Vistra willing to sell generation assets to secure Energy Harbor deal
In a filing Monday with the Federal Energy Regulatory Commission, Vistra Corporation committed to divesting itself of two power generation assets to help alleviate concerns over its proposed acquisition of Energy Harbor.
The transaction, announced in March, would merge Vistra’s nuclear and retail businesses and its Vistra Zero renewables and storage projects with Energy Harbor’s nuclear and retail businesses under a new subsidiary holding company named Vistra Vision.
The companies’ nuclear assets include Vistra’s two-unit Comanche Peak plant in Texas and Energy Harbor’s two-unit Beaver Valley plant in Pennsylvania, as well as its single-unit Davis-Besse and Perry facilities in Ohio.
The concerns: On August 17, FERC issued a “deficiency letter” to the companies seeking additional information on potential market power issues surrounding the planned $6.3 billion asset purchase. The following week, the Department of Justice filed comments with FERC, urging the agency to carefully review the proposal to ensure that it will not “substantially lessen competition and increase wholesale electricity prices” in the PJM region.
Figuring prominently in these concerns is PJM’s ATSI transmission zone—the only zone in which Vistra and Energy Harbor both own generation assets. Included in ATSI are Energy Harbor’s Davis-Besse and Perry and Vistra’s gas- and oil-fired Richmond facility and oil-fired Stryker unit.
The response: In Monday’s 101-page filing, Vistra and Energy Harbor, while maintaining that their proposal as announced raised no competitive concerns, offered the following: “In an effort to put to rest any potential arguments to the contrary and provide for a quicker review process to allow applicants to close on the proposed transaction as soon as possible, including for customer, employee, and investor certainty, applicants are herein also including an affirmative commitment to divest the only generation facilities currently owned by Vistra in ATSI—the Richland and Stryker facilities. These are the only generation facilities that could even arguably be considered as located in an overlapping ‘submarket’ in PJM with the Energy Harbor facilities. In addition . . . applicants will commit to offer the Richland and Stryker facilities at a level no greater than their cost-based offers, as determined pursuant to PJM rules, pending the completion of such divestiture.”
The companies asked FERC to approve the merger “as expeditiously as possible,” and no later than October 10.
