Vistra Says the Vote Doesn’t Change Its View

IRVING, Tex., Nov. 6 — Vistra,Vistra, which owns power plants with about 50,000 megawatts of capacity, told investors on Friday that the week’s elections had not changed its outlook. “Stated more simply, the election results do not change our fundamental view of the opportunities Vistra has and our team is prepared to continue executing,” Jim Burke, its chief executive, said on the company’s call, according to a transcript published by Benzinga.

Its shares rose 10.55 percent on Friday, to $124.80, the day it reported that its ongoing operations adjusted EBITDA rose more than 50 percent in the third quarter, to $2.38 billion. They still ended the week down 9.81 percent.The MeasureOngoing operations adjusted EBITDA is Vistra’s own non-GAAP measure: earnings before interest, taxes, depreciation and amortization, adjusted for unrealized hedging gains and losses and other items, without its Asset Closure segment.

The vote was “a bigger shift for Texas, no doubt,” Mr. Burke said. Gina Hinojosa, a Democrat who in July called for a moratorium on data centers “until a legislative session that puts Texans first,” won Tuesday’s election for governor, according to The Associated Press. Vistra’s shares fell 13.83 percent on Wednesday and 6.15 percent more on Thursday. Just under 40 percent of its generation earnings come from its Texas plants, Mr. Burke said, and it has an agreement with Amazon Web Services at its Comanche Peak nuclear plant, beside which a data center is being developed.

“To be clear, the pacing was already being impacted ahead of the election, but our plans have always had a more conservative view of the AI buildout,” Mr. Burke said. He said the governor-elect’s key messages had been very similar to some of Gov. Greg Abbott’s: that there have to be guardrails on development. Asked by an analyst about a moratorium, he said that “if Texas decides to just go down a moratorium, it would be problematic, I think, for lots of customers, not just our Comanche Peak project.”

To be clear, the pacing was already being impacted ahead of the election, but our plans have always had a more conservative view of the AI buildout.

Mr. Burke acknowledged that prices on ERCOT, the Texas grid, were trending lower, and put it partly down to the state’s own checks on data centers. “We believe this is due to several factors including some crypto mining facilities coming offline so they can convert into data centers as well as the data center audit and permitting pause,” he said. “We do not see this as a long-term impact.”The PauseMr. Abbott ordered the Texas Commission on Environmental Quality on Sept. 21 to stop issuing new permits for data centers until ERCOT, the grid operator, and the state’s water board complete an audit of data centers seeking to be built, The Texas Tribune reported. Its projections of free cash flow out to 2030 make no assumption of “some big recovery in ERCOT,” he said.

The Numbers

Net income, under generally accepted accounting principles, was $1,140 million, against $652 million a year earlier, including a $559 million unrealized gain on hedges expected to settle in future years. The Texas segment’s adjusted EBITDA rose to $1,227 million, from $784 million.

Vistra narrowed its forecast for 2026 ongoing operations adjusted EBITDA to $7.1 billion to $7.5 billion, raising the midpoint, and gave its first range for 2027: $7.7 billion to $8.5 billion. Its board added $1.5 billion to the buyback, leaving about $2.5 billion, which Vistra expects to spend by the end of 2028. “Our stock might move $30 in two days,” Mr. Burke said, explaining that customer talks can run six to 12 months and that Vistra would not haggle in them just to react to a buyback opportunity. Over Wednesday and Thursday, its shares fell $26.70.

The Texas Check

ERCOT is checking whether data-center developers are shrinking projects to stay under 75 megawatts, the size at which its own review begins, the San Antonio Express-News reported on Friday. Chad Seely, ERCOT’s general counsel, told the Public Utility Commission on Thursday that nearly 10 gigawatts of medium-size loads, under 75 megawatts, were working directly with utilities, with a substantial concentration between 60 and 74.9 megawatts, the paper reported.Seventy-Five MegawattsRoughly the power that 18,750 Texas homes use on a summer day, by the Express-News’s reckoning. Projects below it can connect through their utilities and skip ERCOT’s large-load approval.

More data centers under 75 megawatts “can present a risk” to transmission planning and grid operations, Mr. Seely told the commissioners; the findings could lead the commission to consider rules for smaller loads, he said. The 433 projects that answered an ERCOT questionnaire asked for 177 gigawatts, nearly twice the record peak demand of 91.31 gigawatts set in July, the Express-News reported. Queues of requests to connect new load “are overstated across the country and especially in ERCOT,” Mr. Burke said on his call.

ERCOT’s full audit report, about 150 pages, is due Dec. 10, and the commission will discuss it at its Dec. 17 meeting, the Express-News reported.