Vistra Corp. has reached a final investment decision to expand gas capacity at its Permian Basin Power Plant, locking in a plan to build two new natural gas power units totaling 860 MW, the company said Monday.
“This expansion more than triples the site's current capacity from 325 MW to 1,185 MW,” Vistra said in a release. The decision to expand was “based on customer demand and to meet West Texas' growing power needs, particularly the state's expanding oil and natural gas industries.”
“As the leading competitive generator in Texas, customers from residential to commercial and industrial are turning to Vistra to help them meet their energy needs,” said Jim Burke, president and CEO of Vistra. “We recognize that energy is critical to powering this economic opportunity, and we expect Texas will play an outsized role.”
Vistra also filed an 8-K with the Securities and Exchange Commission on Monday, confirming that it “has entered into a 20-year power purchase agreement (with options to extend for up to an additional 20 years) with a large, investment grade company ... pursuant to which the Company has agreed to supply to the Customer 1,200 MW of carbon-free power from the Comanche Peak Nuclear Power Plant.”
Vistra said it “anticipates power delivery to begin in the fourth quarter of 2027 and ramp to full capacity by 2032.” The company received permission last year from the Nuclear Regulatory Commission to extend the operation of Comanche through 2053, an additional 20 years beyond its original licenses.
On Sept. 22, Jefferies downgraded Vistra’s stock to “hold” based on the lack of a deal up to that point and their view that the company’s stock, which rallied based on excitement about a deal, had gotten close to its peak price.
“We still have a positive view of [the power sector] but it is difficult to ignore the growing political risks in Texas and PJM,” the investment bank said in a Sept. 22 email. “We have been surprised at the strength in [independent power producers] and lack of [Vistra] deals specifically. Remain confident on Comanche deal, but no announcement yet gives us a pause.”
Jefferies said it is also “concerned with potential other delays caused by the ERCOT system reliability issues. Although we see all those potential issues as process related, they are weighing on the confidence that Vistra can get Comanche and other deals done on timely basis.”
Burke said during Vistra’s second quarter earnings call in August that the company aims to meet the power demand rising from a number of factors, including “the build-out of large chip manufacturing facilities … the electrification of oil and gas load in the Permian Basin of West Texas, the reshoring of industrial activity and, of course, the build-out of data centers.”
