Company supports the order, which ensures fair and equitable treatment of all market participants
IRVING, Texas, Dec. 30, 2019 /PRNewswire/ -- After thorough review of the Federal Energy Regulatory Commission's order on the PJM capacity auction rules, Vistra Energy (NYSE: VST) supports the reasoned action that directs PJM to reform its capacity auction to address the anti-competitive effects state-subsidized resources have on the ability of the capacity market to function properly. While the order allows certain exemptions, it strikes the right balance by specifically directing PJM to establish a minimum capacity offer price for all state-subsidized resources equal to the net cost of entry for new resources and the net avoidable cost rate for existing resources. FERC initiated the proceeding to reform PJM's capacity market in a June 2018 order that rejected two PJM proposals for capacity market reform, finding PJM's existing capacity auction rules unjust and unreasonable as a result of the price-suppressive impact of state subsidies.
"We are pleased FERC has resolved the regulatory uncertainty hanging over the PJM markets. We applaud the Commission for directing reforms that preserve the integrity of competitive markets and will provide the confidence in the PJM capacity auction process necessary to support investment in a balanced set of resources to maintain electric reliability," said Curt Morgan, president and chief executive officer of Vistra. "We recognize that some will initially react negatively to the FERC order; however, as they evaluate options, we hope they take into account the tremendous savings their constituents have realized over the years from the competitive PJM markets and recognize that FERC must ensure fair and equitable treatment for all market participants. Vistra supports states developing energy policies, but the company does not support exercising those policy decisions in a way that distorts competitive pricing."
Morgan continued, "It seems most of the energy policy objectives relate to climate change and we believe there is a better path forward to achieve these objectives – one that is market-based, does not disrupt competitive market dynamics, and provides a level playing field. As we recently announced, Vistra supports an economy-wide, national or regional carbon abatement program with a dividend as the most effective and equitable mechanism to promote the reduction of greenhouse gas emissions. This kind of approach would allow companies to make strategic choices about their assets based on a uniform set of rules and transparent pricing and would eliminate the need for subsidies that are the focus of FERC's reforms. We encourage states to work expeditiously to adopt and enhance market-based carbon abatement programs, and we look forward to participating in that process."
Vistra believes the FERC order is appropriate for the following reasons:
The PJM capacity market order is a balanced approach to a very complex and hyper-politicized matter that will preserve the competitive markets, which have protected electric consumers and provided billions of dollars of savings, and ensure that rates are just and reasonable for all market participants, regardless of their fuel source. The order and an effective carbon abatement program can be a powerful combination bridging power markets to a new future. We look forward to working with PJM and stakeholders as this order is implemented.
About Vistra Energy
Vistra Energy (NYSE: VST) is a premier, integrated, Fortune 350 energy company based in Irving, Texas, providing essential resources for customers, commerce, and communities. Vistra combines an innovative, customer-centric approach to retail with safe, reliable, diverse, and efficient power generation. The company brings its products and services to market in 20 states and the District of Columbia, including six of the seven competitive power markets in the U.S. and markets in Canada and Japan, as well. Serving nearly 5 million residential, commercial, and industrial retail customers with electricity and gas, Vistra is the largest competitive residential electricity provider in the country and offers over 40 renewable energy plans. The company is also the largest competitive power generator in the U.S. with a capacity of approximately 39,000 megawatts powered by a diverse portfolio of natural gas, nuclear, coal, solar, and battery energy storage facilities. In addition, the company is a large purchaser of wind power. The company is currently developing the largest battery storage system of its kind in the world – a 300-MW/1,200-MWh system in Moss Landing, California. Vistra is guided by four core principles: we do business the right way, we work as a team, we compete to win, and we care about our people, our neighbors, and our stakeholders. Learn more about Vistra's environmental, social, and governance efforts and read the company's sustainability report at https://www.vistraenergy.com/sustainability/.
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