Vistra Expands Nuclear Portfolio in $3.4 Billion Deal for Energy Harbor

Vistra Expands Nuclear Portfolio in $3.4 Billion Deal for Energy Harbor

Texas-based energy company Vistra Corp. is adding to its nuclear power generation capacity. The group on March 6 announced it would buy Ohio-based Energy Harbor Corp. in a $3.4 billion deal that includes ownership of three nuclear power stations.

The transaction includes $3 billion in cash, with Energy Harbor shareholders receiving a 15% stake in Vistra Vision, a new subsidiary holding company. The new unit also will assume about $430 million of net debt from Energy Harbor, the company formerly known as FirstEnergy Solutions before a restructuring in 2020. The company had been a subsidiary of parent FirstEnergy.

Vistra will add about 4,000 MW of nuclear power generation capacity to its portfolio after the deal is completed, expected in the second half of this year. The nuclear and retail businesses of both companies will be combined. The Vistra Zero brand’s renewables and energy storage projects also will operate under Vistra Vision.

Jim Burke, Vistra president and CEO, said, “We are excited to announce this unique combination and the many benefits it brings to our key stakeholders—customers, employees, communities, and shareholders. Vistra has been focused on responsibly transitioning our power generation profile, and though we’ve made significant progress over the past several years, there are few opportunities to grow a reliable and dispatchable zero-carbon generation portfolio at scale this quickly.”

Large Nuclear Fleet

Energy Harbor operates the second-largest non-regulated nuclear power fleet in the U.S., including the 894-MW Davis-Besse (also known as Oak Harbor) and 1,300-MW Perry nuclear plants in Ohio, and the 1,800-MW Beaver Valley nuclear facility in Pennsylvania, which will now be owned by Vistra. The two Ohio-based plants were at the center of a political scandal tied to bribes paid to state lawmakers in exchange for passage of a $1.3 bailout to FirstEnergy and other utilities to keep the Ohio nuclear plants operating.

The Davis-Besse nuclear plant in Ohio will be owned by Texas-based Vistra under terms of a sales agreement announced March 6. Source: FirstEnergy

The deal does not include two coal-fired power plants owned by Energy Harbor: the 1,700-MW W.H. Sammis plant in Jefferson County, Ohio, and the 1,368-MW Pleasants Power Station near Belmont, West Virginia. The Sammis plant is scheduled to close within the next few months.

West Virginia lawmakers are working on a plan to keep Pleasants Power in operation. Energy Harbor a year ago said it would close the facility by the end of May this year if it could not find a buyer for the plant.

Vistra Vision is being designed as “a large-scale ~7,800 MW zero-carbon generation business with ~5 million retail customers across the United States,” according to a Vistra news release. The company said it also “will have access to a growth pipeline of ~1,100 MW of additional renewables projects.” Vistra said the parent company “will own 85% of Vistra Vision as well as 100% of the entities holding its remaining conventional generation assets, referred to generally as ‘Vistra Tradition’.”

Burke said, “As our country navigates a massive energy transition to cleaner sources of electricity, nuclear energy provides the unique capability of being both carbon-free and a dependable, always-on source of reliable power. With the enactment of the zero-emission nuclear production tax credit, nuclear power generation now has down-side protection against lower power prices, resulting in tremendous upside opportunity compared to other generation with similar attributes.”

A statement Monday from Vistra said, “This combination creates a leading integrated retail electricity and zero-carbon generation company with the second-largest competitive nuclear fleet in the country, along with a growing renewables and energy storage portfolio.”

Bribery Scandal

Monday’s deal is the latest chapter in a saga that began five years ago, when the then-FirstEnergy Solutions in March 2018 announced it would close Davis-Besse and Perry by 2021. That announcement came just days before FirstEnergy Solutions filed a Chapter 11 bankruptcy.

The possible closure of the two nuclear plants prompted the now-infamous House Bill 6 (HB6) in Ohio, a measure to provide subsidies for the nuclear plants and support an overhaul of the state’s energy policy. The bill was publicly unveiled in April 2019, and became law two months later. Federal investigators in July 2020 indicted Larry Householder, who had served as Speaker of the House, and four lobbyists who allegedly were involved in orchestrating a $61 million bribery scheme to pass HB6.

The legislation was repealed in late March 2021. The trial of Householder and former Ohio Republican Party Chair Matt Borges, also implicated in the scandal, is ongoing in Cincinnati, with closing arguments set for March 7. The two are each charged with one count of racketeering conspiracy. Both have pleaded not guilty.

FirstEnergy earlier admitted to paying $60 million in bribe money to Householder and his allies to secure the passage of HB6. The company earlier this year agreed to pay a $3.86 million fine for not disclosing lobbying on the nuclear bailout. The company in 2021 said it would pay a $230 million fine for its role in the bribery scandal.

Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).

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