA) and the environmental regulatory bodies of states in which it operates. History The company was founded in 1882. It was incorporated in 2016. The company was formerly known as Vistra Energy Corp. and changed its name to Vistra Corp. in 2020.