Update: Vistra Reports Residential Retail Customer Growth

Vistra Estimates Negative Impact From ERCOT Winter Weather Event Of Up To $1.3 Billion

Reports Strong Retail Margin Performance In ERCOT For 4th Quarter 2020

February 26, 2021

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Reporting by Paul Ring • ring@energychoicematters.com

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Update, 8:45 a.m., 2/26

Vistra provided details on its retail customer count in reporting earnings

As of Q4 2020, Vistra's residential retail customer count was 2,736,000 million, versus 2,724,000 million as of Q3 2020 and 2,819,000 a year ago. The residential customer count reflects direct-to-consumer electric/gas residential counts excluding municipal-aggregation and international customers

Vistra said that it grew residential customers year-over-year in Texas

In Q4 2020 highlights, Vistra noted that it purchased and "integrated" the Infinite and Veteran Energy customer portfolios in Texas, as previously reported.

Overall, Vistra serves approximately 4.5 million customers and operates in 20 states and the District of Columbia, with about 2.4 million customers in Texas

As of December 31, 2020, Vistra provided electricity to approximately 31% of the residential customers in ERCOT and for approximately 15% of business customers' demand

Retail volumes for the fourth quarter were as follows:

Vistra Retail Volumes (TWh)
                               
            Q4 2019   Q4 2020
Residential   6.7       6.9
Business     10.7      10.9
Muni Agg.     2.7       2.9

Total        20.1      20.8

For the full year 2020, total retail electricity sales volumes were 90,349 GWh (54,075 GWh ERCOT; 36,274 GWh Northeast/Midwest), versus 77,600 GWh a year ago

For the full year 2020, total retail operating revenues were $8.270 billion, versus $6.872 billion a year ago

Concerning the one-time adverse impact on pre-tax net income from the ERCOT winter weather event estimated to be in the range of approximately $900 million to $1.3 billion, first reported in our story below, Vistra said that, at this time, it believes the primary drivers of the estimated impact are:

• Scarcity of gas supply and non-delivery of contracted gas

• Lower output from solid fuel coal units

• Load loss appears to have been disproportionately higher in Houston / South Texas, while Vistra’s residential customer base is predominantly in North Texas

• Timing of long / short position throughout the week did not match pricing intervals (e.g., lack of pricing at the cap on Monday the 15th)

"In addition to finalizing financial estimates, the ultimate financial impact may be affected by state corrective action and litigation outcomes," Vistra said

Earlier:

In reporting fourth quarter and full year earnings for 2020, Vistra said, "The overall financial impact from winter storm Uri is still being calculated, but Vistra expects it will have a material adverse impact on its financial results driven by generation output being constrained due to challenges with receiving a steady supply of fuel for some plants as well as challenges with handling fuel already on site given the freezing conditions. As a result of these challenges, Vistra had to procure power in the ERCOT market at prices at or near the price cap to meet its supply obligations."

"As a result of Winter Storm Uri hitting Texas last week, Vistra is not able to reaffirm or adjust its 2021 guidance as Vistra does not yet have enough information to provide an exact estimate of the one-time financial impact of this unprecedented winter storm. While the financial impacts of Winter Storm Uri to Vistra are not yet finalized, Vistra management preliminarily estimates the one-time adverse impact will be in the range of ~$900 million to $1,300 million. This estimated range is preliminary and based on currently available information and management estimates. The final amount of the estimated loss is subject to a variety of factors including, but not limited to, outstanding pricing, load, and settlement data from ERCOT, potential state corrective action, or the outcome of potential litigation arising from this event. Vistra will provide a further update as information is available, the timing of which is currently unknown," Vistra said

"Vistra continues to be committed to our capital allocation plan, including our recommended dividend trajectory and debt reduction expectations. Vistra will provide a further update on 2021 capital allocation as estimates of the financial impact of Winter Storm Uri are finalized, the timing of which is currently unknown. Vistra remains confident in its ability to generate significant Adjusted EBITDA and Free Cash Flow before Growth over the long-term, supporting our diverse capital allocation plans," Vistra said

"As of Dec. 31, 2020, Vistra had total available liquidity of ~$2,399 million, including cash and cash equivalents of $406 million, $1,988 million of availability under its revolving credit facility, and $5 million of availability under its various bi-lateral letter of credit facilities. Winter Storm Uri resulted in Vistra being required to post a significant amount of collateral, including to ERCOT, clearinghouses for natural gas and power transactions, and other trading counterparties. Despite these posting requirements, Vistra consistently maintained, and it continues to maintain, sufficient liquidity to conduct its operations in the ordinary course. As of Feb. 25, 2021, Vistra had more than $1.5 billion of cash and availability under its revolving credit facility," Vistra said

Vistra reported that its Retail segment reported Adjusted EBITDA of $411 million for the fourth quarter of 2020, $68 million higher than $343 million reported in the fourth quarter of 2019, "driven by strong margin performance in ERCOT and the addition of Ambit."

Full year Adjusted EBITDA for the Retail segment was $983 million for 2020, versus $807 million a year ago

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