What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-02-29 compared with 2023-03-01 · 232 added, 223 removed, 329 unchanged (58% of the section changed)

References in this report to "we," "our," "us" and "the Company" are to Vistra and/or its subsidiaries, as apparent in the context.

See Glossary for defined terms.

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 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.

Effective July 2, 2020, we changed our name from Vistra Energy Corp.

to Vistra Corp.

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 3.5 million customers and operate in 20 states and the District of Columbia.

Our generation fleet totals approximately 37,000 MW of generation capacity with a portfolio of natural gas, nuclear, coal, solar and battery energy storage facilities.

Vistra has six reportable segments:

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

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

Business Strategy

Vistra is a leader in the clean power transition.

With a strong zero-carbon generation portfolio and a deliberate and responsible strategy to decarbonize, the company is focused on delivering healthy returns and value for all stakeholders.

Our business strategy is focused on the following areas:

• Growth and transformation.

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.

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.

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.

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.

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 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, 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 $7.75 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 operate its business and 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 ESS projects, resulting in a continued modernization of Vistra's generation fleet.

• Integrated business model.

Our integrated business model is an important component of our business strategy.

This element of our business provides long-term sustainable solutions enabled by our diversified portfolio.

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 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 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 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.

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.

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.

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.

Our commercial team is focused on effectively and efficiently managing risk, through opportunistic hedging, and optimizing our assets and business positions.

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.

We actively hedge near-term cash flows and optimize long-term value through hedging and forward sales contracts.

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.

• Corporate responsibility and ESG initiatives.

It is our purpose to light up people's lives and power a better way forward.

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.

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.

TXU Energy Aid serves as an integral resource for social service agencies that assist those in need across Texas pay their electricity bills.

Ambit Cares partners with Feeding America® to assist those in need across the U.S.

by fighting hunger through a network of food banks.

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.

Our ESG initiatives complement our business strategy and strengthen our resiliency.

For instance, our investment in and growth of Vistra Zero supports our long-term goal to achieve net-zero carbon emissions by 2050.

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

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.

See Glossary of Terms and Abbreviations for defined terms.

Vistra is an integrated retail electricity and power generation company.

We combine an innovative, customer-centric approach to retail sales with safe, reliable, diverse, and efficient power generation.

Our integrated power generation and wholesale operation allows us to efficiently obtain the electricity needed to serve our customers at the lowest cost.

The integrated model enables us to structure products and contracts in a way that offers significant value compared to stand-alone retail electric providers.

The Company brings its products and services to market in 20 states and the District of Columbia, including all major competitive wholesale power markets in the U.S.

We serve approximately 4 million residential, commercial, and industrial retail customers with electricity and natural gas.

Our generation fleet totals approximately 37,000 megawatts of generation capacity powered by a diverse portfolio, including natural gas, nuclear, coal, solar, and battery energy storage facilities.

Vistra is guided by four core principles:

we do business the right way, we work as a team, we compete to win, and we care about our stakeholders, including our customers, our communities where we work and live, our employees, and our investors.

Market Discussion

The operations of Vistra are aligned into six reportable business segments:

The operations of Vistra, as an integrated retail electricity and power generation company, are further aligned into six reportable business segments:

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

The following is a summary of our segments:

• 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 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.

Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs)

Separately, ISOs/RTOs administer the transmission infrastructure and markets across a regional footprint in most of the markets in which we operate.

Our Texas, East, West and Sunset segments include our electricity generation operations, and our Asset Closure segment is engaged in the decommissioning and reclamation of retired plants and mines.

Retail Operations

Vistra is one of the largest competitive residential retail electricity providers in the U.S.

Our Retail operations are engaged in retail sales of electricity, natural gas and related services to approximately 4 million customers.

Substantially all of our retail activities are conducted by TXU Energy, Ambit Energy, Dynegy Energy Services, Homefield Energy, and U.S.

Gas & Electric across 19 U.S.

states and the District of Columbia.

Our TXU Energy brand, which has been used to sell electricity to customers in the competitive retail electricity market in Texas for approximately 20 years, is registered and protected by trademark law and is the only material intellectual property asset that we own.

We have also acquired the trade names for Ambit Energy, Dynegy Energy Services, Homefield Energy, TriEagle Energy, Public Power and U.S.

Gas & Electric through the Ambit Transaction, Crius Transaction and the Dynegy Merger, as the case may be.

As of December 31, 2023, we have reflected intangible assets on our balance sheet for our trade names of approximately $1.341 billion (see Note 6 to the Financial Statements).

The largest portion of our retail operations are in Texas, where we provide retail electricity to approximately 2.5 million customers.

We believe that we have differentiated ourselves by providing a distinctive customer experience predicated on delivering reliable and innovative power products and solutions to our customers, which give our customers choice, convenience and control over how and when they use electricity and related services.

Our retail business also offers a comprehensive suite of green products and services, including 100% wind and solar options, as well as thermostats, dashboards and other programs designed to encourage reduced consumption and increased energy efficiency.

Electricity Generation Operations

Vistra is the largest competitive power generator in the U.S.

as measured by MWh.

At December 31, 2023, our generating capacity was powered by the following:

Net Capacity (MW)

% of Net Capacity

CCGT, CT or ST

Solar/Battery

Our natural gas-fueled generation fleet is comprised of 23 CCGT generation facilities totaling 19,512 MW and 11 peaking generation facilities totaling 4,801 MW.

We satisfy our fuel requirements at these facilities through a combination of spot market and near-term purchase contracts.

Additionally, we have near-term natural gas transportation agreements and natural gas storage agreements in place to ensure reliable fuel supply.

Our coal/lignite-fueled generation fleet is comprised of seven generation facilities totaling 8,428 MW of generation capacity.

Maintenance outages at these units are scheduled during the spring or fall off-peak demand periods.

We meet our fuel requirements at our coal-fueled generation facilities in PJM and MISO with coal purchased from multiple suppliers under contracts of various lengths and transported to the facilities by either railcar or barges.

We meet our fuel requirements in ERCOT using lignite that we mine at the Oak Grove generation facility and coal purchased and transported by railcar at the Coleto Creek and Martin Lake generation facilities.

We own and operate two nuclear generation units at the Comanche Peak plant site in ERCOT, each of which is designed for a capacity of 1,200 MW.

Comanche Peak Unit 1 and Unit 2 went into commercial operation in 1990 and 1993, respectively, and are generally operated at full capacity.

Refueling (nuclear fuel assembly replacement) outages for each unit are scheduled to occur every eighteen months during the spring or fall off-peak demand periods.

Every three years, the refueling cycle results in the refueling of both units during the same year, which occurred in 2023.

While one unit is undergoing a refueling outage, the remaining unit is intended to operate at full capacity.

During a refueling outage, other maintenance, modification and testing activities are completed that cannot be accomplished when the unit is in operation.

The Comanche Peak facility operated at a capacity factor of 90%, 94% and 96% in 2023, 2022 and 2021, respectively.

We have contracts in place for all of Comanche Peak's 2024 through 2027 nuclear fuel requirements.

We do not anticipate any significant difficulties in acquiring uranium and contracting for associated conversion, enrichment and fabrication services in the foreseeable future, but we are closely monitoring developments that may arise out of the Russia and Ukraine conflict.

Management's Discussion and Analysis of Financial Condition, and Results of Operations – Significant Activities and Events, and Items Influencing Future Performance – Macroeconomic Conditions .

Our generation operations by segment are represented in the following table:

Net Capacity (MW)

% of Net Capacity

18,151 49% ERCOT

12,093 33% PJM, ISO-NE and NYISO

1,880 5% CAISO

4,578 13% MISO, PJM and ERCOT

Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) — Separate from our operations, ISOs/RTOs administer the transmission infrastructure and markets across a regional footprint in most of the markets in which we operate.

They are responsible for dispatching all generation facilities in their respective footprints and are responsible for both maximum utilization and reliable and efficient operation of the transmission system.

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

Retail Segment

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

Substantially all of these activities are conducted by TXU Energy, Ambit Energy, Value Based Brands, Dynegy Energy Services, Homefield Energy, TriEagle Energy, Public Power and U.S.

Gas & Electric across 19 U.S.

states and the District of Columbia.

The largest portion of our retail operations are in Texas, where we provide retail electricity to approximately 2.4 million customers in ERCOT.

We are an active participant in the competitive ERCOT retail market and continue to be a market leader, which we believe is driven by, among other things, strong brands, innovative products and services and excellent customer service.

As of December 31, 2022, we provided electricity to approximately 30% of the residential customers in ERCOT and for approximately 16% of business customers' demand.

Our integrated power generation and wholesale operation allows us to efficiently obtain the electricity needed to serve our customers at the lowest cost.

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 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.

Gas & Electric and Ambit Energy retail businesses, through which we provide retail electricity, natural gas and related services to approximately 1.1 million customers in 18 states and the District of Columbia.

Texas Segment

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

ISO/RTO Technology Primary Fuel Number of Facilities Net Capacity (MW)

ERCOT CCGT Natural Gas 7 7,838

ERCOT ST Coal 2 3,850

ERCOT CT or ST Natural Gas 7 3,455

ERCOT Nuclear Nuclear 1 2,400

ERCOT Solar/Battery Renewable 4 598

Total Texas Segment 21 18,141

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 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.

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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.

The PUCT has 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 ERCOT 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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these changes resulted in a more rapid escalation in power prices as operating reserves fall below defined thresholds.

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.

Effective January 1, 2022, when operating reserves drop to 3,000 MW or less, the ORDC automatically adjusts power prices to $5,000/MWh which is equal to the high system-wide offer cap.

ERCOT also calculates the "peaker net margin" based on revenues a hypothetical unhedged peaking unit would collect in the market.

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.

In December 2023, the PUCT also approved an Emergency Pricing Program that temporarily lowers the system-wide offer cap to $2,000/MWh if prices have been at the cap for 12 hours in a rolling 24-hour period.

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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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 ).

Management's Discussion and Analysis of Financial Condition, and Results of Operations – Significant Activities and Events, and Items Influencing Future Performance ).

Transactions in ERCOT take place in two key markets:

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

ERCOT currently procures ancillary services in the day-ahead market, but plans to implement co-optimization of energy and ancillary services in the real-time market in 2026.

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

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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.

ISO/RTO Technology Primary Fuel Number of Facilities Net Capacity (MW)

PJM CCGT Natural Gas 8 6,081

PJM CT Natural Gas 4 1,346

PJM CT Fuel Oil 2 93

ISO-NE CCGT Natural Gas 6 3,361

NYISO CCGT Natural Gas 1 1,212

Total East Segment 21 12,093

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 2024 to 2025.

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

ERCOT implemented the ERCOT Contingency Reserve Service (ECRS) in June 2023 to further address the need for operating reserves to manage load and intermittent resource output uncertainty.

The Texas legislature has also directed the creation of a new ancillary service, Dispatchable Reliability Reserve Service, that is currently projected to be implemented in 2026.

PJM — PJM is an RTO that manages the flow of electricity from approximately 183,000 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.

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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.

PJM's RPM auction for planning year 2025-2026 was delayed and is expected to be run in June 2024.

We also enter into bilateral capacity transactions.

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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.

ISO-NE offers the Forward Capacity Market where capacity prices are determined through auctions.

Performance incentive rules have the potential to increase capacity payments for those resources that are providing excess energy or reserves during a shortage event, while penalizing those that produce less than the required level.

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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.

NYISO offers the Installed Capacity Market, a forward capacity market where capacity prices are determined through auctions.

Strip auctions occur one to two months prior to the commencement of a six-month seasonal planning period.

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The balance is cleared through the seasonal and monthly capacity auctions.

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)

CAISO CCGT Natural Gas 1 1,020

CAISO Battery Renewable 1 400

CAISO CT Fuel Oil 1 110

Total West Segment 3 1,530

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.

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The voluntary Competitive Solicitation Process, which FERC approved in October 2015, is a modification to the Capacity Procurement Mechanism (CPM) and provides another avenue to sell RA capacity.

Sunset Segment

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.

See Note 3 to the Financial Statements for more information related to these planned generation retirements.

ISO/RTO Technology Primary Fuel Number of Facilities Net Capacity (MW)

ERCOT ST Coal 1 650

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 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.

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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.

Wholesale Operations

Our wholesale commodity risk management group is responsible for dispatching our generation fleet in response to market needs after implementing portfolio optimization strategies, thus linking and integrating the generation fleet production with our retail customer and wholesale sales opportunities.

Wholesale Operations — Our wholesale commodity risk management group is responsible for dispatching our generation fleet in response to market needs after implementing portfolio optimization strategies, thus linking and integrating the generation fleet production with our retail customer and wholesale sales opportunities.

Market demand, also known as load, faced by electric power systems, such as those we operate in, varies from moment to moment as a result of changes in business and residential demand, which is often driven by weather.

Unlike most other commodities, the production and consumption of electricity must remain balanced on an instantaneous basis.

There is a certain baseline demand for electricity across an electric power system that occurs throughout the day, which is typically satisfied by baseload generating units with low variable operating costs.

Baseload generating units can also increase output to satisfy certain incremental demand and reduce output when demand is unusually low.

Intermediate/load-following generating units, which can more efficiently change their output to satisfy increases in demand, typically satisfy a large proportion of changes in intraday load as they respond to daily increases in demand or unexpected changes in supply created by reduced generation from renewable resources or other generator outages.

There is a certain baseline demand for electricity across an electric power system that occurs throughout the day, which is typically satisfied by baseload generation units with low variable operating costs.

Baseload generation units can also increase output to satisfy certain incremental demand and reduce output when demand is unusually low.

Intermediate/load-following generation units, which can more efficiently change their output to satisfy increases in demand, typically satisfy a large proportion of changes in intraday load as they respond to daily increases in demand or unexpected changes in supply created by reduced generation from renewable resources or other generator outages.

Peak daily loads may be satisfied by peaking units.

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Price formation is typically based on the highest variable cost unit that clears the market to satisfy system demand at a given point in time.

Our commodity risk management group also enters into electricity, gas and other commodity derivative contracts to reduce exposure to changes in prices primarily to hedge future revenues and fuel costs for our generation facilities and purchased power costs for our Retail segment.

Our commodity risk management group also enters into electricity, natural gas and other commodity derivative contracts to reduce exposure to changes in prices primarily to mitigate the volatility of future revenues and fuel costs for our generation facilities and purchased power costs for our Retail segment.

The demand for and market prices of electricity and natural gas are affected by weather.

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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, 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.

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 generation 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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Risk Factors for additional information concerning the risks faced with respect to the markets in which we operate.

We have also acquired the trade names for Ambit Energy, Dynegy Energy Services, Homefield Energy, TriEagle Energy, Public Power and U.S.

Gas & Electric through the Ambit Transaction, Crius Transaction and the Merger, as the case may be.

As of December 31, 2022, we have reflected intangible assets on our balance sheet for our trade names of approximately $1.341 billion (see Note 5 to the Financial Statements).

Business Strategy

Vistra is a leader in the clean power transition.

With a strong zero-carbon generation portfolio and a deliberate and responsible strategy to decarbonize, Vistra understands our obligation to balance reliability, affordability, and sustainability.

To align our strategy with this obligation we have defined four strategic priorities that we aim to execute against:

• Long-term, attractive earnings profile through the integrated business model.

• Strategic energy transition that supports the reliability and affordability of electricity.

• Significant and consistent shareholder return of capital.

• Maintaining a strong balance sheet.

Long-term, attractive earnings profile through the integrated business model.

Our integrated business model distinguishes us from our electricity competitors as it pairs our reliable and efficient diversified generation fleet and wholesale commodity risk management capabilities with our retail platform.

Integrating retail with power generation stands as a fundamental competitive advantage that mitigates the impact of commodity price fluctuations and enhances the stability and predictability of our cash flows.

Stability and predictability of cash flows are essential as we evaluate economically attractive investments.

Strategic energy transition that supports the reliability and affordability of electricity.

As one of the largest electricity generators in the U.S., Vistra has led the way in decarbonization efforts and is committed to sustainability, setting aggressive targets, and transitioning our fleet to low-to-no carbon resources, all while balancing our obligations to our stakeholders.

While the way we generate electricity may be changing, our essential role in providing reliable and affordable electricity is not.

Significant and consistent shareholder return of capital.

We make thoughtful capital allocation decisions that balances the goal of returning significant and consistent capital to our stockholders through share repurchases and quarterly dividends with the allocation of capital to maintain current assets and explore opportunities for growth.

Maintaining a strong balance sheet.

Vistra' s disciplined approach to capital management supports our commitment to maintain a strong balance sheet.

A strong balance sheet ensures our access to diverse sources of liquidity and provides financial flexibility for our capital allocation decisions, including decisions to return significant and consistent capital to our stockholders.

Human Capital Resources

As a key component of our core principle that we work as a team , Vistra believes our most valuable asset is our talented, dedicated and diverse group of employees who work together to achieve our objectives, and our top priority is ensuring their safety.

One of Vistra's core principles is that we care about our key stakeholders , including our employees.

We invest in our people through numerous development and training opportunities, engaging employee programs and generous benefit and wellness offerings.

Vistra's approach to human capital management is guided by our core values.

These values are:

• We do business the right way.

Every decision we make and action we take will be evidence of the utmost integrity and compliance.

• We compete to win.

We will create the leading integrated energy company with an unmatched work ethic, an analysis-driven and disciplined culture with strong leadership and decision-making throughout the organization.

• We work as a team.

We are committed to each other, everything we do and to the success of our company.

• We care about our key stakeholders.

We respect our fellow employees, we focus on our customers and we care about our communities where we live and do business.

We will maintain productive and respectful relationship with our legislators, regulators and community leaders.

Our core values apply to all employees, suppliers and contractors and guide how we interact with our partner companies, communities, the environment and all other stakeholders.

We aim to conduct all aspects of our business in accordance with these core values, which serve as the cultural foundation of the Company.

Vistra believes our most valuable asset is our talented, dedicated and diverse group of employees who work together to achieve our objectives, and our top priority is ensuring their safety.

As of December 31, 2023, we had approximately 4,870 full-time employees, including approximately 1,200 employees under collective bargaining agreements.

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Our focus on reducing the severity of injuries for both our employees and contractors who work with us has shown positive results.

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 0.85, in the second quartile as compared to the Edison Electric Institute (EEI) 2021 Total Company Injury Data.

Since the implementation of our Best Defense safety program, the number of serious injuries or fatalities has decreased significantly.

Although we do not focus on recordable incidents, our Total Recordable Incident rate (TRIR) for company employees was 0.54, in the top quartile as compared to the Edison Electric Institute (EEI) 2022 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.

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

Our Hopewell, Ontelaunee and Independence generation facilities completed reevaluations and were re-certified as VPP Star in 2023.

VPP Star status is the highest designation of OSHA's Voluntary Protection Programs.

The achievement recognizes employers and workers who have implemented effective safety and health management systems and maintain injury and illness rates below national Bureau of Labor Statistics averages for their respective industries.

These sites are self-sufficient in their ability to control workplace hazards and are reevaluated every three to five years.

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 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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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.

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.

We continued to utilize our fifteen 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 and analytics.

The emphasis on skills-based hiring continues to evolve as we see increased mobility of employees throughout the organization as well as increased retention.

Vistra is elevating its commitment to disability diversity by increasing our commitment and support level with DisabilityIn.

We now have leaders on all eligible committees within the organization (executive sponsor, Chief Diversity Officer, ERG leader, accessibility).

We centralized our intern program to ensure a diverse intern pool from across the country and are expanding our college partnerships to ensure geographically diverse opportunities in research, sponsorships and recruitment.

Training on inclusion and acceptance is being presented to all frontline employees to ensure every employee is included in the conversation.

Vistra is active in our communities to promote inclusivity.

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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.

Further, in the fourth 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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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's Essentials of Leadership provides new managers with skills to lead organizations in situational leadership, business acumen, inclusive leadership, and exposes them to best practices from across the company.

We continue to evaluate and refine our programs as the development needs of our employees change.

In 2023, Vistra refreshed our Front-Line Leader development program focusing on the development of supervisors and managers at our plants.

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.

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.

The Vistra Learning Community is our online platform that strategically 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 2024, Vistra continued its formal mentoring program available to all employees to focus on topics like organizational knowledge, career development, individual development, collaboration and leadership.

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Climate Change

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.

There is continuing emphasis domestically and internationally on global climate change and how GHG emissions, such as CO 2 , contribute to global climate change.

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.

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

Since 2010, Vistra has retired more than 15,100 MW of coal and natural gas power plants resulting in a 50% reduction in carbon dioxide (CO 2 ) emissions, a 68% reduction in nitrogen oxide (NO X ) emissions, and an 89% reduction in sulfur dioxide (SO 2 ) emissions through year-end 2023, compared to a 2010 baseline.

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

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◦ additional solar generation facilities in Texas, with expected commercial operation dates beginning in 2025, 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 operate battery ESSs totaling 270 MW in Texas and 400 MW in California.

We have announced our plans to develop:

◦ 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

◦ 350 MW of battery ESS in California with an expected commercial operation date in 2023.

◦ up to 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 2026.

• Battery Energy Storage Projects — We operate battery ESS totaling 270 MW in Texas and 750 MW in California.

We have announced our plans to develop up to 150 MW of battery ESS at retired or to-be-retired plant sites in Illinois with expected commercial operation dates ranging from 2024 to 2026.

• 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.

• 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.

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

• Retirements of Fossil Fuel Generation — Since 2018, lignite/coal-fueled generation facilities retired include 4,167 MW in Texas, 4,040 MW in Illinois 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.

• Acquisition of Nuclear Generation Facilities — In 2023, we announced the acquisition of 4,048 MW of nuclear generation facilities in PJM from Energy Harbor.

We anticipate the transaction will close on March 1, 2024.

We will only invest in growth projects if we are confident in the expected returns.

See Note 3 to the Financial Statements for discussion of our solar and battery ESS projects and Note 4 to the Financial Statements for discussion of our retirement of generation facilities.

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 strategy.

See Note 15 to the Financial Statements for more information concerning the Series B Preferred Stock issued under our Green Finance Framework.

GHG Emissions

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.

The ACE rule developed emission guidelines that states must use when developing plans to regulate GHG emissions from existing coal-fueled electric generating units.

In July 2019, the EPA finalized a rule that repealed the Clean Power Plan (CPP) and established new regulations addressing GHG emissions from existing coal-fueled electric generation units, referred to as the Affordable Clean Energy (ACE) rule.

The ACE rule developed emission guidelines that states must use when developing plans to regulate GHG emissions from existing coal-fueled electric generation units.

In response to challenges brought by environmental groups and certain states, the U.S.

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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.

In addition, the EPA opened a docket seeking input on questions related to the regulation of GHGs under Section 111(d) which closed in March 2023.

In May 2023, the EPA released a new proposal regulating power plant GHG emissions, while also proposing to repeal the ACE rule.

The new GHG proposal sets limits for (a) new natural gas-fired combustion turbines, (b) existing coal-, oil- and natural gas-fired steam generation units, and (c) certain existing natural gas-fired combustion turbines.

The proposed standards are based on technologies such as carbon capture and sequestration/storage (CCS), low-GHG hydrogen co-firing, and natural gas co-firing.

Starting in 2030, the proposal would generally require more CO 2 emissions control at fossil fuel-fired power plants that operate more frequently and for more years and would phase in increasingly stringent CO 2 requirements over time.

Under the proposal, states would be required to submit plans to the EPA within 24 months of the rule's effective date that provide for the establishment, implementation, and enforcement of standards of performance for existing sources.

These state plans must generally establish standards that are at least as stringent as the EPA's emission guidelines.

Existing steam generation units must start complying with their standards of performance on January 1, 2030.

Existing combustion turbine units must start complying with their standards of performance on January 1, 2032, or January 1, 2035, depending on their subcategory.

We submitted comments to the EPA on this proposal in August 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 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.

RGGI is currently conducting its third program review which may include an updated model rule.

Our generation facilities in Connecticut, Maine, Massachusetts, New Jersey, New York and Virginia emitted approximately 10 million short tons of CO 2 during 2023.

The spot market price of RGGI allowances required to operate these facilities as of December 31, 2023 was approximately $15.35 per allowance.

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The Governor of Virginia issued an executive order in January 2022 to begin the process of removing the state from RGGI.

however, the Virginia General Assembly would need to modify the law to exit the program.

At this time, no new laws have passed and Virginia remains in RGGI.

The Virginia State Pollution Control Board withdrew the state from RGGI at the end of 2023, coinciding with the end of the program's three-year compliance period and contract with RGGI, Inc.

In August 2023, opponents of the state's action filed suit seeking a stay alleging withdrawal from RGGI is impermissible without new legislation.

Virginia is not participating in RGGI at this time.

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.

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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.

In July 2022, the Commonwealth Court of Pennsylvania (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.

In November 2023, the Commonwealth Court found that Pennsylvania cannot join RGGI without legislative approval and enjoined the Pennsylvania Department of Environmental Protection from implementing RGGI.

The state has appealed this decision to the Pennsylvania Supreme Court where it is still pending.

The Pennsylvania Department of Environmental Protections has indicated it will not seek to implement RGGI until the Pennsylvania Supreme Court acts.

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

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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.

In February 2023, the EPA disapproved Texas' SIP and the State of Texas, Luminant, certain trade groups, and others challenged that disapproval 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.

In March 2023, those same parties filed motions to stay the EPA's SIP disapproval in the Fifth Circuit Court, and the EPA moved to transfer our challenges to the D.C.

Circuit Court or have those challenges dismissed.

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

In March 2023, the EPA administrator signed its final FIP.

The FIP applies to 22 states beginning with the 2023 ozone seasons.

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

Texas would be moved into the revised Group 3 trading program previously established in the Revised CSAPR Update Rule that includes emission budgets for 2023 that the EPA says are achievable through existing controls installed at power plants.

Allowances will be limited under the program and will be further reduced beginning in ozone season 2026 to a level that is intended to reduce operating time of coal-fueled power plants during ozone season or force coal plants to retire, particularly those that do not have selective catalytic reduction systems such as our Martin Lake power plant.

In May 2023, the Fifth Circuit Court granted our motion to stay the EPA's disapproval of Texas' SIP pending a decision on the merits and denied the EPA's motion to transfer our challenge to the D.C.

Circuit Court.

As a result of the stay, we do not believe the EPA has authority to implement the FIP as to Texas sources pending the resolution of the merits, meaning that Texas will remain in Group 2 and not be subject to any requirements under the FIP at least until the Fifth Circuit Court rules on the merits.

Oral argument was heard in December 2023 before the Fifth Circuit Court.

In June 2023, the EPA published the final FIP in the Federal Register, which included requirements as to Texas despite the stay of the SIP disapproval by the Fifth Circuit Court.

In June 2023, the State of Texas, Luminant and various other parties also filed challenges to the FIP in the Fifth Circuit Court, filed a motion to stay the FIP and confirm venue for this dispute in the Fifth Circuit Court.

After the motion to stay and to confirm venue was filed, the EPA signed an interim final rule on June 29, 2023 that confirms the FIP as to Texas is stayed.

In July 2023, the Fifth Circuit Court ruled that the FIP challenge would be held in abeyance pending the resolution of the litigation on the SIP disapproval and denied the motion to stay as not needed given the EPA's administrative stay.

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

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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.

The program includes 39 generating units (including the Martin Lake, Big Brown, Monticello, Sandow 4, Coleto Creek, Stryker 2 and Graham 2 plants).

The program includes 39 generation 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.

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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 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.

Circuit Court have been held in abeyance pending the EPA's action on reconsideration.

The EPA is in the process of reconsidering the BART rule, and the challenges in the D.C.

Circuit Court have been held in abeyance pending the EPA's final action on reconsideration.

In May 2023, a proposed BART rule was published in the Federal Register that would withdraw the trading program provisions of the prior rule and would establish SO 2 limits on six facilities in Texas, including Martin Lake and Coleto Creek.

Under the current proposal, compliance would be required within 3 years for Martin Lake and 5 years for Coleto Creek.

Due to the announced shutdown for Coleto Creek, we do not anticipate any impacts at that facility, and we are evaluating potential compliance options at Martin Lake should this proposal become final.

We submitted comments to the EPA on this proposal in August 2023.

National Ambient Air Quality Standards (NAAQS)

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

In January 2024, in a split decision, the Fifth Circuit Court denied the petitions for review we and the State of Texas filed over EPA' 2016 nonattainment designation for SO 2 for the area around Martin Lake.

As a result of this decision, the EPA's nonattainment designation – originally made in 2016 – remains in place.

We anticipate the EPA will likely move forward with either proposing a federal plan for the area in light of an approved consent decree between the Sierra Club and the EPA that requires the EPA taking final action promulgating a FIP for the nonattainment area by December 13, 2024 or the EPA may approve Texas' SIP submittal discussed above.

In February 2024, we filed a petition asking the full Fifth Circuit Court to review the panel decision issued in January 2024.

Ozone Designations

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

Particulate Matte r

In February 2024, the EPA issued a 715-page rule addressing the annual health-based national ambient air quality standards for fine particulate matter (or PM2.5).

In general, the rule lowers the level of the annual PM2.5 standard from 12.0 micrograms per cubic meter (µg/m3) to 9.0 µg/m3.

The effective date of the rule is 60 days from publication in the Federal Register, and the earliest attainment date for areas exceeding the new standard is 2032.

At this time, we are still determining what impact, if any, this rule will have on our existing plants or any plants we may build in the future.

Based on 2020-2022 design value associated with the rule, we have just five plants (Oakland (California), Calumet (Illinois), Liberty (Pennsylvania), Miami Fort (Ohio) and Lake Hubbard (Texas)) operating in areas where the air quality monitoring data are currently exceeding the new PM2.5 standard.

We have previously announced that our Miami Fort generation facility will close by the end of 2027.

States will have to develop a plan (by late 2027 at the earliest) to get those areas into attainment and there would be a possibility that additional controls would be required for those sites.

However, before the state begins this planning process, the designation process will occur within two years from the issuance of the final rule.

The states develop recommendations about the boundaries of the nonattainment counties and the EPA must finalize the designations including the boundaries of each nonattainment area.

CCR/Groundwater

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Each of our coal-fueled plants has at least one CCR surface impoundment.

At present, CCR is regulated by the states as solid waste.

Coal Combustion Residuals

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Prior to the November 2020 deadline, we submitted applications to the EPA requesting compliance extensions under both conversion and retirement scenarios.

In 2022 and 2023, we withdrew the applications for Coffeen, Martin Lake, Joppa and Zimmer stations because extensions were no longer needed.

In November 2020, environmental groups petitioned for review of this rule in the D.C.

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Also, in November 2020, the EPA finalized a rule that would allow an alternative liner demonstration for certain qualifying facilities.

In November 2020, we submitted an alternate liner demonstration for one CCR unit at Martin Lake.

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 November 2020, we submitted an application for an alternate liner demonstration for one CCR unit at Martin Lake, however, we withdrew the application for an alternate liner demonstration in November 2023 after determining the pond was no longer needed for CCR.

In August 2021, we submitted a request to transfer our conversion application for the Zimmer facility to a retirement application following the 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 proposed action on any of those applications.

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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.

Briefing before the D.C.

Circuit Court is complete, and the court will hear argument in March 2024.

In May 2023, the EPA issued another proposal that further revises the federal CCR rule that would expand coverage of groundwater monitoring and closure requirements to the following two new categories of units:

(a) legacy units which are CCR impoundments at inactive sites that ceased receiving waste before October 19, 2015 and (b) so-called "CCR management units" which generally could encompass areas of CCR located at a facility that is currently regulated by the existing CCR rule.

CCR Management Units, as defined by the EPA in the proposal, could include any ash deposits, haul roads, and previously closed impoundments and landfills.

As part of the proposed rule, the EPA identified 134 CCR management units at 82 different facilities across the country, including six of our potential units.

The Vermilion ash ponds discussed below are the only unit which we believe qualify as a legacy CCR surface impoundment and given our closure plan for that site we do not believe this proposal, if finalized, will have any impact on that site.

We are continuing to evaluate what would be required of the CCR management units identified in the proposal should the proposal become final in its current form.

We submitted comments in July 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 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.

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

We answered that complaint in July 2021.

In July 2023, PRN filed an unopposed motion to voluntarily dismiss the case with prejudice, which the IPCB granted in August 2023 and closed the case.

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

In June 2023, the Illinois state court approved and entered the final consent order, which included the terms above and a requirement that when IEPA issues a final closure permit for the site, DMG will demolish the power station and submit for approval to construct an on-site landfill within the footprint of the former plant to store and manage the coal ash.

These proposed closure costs are reflected in the ARO in our consolidated balance sheets (see Note 22 to the Financial Statements).

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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 and five of our sites in July 2022.

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

One additional closure construction application was filed for our Baldwin facility in August 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.

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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 approved by the IEPA.

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.

However, the CCR surface impoundment and landfill closure costs currently reflected in our existing ARO liabilities, reflect the costs of closure methods that our operations and environmental services teams believe are appropriate based on existing closure requirements and protective of the environment for each location.

Once the IEPA acts on our permit applications, we will reassess the decommissioning costs and adjust our ARO liabilities accordingly.

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.

9 unchanged sentences

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.

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.

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.

In March 2023, the EPA published its proposed supplemental ELG rule, which retains the retirement exemption from the 2020 ELG rule and sets new limits for plants that are continuing to operate.

The proposed rule also establishes pretreatment standards for combustion residual leachate, and we are currently evaluating the impact of those proposed requirements.

We submitted comments on the proposal in May 2023.

Radioactive Waste

1 unchanged sentence

Luminant stores its used nuclear fuel on-site in storage pools or dry cask storage facilities and believes its on-site used nuclear fuel storage capability is sufficient for the foreseeable future.

Corporate Information

Vistra is a Delaware corporation whose common stock is listed and trade on the NYSE.

Our principal executive office is located at 6555 Sierra Drive, Irving, Texas 75039.

The telephone number for our principal executive office is (214) 812-4600.

We maintain a website located at www.vistracorp.com .

Available Information

We file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports with the SEC.

You may obtain copies of these documents, free of charge, on the SEC's website at www.sec.gov or on Vistra's website at www.vistracorp.com , as soon as reasonably practicable after they have been filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended.

Vistra also posts important information, including press releases, investor presentations, sustainability reports, and notices of upcoming events on its website and utilizes its website as a channel of distribution to reach public investors and as a means of disclosing material non-public information for complying with disclosure obligations under Regulation FD.

Investors may be notified of postings to our website by signing up for email alerts and RSS feeds on the "Investor Relations" page.

The information on Vistra's website shall not be deemed a part of, or incorporated by reference into, this annual report on Form 10-K.

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