What changed in this filing

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Item 1. Business

2023-03-01 compared with 2022-02-25 · 140 added, 141 removed, 412 unchanged (41% of the section changed)

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Vistra is a holding company operating an integrated retail and electric power generation business primarily in markets throughout the U.S.

Through our subsidiaries, we are engaged in competitive energy activities including electricity generation, wholesale energy sales and purchases, commodity risk management and retail sales of electricity and natural gas to end users.

Through our subsidiaries, we are engaged in competitive energy market activities including electricity generation, wholesale energy sales and purchases, commodity risk management and retail sales of electricity and natural gas to end users.

We incorporated under Delaware law in 2016.

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(i) Retail, (ii) Texas, (iii) East, (iv) West, (v) Sunset and (vi) Asset Closure.

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.

See Market Discussion below and Note 19 to the Financial Statements for further information concerning our reportable segments.

Business Strategy

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• Growth and transformation.

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.

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.

Vistra's strategy is to responsibly and reliably grow our businesses through economically attractive investments, including in retail business and renewable, energy storage and other assets that assist in reducing our carbon footprint and create a more sustainable and resilient company well positioned to generate long-term value for all of our stakeholders.

Since 2010, Vistra has retired more than 14,500 MW of coal and gas power plants resulting in a 45% reduction in carbon dioxide (CO 2 ) emissions, a 61% reduction in nitrogen oxide (NO X ) emissions, and a 81% reduction in sulfur dioxide (SO 2 ) emissions through year-end 2022, compared to a 2010 baseline.

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.

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.

Additionally, we have announced the retirement of approximately 5,000 MW of coal-fueled power plants by 2027, with plans to repurpose feasible sites to solar and energy storage developments.

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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.

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.

We intend to opportunistically evaluate the acquisition and development of high-quality generation and storage assets and power-related businesses, including retail businesses and renewable, energy storage and other assets, that complement our core capabilities and align with our operational, financial and sustainability goals.

We pride ourselves on our deliberate and responsible approach to grow and transform, considering impacts on all stakeholders.

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.

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.

As a result, consistent with our disciplined capital allocation approval process, we endeavor to pursue growth opportunities that have compelling economic value and align with or enhance our purpose and core principles.

• Disciplined capital allocation.

Vistra takes a disciplined approach to capital allocation in support of our commitment to maintain a strong balance sheet.

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.

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 $7.75 billion in capital to common shareholders from November 2021 through 2026.

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.

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.

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.

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 ESS projects, resulting in a continued modernization of Vistra's generation fleet.

• Integrated business model.

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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.

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.

Coupling retail with generation is a core competitive advantage that reduces the effects of commodity price movements and contributes to the stability and predictability of our cash flows, a crucial feature of the strategy as Vistra responsibly grows its renewables portfolio and winds down its coal-fueled assets.

• Superior customer service.

Through our retail brands, including TXU Energy, Ambit Energy, Value Based Brands, Dynegy Energy Services, Homefield Energy, TriEagle Energy, Public Power and U.S.

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.

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.

Gas & Electric, we serve the retail electricity and natural gas needs of end-use residential, small business and commercial and industrial electricity customers through multiple sales and marketing channels.

In addition to benefitting from our integrated business model, we leverage our brands, our commitment to safe, reliable and affordable product offerings, our wholesale commodity risk management operations and our strong customer service to differentiate our products and solutions from our competitors.

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.

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.

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 SM residential plans, TXU Energy's Free EV Miles SM residential plans, MyEnergy Dashboard SM , the TXU Energy Green Up SM renewable energy credit program and a diverse set of solar options.

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.

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by fighting hunger through a network of food banks.

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.

The Board has ultimate oversight of all our ESG initiatives and ensures these considerations are embedded at every level of our company.

Beyond these giving initiatives, Vistra endeavors to consider ESG and all of its stakeholders – customers, suppliers, local communities, employees, contractors, investors and the environment, among others – into our material decisions, processes and activities.

The Board has ultimate oversight of our ESG initiatives.

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.

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Dividend Declarations — In February 2023, the Board declared a quarterly dividend of $0.1975 per share of common stock that will be paid in March 2023 and a semi-annual dividend of $40.00 per share of Series A Preferred Stock that will be paid in April 2023.

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.

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.

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).

The net proceeds of the Series A Offering were approximately $990 million, after deducting underwriting commissions and offering expenses.

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.

See Note 14 to the Financial Statements for more information concerning the Series A Preferred Stock and our Share Repurchase Program.

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.

The net proceeds of the Series B Offering were approximately $985 million, after deducting underwriting commissions and offering expenses.

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.

See Note 14 to the Financial Statements for more information concerning the Series B Preferred Stock.

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.

The Credit Agreement provides for a $1.0 billion senior secured commodity-linked revolving credit facility (the Commodity-Linked Facility).

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.

See Note 11 to the Financial Statements for more information concerning the Commodity-Linked Facility.

Market Discussion

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The following is a summary of our segments:

• The Retail segment represents Vistra's retail sales of electricity and natural gas to residential, commercial and industrial customers.

• 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 Retail segment represents Vistra's retail sales of electricity and natural gas to residential, small business and commercial and industrial customers.

• The Texas segment represents Vistra's electricity generation operations in the ERCOT market, 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.

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.

• 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.

• The Sunset segment represents plants with announced retirement plans that were previously reported in the ERCOT, PJM and MISO segments.

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.

electric grid, other than assets that are now part of the Sunset or Asset Closure segments, respectively, and includes operations in the PJM, ISO-NE and NYISO markets.

• The West segment represents Vistra's electricity generation operations in the CAISO market, including our development of battery ESS projects at our Moss Landing power plant site (see Note 2 to the Financial Statements).

• The Sunset segment represents generation plants with announced retirement dates after December 31, 2022.

Separately reporting the Sunset segment differentiates operating plants with announced retirement plans from our other operating plants in the Texas, East and West segments.

• The Asset Closure segment is engaged in the decommissioning and reclamation of retired plants and mines.

The Asset Closure segment also includes results from generation plants we retired in the year ended December 31, 2022.

See Note 19 to the Financial Statements for further information concerning reportable segments.

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In ISO/RTO regions with centrally dispatched market structures (e.g., ERCOT, PJM, ISO-NE, NYISO, MISO, and CAISO), all generators selling into the centralized market receive the same price for energy sold based on the bid price associated with the production of the last MWh that is needed to balance supply with demand within a designated zone or at a given location.

Different zones or locations within the same ISO/RTO may produce different prices respective to other zones within the same ISO/RTO due to transmission losses and congestion.

Different zones or locations within the same ISO/RTO may produce different prices respective to other zones or locations within the same ISO/RTO due to transmission losses and congestion.

For example, a less efficient and/or less economical natural gas-fueled unit may be needed in some hours to meet demand.

If this unit's production is required to meet demand on the margin, its offer price will set the market clearing price that will be paid for all dispatched generation in the same zone or location (although the price paid at other zones or locations may vary because of transmission losses and congestion), regardless of the price that any other unit may have offered into the market.

If this unit's production is required to meet demand on the margin, its offer price will set the market clearing price for all dispatched generation in the same market (although the price paid at other zones or locations may vary because of transmission losses and congestion), regardless of the price that any other unit may have offered into the market.

Generators will receive the location-based marginal price for their output.

Retail Markets

Retail Segment

The Retail segment is engaged in retail sales of electricity, natural gas and related services to approximately 3.5 million customers.

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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.

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.

This is because the retail load requirements of our retail operations provide a natural offset to the length of Luminant's generation portfolio thereby reducing the exposure to wholesale power price volatility as compared to a non-integrated independent power producer.

Additionally, our wholesale commodity risk management operations help increase the profitability of our retail business by allowing us to bypass bid-ask spread in the market (particularly for illiquid products and time periods) and achieve lower collateral costs as compared to other, non-integrated retail electric providers.

Moreover, our retail business can reduce, to some extent, the exposure of our wholesale generation business to wholesale power price volatility.

This is because the retail load requirements of our retail operations can provide a natural offtake to the length of Luminant's generation portfolio when economic, thereby reducing the exposure to wholesale power price volatility as compared to a non-integrated independent power producer.

Outside of ERCOT, we also serve residential, municipal, commercial and industrial customers substantially through our Homefield Energy, Dynegy Energy Services, Public Power, U.S.

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Our Texas segment is comprised of 21 power generation facilities totaling 18,141 MW of generation capacity in ERCOT.

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 21 18,141

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.

We have announced the potential for additional development of solar photovoltaic power generation facilities and battery ESS in Texas, with estimated commercial operation dates for these facilities beginning in 2024.

See Note 2 to the Financial Statements for a summary of our solar and battery energy storage projects.

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.

ERCOT — ERCOT is an ISO that manages the flow of electricity from approximately 98,000 MW of expected Summer 2023 peak generation capacity to approximately 26 million Texas customers, representing approximately 90% of the state's electric load.

As an energy-only market, ERCOT's market design is distinct from other competitive electricity markets in the U.S.

Other markets maintain a minimum planning reserve margin through regulated planning, resource adequacy requirements and/or capacity markets.

In contrast, ERCOT's resource adequacy is predominately dependent on energy-market price signals.

In contrast, ERCOT's resource adequacy is currently predominately dependent on energy-market price signals.

The PUCT recently voted to recommend a Performance Credit Mechanism (PCM) that would align a required reliability standard with resource availability during higher-risk system conditions in a centrally-cleared market.

These changes are currently being evaluated by the PUCT and the Texas legislature and have not been implemented as of the date hereof.

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.

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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.

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.

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.

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In addition, ERCOT uses ancillary services to maintain system reliability, including regulation service, responsive reserve service and non-spinning reserve service.

Ancillary services are provided by generators to help maintain the stable voltage and frequency requirements of the transmission system.

Ancillary services are provided by generators and qualified loads to help maintain the stable voltage and frequency requirements of the transmission system.

Because ERCOT has one of the highest concentrations of wind and solar capacity generation among U.S.

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We have participated in RPM auctions for years up to and including PJM's planning year 2024-2025, which ends May 31, 2025.

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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An independent market monitor continually monitors PJM markets to ensure a robust, competitive market and to identify improper behavior by any entity.

ISO-NE — ISO-NE is an ISO that manages the flow of electricity from approximately 31,000 MW of installed generation capacity to approximately 15 million customers in the states of Vermont, New Hampshire, Massachusetts, Connecticut, Rhode Island and Maine.

ISO-NE — ISO-NE is an ISO that manages the flow of electricity from approximately 32,600 MW of winter generation capacity to approximately 15 million customers in the states of Vermont, New Hampshire, Massachusetts, Connecticut, Rhode Island and Maine.

ISO-NE dispatches power plants to meet system energy and reliability needs and settles physical power deliveries at LMPs.

Its energy markets allow market participants to buy and sell energy and ancillary services at prices established through real-time and day-ahead auctions.

Energy prices vary among the participating states in ISO-NE and are largely influenced by transmission constraints and fuel supply.

Energy prices vary among the locations in ISO-NE and are largely influenced by transmission constraints and fuel supply.

ISO-NE offers a forward capacity market where capacity prices are determined through auctions.

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Its energy markets allow market participants to buy and sell energy and ancillary services at prices established through real-time and day-ahead auctions.

Energy prices vary among the regional zones in the NYISO and are largely influenced by transmission constraints and fuel supply.

Energy prices vary among the regional zones and locations in the NYISO and are largely influenced by transmission constraints and fuel supply.

NYISO offers a forward capacity market where capacity prices are determined through auctions.

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Energy is priced in CAISO utilizing an LMP methodology.

The capacity market is comprised of Generic, Flexible and Local Resource Adequacy (RA) Capacity and is administered by the California Public Utilities Commission.

Unlike other centrally cleared capacity markets, the resource adequacy market in California is a bilaterally traded market.

The capacity market is comprised of Generic, Flexible and Local Resource Adequacy (RA) Capacity and is administered by the California Public Utilities Commission (CPUC).

Unlike other centrally cleared capacity markets, the resource adequacy markets in California are primarily bilaterally traded markets.

In 2020, the CPUC introduced a central procurement entity for Local RA Capacity effective for the 2023 compliance year.

The central procurement entity runs a pay-as-bid auction for Local RA Capacity.

In November 2016, CAISO implemented a voluntary capacity auction for annual, monthly, and intra-month procurement to cover for deficiencies in the market.

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Sunset Segment

Our Sunset segment is comprised of 10 power generation facilities totaling 7,486 MW of generating capacity in MISO, PJM and ERCOT.

Our Sunset segment is comprised of six power generation facilities totaling 5,163 MW of generating capacity in MISO, PJM and ERCOT.

The Sunset segment represents plants with announced retirement plans between 2022 and 2027 that were previously reported in the ERCOT, PJM and MISO segments.

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ERCOT ST Coal 1 650

MISO ST Coal 4 3,187

MISO CT Natural Gas 2 221

MISO (a) ST Coal 3 2,385

PJM ST Coal 2 2,128

Total Sunset Segment 6 5,163

(a) Includes the 585 MW Edwards facility that was retired on January 1, 2023.

See Texas Segment above for a discussion of the ERCOT ISO and East Segment above for a discussion of the PJM RTO.

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 — MISO is an RTO that manages the flow of electricity from approximately 190,000 MW of installed generation capacity to approximately 45 million customers in all or parts of Iowa, Minnesota, North Dakota, Wisconsin, Michigan, Kentucky, Indiana, Illinois, Missouri, Arkansas, Mississippi, Texas, Louisiana, Montana, South Dakota and Manitoba, Canada.

MISO dispatches power plants to meet system energy and reliability needs and settles physical power deliveries at LMPs.

Its energy markets allow market participants to buy and sell energy and ancillary services at prices established through real-time and day-ahead auctions.

Energy prices vary among the regional zones in MISO and are largely influenced by transmission constraints and fuel supply.

Energy prices vary among the regional zones and locations in MISO and are largely influenced by transmission constraints and fuel supply.

An independent market monitor is responsible for evaluating the performance of the markets and identifying conduct by market participants or MISO that may compromise the efficiency or distort the outcome of the markets.

MISO administers a one-year Planning Resource Auction for the next planning year from June 1st of the current year to May 31st of the following year.

In 2022, FERC approved MISO's proposal to change the annual Planning Resource Auction into a seasonal auction, effective for the 2023-2024 planning year.

We participate in these auctions with open capacity that has not been committed through bilateral or retail transactions.

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The pattern of this fluctuation may change depending on, among other things, the retail load served and the terms of contracts to purchase or sell electricity.

Competition in the markets in which we operate is impacted by electricity and fuel prices, congestion along the power grid, subsidies provided by state and federal governments for new and existing generation facilities, new market entrants, construction of new generating assets, technological advances in power generation, the actions of environmental and other regulatory authorities, and other factors.

Competition in the markets in which we operate is impacted by electricity and fuel prices, congestion along the power grid, subsidies provided by state and federal governments for new and existing generation facilities, including renewables generation and battery ESS, new market entrants, construction of new generating assets, technological advances in power generation, the actions of environmental and other regulatory authorities, and other factors.

We primarily compete with other electricity generators and retailers based on our ability to generate electric supply, market and sell electricity at competitive prices and to efficiently utilize transportation from third-party pipelines and transmission from electric utilities to deliver electricity to end-users.

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In 2022, 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.

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.

Although we do not focus on recordable incidents, our Total Recordable Incident rate (TRIR) for the company was 0.85, in the second quartile as compared to the Edison Electric Institute (EEI) 2021 Total Company Injury Data.

We encourage near-miss reporting and review of events to promote a learning environment.

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In addition to compliance, our generation fleet has a total of 14 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.

Four additional plants have submitted applications and are awaiting review by the OSHA.

Two 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.

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Additionally, 32 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.

In 2021, we continued our COVID-19 protections and protocols ensuring the safety of all of our employees.

In 2022, we continued our COVID-19 protections and protocols helping to ensure the safety of all of our employees.

Diversity, Equity and Inclusion

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Vistra's diversity is evolving, and our Board and management are leading by example.

Currently, three of the ten Board members are women, and two of the ten are ethnically diverse.

Currently, four of the eleven Board members are women, and two of the eleven are ethnically diverse.

Overall, 32% of the Company's workforce is ethnically diverse.

Women currently hold 25% of the Company's senior management positions, and ethnically diverse employees represent 27% of senior management.

During 2021, we launched multiple initiatives to unlock the full potential of our people - and our company - through our diversity, equity, and inclusion efforts.

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.

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.

Seven new ERGs were formed in 2021, bringing the total number to twelve.

New ERGs represent not only diverse cultures, but also employees with disabilities, the LGBTQ+ community and employees engaged in innovation.

During 2022, we continued our efforts to unlock the full potential of our people by launching multiple new initiatives within our diversity, equity, and inclusion efforts.

Our Chief Diversity Officer continued to develop and lead Vistra's employee-led Diversity, Equity and Inclusion Advisory Council, established in 2020.

In 2022, the council expanded its role and participated directly in the development of new diversity training modules, the launching of Vistra's 2022 Employee Engagement Survey and the launch of a new learning platform.

We continued to utilize our thirteen Employee Resource Groups (ERGs) 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.

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.

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.

The emphasis on skills based hiring continued in 2022.

People managers across the organization also participated in one-day and two-day training sessions conducted by Basic Diversity, Inc.

Vistra is active in our communities to promote inclusivity.

Vistra's supply chain diversity initiative seeks to reflect our customer base and workforce compositions through creating a diverse supply chain.

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.

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.

Vistra continued to expand its commitment to an inclusive economy by fostering mentorship of diverse businesses.

Further, in the third 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

We believe the development of employees at all levels is critical to Vistra's current and future success.

We have launched key programs to develop leaders at all levels of the organization, including monthly leader meetings for director-level employees focusing on gaining a deeper understanding of Vistra's strategy, developing cross-functional relationships and interacting with senior leadership of the company.

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.

We also revised multiple leadership programs to continue virtually while we continue with remote work during the current pandemic.

We have launched key programs to develop leaders at all levels of the organization.

Vistra's 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.

We also reinstated in-person leadership development classes and continued to provide virtual opportunities.

In 2022, Vistra added an emotional intelligence program that was well received by leaders across the organization.

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.

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.

Over 600 employees participated in 2021 and logged over 4,000 hours of development.

The launch of the new and improved online learning platform in 2022 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.

In 2022, Vistra continued its formal mentoring program available to all employees to focus on topics like organizational knowledge, career development, individual development, collaboration and leadership.

Over 600 employees participated in 2022.

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.

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Fitness centers in multiple facilities offer cardio equipment, a selection of free weights and exercise mats.

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.

Our employee-led wellness team engages our people to get active and support causes that promote healthy living.

With support from the company, the wellness team covers the registration costs for employees to participate in running and cycling events throughout the year.

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We are subject to extensive environmental regulation by governmental authorities, including the EPA and the environmental regulatory bodies of states in which we operate.

The EPA has recently finalized or proposed several regulatory actions establishing new requirements for control of certain emissions from sources, including electricity generation facilities.

The EPA has finalized or proposed several regulatory actions establishing new requirements for control of certain emissions from sources, including electricity generation facilities.

Risk Factors for additional discussion of risks posed to us regarding regulatory requirements.

See Note 12 to the Financial Statements for a discussion of litigation related to EPA reviews.

In January 2021, the Biden administration issued a series of Executive Orders, including one titled Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis (the Environment Executive Order) which directed agencies, including the EPA, to review various agency actions promulgated during the prior administration and take action where the previous administration's action conflicts with national objectives.

Several of the EPA agency actions discussed below are now subject to this review.

Climate Change

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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.

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.

We have already taken or announced significant steps to transform our generation portfolio and reduce the emissions profile of our generation fleet, including:

• Solar Development Projects — We began commercial operation of our 180 MW Upton 2 solar facility in 2018.

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 further diversification into low-to-no emission businesses, primarily renewables and energy storage.

We have already taken or announced significant steps to transform our generation portfolio and reduce the emissions intensity of our generation fleet, including:

• Solar Projects — We operate solar generations facilities totaling 338 MW in Texas.

We have announced our plans to develop:

◦ up to 768 MW of solar generation facilities in Texas with expected commercial operation dates during 2022-2023, and

◦ additional solar generation facilities in Texas, with expected commercial operation dates beginning in 2024, and

◦ 300 MW of solar generation facilities at retired or to-be retired plant sites in Illinois with expected commercial operation dates ranging from 2024 to 2025.

• 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.

• Battery Energy Storage Projects — We operate battery ESSs totaling 270 MW in Texas and 400 MW in California.

We have announced our plans to develop:

◦ 260 MW of battery ESS in Texas with an expected commercial operation date in 2022;

◦ 150 MW of battery ESS at retired or to-be-retired plant sites in Illinois with expected commercial operation dates ranging from 2024 to 2025, and

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In 2018, we acquired 15,448 MW of CCGTs across various ISOs/RTOs in connection with the Merger.

• 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.

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.

• Retirements of Fossil Fuel Generation — Since 2018, lignite/coal-fueled generation facilities retired include 4,167 MW in Texas, 3,455 MW in Illinois (including the Edwards facility that was retired on January 1, 2023) and 1,300 MW in Ohio.

We expect to retire an additional 4,578 MW of coal-fueled generation facilities in Illinois, Ohio and Texas no later than year-end 2027.

See Note 2 to the Financial Statements for discussion of our solar and battery ESS projects and Note 3 to the Financial Statements for discussion of our retirement of generation facilities.

GHG Emissions

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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.

In October 2021, the U.S.

Supreme Court granted four petitions for certiorari of the D.C.

Circuit Court's decision and consolidated the cases for review.

The case is now fully briefed and scheduled for oral argument in February 2022.

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.

In April 2021, the D.C.

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.

In June 2022, the U.S.

Supreme Court issued an opinion reversing the D.C.

Circuit Court's decision, and finding that the EPA exceeded its authority under Section 111 of the Clean Air Act when the EPA set emission requirements in the CPP based on generation shifting.

In October 2022, the D.C.

Circuit Court issued an amended judgment, denying petitions for review of the ACE rule and challenges to the repeal of the CPP.

In addition, the EPA has opened a docket seeking input on questions related to the regulation of GHGs under Section 111(d) and has indicated its intent to issue a new proposal in Spring 2023.

State Regulation of GHGs

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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.

RGGI is currently conducting its third program review to be completed in 2022 which may include an updated model rule.

RGGI is currently conducting its third program review to be completed by the end of 2023 which may include an updated model rule.

Our generating facilities in Connecticut, Maine, Massachusetts, New Jersey, New York and Virginia emitted approximately 9 million tons of CO 2 during 2022.

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In June 2019, New Jersey adopted two rules that govern New Jersey's reentry into the RGGI auction and distribution of the RGGI auction proceeds.

Pennsylvania — In April 2022, the Pennsylvania Environmental Quality Board finalized regulations that would establish Pennsylvania's participation in RGGI.

In July 2022, the Commonwealth Court took action to uphold a preliminary injunction over Pennsylvania's RGGI regulations.

The Pennsylvania Supreme Court denied a request for emergency relief from the injunction in August 2022 and review of the legality of the injunction is now pending before the Pennsylvania Supreme Court.

As a result, RGGI is not being implemented or enforced in Pennsylvania at this time.

California — Our assets in California are subject to the California Global Warming Solutions Act, which required the California Air Resources Board (CARB) to develop a GHG emission control program to reduce emissions of GHGs in the state to 1990 levels by 2020.

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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.

Additionally, our MISO coal-fueled facilities mainly use low sulfur coal.

Cross-State Air Pollution Rule (CSAPR)

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 National Ambient Air Quality Standards (NAAQS).

In 2019, following challenges by numerous parties, the D.C.

Circuit Court found that the CSAPR Update did not fully address certain states' 2008 ozone NAAQS obligations.

In October 2020, the EPA proposed an action to address the outstanding 2008 ozone NAAQS obligations in response to the D.C.

Circuit Court's 2019 ruling.

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.

We do not believe that the final rule causes a material adverse impact on our future financial results.

In October 2015, the EPA revised the primary and secondary ozone NAAQS to lower the 8-hour standard for ozone emissions during ozone season (May to September).

As required under the CAA, in October 2018, the State of Texas submitted a State Implementation Plan (SIP) to the EPA demonstrating that emissions from Texas sources do not contribute significantly to nonattainment in, or interfere with maintenance by, any other state with respect to the revised ozone NAAQS.

In February 2023, the EPA disapproved Texas's SIP.

In April 2022, prior to the EPA's disapproval of Texas's SIP, the EPA proposed a Federal Implementation Plan (FIP) to address the 2015 ozone NAAQS.

The proposed FIP would apply to 25 states beginning with the 2023 ozone seasons.

States where Vistra operates generation units that would be subject to this proposed rule are Illinois, New Jersey, New York, Ohio, Pennsylvania, Texas, Virginia and West Virginia.

The revised Group 3 trading program (previously established in the Revised CSAPR Update Rule) would include emission budgets for 2023 that the EPA says are achievable through existing controls installed at power plants.

Starting in 2026, the budgets would be based on levels achieved through installation of SCR controls at the approximately 20% of large coal-fueled power plants that do not currently have such controls.

Starting in 2025, the budgets would be updated annually to account for source retirements.

Starting in 2024, the rule would also impose a daily emissions rate limit for coal-fueled units with existing controls and would impose such a limit for units installing new controls in 2027.

We, along with many other companies, trade groups, states and ISOs, including ERCOT, PJM and MISO, filed responsive comments to the EPA's proposal in June 2022, expressing concerns about certain elements of the proposal, particularly those that may result in challenges to electric reliability under certain conditions.

The EPA is expected to finalize the proposed FIP in March 2023.

In February 2022, the State of Texas, Luminant, certain trade groups, and others filed legal challenges to the EPA's disapproval of Texas's SIP in the U.S.

Court of Appeals for the Fifth Circuit (Fifth Circuit Court).

If the EPA finalizes the FIP described above as expected in March 2023, it will impose reduced ozone season NO X budgets under the CSAPR program for our Texas power plants.

We cannot predict the outcome of our legal challenges to the EPA's disapproval of the SIP, any legal action related to the EPA's FIP once finalized, or the effects of the final rule (after the conclusion of legal challenges) on operations of our generation fleet.

Regional Haze — Reasonable Progress and Best Available Retrofit Technology (BART) for Texas

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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.

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).

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 SIP and a partial 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.

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The compliance obligations in the program started on January 1, 2019.

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.

For NO X , the rule adopted the CSAPR's ozone program as BART and for particulate matter, the rule approved Texas' SIP that determines that no electricity generation units are subject to BART for particulate matter.

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.

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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.

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.

The EPA has stated it is starting a proceeding for reconsideration of the BART rule, which we expect in 2023.

The challenges in the D.C.

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The final designations require Texas to develop nonattainment plans for these areas.

In February 2017, the State of Texas and Luminant filed challenges to the nonattainment designations in the U.S.

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.

In February 2017, the State of Texas and Luminant filed challenges to the nonattainment designations in the Fifth Circuit Court.

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.

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.

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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.

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.

We, along with the State of Texas, challenged that EPA action and have consolidated it with the pending challenge in the Fifth Circuit Court, and this case was argued before the Fifth Circuit Court in July 2022.

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.

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Emission reductions required are those necessary to demonstrate attainment with the NAAQS.

The TCEQ's SIP action was finalized in February 2022 and will be submitted to the EPA for review and approval.

The TCEQ's SIP action was finalized in February 2022 and has been submitted to the EPA for review and approval.

Ozone Designations

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States will be required to develop SIPs to address emissions in areas with a higher (more stringent) classification.

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.

In 2019, following challenges by numerous parties, the D.C.

Circuit Court found that the CSAPR Update did not fully address certain states' 2008 ozone NAAQS obligations.

In October 2020, the EPA proposed an action to address the outstanding 2008 ozone NAAQS obligations in response to the D.C.

Circuit Court's 2019 ruling.

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.

Coal Combustion Residuals (CCR)/Groundwater

CCR/Groundwater

The combustion of coal to generate electric power creates large quantities of ash and byproducts that are managed at power generation facilities in dry form in landfills and in wet form in surface impoundments.

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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.

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.

In January 2022, the EPA determined that our conversion and retirement applications for our CCR facilities were complete but has not yet proposed action on any of those applications.

In addition, in January 2022, the EPA also made a series of public statements, including in a press release, that purported to impose new, more onerous closure requirements for CCR units.

The EPA issued these new purported requirements without prior notice and without following the legal requirements for adopting new rules.

These new purported requirements announced by the EPA are contrary to existing regulations and the EPA's prior positions.

In April 2022, we, along with the Utility Solid Waste Activities Group (USWAG), a trade association of over 130 utility operating companies, energy companies, and certain other industry associations, filed petitions for review with the D.C.

Circuit Court and have asked the court to determine that the EPA cannot implement or enforce the new purported requirements because the EPA has not followed the required procedures.

The State of Texas and the TCEQ have intervened in support of the petitions filed by the Vistra subsidiaries and USWAG, and various environmental groups have intervened on behalf of the EPA.

Briefing on this petition will be complete by May 2023.

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.

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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.

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 May 2018, Prairie Rivers Network (PRN) filed a citizen suit in federal court in Illinois against 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.

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In June 2021, the U.S.

Court of Appeals for the Seventh Circuit affirmed the district court's dismissal of the lawsuit, but stated that PRN may refile.

Court of Appeals for the Seventh Circuit affirmed the district court's dismissal of the lawsuit.

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.

In July 2021, we answered that complaint, and this matter is in the very early stages.

We answered that complaint in July 2021, and this matter is currently abated.

In 2012, the IEPA issued violation notices alleging violations of groundwater standards at the Newton and Coffeen facilities' CCR surface impoundments.

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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.

These proposed closure costs are reflected in the ARO in our condensed consolidated balance sheets (see Note 21 to the Financial Statements).

The interim order was modified in December 2022 to require certain amendments to the Safety Emergency Response Plan.

These proposed closure costs are reflected in the ARO in our consolidated balance sheets (see Note 20 to the Financial Statements).

In July 2019, coal ash disposal and storage legislation in Illinois was enacted.

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The rule does not mandate closure by removal at any site.

In May 2021, we filed an appeal in the Illinois Fourth Judicial District over certain provisions of the final rule.

We filed our opening brief in October 2021.

In May 2021, we filed an appeal in the Illinois Fourth Judicial District over certain provisions of the final rule and that case remains pending.

Other parties have also filed appeals of certain provisions of the final rule.

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.

One additional closure construction application will be filed for our Baldwin facility in 2023.

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.

The Illinois coal ash rule was finalized in April 2021 and does not require removal.

However, the rule will require us to undertake further site-specific evaluations required by each program.

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.

However, the rule required us to undertake further site specific evaluations required by each program.

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.

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We also believe we can satisfy the requirements necessary to obtain any required permits or renewals.

Cooling Water Intake Structures — Clean Water Act Section 316(b) regulations pertaining to existing water intake structures at large generation facilities became effective in 2014.

This provision generally requires that the location, design, construction and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impacts.

Although the rule does not mandate a certain control technology, it does require site-specific assessments of technology feasibility on a case-by-case basis at the state level.

At this time, we estimate the cost of our compliance with the cooling water intake structure rule to be minimal at our Illinois plants due to the planned retirements of those plants by 2027.

Our estimate could change materially depending upon a variety of factors, including site-specific determinations made by states in implementing the rule, the results of impingement and entrainment studies required by the rule, the results of site-specific engineering studies and the outcome of litigation concerning the rule and potential plant retirements.

Effluent Limitation Guidelines (ELGs) — In November 2015, the EPA revised the ELGs for steam electricity generation facilities, which will impose more stringent standards (as individual permits are renewed) for wastewater streams, such as flue gas desulfurization (FGD), fly ash, bottom ash and flue gas mercury control wastewaters.

Effluent Limitation Guidelines (ELGs) — In November 2015, the EPA revised the ELGs for steam electricity generation facilities, which will impose more stringent standards (as individual permits are renewed) for wastewater streams, such as FGD, fly ash, bottom ash and flue gas mercury control wastewaters.

Various parties filed petitions for review of the ELG rule, and the petitions were consolidated in the Fifth Circuit Court.

In April 2017, the EPA granted petitions requesting reconsideration of the ELG rule and administratively stayed the rule's compliance date deadlines.

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.

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.

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.

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.

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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.

What changed 10-K

Item 1. Business