IRVING, Texas - Vistra Corp. (NYSE: VST), a major electricity generator, unveiled plans to enhance the Texas power grid's reliability by adding up to 2,000 megawatts of dispatchable natural gas-fired power capacity across West, Central, and North Texas. This move comes as the state experiences a surge in power demand due to economic growth and population increase.
The company's strategy involves constructing up to 860 megawatts of advanced simple-cycle peaker plants in West Texas, repowering the retiring coal-fueled Coleto Creek Power Plant near Goliad to a gas-fueled facility, and upgrading existing gas plants to add over 600 megawatts of capacity. These initiatives are part of Vistra's commitment to providing dependable and affordable electricity while transitioning to a cleaner energy fleet.
The Coleto Creek Power Plant, set to retire in 2027 to comply with federal Environmental Protection Agency rules, will be repowered to utilize natural gas, resulting in lower carbon emissions and leveraging Texas' abundant gas supply. Vistra aims to expedite the project by using existing infrastructure, including the grid interconnection.
Vistra's existing Texas facilities, which currently operate approximately 11,300 megawatts of natural gas power plants, will undergo upgrades to increase fleet output by more than 500 megawatts in summer and 100 megawatts in winter. With these improvements, nearly half of this capacity will be operational this summer, and the rest is expected by summer 2025.
The company's decision to expand its generation capacity is based on recent market reforms passed by Texas policymakers in the 2023 legislative session, aimed at enhancing grid reliability and providing proper market signals. These reforms include the introduction of a suite of ancillary services, the performance credit mechanism, and an effective reliability standard.
Vistra, the largest electricity generator in Texas, also operates a diversified fleet of power generation assets, including three large solar farms and two battery energy storage assets totaling approximately 600 megawatts. This portfolio helps the company ensure a reliable power supply for Texans and Texas businesses.
The information is based on a press release statement from Vistra Corp.
InvestingPro Insights
Vistra Corp. (NYSE: VST) has been demonstrating a robust performance in the market with a significant return over the last week of 7.79%, and an even more impressive year-to-date price total return of 169.93%. The company's aggressive strategy in enhancing the Texas power grid's reliability aligns with its financial strength, as reflected in its substantial year-over-year price total return of 342.92%. Investors have been closely watching Vistra's moves, especially given the company's consistent dividend increases over the past five years, signaling a strong commitment to shareholder returns.
From an investment perspective, Vistra's management has been actively engaging in share buybacks, which often indicates confidence in the company's future and a commitment to increasing shareholder value. Additionally, with a P/E ratio of 63.01, the company is trading at a low multiple relative to its near-term earnings growth, as highlighted by the InvestingPro Tips. This could suggest that Vistra's stock might be undervalued compared to its earnings potential, making it an attractive buy for value investors.
For those considering an investment in Vistra, the company's financial metrics and strategic initiatives are noteworthy. Moreover, there are more InvestingPro Tips available which could provide deeper insights into Vistra's performance and potential investment opportunities. To explore these additional tips and make a more informed decision, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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