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to Vistra Corp.
−Removed: to distinguish from companies that are involved in exploring for, producing, refining, or transporting fossil fuels (many of which use "energy" in their names) and to better reflect our integrated business model, which combines a retail electricity and natural gas business focused on serving its customers with new and innovative products and services and an electric power generation business powering the communities we serve with safe, reliable power.
+Added: to distinguish from companies that are involved in exploring for, producing, refining, or transporting fossil fuels (many of which use "energy" in their names) and to better reflect our integrated business model, which combines a retail electricity and natural gas business focused on serving its customers with new and innovative products and services and an electric power generation business leading the clean power transition through our Vistra Zero portfolio while powering the communities we serve with safe, reliable and affordable power.
We serve approximately 4.3 million customers and operate in 20 states and the District of Columbia.
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(i) Retail, (ii) Texas, (iii) East, (iv) West, (v) Sunset and (vi) Asset Closure.
−Removed: In the third quarter of 2020, Vistra updated its reportable segments to reflect changes in how the Company's Chief Operating Decision Maker (CODM) makes operating decisions, assesses performance and allocates resources.
−Removed: Management believes that the revised reportable segments provide enhanced transparency into the Company's long-term sustainable assets and its commitment to managing the retirement of economically and environmentally challenged plants.
−Removed: See Market Discussion below and Note 20 to the Financial Statements for further information concerning the updates to our reportable segments.
−Removed: Acquisitions and Merger
−Removed: Ambit Transaction — On November 1, 2019, an indirect, wholly owned subsidiary of Vistra completed the acquisition of Ambit (Ambit Transaction).
−Removed: Because the Ambit Transaction closed on November 1, 2019, Vistra's consolidated financial statements and the notes related thereto do not include the financial condition or the operating results of Ambit and its subsidiaries prior to November 1, 2019.
−Removed: See Note 2 to the Financial Statements for a summary of the Ambit Transaction.
−Removed: Crius Transaction — On July 15, 2019, an indirect, wholly owned subsidiary of Vistra completed the acquisition of the equity interests of two wholly owned subsidiaries of Crius that indirectly own the operating business of Crius (Crius Transaction).
−Removed: Because the Crius Transaction closed on July 15, 2019, Vistra's consolidated financial statements and the notes related thereto do not include the financial condition or the operating results of Crius and its subsidiaries prior to July 15, 2019.
−Removed: See Note 2 to the Financial Statements for a summary of the Crius Transaction.
−Removed: Dynegy Merger Transaction — On the Merger Date, Vistra and Dynegy completed the transactions contemplated by the Merger Agreement.
−Removed: Pursuant to the Merger Agreement, Dynegy merged with and into Vistra, with Vistra continuing as the surviving corporation.
−Removed: Because the Merger closed on April 9, 2018, Vistra's consolidated financial statements and the notes related thereto do not include the financial condition or the operating results of Dynegy prior to April 9, 2018.
−Removed: See Note 2 to the Financial Statements for a summary of the Merger transaction.
+Added: See Market Discussion below and Note 20 to the Financial Statements for further information concerning our reportable segments, including an update of our reportable segments in the third quarter of 2020.
Business Strategy
−Removed: Our business strategy is to deliver long-term stakeholder value through a focus on the following areas:
−Removed: • Integrated business model.
−Removed: We believe the key factor that distinguishes us from others in the competitive electricity industry is the integrated nature of our business ( i.e.
−Removed: , pairing our reliable and efficient mining, diversified generation fleet and wholesale commodity risk management capabilities with our retail platform).
−Removed: Our business strategy is guided by our integrated business model because we believe it is our core competitive advantage and differentiates us from our non-integrated competitors by reducing the effects of commodity price movements and contributing to earnings and cash flow stability.
−Removed: Consequently, our integrated business model is at the core of our business strategy.
+Added: Vistra is a leader in the clean power transition.
+Added: 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.
+Added: Our business strategy is focused on the following areas:
• Growth and transformation.
−Removed: Vistra's strategy is to grow our business through prudent investments in attractive retail, renewable, and energy storage assets while reducing our carbon footprint and creating a more sustainable company with enduring long-term value for our stakeholders.
−Removed: We expect to meaningfully transform our generation portfolio over the next decade by growing our portfolio of zero-carbon resources, including solar and energy storage, through our Vistra Zero brand and by retiring approximately 7,000 MWs of coal assets between now and year-end 2027.
−Removed: We believe our long-term asset mix will support electric system reliability while providing customers with cost-effective energy that meets their sustainable preferences.
+Added: Vistra's strategy is to responsibly and reliably grow our business through economically attractive investments in retail, renewable, and energy storage assets that assist in reducing our carbon footprint and create a more sustainable and resilient company well positioned to generate stable long-term value for all of our stakeholders.
+Added: Since 2010, Vistra has retired more than 12,000 MW of coal and gas power plants resulting in a 45% reduction of greenhouse gas (GHG emissions), a 45% reduction in carbon dioxide (CO 2 ) emissions, a 55% reduction in nitrogen oxide (NO X ) emissions, and a 75% reduction in sulfur dioxide (SO 2) emissions through year-end 2020, compared to a 2010 baseline.
+Added: Now, we are transforming our generation portfolio through investments in zero-carbon resources and new carbon-reducing technologies, targeting net-zero carbon emissions by 2050.
+Added: By year-end 2026, our Vistra Zero portfolio is expected to grow to 7,300 MW of zero-carbon generation, including solar, energy storage and our Comanche Peak nuclear power plant.
+Added: Additionally, we have announced the retirement of approximately 7,500 MW of coal-fueled power plants by 2027, with plans to repurpose feasible sites to solar and energy storage developments.
+Added: Repurposed sites provide a strategic advantage in the development of greener power due to the interconnection infrastructure already available, but additionally, and importantly, they allow us to continue supporting the local communities and our employees in those areas.
+Added: We believe our diversified asset mix will support the reliability of the electric system while providing customers with cost-effective energy that meets their sustainable preferences throughout the clean power transition.
Our growth strategy leverages our core capabilities of multi-channel retail marketing in large and competitive markets, operating large-scale, environmentally sensitive, and diverse assets across a variety of fuel technologies, fuel logistics and management, commodity risk management, cost control, and energy infrastructure investing.
−Removed: We intend to opportunistically evaluate the acquisition and development of high-quality energy infrastructure assets and businesses, including renewable energy and battery storage assets as well as retail businesses, that complement our core capabilities and enable us to achieve operational or financial synergies.
−Removed: While we are intent on growing our business and creating value for our stockholders, we are committed to making disciplined investments that are consistent with our focus on maintaining a strong balance sheet and strong liquidity profile.
−Removed: As a result, consistent with our disciplined capital allocation approval process, growth opportunities we pursue must have compelling economic value and align with or enhance our business strategy.
+Added: To advance our sustainability and energy transition initiatives, in December 2021, we adopted our Green Finance Framework, pursuant to which we issued $1.0 billion of Series B Preferred Stock to finance or refinance, in whole or in part, new or existing eligible green projects.
+Added: We intend to opportunistically evaluate the acquisition and development of high-quality generation and storage assets and power-related businesses, including renewable energy and battery storage assets as well as retail businesses, that complement our core capabilities and align with our operational, financial and sustainability goals.
+Added: We pride ourselves on our deliberate and responsible approach to grow and transform, considering impacts on all stakeholders.
+Added: We make disciplined investments that are consistent with our focus on maintaining both a strong balance sheet and strong liquidity profile and our commitment to ensuring grid reliability, affordable power, and pursuit of a just transition away from carbon-emitting generation assets for the communities in which we operate and serve.
+Added: As a result, consistent with our disciplined capital allocation approval process, the growth opportunities we pursue must have compelling economic value and align with or enhance our purpose and core principles.
• Disciplined capital allocation.
−Removed: Vistra takes a balanced approach to capital allocation, focusing on maintaining a strong balance sheet, investing prudently in the maintenance of our existing assets and potential growth acquisitions, and returning capital to stockholders.
−Removed: A strong balance sheet helps to ensure Vistra's interest expense is manageable in a variety of wholesale power price environments while giving Vistra access to flexible and diverse sources of liquidity.
−Removed: We prudently make necessary capital investments to maintain the safety and reliability of our facilities while also investing in new technologies when economic, including solar assets and battery storage systems, resulting in a continued modernization of Vistra's generation fleet.
−Removed: Because we believe cost discipline and strong management of our assets and commodity positions are necessary to deliver long-term value to our stakeholders, we generally make capital allocation decisions that we believe will lead to attractive cash returns on investment, including by returning capital to our stockholders through quarterly dividends and our share repurchase program (see Note 14 to the Financial Statements).
+Added: Vistra takes a disciplined approach to capital allocation in support of our commitment to maintain a strong balance sheet.
+Added: We thoughtfully make capital allocation decisions that we believe will lead to attractive cash returns on investment, including returning capital to our stockholders through quarterly dividends and our share repurchase program as reflected in our current plans to return up to $7.5 billion in capital to common shareholders and reduce up to $3 billion in debt (exclusive of potential limited recourse project financing) through 2026.
+Added: In addition to our dedicated approach to returning value to all stakeholders, we invest prudently in the maintenance of our existing assets and potential growth acquisitions.
+Added: A strong balance sheet ensures Vistra's interest expense is manageable in a variety of wholesale power price environments while giving Vistra access to flexible and diverse sources of liquidity needed to make prudent capital investment decisions.
+Added: We believe in cost discipline and strong commercial management of our assets and commodity positions to deliver long-term value to our stakeholders, to maintain the safety and reliability of our facilities, all while accelerating growth in our Vistra Zero portfolio pipeline with cost-efficient capital and investment in new technologies when economic, including solar assets and energy storage systems, resulting in a continued modernization of Vistra's generation fleet.
+Added: • Integrated business model.
+Added: Our integrated business model is an important component of our business strategy.
+Added: This element of our business provides long-term sustainable solutions enabled by our diversified portfolio.
+Added: This key factor distinguishes us from our electricity competitors by pairing our reliable and efficient mining, diversified generation fleet and wholesale commodity risk management capabilities with our retail platform.
+Added: Coupling retail with generation is a core competitive advantage that reduces the effects of commodity price movements and contributes to stable earnings and predictable cash flow, a crucial feature of the strategy as Vistra responsibly grows its renewables portfolio and winds down its carbon-emitting assets.
• Superior customer service.
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Gas & Electric, we serve the retail electricity and natural gas needs of end-use residential, small business, commercial and industrial electricity customers through multiple sales and marketing channels.
−Removed: In addition to benefitting from our integrated business model, we leverage our brands, our commitment to a consistent and reliable product offering, the backstop of the electricity generated by our generation fleet, our wholesale commodity risk management operations and our strong customer service to differentiate our products and services from our competitors.
−Removed: We strive to be at the forefront of innovation with new offerings and customer experiences to reinforce our value proposition.
−Removed: We maintain a focus on solutions that give our customers choice, convenience and control over how and when they use electricity and related services, including TXU Energy's Free Nights and Solar Days residential plans, MyEnergy Dashboard SM , TXU Energy's iThermostat product and mobile solution, the TXU Energy Rewards program, the TXU Energy Green Up SM renewable energy credit program and a diverse set of solar options.
−Removed: Our focus on superior customer service will guide our efforts to acquire new residential and commercial customers, serve and retain existing customers and maintain valuable sales channels for our electricity generation resources.
−Removed: We believe our customer service, products and trusted brands will result in high residential customer retention rates, particularly in Texas where our TXU Energy brand has maintained its residential customers in a highly competitive retail market.
+Added: In addition to benefitting from our integrated business model, we leverage our brands, our commitment to a safe, reliable and affordable product offering, the backstop of the electricity generated by our generation fleet, our wholesale commodity risk management operations and our strong customer service to differentiate our products and solutions from our competitors.
+Added: We strive to be at the forefront of innovation with new environmentally-conscious and sustainable-focused product offerings and customer experiences to reinforce our value proposition.
+Added: We maintain a focus on solutions that provide our customers with choice, convenience and control over how and when they use electricity and related services, including TXU Energy's Free Nights and Solar Days residential plans, MyEnergy Dashboard SM , TXU Energy's iThermostat product and mobile solution, the TXU Energy Rewards program, the TXU Energy Green Up SM renewable energy credit program and a diverse set of solar options.
+Added: Our focus on superior customer service guides our efforts in acquiring new residential and commercial customers, serving and retaining existing customers, and maintaining valuable sales channels for our electricity generation resources.
+Added: We believe our dependable customer service, innovative products and trusted brands will result in high residential customer retention rates, particularly in Texas where our TXU Energy brand has maintained its residential customers in a highly competitive retail market.
• Excellence in operations while maintaining an efficient cost structure.
−Removed: We believe that operating our facilities in a safe, reliable, environmentally compliant, and cost-effective and efficient manner is a foundation for delivering long-term stakeholder value.
−Removed: We also believe stakeholder value is increased as a result of making disciplined investments that enable our generation facilities to operate not only effectively and efficiently, but also safely, reliably and in an environmentally compliant manner.
+Added: We believe delivering long-term stakeholder value is increased as a result of making disciplined investments that enable our generation facilities to operate not only effectively and efficiently, but also safely, reliably and in an environmentally compliant manner as we lead in the clean power transition through the acceleration of our renewables portfolio.
We believe that an ongoing focus on operational excellence and safety is a key component to success in a highly competitive environment and is part of the unique value proposition of our integrated model.
Additionally, we are committed to optimizing our cost structure, reducing our debt levels, and implementing enterprise-wide process and operating improvements without compromising the safety of our communities, customers and employees.
−Removed: We believe we have a highly effective and efficient cost structure and that our cost structure supports excellence in our operations.
+Added: We believe we have a highly effective and efficient cost structure and that our cost structure supports excellence in our operations and is instrumental in our long-term value proposition.
• Integrated hedging and commercial management.
−Removed: Our commercial team is focused on managing risk, through opportunistic hedging, and optimizing our assets and business positions.
−Removed: We actively seek to manage our exposure to wholesale electricity prices in markets in which we operate, on an integrated basis, through contracts for physical delivery of electricity, exchange-traded and over-the-counter financial contracts, term, day-ahead and real-time market transactions, and bilateral contracts with other wholesale market participants, including other power generators and end-user electricity customers.
−Removed: We seek to hedge near-term cash flows and optimize long term value through hedging and forward sales contracts.
−Removed: We believe our integrated hedging and commercial management strategy, in combination with a strong balance sheet and strong liquidity profile, will provide a long-term advantage through cycles of higher and lower commodity prices.
−Removed: • Corporate responsibility and citizenship.
−Removed: We are committed to providing safe, reliable, cost-effective and environmentally compliant electricity for the communities and customers we serve.
−Removed: We strive to improve the quality of life in the communities in which we operate.
−Removed: We are also committed to being a good corporate citizen in the communities in which we conduct operations.
−Removed: We and our employees are actively engaged in programs intended to support and strengthen the communities in which we conduct operations.
+Added: Our commercial team is focused on effectively and efficiently managing risk, through opportunistic hedging, and optimizing our assets and business positions.
+Added: We proactively manage our exposure to wholesale electricity prices and fuel costs in markets in which we operate, on an integrated basis, through contracts for physical delivery of electricity, exchange-traded and over-the-counter financial contracts, term, day-ahead and real-time market transactions, and bilateral contracts with other wholesale market participants, including other power generators and end-user electricity customers.
+Added: We actively hedge near-term cash flows and optimize long-term value through hedging and forward sales contracts.
+Added: We believe our integrated hedging and commercial management strategy, in combination with a strong balance sheet and attractive liquidity profile, will provide long-term advantages through cycles of higher and lower commodity prices.
+Added: • Corporate responsibility and ESG initiatives.
+Added: It is our purpose to light up people's lives and power a better way forward.
+Added: We strive to be a good corporate citizen by investing in our employees, putting customers and suppliers first, and improving communities where we live, work and serve as we accelerate toward a clean energy future.
+Added: Vistra and its employees are actively engaged in programs intended to support our customers and strengthen the communities in which we conduct operations.
Our foremost giving initiatives are through the United Way, TXU Energy Aid and Ambit Cares campaigns.
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by fighting hunger through a network of food banks.
+Added: Beyond these giving initiatives, Vistra embeds ESG and considers all stakeholders – customers, suppliers, local communities, employees, contractors, investors and the environment, among others – into all of our decisions, processes and activities.
+Added: The Board has ultimate oversight of all our ESG initiatives and ensures these considerations are embedded at every level of our company.
+Added: We know that prioritizing our stakeholders leads to higher customer satisfaction, more community involvement and support, and committed employees and suppliers, which in turn, leads to a more sustainable company.
+Added: Our ESG initiatives complement our business strategy and strengthen our resiliency.
+Added: For instance, our investment in and growth of Vistra Zero supports our long-term goal to achieve net-zero carbon emissions by 2050.
+Added: We stay informed of evolving ESG standards and remain committed to provide specific and measurable ESG goals and initiatives in a transparent manner.
Recent Developments
−Removed: Dividend Declaration — In February 2021, the Board declared a quarterly dividend of $0.15 per share that will be paid in March 2021.
−Removed: Change in Principal Financial Officer — In December 2020, James A.
−Removed: Burke, who previously served as the Company's Executive Vice President and Chief Operating Officer, was elected as President and Chief Financial Officer and assumed the duties of serving as the Company's Principal Financial Officer following the resignation of David A.
−Removed: Campbell from his roles as Chief Financial Officer and Principal Financial Officer of the Company.
−Removed: Share Repurchase Program — In September 2020, we announced that the Board authorized a new share repurchase program (Share Repurchase Program) under which up to $1.5 billion of our outstanding shares of common stock may be repurchased.
−Removed: The Share Repurchase Program became effective January 1, 2021, at which time the prior share repurchase plan and all authorized amounts remaining thereunder terminated as of such date.
−Removed: From January 1, 2021 through February 23, 2021, 5,902,720 shares of our common stock had been repurchased under the Share Repurchase Program for $125 million.
−Removed: See Note 14 to the Financial Statements for more information concerning the Share Repurchase Program and the Prior Share Repurchase Program.
+Added: Dividend Declarations — In February 2022, the Board declared a quarterly dividend of $0.17 per share of common stock that will be paid in March 2022 and a semi-annual dividend of $40.00 per share of Series A Preferred Stock that will be paid in April 2022.
+Added: Green Finance Framework — In December 2021, we announced the publication of our Green Finance Framework, which allows us to issue green financial instruments to fund new or existing projects that support renewable energy and energy efficiency with alignment to our ESG initiatives.
+Added: See below and Note 14 to the Financial Statements for more information concerning the Series B Preferred Stock, which was issued in December 2021 under the Green Finance Framework.
+Added: Series A Preferred Stock Offering — On October 15, 2021, we issued 1,000,000 shares of Series A Preferred Stock in a private offering (Series A Offering).
+Added: The net proceeds of the Series A Offering were approximately $990 million, after deducting underwriting commissions and offering expenses.
+Added: We intend to use the net proceeds from the Series A Offering to repurchase shares of our outstanding common stock under the Share Repurchase Program.
+Added: See Note 14 to the Financial Statements for more information concerning the Series A Preferred Stock and our Share Repurchase Program.
+Added: Series B Preferred Stock Offering — On December 10, 2021, we issued 1,000,000 shares of Series B Preferred Stock in a private offering (Series B Offering) under our Green Finance Framework.
+Added: The net proceeds of the Series B Offering were approximately $985 million, after deducting underwriting commissions and offering expenses.
+Added: We intend to use the proceeds from the Series B Offering to pay for or reimburse existing and new eligible renewable and battery ESS developments.
+Added: See Note 14 to the Financial Statements for more information concerning the Series B Preferred Stock.
+Added: Commodity-Linked Revolving Credit Facility — On February 4, 2022, Vistra Operations entered into a credit agreement by and among Vistra Operations, Vistra Intermediate, the lenders, joint lead arrangers and joint bookrunners party thereto, and Citibank, N.A., as administrative agent and collateral agent.
+Added: The Credit Agreement provides for a $1.0 billion senior secured commodity-linked revolving credit facility (the Commodity-Linked Facility).
+Added: Vistra Operations intends to use the liquidity provided under the Commodity-Linked Facility to make cash postings as required under various commodity contracts to which Vistra Operations and its subsidiaries are parties as power prices increase from time-to time and for other working capital and general corporate purposes.
+Added: See Note 11 to the Financial Statements for more information concerning the Commodity-Linked Facility.
Market Discussion
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(i) Retail, (ii) Texas, (iii) East, (iv) West, (v) Sunset and (vi) Asset Closure.
−Removed: In the third quarter of 2020, Vistra updated its reportable segments to reflect changes in how the Company's CODM makes operating decisions, assesses performance and allocates resources.
−Removed: Management believes that the revised reportable segments provide enhanced transparency into the Company's long-term sustainable assets and its commitment to managing the retirement of economically and environmentally challenged plants.
−Removed: The following is a summary of the updated segments:
−Removed: • The Sunset segment represents plants with announced retirement plans that were previously reported in the ERCOT, PJM and MISO segments.
−Removed: As we announced significant plant closures in the third quarter of 2020, management believes it is important to have a segment which differentiates between operating plants with defined retirement plans and operating plants without defined retirement plans.
+Added: The following is a summary of our segments:
+Added: • The Retail segment represents Vistra's retail sales of electricity and natural gas to residential, commercial and industrial customers.
+Added: • The Texas segment represents Vistra's electricity generation operations in ERCOT, other than assets that are now 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.
−Removed: electric grid, other than assets that are now part of the Sunset or Asset Closure segments, respectively, and includes operations in PJM, ISO-NE and NYISO that were previously reported in the PJM and NY/NE segments, respectively.
−Removed: • The West segment represents Vistra's electricity generation operations in CAISO and was previously reported in the Corporate and Other non-segment.
+Added: electric grid, other than assets that are now part of the Sunset or Asset Closure segments, respectively, and includes operations in PJM, ISO-NE and NYISO.
+Added: • The West segment represents Vistra's electricity generation operations in CAISO.
As reflected by the Moss Landing and Oakland ESS projects (see Note 3 to the Financial Statements), the Company expects to expand its operations in the West segment.
−Removed: In addition, the ERCOT segment was renamed the Texas segment.
−Removed: There were no changes to the Retail and Asset Closure segments.
−Removed: All historical segment results within these consolidated financial statements have been recast to be in alignment with our new segmentation.
+Added: • The Sunset segment represents plants with announced retirement plans that were previously reported in the ERCOT, PJM and MISO segments.
+Added: Given recent and expected future retirements of certain power plants, management believes it is important to have a segment which differentiates between operating plants with defined retirement plans and operating plants without defined retirement plans.
+Added: • The Asset Closure segment is engaged in the decommissioning and reclamation of retired plants and mines.
See Note 20 to the Financial Statements for further information concerning reportable segments.
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The integrated model enables us to structure products and contracts in a way that offers significant value compared to stand-alone retail electric providers.
−Removed: Additionally, our wholesale commodity risk management operations protect our retail business from power price volatility by allowing us to bypass bid-ask spread in the market (particularly for illiquid products and time periods) and achieve lower collateral costs for our retail business as compared to other, non-integrated retail electric providers.
+Added: Additionally, our wholesale commodity risk management operations help protect our retail business from power price volatility by allowing us to bypass bid-ask spread in the market (particularly for illiquid products and time periods) and achieve lower collateral costs for our retail business as compared to other, non-integrated retail electric providers.
Moreover, our retail business reduces, to some extent, the exposure of our wholesale generation business to wholesale power price volatility.
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Our Texas segment is comprised of 18 power generation facilities totaling 17,623 MW of generation capacity in ERCOT.
−Removed: We also operate a 10 MW battery energy storage system (ESS) at our Upton 2 solar facility.
−Removed: In September 2020, we announced the planned development of 668 MW of solar photovoltaic power generation facilities and 260 MW of battery ESS in Texas with estimated commercial operation dates between the summer of 2021 and the fall of 2022.
−Removed: See Note 3 to the Financial Statements for a summary of our solar and battery energy storage projects.
+Added: We also operate a 10 MW battery ESS at our Upton 2 solar facility.
ISO/RTO Technology Primary Fuel Number of Facilities Net Capacity (MW)
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Total Texas Segment 18 17,623
−Removed: ERCOT — ERCOT is an ISO that manages the flow of electricity from approximately 86,000 MW of installed generation capacity to approximately 26 million Texas customers, representing approximately 90% of the state's electric load.
+Added: We plan to develop up to 768 MW of solar photovoltaic power generation facilities and 260 MW of battery ESS in Texas with estimated commercial operation dates between first quarter of 2022 to fourth quarter of 2023.
+Added: See Note 3 to the Financial Statements for a summary of our solar and battery energy storage projects.
+Added: ERCOT — ERCOT is an ISO that manages the flow of electricity from approximately 86,000 MW of summer peak generation capacity to approximately 26 million Texas customers, representing approximately 90% of the state's electric load.
As an energy-only market, ERCOT's market design is distinct from other competitive electricity markets in the U.S.
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In 2014, ERCOT implemented the Operating Reserve Demand Curve (ORDC), pursuant to which wholesale electricity prices in the real-time electricity market increase automatically as available operating reserves decrease below defined threshold levels, creating a price adder.
−Removed: When operating reserves drop to 2,000 MW or less, the ORDC automatically adjusts power prices to the established value of lost load (VOLL), which is set at $9,000/MWh which is equal to the system-wide offer cap.
−Removed: In both March 2019 and March 2020, ERCOT implemented 0.25 standard deviation shifts in the loss of load probability calculation using a single blended ORDC curve;
+Added: The slope of the ORDC curve is determined through a mathematical loss of load probability calculation using forecasted reserves and historical data.
+Added: In both March 2019 and March 2020, ERCOT implemented 0.25 standard deviation shifts in the loss of load probability calculation and moved to using a single blended ORDC curve;
these changes resulted in a more rapid escalation in power prices as operating reserves fall below defined thresholds.
−Removed: ERCOT calculates the "peaker net margin" based on revenues a hypothetical unhedged peaking unit would collect in the market.
−Removed: If the peaker net margin exceeds a certain threshold, the system-wide offer cap is reduced for the remainder of the calendar year.
−Removed: Historically, high demand due to elevated temperatures in the summer months, combined with underperformance of wind generation, has created the conditions during which the ORDC contributes meaningfully to power prices.
+Added: Effective January 1, 2022, when operating reserves drop to 3,000 MW or less, the ORDC automatically adjusts power prices to the established value of lost load (VOLL), which is set at $5,000/MWh which is equal to the high system-wide offer cap.
+Added: ERCOT also calculates the "peaker net margin" based on revenues a hypothetical unhedged peaking unit would collect in the market.
+Added: If the peaker net margin exceeds a certain threshold, the system-wide offer cap is reduced to the low system-wide offer cap of $2,000/MWh for the remainder of the calendar year.
+Added: The peaker net margin exceeded the threshold for the first time during Winter Storm Uri, and as a result the low system-wide offer cap was in place for the balance of 2021.
+Added: Historically, high demand due to elevated temperatures in the summer months or high demand due to reduced temperatures in the winter months, combined with underperformance of wind generation, has created the conditions during which the ORDC contributes meaningfully to power prices.
Extreme weather conditions can also lead to scarcity conditions regardless of season.
−Removed: Other than during periods of "scarcity pricing," the price of power is typically set by natural gas-fueled generation facilities;
−Removed: as a result, historically low natural gas prices have had a corresponding impact on wholesale prices (see Item 7.
+Added: Other than during periods of "scarcity pricing," the price of power is typically set by natural gas-fueled generation facilities (see Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations – Key Operational Risks and Challenges ).
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Ancillary services are provided by generators to help maintain the stable voltage and frequency requirements of the transmission system.
−Removed: Because ERCOT has one of the highest concentrations of wind capacity generation among U.S.
−Removed: markets, the ERCOT market is more susceptible to fluctuations in wholesale electricity supply due to intermittent wind production, making ERCOT more vulnerable to periods of generation scarcity.
+Added: Because ERCOT has one of the highest concentrations of wind and solar capacity generation among U.S.
+Added: markets, the ERCOT market is more susceptible to fluctuations in wholesale electricity supply due to intermittent wind and solar production, making ERCOT more vulnerable to periods of generation scarcity.
+Added: Beginning in July 2021, ERCOT has increased its ancillary service procurement volumes to maintain a more conservative level of operating reserves.
Our East segment is comprised of 21 power generation facilities in 10 states totaling 12,093 MW of generating capacity in PJM, ISO-NE and NYISO.
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Total East Segment 21 12,093
−Removed: PJM — PJM is an RTO that manages the flow of electricity from approximately 180,000 MW of installed 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.
+Added: We plan 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 2023 to 2025.
+Added: See Note 3 to the Financial Statements for a summary of our solar and battery energy storage projects.
+Added: PJM — PJM is an RTO that manages the flow of electricity from approximately 180,000 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.
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We have participated in RPM auctions for years up to and including PJM's planning year 2022-2023, which ends May 31, 2023.
−Removed: Due to a change in auction rules, PJM's next RPM auction, for planning year 2022-2023, was delayed until May 2021.
+Added: Due to a FERC order issued in December 2021, PJM's RPM auction for planning year 2023-2024 will be delayed and is expected to be run in the summer of 2022.
We also enter into bilateral capacity transactions.
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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.
−Removed: NYISO — NYISO is an ISO that manages the flow of electricity from approximately 40,000 MW of installed generation capacity to approximately 20 million New York customers.
+Added: NYISO — NYISO is an ISO that manages the flow of electricity from approximately 39,000 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.
6 unchanged sentences
The balance is cleared through the seasonal and monthly capacity auctions.
−Removed: Our West segment is comprised of two power generation facilities totaling 1,185 MW of generation capacity and one battery ESS totaling 300 MW in CAISO, all of which are located in California.
+Added: Our West segment is comprised 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.
ISO/RTO Technology Primary Fuel Number of Facilities Net Capacity (MW)
3 unchanged sentences
Total West Segment 3 1,530
−Removed: In addition, we are developing approximately 136 MW of battery energy storage systems at our Moss Landing and Oakland facilities that are expected to enter commercial operations in 2021-2022 (see Note 3 to the Financial Statements).
+Added: We plan to develop an additional 350 MW in the third phase of our battery ESS at our 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.
6 unchanged sentences
Our Sunset segment is comprised of 10 power generation facilities totaling 7,486 MW of generating capacity in MISO, PJM and ERCOT.
−Removed: The Sunset segment represents plants with announced retirement plans between 2022 and 2027 that were previously reported in the ERCOT, PJM and MISO segments No separate segment previously existed to differentiate operating plants with defined retirement plans from operating plants without defined retirement plans.
+Added: The Sunset segment represents plants with announced retirement plans between 2022 and 2027 that were previously reported in the ERCOT, PJM and MISO segments.
See Note 4 to the Financial Statements for more information related to these planned generation retirements.
6 unchanged sentences
See Texas Segment above for a discussion of the ERCOT ISO and East Segment above for a discussion of the PJM RTO.
−Removed: MISO — MISO is an RTO that manages the flow of electricity from approximately 198,000 MW of installed generation capacity to approximately 42 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.
+Added: MISO — MISO is an RTO that manages the flow of electricity from approximately 202,000 MW of generation capacity to approximately 42 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.
5 unchanged sentences
We also participate in the MISO annual and monthly financial transmission rights auctions to manage the cost of our transmission congestion, as measured by the congestion component of the LMP price differential between two points on the transmission grid across the market area.
−Removed: Joppa, which is partially interconnected to MISO and partially within the Electric Energy, Inc.
−Removed: (EEI) control area, is interconnected to the Tennessee Valley Authority and Louisville Gas and Electric Company.
−Removed: Joppa primarily sells its capacity and energy to MISO.
Wholesale Operations
41 unchanged sentences
Our focus on reducing the severity of injuries for both our employees and contractors who work with us has shown positive results.
−Removed: In 2020, we did not have any serious injuries or fatalities to our Vistra employees.
−Removed: Although we do not focus on recordable incidents, our Total Recordable Incident rate (TRIR) for the company was 0.61, better than the first quartile as compared to the Edison Electric Institute (EEI) 2019 Total Company Injury data.
+Added: In 2021, we did not have any serious injuries, as determined in accordance with industry standards, or fatalities to our Vistra employees or business partners working at our sites.
+Added: Although we do not focus on recordable incidents, our Total Recordable Incident rate (TRIR) for the company was 0.87, better than the second quartile as compared to the Edison Electric Institute (EEI) 2020 Total Company Injury Data.
We encourage near-miss reporting and review of events to promote a learning environment.
1 unchanged sentence
All Vistra employees are covered by our safety program.
−Removed: Office employees are required to complete periodic training on safety topics through our online learning management system.
−Removed: Power plant employees are required to complete trainings based on job function, which is also tracked through our central learning management system.
+Added: Corporate and retail employees are required to complete periodic training on safety topics through our online learning management system.
+Added: Employees who are located at a power plant are required to complete trainings based on job function, which is also tracked through our central learning management system.
In addition, the Company engages an independent third-party conformity assessment and certification vendor to manage adherence to our safety standards for all vendors and contractors who work at our plants.
In addition, we work closely with our suppliers and contractors to ensure our safety practices are upheld.
−Removed: Our generation fleet has a total of 12 plants that have been awarded the Voluntary Protection Program (VPP) Star designation by the OSHA for superior demonstration of effective safety and health management systems and for maintaining injury and illness rates below the national averages for our industry.
−Removed: Two additional plants submitted applications in 2020 and are awaiting review by the OSHA.
+Added: All of our power plant facilities have effective health and safety programs and comply with OSHA regulations.
+Added: In addition to compliance, our generation fleet has a total of 12 plants that have been awarded the Voluntary Protection Program (VPP) Star designation by the OSHA for superior demonstration of effective safety and health management systems and for maintaining injury and illness rates below the national averages for our industry.
+Added: Four additional plants have submitted applications and are awaiting review by the OSHA.
VPP Star status is the highest designation of OSHA's Voluntary Protection Programs.
2 unchanged sentences
Additionally, 31 of our power plants and mine locations have adopted a proactive Behavior Based Safety approach to safety which focuses on identifying and providing feedback on at-risk behaviors observed.
−Removed: In 2020, our Kosse mine site was recognized for the Sentinels of Safety Award by the National Mining Association, the highest distinction for mine safety.
−Removed: This is the second time Kosse has been awarded in the last three years showing the commitment to safety at our mining operations.
+Added: In 2021, we continued our COVID-19 protections and protocols ensuring the safety of all of our employees.
Diversity, Equity and Inclusion
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Our diversity includes all the ways we differ, such as age, gender, ethnicity and physical appearance, as well as underlying differences such as thoughts, styles, religions, nationality, education and numerous other traits.
−Removed: Creating and maintaining an environment where differences are valued and respected enhances our ability to recruit and retain the best talent in the marketplace.
−Removed: As we continue to promote and maintain an environment that fosters creativity, productivity and mutual respect, Vistra becomes the employer of choice by recognizing and using the value that each individual brings to the workplace.
−Removed: Vistra's diversity is evolving and management is leading by example.
+Added: Creating and maintaining an environment where differences are valued and respected enhances our ability to recruit and retain the best talent in the marketplace and to provide a work environment that allows all employees to be their best.
+Added: Vistra's diversity is evolving, and our Board and management are leading by example.
+Added: Currently, three of the ten Board members are women, and two of the ten are ethnically diverse.
Overall, 28% of the Company's workforce is ethnically diverse.
Women currently hold 26% of the Company's senior management positions, and ethnically diverse employees represent 27% of senior management.
−Removed: In 2020, the Board of Directors increased diversity as well.
−Removed: Currently three of the ten board members are women, and two of the ten board members are ethnically diverse.
During 2021, we launched multiple initiatives to unlock the full potential of our people - and our company - through our diversity, equity, and inclusion efforts.
−Removed: We formalized a Diversity, Equity and Inclusion Advisory Council and expanded our Employee Resource Groups (ERG) to promote the appreciation of and communicate awareness of diverse employee groups and communities and their contribution to the overall success of the organization, both internally and externally.
−Removed: New ERGs will join existing ERGs such as Vistra's Women's Information Network, Opportunities for Professional Enrichment and Networking, Parents at Work, Veterans and Toastmasters.
+Added: We named our first Chief Diversity Officer in January 2021 who sponsors Vistra's employee-led Diversity, Equity and Inclusion Advisory Council, established in 2020.
+Added: We continued to expand our Employee Resource Groups (ERG) to promote the appreciation of and communicate awareness of diverse employee groups and communities and their contribution to the overall success of the organization, both internally and externally.
+Added: Seven new ERGs were formed in 2021, bringing the total number to twelve.
+Added: New ERGs represent not only diverse cultures, but also employees with disabilities, the LGBTQ+ community and employees engaged in innovation.
Further initiatives were launched to support the education, recruitment and retention of current and future employees, with particular emphasis being placed on driving equal access to opportunities throughout the organization.
−Removed: We contracted with Basic Diversity, Inc.
−Removed: to conduct an assessment of Vistra's diversity, equity and inclusion training needs, and as part of our commitment to diversity, equity and inclusion, we named our first Chief Diversity Officer in January 2021.
+Added: Hiring manager training was developed and deployed to train managers on the importance of skills based hiring and inclusive recruiting processes, and we continue to work with Basic Diversity to develop training for employees to identify bias and develop strong inclusive leaders.
+Added: Vistra is active in our communities to promote inclusivity.
+Added: Vistra's supply chain diversity initiative seeks to reflect our customer base and workforce compositions through creating a diverse supply chain.
+Added: Through a new partnership with Disability:IN, the leading nonprofit resource for business disability inclusion worldwide, Vistra expanded its commitment to an inclusive global economy.
+Added: Further, in the second year of Vistra's $10 million five-year commitment to support underserved communities, Vistra provided funding to educational and economic development nonprofits around the country working to transform underserved communities for the better.
Training and Development
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Essentials in Leadership provides first time managers with skills to lead organizations in situational leadership, business acumen, identification of communication styles and inclusive communication practices, and exposes them to best practices from across the company.
−Removed: We also revised multiple leadership programs to continue virtually during the COVID-19 pandemic.
+Added: We also revised multiple leadership programs to continue virtually while we continue with remote work during the current pandemic.
Vistra also provides many other training and development programs to help grow and develop employees at every level, including online learning platform courses, learning management system courses, recorded webinars and presentations, self-paced development and employee-specific skill training.
Thousands of web-based targeted courses are available to all employees, and the company further supports employees in completing thousands of hours of professional training to support continuing education requirements for their respective professional licenses, including accounting, legal and nuclear.
−Removed: We also support a variety of employee-initiated and -led programs based on demographics, interests and purpose, including Women's Information Network, Opportunities for Professional Enrichment and Networking, Parents at Work, TXU Green Team and Toastmasters.
+Added: In 2021, Vistra launched a formal mentoring program available to all employees to focus on topics like organizational knowledge, career development, individual development, collaboration and leadership.
+Added: Over 600 employees participated in 2021 and logged over 4,000 hours of development.
+Added: In addition, all full-time employees, other than those in a collective bargaining unit, receive a formal performance review guiding development and improving results of the business.
Employee Benefits
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We are committed to maintaining an equitable compensation structure, including performing annual salary reviews by employee category level within significant locations of operations.
−Removed: Eligible full- and part-time employees are provided access to medical, prescription drug, dental, vision, life insurance, accidental death and dismemberment and long-term disability coverage.
+Added: Eligible full- and part-time employees are provided access to medical, prescription drug, dental, vision, life insurance, accidental death and dismemberment, long-term disability coverage, accident coverage, critical illness coverage and hospital indemnity coverage.
Regular full-time employees are eligible for short-term disability benefits, and all employees are eligible for the employee assistance program, parental leave, maternity leave and a 401(k) plan through which the Company matches employee contributions up to 6%.
We believe a healthy workforce leads to greater well-being at work and at home.
−Removed: Our healthcare plans are designed to reward employees for getting annual physicals and cancer screenings.
+Added: To help keep our workforce healthy, we offer access to on-site medical clinics at six locations.
+Added: Our healthcare plans are also designed to reward employees for getting annual physicals, age and gender health screenings and immunizations.
+Added: In addition, our employee medical plans promote mental health and emotional wellness and offer resources for employees seeking assistance.
Fitness centers in multiple facilities offer cardio equipment, a selection of free weights and exercise mats.
−Removed: Our employee-led wellness team engages our people to get active and support causes that promote healthy living.
−Removed: With support from the company, the wellness team covers the registration costs for employees to participate in more than a dozen running events each year.
−Removed: Additionally, the team hosts quarterly blood drives and recruits participants for our cycling and soccer teams.
+Added: While deferred at times during COVID-19, our employee-led wellness team engages our people to get active and support causes that promote healthy living.
+Added: With support from the company, the wellness team covers the registration costs for employees to participate in running and cycling events throughout the year.
Environmental Regulations and Related Considerations
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Climate Change
−Removed: There is increasing attention and interest domestically and internationally about global climate change and how greenhouse gas (GHG) emissions, such as carbon dioxide (CO 2 ), contribute to global climate change.
−Removed: GHG emissions from the combustion of fossil fuels, primarily by our coal/lignite-fueled-generation plants, represent the substantial majority of our total GHG emissions.
+Added: There is continuing attention and interest domestically and internationally about global climate change and how GHG emissions, such as CO 2 , contribute to global climate change.
+Added: GHG emissions from the combustion of fossil fuels, primarily by our coal-fueled-generation plants as well as our natural gas-fueled generation plants represent the substantial majority of our total GHG emissions.
CO 2 , methane and nitrous oxide are emitted in this combustion process, with CO 2 representing the largest portion of these GHG emissions.
−Removed: We estimate that our generation facilities produced approximately 103 million short tons of CO 2 in 2020.
−Removed: We have already taken or announced significant steps to transition the fuel-mix and reduce the emissions profile of our generation fleet, including:
−Removed: • Solar Development Projects — In 2018, we began commercial operation of our 180 MW Upton 2 solar facility.
−Removed: In September 2020, we announced the planned development of 668 MW of solar generation facilities in Texas that are expected to begin commercial operations during 2021-2022.
−Removed: • Battery Energy Storage Projects — In 2018, our 10 MW battery energy storage system (ESS) at our Upton 2 solar facility in Texas commenced operations.
−Removed: Between 2018 and 2020, we announced the planned development of approximately 436 MW of various ESSs in California that are expected to enter commercial operations in 2021-2022.
−Removed: In September 2020, we announced the planned development of a 260 MW ESS in Texas that is expected to enter commercial operation in 2022.
+Added: We estimate that our generation facilities produced approximately 108 million short tons of CO 2 in the year ended 2021.
+Added: To manage our environmental impact from our business activities and reduce our emissions profile, Vistra set emissions reduction targets.
+Added: Vistra is targeting to achieve a 60% reduction in Scope 1 and Scope 2 CO 2 equivalent emissions by 2030 as compared to a 2010 baseline with a long-term goal to achieve net-zero carbon emissions by 2050, assuming necessary advancements in technology and supportive market constructs and public policy.
+Added: In furtherance of Vistra's efforts to meet its net-zero target, Vistra expects to deploy multiple levers to transition the company to operating with net-zero emissions, including decarbonization of existing business lines and diversification into low-emission businesses, primarily renewables and energy storage.
+Added: We have already taken or announced significant steps to transform our generation portfolio and reduce the emissions profile of our generation fleet, including:
+Added: • Solar Development Projects — We began commercial operation of our 180 MW Upton 2 solar facility in 2018.
+Added: We have announced our plans to develop:
+Added: ◦ up to 768 MW of solar generation facilities in Texas with expected commercial operation dates during 2022-2023, and
+Added: ◦ 300 MW of solar generation facilities at retired or to-be retired plant sites in Illinois with expected commercial operation dates ranging from 2023 to 2025.
+Added: • Battery Energy Storage Projects — We began commercial operation of our 10 MW battery ESS at our Upton 2 solar facility in 2018 and our 400 MW of battery ESSs at our Moss Landing facility in 2021.
+Added: We have announced our plans to develop:
+Added: ◦ 260 MW of battery ESS in Texas with an expected commercial operation date in 2022;
+Added: ◦ 150 MW of battery ESS at retired or to-be-retired plant sites in Illinois with expected commercial operation dates ranging from 2023 to 2025, and
+Added: ◦ 350 MW of battery ESS in California with an expected commercial operation date in 2023.
• Acquisition of CCGTs — In 2016 and 2017, we acquired 4,042 MW of CCGTs in Texas.
In 2018, we acquired 15,448 MW of CCGTs across various ISOs/RTOs in connection with the Merger.
−Removed: • Retirements of Coal Generation — In 2018, we retired 4,167 MW of lignite/coal-fueled generation facilities in Texas.
+Added: • Retirements of Fossil Fuel Generation — In 2018, we retired 4,167 MW of lignite/coal-fueled generation facilities in Texas.
In 2019, we retired 2,068 MW of coal-fueled generation facilities in Illinois.
−Removed: We expect to retire an additional 7,486 MW of coal-fueled generation facilities in Illinois, Ohio and Texas no later than year-end 2027.
+Added: We expect to retire an additional 7,486 MW of fossil-fueled generation facilities in Illinois, Ohio and Texas no later than year-end 2027.
See Note 3 to the Financial Statements for discussion of our solar and battery energy storage projects and Note 4 to the Financial Statements for discussion of our retirement of generation facilities.
−Removed: Greenhouse Gas Emissions
−Removed: In August 2015, the EPA finalized rules to address GHG emissions from electricity generation units, referred to as the Clean Power Plan, including rules for existing facilities that would establish state-specific emissions rate goals to reduce nationwide CO 2 emissions.
−Removed: Various parties filed petitions for review in the U.S.
−Removed: Court of Appeals for the District of Columbia Circuit (D.C.
−Removed: Circuit Court).
−Removed: In July 2019, petitioners filed a joint motion to dismiss in light of the EPA's new rule that replaces the Clean Power Plan, the Affordable Clean Energy rule, discussed below.
−Removed: In September 2019, the D.C.
−Removed: Circuit Court granted petitioners' motion to dismiss and dismissed all of the petitions challenging the Clean Power Plan as moot.
−Removed: In July 2019, the EPA finalized a rule to repeal the Clean Power Plan, with new regulations addressing GHG emissions from existing coal-fueled electric generation units, referred to as the Affordable Clean Energy (ACE) rule.
−Removed: The ACE rule develops emission guidelines that states must use when developing plans to regulate GHG emissions from existing coal-fueled electric generating units.
−Removed: The ACE rule set a deadline of July 2022 for states to submit their plans for regulating GHG emissions from existing facilities.
−Removed: States where we operate coal plants (Texas, Illinois and Ohio) have begun the development of their state plans to comply with the rule.
−Removed: Environmental groups and certain states filed petitions for review of the ACE rule and the repeal of the Clean Power Plan in the D.C.
−Removed: Circuit Court, and the D.C.
−Removed: Circuit Court heard argument on those issues in October 2020.
−Removed: In January 2021, the D.C.
−Removed: Circuit Court vacated the ACE rule and remanded the rule to the EPA for further action.
−Removed: In its decision, the D.C.
−Removed: Circuit Court concluded that the EPA's basis for repealing the Clean Power Plan and adopting the ACE rule was not supported by the Clean Air Act.
−Removed: Additionally, in December 2018, the EPA issued proposed revisions to the emission standards for new, modified and reconstructed units.
−Removed: Vistra submitted comments on that proposed rulemaking in March 2019.
−Removed: In January 2021, the EPA, just prior to the transition to the Biden administration, issued a final rule setting forth a significant contribution finding for the purpose of regulating GHG emissions from new, modified, or reconstructed electric utility generating units.
−Removed: The final rule exclude sectors from future regulation where GHG emissions make up less than three percent of U.S.
GHG Emissions
−Removed: The final rule did not set any specific emission limits for new, modified, or reconstructed electric utility generating units.
+Added: In July 2019, the EPA finalized a rule that repealed the Clean Power Plan (CPP) that had been finalized in 2015 and established new regulations addressing GHG emissions from existing coal-fueled electric generation units, referred to as the Affordable Clean Energy (ACE) rule.
+Added: The ACE rule developed emission guidelines that states must use when developing plans to regulate GHG emissions from existing coal-fueled electric generating units.
+Added: In response to challenges brought by Environmental groups and certain states, the U.S.
+Added: Court of Appeals for the District of Columbia Circuit (D.C.
+Added: Circuit Court) vacated the ACE rule, including the repeal of the CPP in, January 2021 and remanded the rule to the EPA for further action.
+Added: In October 2021, the U.S.
+Added: Supreme Court granted four petitions for certiorari of the D.C.
+Added: Circuit Court's decision and consolidated the cases for review.
+Added: The case is now fully briefed and scheduled for oral argument in February 2022.
+Added: Additionally, in January 2021, the EPA, just prior to the transition to the Biden administration, issued a final rule setting forth a significant contribution finding for the purpose of regulating GHG emissions from new, modified, or reconstructed electric utility generating units.
+Added: In April 2021, the D.C.
+Added: Circuit Court granted the EPA's unopposed motion for voluntary vacatur and remand of the GHG significant contribution rule.
The ACE rule and the rule on significant contribution are subject to the Environment Executive Order discussed above.
6 unchanged sentences
In December 2017, the RGGI states released an updated model rule with changes to the CO 2 budget trading program, including an additional 30 percent reduction in the CO 2 annual cap by the year 2030, relative to 2020 levels.
−Removed: Our generating facilities in Connecticut, Maine, Massachusetts, New Jersey and New York emitted approximately 7 million tons of CO 2 during 2020.
+Added: RGGI is currently conducting its third program review to be completed in 2022 which may include an updated model rule.
+Added: Our generating facilities in Connecticut, Maine, Massachusetts, New Jersey, New York and Virginia emitted approximately 8.5 million tons of CO 2 during 2021.
The spot market price of RGGI allowances required to operate these facilities as of December 31, 2021 was approximately $13.68 per allowance.
−Removed: The spot market price of RGGI allowances required to operate our affected facilities during 2021 was $8.34 per allowance on February 23, 2021.
+Added: The spot market price of RGGI allowances required to operate our affected facilities during 2022 was approximately $14.01 per allowance on February 22, 2022.
While the cost of allowances required to operate our RGGI-affected facilities is expected to increase in future years, we expect that the cost of compliance would be reflected in the power market, and the actual impact to gross margin would be largely offset by an increase in revenue.
3 unchanged sentences
Beginning in 2019, the allocation process transitioned to a competitive auction process whereby allowances are partially distributed through a competitive auction process and partially distributed based on the process and schedule established by the rule.
−Removed: Beginning in 2021, all allowances will be distributed through the auction.
+Added: Beginning in 2021, all allowances were distributed through the auction.
Limited banking of unused allowances is allowed.
Virginia — In May 2019, the Virginia Department of Environmental Quality issued a final rule to adopt a carbon cap-and trade program for fossil-fueled electricity generation units, including our Hopewell facility, beginning in 2020.
−Removed: The program is based on the RGGI proposed 2017 model rule and will link Virginia to RGGI beginning in 2021.
+Added: The program is based on the RGGI proposed 2017 model rule and linked Virginia to RGGI in 2021.
+Added: The Governor of Virginia issued an Executive Order in January 2022 to begin the process of removing the state from RGGI;
+Added: however, the Virginia General Assembly would need to modify the law to exit the program.
+Added: At this time, no new laws have passed and Virginia remains in RGGI.
New Jersey — In January 2018, the Governor of New Jersey signed an executive order directing the state's environmental agency and public utilities board to begin the process of rejoining RGGI, and New Jersey formally rejoined RGGI in June 2019.
7 unchanged sentences
The CAA and comparable state laws and regulations relating to air emissions impose various responsibilities on owners and operators of sources of air emissions, which include requirements to obtain construction and operating permits, pay permit fees, monitor emissions, submit reports and compliance certifications, and keep records.
−Removed: The CAA requires that fossil-fueled electricity generation plants meet certain pollutant emission standards and have sufficient emission allowances to cover sulfur dioxide (SO 2 ) emissions and in some regions nitrogen oxide (NO X ) emissions.
+Added: The CAA requires that fossil-fueled electricity generation plants meet certain pollutant emission standards and have sufficient emission allowances to cover SO 2 emissions and in some regions NO X emissions.
In order to ensure continued compliance with the CAA and related rules and regulations, we utilize various emission reduction technologies.
These technologies include flue gas desulfurization (FGD) systems, dry sorbent injection (DSI), baghouses and activated carbon injection or mercury oxidation systems on select units and electrostatic precipitators, selective catalytic reduction (SCR) systems, low-NO X burners and/or overfire air systems on all units.
−Removed: Additionally, our MISO coal-fueled facilities mainly use low sulfur coal, which, prior to combustion, goes through a refined coal process to further reduce NO X and mercury emissions.
−Removed: In 2018, we received approval to use refined coal at some of our Texas coal-fueled facilities.
+Added: Additionally, our MISO coal-fueled facilities mainly use low sulfur coal.
Regional Haze — Reasonable Progress and Best Available Retrofit Technology (BART) for Texas
2 unchanged sentences
Second, certain electricity generation units built between 1962 and 1977 are subject to BART standards designed to improve visibility if such units cause or contribute to impairment of visibility in a federal class I area.
−Removed: BART reductions of SO 2 and NO X are required either on a unit-by-unit basis or are deemed satisfied by state participation in an EPA-approved regional trading program such as the CSAPR or other approved alternative program.
In October 2017, the EPA issued a final rule addressing BART for Texas electricity generation units, with the rule serving as a partial approval of Texas' 2009 State Implementation Plan (SIP) and a partial Federal Implementation Plan (FIP).
For SO 2 , the rule established an intrastate Texas emission allowance trading program as a "BART alternative" that operates in a similar fashion to a CSAPR trading program.
−Removed: The program includes 39 generating units (including our Martin Lake, Big Brown, Monticello, Sandow 4, Coleto Creek, Stryker 2 and Graham 2 plants).
+Added: The program includes 39 generating units (including the Martin Lake, Big Brown, Monticello, Sandow 4, Coleto Creek, Stryker 2 and Graham 2 plants).
The compliance obligations in the program started on January 1, 2019.
−Removed: The retirements of our Monticello, Big Brown and Sandow 4 plants have enhanced our ability to comply with this BART rule for SO 2 .
For NO X , the rule adopted the CSAPR's ozone program as BART and for particulate matter, the rule approved Texas's SIP that determines that no electricity generation units are subject to BART for particulate matter.
−Removed: Various parties filed a petition challenging the rule in the Fifth Circuit Court as well as a petition for reconsideration filed with the EPA.
−Removed: Luminant intervened on behalf of the EPA in the Fifth Circuit Court action.
−Removed: In March 2018, the Fifth Circuit Court abated its proceedings pending conclusion of the EPA's reconsideration process.
In August 2020, the EPA issued a final rule affirming the prior BART final rule but also included additional revisions that were proposed in November 2019.
−Removed: In October 2020, environmental groups petitioned for review of this rule in both the D.C.
−Removed: Circuit Court and the Fifth Circuit Court.
−Removed: Briefing is underway on the proper venue for any challenge to the final rule.
−Removed: As finalized, we expect that we will be able to comply with the rule.
−Removed: The BART rule is subject to the Environment Executive Order discussed above.
−Removed: Affirmative Defenses During Malfunctions
−Removed: In May 2015, the EPA finalized a rule requiring 36 states, including Texas, Illinois and Ohio, to remove or replace either EPA-approved exemptions or affirmative defense provisions for excess emissions during upset events and unplanned maintenance and startup and shutdown events, referred to as the SIP Call.
−Removed: Various parties (including Luminant, the State of Texas and the State of Ohio) filed petitions for review of the EPA's final rule, and all of those petitions were consolidated in the D.C.
−Removed: Circuit Court.
−Removed: In April 2017, the D.C.
−Removed: Circuit Court ordered the case to be held in abeyance.
−Removed: In April 2019, the EPA Region 6 proposed a rule to withdraw the SIP Call with respect to the Texas affirmative defense provisions.
−Removed: We submitted comments on that proposed rulemaking in June 2019.
−Removed: In February 2020, the EPA issued the final rule withdrawing the Texas SIP Call.
−Removed: In April 2020, a group of environmental petitioners, including the Sierra Club, filed a petition in the D.C.
−Removed: Circuit Court challenging the EPA's action with respect to Texas.
−Removed: Briefing is currently underway in the challenge to the EPA's action with respect to Texas.
−Removed: In October 2020, the EPA issued new guidance on the inclusion of startup, shutdown and malfunction (SSM) provisions in SIPs, which is intended to supersede the policy in the multi-state SIP Call.
−Removed: The guidance provides that the SIPs may contain provisions for SSM events if certain conditions are met.
−Removed: The EPA SSM guidance is subject to the Environment Executive Order discussed above.
−Removed: Illinois Multi-Pollutant Standards (MPS)
−Removed: In August 2019, changes proposed by the Illinois Pollution Control Board to the MPS rule, which places NO X , SO 2 and mercury emissions limits on our coal plants located in MISO went into effect.
−Removed: Under the revised MPS rule, our allowable SO 2 and NO X emissions from the MISO fleet are 48% and 42% lower, respectively, than prior to the rule changes.
−Removed: The revised MPS rule requires the continuous operation of existing selective catalytic reduction (SCR) control systems during the ozone season, requires SCR-controlled units to meet an ozone season NO X emission rate limit, and set an additional, site-specific annual SO 2 limit for our Joppa Power Station.
−Removed: Additionally, in 2019, the Company retired its Havana, Hennepin, Coffeen and Duck Creek plants in order to comply with the MPS rule's requirement to retire at least 2,000 MW of our generation in MISO.
−Removed: See Note 4 to the Financial Statements for information regarding the retirement of these four plants.
+Added: Challenges to both the 2017 rule and the 2020 rules have been consolidated in the D.C.
+Added: Circuit Court, where we have intervened in support of the EPA.
+Added: We are in compliance with the rule, and the retirements of our Monticello, Big Brown and Sandow 4 plants have enhanced our ability to comply.
+Added: The BART rule is subject to the Environment Executive Order discussed above, and the EPA has stated it is starting a proceeding for reconsideration of the BART rule.
+Added: The challenges in the D.C.
+Added: Circuit Court have been held in abeyance pending the EPA's action on reconsideration.
National Ambient Air Quality Standards (NAAQS)
4 unchanged sentences
SO 2 Designations for Texas
−Removed: In November 2016, the EPA finalized its nonattainment designations for counties surrounding our Big Brown, Monticello and Martin Lake generation plants.
+Added: In November 2016, the EPA finalized its nonattainment designations for counties surrounding our Martin Lake generation plant and our now-retired Big Brown and Monticello plants.
The final designations require Texas to develop nonattainment plans for these areas.
−Removed: In February 2017, the State of Texas and Luminant filed challenges to the nonattainment designations in the Fifth Circuit Court.
+Added: In February 2017, the State of Texas and Luminant filed challenges to the nonattainment designations in the U.S.
+Added: Court of Appeals for the Fifth Circuit (Fifth Circuit Court).
Subsequently, in October 2017, the Fifth Circuit Court granted the EPA's motion to hold the case in abeyance considering the EPA's representation that it intended to revisit the nonattainment rule.
In December 2017, the TCEQ submitted a petition for reconsideration to the EPA.
−Removed: In August 2019, the EPA issued a proposed Error Correction Rule for all three areas, which, if finalized, would revise its previous nonattainment designations and each area at issue would be designated unclassifiable.
−Removed: In September 2019, we submitted comments in support of the proposed Error Correction Rule.
−Removed: In April 2020, the Sierra Club filed suit to compel the EPA to issue a Finding of Failure to submit an attainment plan with respect to the three areas in Texas.
+Added: In August 2019, the EPA issued a proposed Error Correction Rule for all three areas, which, if finalized, would have revised its previous nonattainment designations and each area at issue would be designated unclassifiable.
In August 2020, the EPA issued a Finding of Failure for Texas to submit an attainment plan.
−Removed: In September 2020, the EPA proposed a "Clean Data" determination for the areas surrounding the retired Big Brown and Monticello plants, which, if finalized, would redesignate those areas as attainment based on monitoring data supporting an attainment designation.
−Removed: We expect the TCEQ to develop a SIP for Texas for submittal to the EPA in 2021.
+Added: In May 2021, the EPA finalized a "Clean Data" determination for the areas surrounding the retired Big Brown and Monticello plants, redesignating those areas as attainment based on monitoring data supporting an attainment designation.
+Added: In June 2021, the EPA published two notices;
+Added: one that it was withdrawing the August 2019 Error Correction Rule and a second separate notice denying petitions from Luminant and the State of Texas to reconsider the original nonattainment designations.
+Added: We, along with the State of Texas, challenged that EPA action and have consolidated it with the pending challenge in the Fifth Circuit Court, with the matter likely being fully briefed by March 2022.
+Added: In September 2021, the TCEQ considered a proposal for its nonattainment SIP revision for the Martin Lake area and an agreed order to reduce SO 2 emissions from the plant.
+Added: The proposed agreed order associated with the SIP proposal reduces emission limits as of January 2022.
+Added: Emission reductions required are those necessary to demonstrate attainment with the NAAQS.
+Added: The TCEQ's SIP action was finalized in February 2022 and will be submitted to the EPA for review and approval.
Ozone Designations
The EPA issued a final rule in October 2015 lowering the ozone NAAQS from 75 to 70 parts per billion.
−Removed: Various parties challenged the 2015 ozone NAAQS;
−Removed: however, in August 2019, the D.C.
−Removed: Circuit Court generally upheld the 2015 ozone NAAQS but remanded the secondary ozone standard to the EPA for reconsideration.
−Removed: In November 2017, the EPA issued an initial round of area designations for the 2015 ozone NAAQS, designating most areas of the U.S.
−Removed: as attainment/unclassifiable.
−Removed: Several states and other groups have filed lawsuits seeking to compel the EPA to complete designations for all areas of the country.
−Removed: In December 2017, the EPA notified states of expected nonattainment area designations for the 2015 ozone NAAQS.
−Removed: Those areas include areas concerning our Dicks Creek, Miami Fort and Zimmer facilities in Ohio, our Calumet facility in Illinois and our Wise, Ennis and Midlothian facilities in Texas.
−Removed: In June 2018, the EPA finalized these designations as marginal nonattainment areas.
−Removed: In November 2017, the EPA denied a petition from nine northeastern states to add several states, including Illinois and Ohio, to the Ozone Transport Region.
−Removed: Eight of the northeastern states filed a petition for judicial review challenging the EPA's action in the D.C.
−Removed: Circuit Court.
−Removed: In April 2019, the D.C.
−Removed: Circuit Court denied the states' petition for review, upholding the EPA's denial.
−Removed: Additionally, in January 2018, New York and Connecticut filed a lawsuit against the EPA in the Southern District of New York seeking to compel the agency to issue a FIP for the 2008 ozone NAAQS that addresses sources in five upwind states, including Illinois.
−Removed: The plaintiffs filed a motion for summary judgment on the matter in April 2018, and the court granted that motion in June 2018.
−Removed: As a result, the EPA was required to propose an action to address the 2008 ozone NAAQS by June 29, 2018, and promulgate a final action by December 6, 2018.
−Removed: In January 2019, the plaintiffs informed the district court that the EPA had satisfied its deadlines in accordance with the court's order.
−Removed: However, in January 2019, New York, Connecticut, four other states, and the City of New York filed a separate petition for review in the D.C.
−Removed: Circuit Court challenging the final action the EPA took in December 2018 consistent with the Southern District of New York's order.
−Removed: In October 2019, the D.C.
−Removed: Circuit Court vacated the final rule, and in February 2020, New Jersey, Connecticut, three other states and the City of New York filed a lawsuit against the EPA in the Southern District of New York to compel the EPA to promulgate a fully-compliant FIP to address the 2008 ozone NAAQS in light of the D.C.
−Removed: Circuit Court's vacatur.
−Removed: In July 2020, the U.S.
−Removed: District Court for the Southern District of New York ordered the EPA to issue a final rulemaking fully addressing the 2008 ozone NAAQS by March 15, 2021.
−Removed: The EPA proposed its action to address the outstanding 2008 ozone NAAQS obligations in October 2020.
−Removed: Vistra subsidiaries filed comments on that rulemaking in December 2020.
+Added: Areas surrounding our Dicks Creek, Miami Fort and Zimmer facilities in Ohio, our Calumet facility in Illinois and our Wise, Ennis and Midlothian facilities in Texas were designated marginal nonattainment areas in June 2018 by the EPA with an attainment deadline of August 2021.
+Added: The EPA is required to take action on areas that did not attain by that date by bumping up the region to a "moderate" designation with an attainment deadline of August 2024.
+Added: States will be required to develop SIPs to address emissions in areas with a higher (more stringent) classification.
+Added: In 2016, the EPA finalized the Cross-State Air Pollution Rule Update (CSAPR Update) to address 22 states' obligations with respect to the 2008 ozone NAAQS.
+Added: In 2019, following challenges by numerous parties, the D.C.
+Added: Circuit Court found that the CSAPR Update did not fully address certain states' 2008 ozone NAAQS obligations.
+Added: In October 2020, the EPA proposed an action to address the outstanding 2008 ozone NAAQS obligations in response to the D.C.
+Added: Circuit Court's 2019 ruling.
+Added: Vistra subsidiaries filed comments on that rulemaking in December 2020, and the EPA published a final rule in the Federal Register on April 30, 2021 that reduces ozone season NO X budgets in certain states.
+Added: We do not believe that the final rule causes a material adverse impact on our future financial results.
These actions are subject to the Environment Executive Order discussed above.
−Removed: In November 2016, the State of Maryland petitioned the EPA to impose additional NO X emission control requirements on 36 electricity generation units in five upwind states, including our Zimmer facility, that the State alleges are contributing to nonattainment with the 2008 ozone NAAQS in Maryland.
−Removed: In the fall of 2017, Maryland and several environmental groups filed lawsuits against the EPA seeking to compel the Agency to act on the State's petition.
−Removed: In October 2018, the EPA took final action denying the Maryland petition, and Maryland filed a petition for review of the EPA's denial in the D.C.
−Removed: Circuit Court.
−Removed: In May 2020, the D.C.
−Removed: Circuit Court largely upheld the EPA's denial of Maryland's petition but granted Maryland's petition with respect to the EPA's treatment of sources with non-catalytic controls and remanded the issue to the EPA.
−Removed: Given that the Zimmer facility utilizes SCR technology to control NO X emissions, we do not believe that the EPA's action on remand could cause a material adverse impact on our future financial results.
−Removed: In March 2018, the State of New York petitioned the EPA to find that emissions from hundreds of sources in nine states, including Illinois, Ohio, Virginia and West Virginia are significantly contributing to New York's nonattainment and interfering with New York's maintenance of the 2008 and 2015 ozone NAAQS.
−Removed: On October 18, 2019, the EPA took final action denying New York's petition.
−Removed: On October 29, 2019, New York, New Jersey and the City of New York filed a petition for review of the EPA's denial of the Section 126 petition.
−Removed: In July 2020, the D.C.
−Removed: Circuit Court vacated the EPA's denial and remanded the action to the EPA for further proceedings.
Coal Combustion Residuals (CCR)/Groundwater
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The requirements include location restrictions, structural integrity criteria, groundwater monitoring, operating criteria, liner design criteria, closure and post-closure care, recordkeeping and notification.
−Removed: The rule allows existing CCR surface impoundments to continue to operate for the remainder of their operating life, but generally would require closure (i.e., cessation of placement of CCR material and corrective action necessary to reach the standards provided in the CCR rule and applicable state rules) if groundwater monitoring demonstrates that the CCR surface impoundment is responsible for exceedances of groundwater quality protection standards or the CCR surface impoundment does not meet location restrictions or structural integrity criteria.
The deadlines for beginning and completing closure vary depending on several factors.
−Removed: Several petitions for judicial review of the CCR rule were filed.
The Water Infrastructure Improvements for the Nation Act (the WIIN Act), which was enacted in December 2016, provides for EPA review and approval of state CCR permit programs.
−Removed: In July 2018, the EPA published a final rule, which became effective in August 2018, that amends certain provisions of the CCR rule that the agency issued in 2015.
−Removed: Among other changes, the 2018 revisions extended closure deadlines to October 31, 2020, related to the aquifer location restriction and groundwater monitoring requirements.
−Removed: Also, in August 2018, the D.C.
+Added: In August 2018, the D.C.
Circuit Court issued a decision that vacates and remands certain provisions of the 2015 CCR rule, including an applicability exemption for legacy impoundments.
−Removed: In December 2019, the EPA issued a proposed rule containing a revised closure deadline for unlined CCR impoundments and new procedures for seeking extensions of that revised closure deadline.
−Removed: We filed comments on the proposal in January 2020.
−Removed: In August 2020, the EPA issued a rule finalizing the December 2019 proposal, establishing a deadline of April 11, 2021 to cease receipt of waste and initiate closure at unlined CCR impoundments.
+Added: In August 2020, the EPA issued a final rule establishing a deadline of April 11, 2021 to cease receipt of waste and initiate closure at unlined CCR impoundments.
The final rule allows a generation plant to seek the EPA's approval to extend this deadline if no alternative disposal capacity is available and either a conversion to comply with the CCR rule is underway or retirement will occur by either 2023 or 2028 (depending on the size of the impoundment at issue).
4 unchanged sentences
In November 2020, we submitted an alternate liner demonstration for one CCR unit at Martin Lake.
−Removed: In October 2020, the EPA published an advanced notice of proposed rulemaking requesting information to inform the EPA in the development of a rule to address legacy impoundments that existed prior to the 2015 CCR regulation as required by the August 2018 D.C.
−Removed: Circuit Court decision.
−Removed: We filed comments on this proposal in February 2021.
−Removed: The rules on revised closure deadlines and alternative liner demonstrations are subject to the Environment Executive Order discussed above.
+Added: In August 2021, we submitted a request to transfer our conversion application for the Zimmer facility to a retirement application following announcement that Zimmer will close by May 31, 2022.
+Added: In January 2022, the EPA determined that our conversion and retirement applications for our CCR facilities were complete but has not yet made a final determination on any of those applications.
MISO — In 2012, the Illinois Environmental Protection Agency (IEPA) issued violation notices alleging violations of groundwater standards onsite at our Baldwin and Vermilion facilities' CCR surface impoundments.
1 unchanged sentence
however, in 2016, the IEPA approved our closure and post-closure care plans for the Baldwin old east, east, and west fly ash CCR surface impoundments.
−Removed: We are working towards implementation of those closure plans.
−Removed: At our retired Vermilion facility, which was not subject to the EPA's 2015 CCR rule until the aforementioned D.C.
+Added: We have completed closure activities at those ponds at our Baldwin facility.
+Added: At our retired Vermilion facility, which was not potentially subject to the EPA's 2015 CCR rule until the aforementioned D.C.
Circuit Court decision in August 2018, we submitted proposed corrective action plans involving closure of two CCR surface impoundments ( i.e.
1 unchanged sentence
In May 2017, in response to a request from the IEPA for additional information regarding the closure of these Vermilion surface impoundments, we agreed to perform additional groundwater sampling and closure options and riverbank stabilizing options.
−Removed: In May 2018, Prairie Rivers Network filed a citizen suit in federal court in Illinois against our subsidiary Dynegy Midwest Generation, LLC (DMG), alleging violations of the Clean Water Act for alleged unauthorized discharges.
+Added: In May 2018, Prairie Rivers Network (PRN) filed a citizen suit in federal court in Illinois against our subsidiary Dynegy Midwest Generation, LLC (DMG), alleging violations of the Clean Water Act for alleged unauthorized discharges.
In August 2018, we filed a motion to dismiss the lawsuit.
In November 2018, the district court granted our motion to dismiss and judgment was entered in our favor.
−Removed: Plaintiffs have appealed the judgment to the U.S.
−Removed: Court of Appeals for the Seventh Circuit and argument was heard in November 2020.
+Added: In June 2021, the U.S.
+Added: Court of Appeals for the Seventh Circuit affirmed the district court's dismissal of the lawsuit, but stated that PRN may refile.
In April 2019, PRN also filed a complaint against DMG before the Illinois Pollution Control Board (IPCB), alleging that groundwater flows allegedly associated with the ash impoundments at the Vermilion site have resulted in exceedances both of surface water standards and Illinois groundwater standards dating back to 1992.
−Removed: This matter is in the very early stages.
+Added: In July 2021, we answered that complaint, and this matter is in the very early stages.
In 2012, the IEPA issued violation notices alleging violations of groundwater standards at the Newton and Coffeen facilities' CCR surface impoundments.
We are addressing these CCR surface impoundments in accordance with the federal CCR rule.
−Removed: In June 2018, the IEPA issued a violation notice for alleged seep discharges claimed to be coming from the surface impoundments at our retired Vermilion facility and that notice has since been referred to the Illinois Attorney General.
−Removed: In December 2018, the Sierra Club filed a complaint with the IPCB alleging the disposal and storage of coal ash at the Coffeen, Edwards, and Joppa generation facilities are causing exceedances of the applicable groundwater standards.
+Added: In June 2018, the IEPA issued a violation notice for alleged seep discharges claimed to be coming from the surface impoundments at our retired Vermilion facility, which is owned by our subsidiary DMG, and that notice was referred to the Illinois Attorney General.
+Added: In June 2021, the Illinois Attorney General and the Vermilion County State Attorney filed a complaint in Illinois state court with an agreed interim consent order which the court subsequently entered.
+Added: Given the violation notices and the enforcement action, the unique characteristics of the site, and the proximity of the site to the only national scenic river in Illinois, we agreed to enter into the interim consent order to resolve this matter.
+Added: Per the terms of the agreed interim consent order, DMG is required to evaluate the closure alternatives under the requirements of the newly implemented Illinois Coal Ash regulation (discussed below) and close the site by removal.
+Added: In addition, the interim consent order requires that during the impoundment closure process, impacted groundwater will be collected before it leaves the site or enters the nearby Vermilion river and, if necessary, DMG will be required to install temporary riverbank protection if the river migrates within a certain distance of the impoundments.
+Added: These proposed closure costs are reflected in the ARO in our condensed consolidated balance sheets (see Note 21 to the Financial Statements).
In July 2019, coal ash disposal and storage legislation in Illinois was enacted.
1 unchanged sentence
The law tasks the IEPA and the IPCB to set up a series of guidelines, rules and permit requirements for closure of ash ponds.
−Removed: In March 2020, the IEPA issued its proposed rule, and we expect the rulemaking process should be completed by early 2021.
−Removed: Under the proposed rule, coal ash impoundment owners would be required to submit a closure alternative analysis to the IEPA for the selection of the best method for coal ash remediation at a particular site.
−Removed: The proposed rule does not mandate closure by removal at any site.
−Removed: Public hearings for the proposed rule were held in August 2020 and September 2020.
−Removed: We expect that the rule will be finalized by March 2021.
+Added: Under the final rule, which was finalized and became effective in April 2021, coal ash impoundment owners would be required to submit a closure alternative analysis to the IEPA for the selection of the best method for coal ash remediation at a particular site.
+Added: The rule does not mandate closure by removal at any site.
+Added: In May 2021, we filed an appeal in the Illinois Fourth Judicial District over certain provisions of the final rule.
+Added: We filed our opening brief in October 2021.
+Added: Other parties have also filed appeals of certain provisions of the final rule.
+Added: In October 2021, we filed operating permit applications for 18 impoundments as required by the Illinois coal ash rule, and filed construction permit applications for three of our sites in January 2022.
For all of the above matters, if certain corrective action measures, including groundwater treatment or removal of ash, are required at any of our coal-fueled facilities, we may incur significant costs that could have a material adverse effect on our financial condition, results of operations, and cash flows.
−Removed: Until the revisions to the Illinois coal ash rulemaking are finalized and we undertake further site-specific evaluations required by each program we will not know the full range of costs of groundwater remediation, if any, that ultimately may be required under those rules.
−Removed: However, the currently anticipated CCR surface impoundment and landfill closure costs, as reflected in our existing ARO balances, reflect the costs of closure methods that our operations and environmental services teams believe are appropriate and protective of the environment for each location.
+Added: The Illinois coal ash rule was finalized in April 2021 and does not require removal.
+Added: However, the rule will require us to undertake further site-specific evaluations required by each program.
+Added: We will not know the full range of decommissioning costs, including groundwater remediation, if any, that ultimately may be required under the Illinois rule until permit applications have been submitted and approved by the IEPA.
+Added: However, the currently anticipated CCR surface impoundment and landfill closure costs, as reflected in our existing ARO liabilities, reflect the costs of closure methods that our operations and environmental services teams believe are appropriate and protective of the environment for each location.
The EPA and the environmental regulatory bodies of states in which we operate have jurisdiction over the diversion, impoundment and withdrawal of water for cooling and other purposes and the discharge of wastewater (including storm water) from our facilities.
10 unchanged sentences
In April 2017, the EPA granted petitions requesting reconsideration of the ELG rule and administratively stayed the rule's compliance date deadlines.
−Removed: In August 2017, the EPA announced that its reconsideration of the ELG rule would be limited to a review of the effluent limitations applicable to FGD and bottom ash wastewaters and the agency subsequently postponed the earliest compliance dates in the ELG rule for the application of effluent limitations for FGD and bottom ash wastewaters from November 1, 2018 to November 1, 2020.
−Removed: Based on these administrative developments, the Fifth Circuit Court agreed to sever and hold in abeyance challenges to effluent limitations.
+Added: In August 2017, the EPA announced that its reconsideration of the ELG rule would be limited to a review of the effluent limitations applicable to FGD and bottom ash wastewaters and the agency subsequently postponed the earliest compliance dates in the ELG rule for the application of effluent limitations for FGD and bottom ash wastewaters.
+Added: Based on these administrative developments, the Fifth Circuit Court agreed to sever and hold in abeyance challenges to those effluent limitations.
The remainder of the case proceeded, and in April 2019 the Fifth Circuit Court vacated and remanded portions of the EPA's ELG rule pertaining to effluent limitations for legacy wastewater and leachate.
−Removed: In November 2019, the EPA issued a proposal that would extend the compliance deadline for FGD wastewater to no later than December 31, 2025 and maintains the December 31, 2023 compliance date for bottom ash transport water.
−Removed: The proposal also creates new sub-categories of facilities with more flexible FGD compliance options, including a retirement exemption to 2028 and a low utilization boiler exemption.
−Removed: The proposed rule also modified some of the FGD final effluent limitations.
−Removed: We filed comments on the proposal in January 2020.
−Removed: The EPA published the final rule in October 2020.
−Removed: The final rule extends the compliance date for both FGD and bottom ash transport water to no later than December 2025, as negotiated with the state permitting agency.
+Added: The EPA published a final rule in October 2020 that extends the compliance date for both FGD and bottom ash transport water to no later than December 2025, as negotiated with the state permitting agency.
Additionally, the final rule allows for a retirement exemption that exempts facilities certifying that units will retire by December 2028 provided certain effluent limitations are met.
−Removed: Notification to the state agency on the retirement exemption is due by October 2021.
In November 2020, environmental groups petitioned for review of the new ELG revisions, and Vistra subsidiaries filed a motion to intervene in support of the EPA in December 2020.
−Removed: The final rule is subject to the Environment Executive Order discussed above.
+Added: In July 2021, the EPA announced its intent to revise the ELG rule and moved to hold the 2020 ELG revision litigation in abeyance pending the EPA's completion of its reconsideration rulemaking.
+Added: Notifications were made to Texas, Illinois and Ohio state agencies on the retirement exemption for applicable coal plants by the regulatory deadline of October 13, 2021.
Radioactive Waste
2 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.