Texas February Freeze Cost About $1.6 Billion, Vistra Says
(Reuters) — U.S. energy company Vistra Corp boosted the negative impact of winter storm Uri in Texas in February to about $1.6 billion from its prior estimate of $900 million to $1.3 billion.
Vistra said the new estimate excludes any recovery from the potential success of its various legal and regulatory challenges related to the storm.
Vistra said firm gas contracts not honored by third parties during the storm forced it to procure replacement gas at incredibly high costs, while the lack of physical gas and insufficient pressures on pipelines affected its ability to generate power at full capacity.
To account for Uri's impact, the company reissued its 2021 ongoing operations adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) guidance ranges at $1,475-$1,875 million and ongoing operations adjusted free cash flow before growth to $200-$600 million.
Before the storm, Vistra in September estimated 2021 ongoing operations adjusted EBITDA guidance ranges at $3,075-3,475 million and ongoing operations adjusted free cash flow before growth of $1,765-2,165 million.
"Our people and, for the most part, our generation performed well. In fact, throughout the week, we consistently generated more megawatts than our market share of total generation," Vistra Chief Executive Curt Morgan told analysts on a call.
"You would think this would translate into positive financial results."
As a result of the replacement gas and insufficient pipeline pressure challenges, Vistra said it had to procure power in the ERCOT market at prices at or near the grid's $9,000 per megawatt hour price cap to meet supply obligations.
Absent these issues with gas deliverability and increased gas costs, Vistra estimated the 2021 adjusted EBITDA impact of Uri would have been a slight positive.
The company said it did not plan to purchase additional shares in 2021, but remained committed to its 15-cent per share quarterly dividend.
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