Good day, and welcome to Vistra's Third Quarter 2025 Earnings Call. Please note, this event is being recorded. I would now like to turn the conference over to Eric Micek, Vice President, Investor Relations. Please go ahead.

Good morning, and thank you for joining Vistra's investor webcast discussing our third quarter 2025 results. Our discussion today is being broadcast live from the Investor Relations section of our website at www.vistracorp.com. There, you can also find copies of today's investor presentation and earnings release. Leading the call today are Jim Burke, Vistra's President and Chief Executive Officer; and Kris Moldovan, Vistra's Executive Vice President and Chief Financial Officer. They are joined by other Vistra's senior executives to address questions during the second part of today's call as necessary. Our earnings release, presentation and other matters discussed on the call today include references to certain non-GAAP financial measures. All references to adjusted EBITDA and adjusted free cash flow before growth throughout this presentation refer to ongoing operations adjusted EBITDA and ongoing operations adjusted free cash flow before growth. Reconciliations to the most directly comparable GAAP measures are provided in the earnings release and in the appendix to the investor presentation available in the Investor Relations section of Vistra's website. Also, today's discussion contains forward-looking statements, which are based on assumptions we believe to be reasonable only as of today's date. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected or implied. We assume no obligation to update our forward-looking statements. I encourage all listeners to review the safe harbor statements included on Slide 2 of the investor presentation on our website that explain the risks of forward-looking statements, the limitations of certain industry and market data included in the presentation and the use of non-GAAP financial measures. I will now turn the call over to our President and CEO, Jim Burke.

Thank you, Eric, and good morning, everyone. I appreciate you joining us to review Vistra's third quarter 2025 results. This year continues to be a transformational one for our company, and the activity during the quarter was a key driver of our progress. We announced the landmark power purchase agreement at Comanche Peak, announced our plan to develop 2 gas-fired units in West Texas and successfully closed the acquisition of approximately 2.6 gigawatts of natural gas-fired assets from Lotus Infrastructure Partners. Importantly, while we are successfully advancing our growth efforts, we continue to be steadfastly focused on execution in our core business. As we will discuss, our core business continues to point to additional value creation in the years ahead. I'm proud of what our team has accomplished this year as we continue building the foundation for sustainable growth and value creation well into the future. Continuing on the topic of sustainable growth on Slide 5, you can see the positive impact of steps we've taken over the past several years. Combined with a more favorable demand backdrop, those actions are now translating into sustainably higher levels of profitability for our company. At the core of this success are the approximately 7,000 team members across the organization. Their dedication and hard work allowed us to deliver another solid quarter of financial performance. Combined with our results year-to-date, we are narrowing our guidance range for 2025 adjusted EBITDA to $5.7 billion to $5.9 billion, and our 2025 adjusted free cash flow before growth to $3.3 billion to $3.5 billion. Moving to our near-term outlook. We are introducing guidance ranges for 2026 adjusted EBITDA of $6.8 billion to $7.6 billion and adjusted free cash flow before growth of $3.925 billion to $4.725 billion, including the expected contribution from the assets acquired from Lotus Infrastructure Partners. It's worth noting that excluding the benefits from the Lotus assets, the midpoint of our 2026 adjusted EBITDA guidance range is above our previously communicated 2026 adjusted EBITDA midpoint opportunity of $6.8 billion plus, another clear sign of sustainable momentum across our business. We are confident in our forecast as we expect consistent earnings from our retail business paired with strong performance from a reliable, flexible and highly hedged generation fleet. Finally, for 2027, we are introducing an adjusted EBITDA midpoint opportunity range of $7.4 billion to $7.8 billion. While multiple drivers of gross margin variability remain, including the 2027, 2028 PJM capacity auction, our hedge percentage, which currently sits at approximately 70% of expected generation, provides line of sight to our adjusted EBITDA midpoint opportunity. Finally, the recently announced power purchase agreement at Comanche Peak marks a major milestone for our company, for our site and for Texas. We believe this 20-year agreement, which enables our customer to energize up to 1,200 megawatts of new load ensures the Comanche Peak nuclear plant will continue to deliver power to Texans at least through the middle of this century. As you may recall, we recently relicensed Comanche Peak out to the 2050s, and this agreement provides the financial backing to maintain operations through that date and potentially beyond. Further, the customer's commitment to bring significant backup generation to the site will also enhance resource adequacy while meeting their own reliability needs. I want to commend our team for their hard work and constant dedication in getting this agreement over the finish line, working, of course, very closely with our customer. We believe this is yet another example of why Vistra is a reliable and trusted partner for these types of long-term agreements needed to meet the ever-increasing power demand across the U.S. We continue to see multiple pathways for long-term agreements at other sites as we believe our fleet and development capabilities are well positioned to provide a variety of power solutions to meet the needs of these large load customers. Turning to Slide 6. Our 4 strategic priorities remain integral to our success. We believe our integrated business model and comprehensive hedging program provide our stakeholders greater visibility into our future financial performance. Our diverse fleet of generation assets, combined with our trusted retail brands and strong commercial acumen form an integrated platform that consistently delivers attractive earnings and downside protection. Our generation team achieved another solid quarter of commercial availability of approximately 93% for our coal and gas fleet. This included exceptional performance during the late July nationwide heat wave and the impacts of the extended outage at one of our 3 Martin Lake units. Nuclear also had a solid quarter of performance, achieving a capacity factor of approximately 95%. Complementing our generation portfolio, our commercial team continues to deliver strong results through disciplined execution over a comprehensive hedging strategy. We've established a highly hedged position for '26 as we enter the year, providing enhanced earnings visibility and stability. Over the next 12 months, the team will continue to prudently manage our open length for '27 to further strengthen that position. As I'll discuss later, we are also making solid progress in advancing additional capacity contracts with large load customers, which will further enhance the long-term value of our company. On the Retail side, we continue to see strong customer count growth driven by our portfolio of brands in the Texas market. We believe the team's continuous innovation combined with strong customer service drives the consistent earnings level of the business while outperforming on customer complaint performance versus our key competitors and maintaining our 5-star ranking. Switching to capital allocation, we remain disciplined in our approach by targeting a significant return of capital, executing on our attractive growth project pipeline and maintaining a strong balance sheet. Since implementing the capital return plan put in place during the fourth quarter of 2021, we have returned over $6.7 billion to our shareholders through share repurchases and common stock dividends. Kris will cover capital allocation in more detail later in the presentation, but you will see that we expect to return at least an additional approximately $2.9 billion through share repurchases and common dividends, including the additional $1 billion authorized this quarter by the Board for share repurchases through 2027. Turning to growth. With the increasing power needs in West Texas, including from the state's expanding oil and natural gas industries, combined with expected demand growth from data center additions, we have made the decision to move forward with developing 2 natural gas units totaling 860 megawatts. We view these projects as attractive for our owners with projected returns in excess of our mid-teens levered return thresholds. Both units remain part of the Texas Energy Fund due diligence process, and we plan to make a final decision on financing in the coming months. Equipment and EPC procurement is progressing well, and we remain on track to deliver this West Texas capacity in early to mid-2028. Lastly, we successfully closed on our acquisition of 7 natural gas plants from Lotus Infrastructure Partners, totaling approximately 2,600 megawatts of capacity. This acquisition, which includes assets across PJM, New England, New York and California reflects our disciplined and opportunistic approach to M&A. It will enhance our already wide geographic footprint and strengthen our ability to meet the diverse needs of our customers. We look forward to integrating these assets into the Vistra portfolio and driving operational efficiencies by running them in line with the high standards of our current large combined cycle and peaking gas fleet. We continue to target approximately $270 million of adjusted EBITDA from these assets in 2026, with potential upside in the out years driven by synergies and higher capacity revenue. Moving to the balance sheet. We continue to prioritize liquidity and low leverage to manage the business prudently. While we currently have a strong balance sheet with leverage of approximately 2.6x, we expect additional deleveraging through the end of 2027 through higher earnings and continued prudent management of our debt levels. As we stated on our last call, we believe the lower leverage levels, combined with a reduction in business risk as a result of more contracted revenue sources, puts us on the path for an upgrade to investment-grade credit ratings. On our strategic energy transition, we continue to execute on our strategy of utilizing existing land and interconnects to develop solar and energy storage projects. Our Oak Hill solar project in ERCOT reached commercial operations last month, bringing 200 megawatts of clean energy to the ERCOT grid. Our Pulaski and Newton sites remain on schedule for commercial operations by year-end 2026. We continue to evaluate the remainder of our development portfolio for additional opportunities as long-term power agreements materialize. Finally, we believe nuclear, with its carbon-free profile and 24/7 availability, is a vital component in meeting the country's electricity needs for decades to come. Large load customers clearly have a preference for this type of generation. To meet these needs, we continue to evaluate upgrade opportunities at our nuclear plants with studies planned to be completed by the end of this year. Initial assessments are promising, indicating the potential to increase capacity at nuclear plants by approximately 10%, with the additional capacity starting to come online in the early 2030s. Turning to Slide 7. We continue to see a structurally improved demand environment, which carries significant positive implications for our business. As we've discussed over the past several quarters, electricity consumption across the country is undergoing a fundamental shift. Load growth in our largest markets remains well ahead of national averages. With weather-normalized load in PJM rising approximately 2% to 3% and the ERCOT market growing around 6% year-over-year. Importantly, customer investment continues to send stronger, more sustained market signals. Data center development remains robust with a number of planned facilities across the U.S. more than doubling from 12 months ago. Our largest markets, PJM and ERCOT, continue to be targeted for a larger share of these developments. As an example, ERCOT's market share of these announcements is over double the region's market share of currently installed data centers. While it's unlikely that every announced project ultimately reaches completion, even factoring in a haircut, we believe this data indicates the load growth levels we covered at the top of the slide will materialize. In fact, we continue to see the potential for even greater acceleration. This is especially evident in recent results calls from the hyperscalers, where they've emphasized expanded investments in AI and data infrastructure, signaling that development activity is expected to remain strong, if not increase further, in the year ahead. This load growth is already leading to higher utilization rates for our combined cycle gas assets, where capacity factors have increased from the low 50% range to the high 50s over the last several years. Growing consumption should efficiently drive existing assets to higher utilization levels over time, potentially reaching rates in the mid-80% range for combined cycle gas plants. This is evidence that there is capacity currently on the grid capable of meeting the load growth anticipated over the next 3 to 5 years. In addition to supply-side solutions, there is also increasing interest in demand-side solutions. The infrequent super peak hours can also be met through practical solutions like on-site backup generation and demand response, approaches that large load customers are continuing to develop and implement. This framework supports accelerating demand growth from emerging sectors such as data centers, crypto operations and other industrial load, allowing them to integrate into our markets by leveraging existing grid investments while improving system utilization and lowering unit costs for end customers. Turning to Slide 8. Vistra is in the middle of a multiyear plan to drive significantly higher profitability levels against the backdrop of accelerating electricity demand growth just outlined. The team has already delivered on several initiatives that have led to our increased outlook through 2027. Our retail business consistently achieved strong margin performance and high levels of free cash flow conversion. Our commercial team, through our comprehensive hedging program, locks in benefits from stronger power markets, while our generation team looks for attractive and cost-effective ways to organically add capacity, such as our natural gas upgrades in Texas. Inorganic expansion has also been a big value driver through both the acquisitions of Energy Harbor and the natural gas plants from Lotus. However, we see an extensive list of near-term and long-term opportunities that are not included in our outlook that will enable us to grow our business through the end of the decade and beyond. Some of these initiatives are already underway, such as the 1,200-megawatt power purchase agreement at Comanche Peak, or the Coleto Creek coal-to-gas conversion, and these are expected to begin contributing to profitability in the next few years. Projects like the new Permian gas units and the Miami Fort coal-to-gas conversion are in the early stages of project execution. Others such as the nuclear uprates, while still early in the process, could provide significant additional optionality around our assets. Long-term power purchase agreements will also be a key driver of increasing our earnings visibility, and we see multiple pathways to agreements across our large diversified fleet of more than 40,000 megawatts of nuclear, gas, coal and renewable generation. We also see numerous opportunities for contracting new build capacity across our geographies, and our experienced development team is actively progressing these options. We continue to see an acceleration in strong customer interest we outlined last quarter, and we believe the momentum we have today should enable us to realize multiple contracting opportunities. In fact, we set aside roughly $50 million per year over the next several years, including 2026, and increased expenses for investments in people and development activities to capture these opportunities and handle the level of customer interest. Importantly, all the potential future drivers I've outlined remain incremental to the core objective of delivering for our customers for running an efficient and reliable fleet that benefits from improving power market fundamentals. We believe there is significant optionality embedded in our large generation fleet, particularly our combined cycle and peaking gas fleet, given that strong market fundamentals can drive higher volumes and higher revenue without significant incremental investment. Now I'll turn it over to Kris to provide more details on our third quarter results, outlook, and capital allocation. Kris?

Thank you, Jim. Turning to Slide 10. Vistra delivered $1.581 billion in adjusted EBITDA in the third quarter including $1.544 billion from Generation and $37 million from retail. Consistent with last quarter, the Generation segment continued to realize material benefits from our comprehensive hedging program, with average realized prices over $10 per megawatt hour higher compared to the same quarter last year. The stronger realized price benefit, together with the higher capacity revenue in our East segment and the expected nuclear PTC revenue recognized at Comanche Peak, more than offset the impacts of extended outages at Martin Lake Unit 1 and our battery facilities at Moss Landing. On a year-to-date basis, the incremental contribution from 2 additional months of Energy Harbor results, combined with stronger realized wholesale prices and higher capacity revenue, have more than offset the impact from the outages and are driving the strong year-over-year performance gains. Moving to Retail. As a reminder, based on the shape and level of supply costs, we typically expect lower profitability in the first and third quarters, with this year being no exception. Notably, the third quarter, like the first 6 months of the year, benefited from strong customer count and margin performance, with results in the quarter being offset by weather-driven gains in the third quarter of last year that were not repeated this summer and some expected intra-year timing impacts of supply costs. Importantly, the Retail business continues to generate strong earnings for our business in a variety of market conditions and remains on track to outperform 2024 results. Turning to Slide 11. Based on our expectations for 2025 and 2026 and the range of midpoint opportunities for 2027 that Jim outlined earlier, as well as our expectation that we will continue to achieve a targeted medium-term adjusted EBITDA to adjusted free cash flow before growth conversion rate of at least 60%, we project to generate a significant amount of cash, approximately $10 billion through year-end 2027. The confidence in our outlook and the cash generation of our business continues to be underpinned by our comprehensive hedging program and the downside support provided by the nuclear PTC, resulting in a highly hedged position over the next several years. As we've highlighted in previous quarters, our share repurchase program has generated significant value for our shareholders. Since beginning the program in November 2021, we have reduced our shares outstanding by approximately 30% through the repurchase of approximately 165 million shares at an average price per share under $34. We continue to expect to return at least $1.3 billion to our shareholders each year through share repurchases and common dividends. With the Board's recent authorization of an additional $1 billion of share repurchases, we have approximately $2.2 billion of share repurchase authorization, enough to meet our annual share repurchase target through 2027. We will continue to execute the share repurchase program through our 10b5-1 plan, allowing us to stay in the market even when in possession of material nonpublic information. While this plan allows us to remain consistent buyers of our shares, we have designed it such that it accelerates repurchase amounts during times of market dislocation. On the balance sheet, after increasing our net debt to reflect the closing of the Lotus transaction, and the financing activities completed in October, as well as incorporating the midpoint of our 2026 guidance range for adjusted EBITDA, our net leverage ratio is approximately 2.6x. As mentioned last quarter, we are targeting leverage metrics consistent with investment-grade credit ratings and believe the improvement in our net leverage levels, combined with the higher earnings visibility from more contracted earnings streams, could position us for an upgrade, potentially within the next 12 to 18 months. Turning to growth investments. We will continue to be opportunistic, yet disciplined in the deployment of capital. In addition to our planned solar and energy storage investments, we will be allocating capital to our new gas-fired units in West Texas, which we estimate will require approximately $900 million before any offsets from project financing. Finally, we expect to continue to evaluate M&A opportunities for both the generation and retail businesses. Even after allocating approximately $3.4 billion to our equity holders through share repurchases in common and preferred dividends and $2.6 billion for accretive growth investments, including closing the acquisition of the gas assets from Lotus Infrastructure Partners, we still expect to have approximately $4 billion of additional capital available to allocate through year-end 2027. Share repurchases remain an important capital allocation priority, and we still believe our shares are trading at an elevated free cash flow yield, especially when compared to the average free cash flow yield for companies in the S&P 500. A strong balance sheet is also important, and we see multiple benefits to achieving investment-grade credit ratings. Finally, the shift in power market fundamentals has led to a significantly wider opportunity set for growth compared to years past. Notably, while the opportunity set has changed, our approach is not. We remain disciplined, seeking to balance growth with shareholder returns and a strong balance sheet. We continue to place a high threshold on capital, targeting at least mid-teens levered returns for any opportunity we pursue. Finally, moving to Slide 12. As Jim mentioned, we are in a multiyear execution plan that is leading to a sustainably higher level of earnings power for our business. This is evident in the higher adjusted EBITDA and adjusted free cash flow before growth guidance we've provided today. While these metrics have been the focus of our guidance historically and will likely continue to be going forward, at least in the short term, these metrics don't fully capture our best-in-class capital allocation demonstrated over the past several years. As a result, we've included a new perspective focused on adjusted free cash flow before growth per share through 2026. We view this metric as a direct indicator of long-term value creation for shareholders. It demonstrates both our ability to generate recurring cash flow and the capacity to deploy that cash toward value-enhancing initiatives. It's also an important measure within Vistra's long-term incentive compensation framework, keeping management and shareholders aligned on how we define success. You can see from the chart on the left that based on actions taken to date, forward curves at the end of October and a stable share count as of September 30, we see a trajectory for adjusted free cash flow before growth per share to grow by approximately 50% from 2024 through 2026. We think this level of improvement over the 2-year period is compelling and is a testament to both the operational excellence and disciplined capital allocation by the team. As Jim outlined earlier, the number of opportunities for our business have never been higher, and we continue to see heightened engagement from our customer base. These opportunities vary in the amount of capital required as well as our ability to control them. Some of these opportunities, like continued share repurchases, are fully in our control. Many of these opportunities, like the recently announced Permian gas units, the 1,200-megawatt Comanche Peak PPA or other new long-term contracts at existing or new build generation assets are highly accretive but are not expected to begin contributing immediately to our results. The continued improvement in power markets remains a potentially significant source of future growth in our business. Collectively we see these multiple drivers leading to a meaningfully higher adjusted free cash flow before growth per share with a compelling growth rate over the next 3 to 5 years. We will continue to deploy our excess capital to maximize the value creation from these opportunities, and we'll provide updates as they materialize. In closing, the growth and results we shared today reflect the strength of our strategy and the dedication of our entire team in consistently delivering for our customers and our shareholders. As we look to the months ahead, our focus remains on finishing the year with solid execution, ensuring reliable performance through the winter season and setting the stage for continued success in 2026.

We're ready to open the line for questions.

So just maybe focusing on the '27 opportunities, which is generally in line with expectations. I guess, what's currently embedded in that range? Obviously, it's a little early for the Comanche deal ramp. But I guess where do you see opportunities to improve versus the midpoint? Is it sort of market volatility and locking in some of the forward curves? Or is there a more strategic dry powder just given the $4 billion of cash available for allocation?

Thank you, Shar. There are several options we can still explore. We have mentioned that we are open in 2027 and have indicated a 70% hedge percentage. As the markets continue to strengthen, we certainly have exposure to that. Regarding strategic deals, contracting is a discussion point, and we see potential for contracts that may begin around 2027. This is not yet included in our forward outlook. I recognize that projecting numbers so far out is challenging, and we need to deliver on these opportunities, but we believe there is potential for growth in our business. That’s why we have set a wider range. Our aim is to continue the upward trend we have historically achieved as we approach the delivery year. We have consistently demonstrated that capability, and I believe we have numerous options available to us.

Perfect. I appreciate that, Jim. And then just on the '27 sort of like you talked about contracting opportunities. I mean peers have been talking about deals becoming unanimously more front of the meter for obviously, reasons including circumventing political sensitivities and reliability arguments. Is this how you're thinking about your Eastern fleet like Beaver Valley? And are you seeing converging pricing between front and behind the meter?

That's a very good question, Shar. There are both challenges and opportunities with co-located deals and front of the meter projects. The concept of additionality is relevant here. Some companies are starting with bridge power to eventually secure a grid connection, while others are beginning with front of the meter from the start. Ultimately, I believe customers will seek a grid connection as it is crucial for long-term reliability from a data center perspective. We consider each deal to be unique, which makes it difficult to explain the specifics in advance since customers have varying sustainability goals, speed to market needs, and preferred markets to support from a data center standpoint. With new build opportunities that we are discussing with various parties, some are exploring how to bring additional resources to meet long-term load growth concerns that necessitate more generation. This doesn't have to happen immediately. One of our key messages that seems to be resonating is that there is currently excess capacity in most markets, especially in major ones like ERCOT and PJM, to accommodate most load growth during non-super peak hours. During super peak hours, customers are also providing solutions through their backup generation. I truly believe that all options remain open for customers, whether it be front of the meter, co-located options, or bridge power to reach the grid or build on-site generation that directly supports their data centers. We have not seen any options disappear from our conversations with customers. It’s significant to note that customers are being innovative because they want to collaborate with stakeholders like regulators and state leaders to ensure reliability and affordability. At this point, I don’t see a trending shift, Shar; I still observe the same variety of options available that we discussed a year ago.

I just wanted to pick up on some of the comments in the prepared remarks there. I believe you talked about meaningfully higher adjusted free cash flow before growth and a compelling growth rate over the next 3 to 5 years here. Just wondering if you might look to quantify that in some sense for the market in the future, given there's a lot of variables as you laid out there, but just wondering any more sense you could provide to that?

Yes, Jeremy, this is Kris. I appreciate your question. We've anticipated this inquiry. As we look ahead, there are numerous opportunities, and it would be misleading to assign a specific growth rate or range since various factors and their timing could differ significantly. We have outlined the opportunities in detail, and we recognize many of them. We believe that at the appropriate time, we will continue to provide growth updates, likely on an annual basis. However, we will not attempt to predict when or at what level these opportunities will materialize.

Jeremy, I would like to add that when we provide our view for 2026 and the midpoint opportunities for 2027, we are in a highly hedged position. Part of our strategy has been to give our investors the information we have regarding hedging and contracting to instill high confidence. As you look further out into a cycle spanning four to five years, where there have not been capacity clears and auctions, you may not have hedged that far ahead. The variability in the market is significant. I believe this is actually a positive aspect for Vistra shareholders because the fundamentals of our business, as we mentioned in our prepared remarks, remain very strong. However, simply providing a number or a growth rate might raise too many questions regarding the assumptions involved. We may not provide enough confidence around those assumptions to make solid commitments. As a company, we have consistently aimed to provide information you can rely on, and that's our focus. The disclosures we've given regarding the 2026 and 2027 timeframe meet that standard.

Got it. That's helpful. And just wanted to come back to, I guess, contracting discussions, if we could. And any color you might be able to provide here, granted deals happen when they happen. But just as far as conversations related to gas power generation relative to nuclear, wondering if you could provide any more color, I guess, on how those trend?

Sure. And I'm going to ask Stacey to provide some feedback here as well. You noticed in our prepared remarks, we talked about investing in growth even during which we're reluctant. I have to tell you, our business is one where we know that in a fundamentally commodity-driven business, you need to be a low-cost operator. But then these are unique opportunities and the pace at which we have not seen before. In fact, this is the highest level of engagements we've been part of is what we're in right now. And so recognizing that, we're adding people, and we're adding dollars to make sure that we can handle the level of inbounds that we're getting. And it's an exciting time. It's a stressful time because there's a ton of work that customers are asking of us. But I think the range of options from gas to nuclear to doing some things that are more short term versus long term, those options are on the table. And frankly, our people are excited to see the growth opportunities they haven't seen in this industry in their whole career. So we're investing in that, not only in SG&A and O&M, but also some CapEx assumptions to capture it. But I'd like Stacey to weigh in on this.

Yes. Thanks, Jim. Jeremy, yes, I would just say, to echo what Jim said, all options continue to be on the table, and we continue to see sort of record levels of interest across our portfolio as well as in opportunities to do new build generation. Demand actually seems to be accelerating from our standpoint based on the conversations we're having and also lengthening into the later years of the decade, whereas I would say, a year ago, customers were very focused on 2026, 2027 power. They're now starting to recognize that they need to layer in longer-dated deals as well and serve their needs in the later part of this decade. And so we just continue to have a number of conversations across our fleet. The number of engagements we have currently and the number of inbounds we're getting are the highest that they've ever been. So we're really excited about the opportunity, but we're also very committed to being disciplined about what opportunities we pursue, making sure that we can deliver and execute on those opportunities.

Understood. Real quick last one, if I could. As it relates to '27 hedging price levels, are you able to provide any color there?

We are not providing that at this point. We will next quarter. That's our typical cadence for providing the roll forward, if you will, of the hedge disclosures. But obviously, we've been laddering into an increasing power market through time. And so you would expect to see that increase year-over-year, and you've seen that from '24 to '25, '25, and '26, you're going to see it again in '27. As you know, our philosophy isn't to try to capture the absolute peak on any of this because the volumes that we're hedging are so large that you do need to thoughtfully execute in the marketplace, both on the retail customer contract side, any of the large commercial and industrial and data center contracts as well as third-party hedging in the market. But we will provide that disclosure, Jeremy, in the next quarter.

Jim, regarding your last question about hedging, considering the positive factors you've mentioned, like demand and time to power, I wonder why you haven't thought about hedging less than you've done previously. It seems like your volumes are so large that you feel the need to secure a significant portion with customers. I’d like to hear your perspective on this.

Yes, Steve, that's a great question. Looking at this year, even with your close monitoring of these markets, you might find that hedging for 2026 could appear out of the money if the market keeps rising post-hedging. By the third quarter of 2025 at ERCOT, where weather conditions didn’t meet expectations, those hedges can end up being quite profitable. I believe it’s important to recognize that once you decide to hedge, it takes time to manage these volumes. This provides assurance to our investors regarding our share buyback program, dividends, capital expenditure plans to sustain and grow the business, and debt reduction. For a fleet of our size producing over 200 terawatt hours annually, it’s not easy to simply ease back and then aggressively pursue hedging. We must be considerate in our approach and avoid constant programmatic hedging. Similar to our share buyback strategy, we have flexibility; we engage more with hedging when prices are favorable. Additionally, the dynamics of a large fleet and the retail customers' need to hedge their exposure play a role. A core value we offer at Vistra is addressing customer needs when they arise. Internally, we frequently discuss how far out we should hedge and the appropriate risk premium for doing so. You’ve highlighted important points, Steve, particularly regarding the business's scale and our strategic approach.

Thanks, Steve. That's a good question. We've been clear with the rating agencies that we see significant opportunities for inorganic growth right now, and we want to ensure we're in a position to take advantage of those opportunities. One of the reasons I mentioned a timeframe of 12 to 18 months is that we've discussed with the agencies the importance of having some cushion. We don't want to reach investment-grade status only to miss a potential opportunity. However, if we examine our metrics, even with the $4 billion assumption and a leverage ratio of 2.3x, we have plenty of flexibility to still meet investment-grade standards, and there's likely additional capacity for leverage as our business risk decreases. It’s possible that our ability to increase leverage goes beyond just the $4 billion mark. Lastly, if the right opportunity arises, we are open to purchasing our own stock, and our equity could also serve as a valuable currency. We've seen others in our industry utilize this strategy, but it would need to be for the right opportunity.

Just a question around your views on the forward curves. You mentioned earlier about the soft weather and the forwards held up reasonably well all things considered. You highlight here about 6.5% year-to-date growth on a weather-normal basis in ERCOT. When you guys think about the potential for constructing additional generation, I know you made the decision to move forward with the peak curves. But maybe just some updated thoughts around where the curves are and as you sort of look out to the demand profile and what's your bias on the pricing level from here?

Sure, Bill, that's a great question. I’ll begin with our decision regarding Texas. We’re adding 860 megawatts, which comes on top of nearly 500 megawatts from gas augmentations that we’ve implemented to increase capacity on the grid. The 860 megawatts in West Texas presents a unique opportunity due to developments in that region. Previously, this hub traded at a discount compared to the north hub serving the Dallas-Fort Worth area. Now, it is trading at a significant premium. We’re examining the supply and demand dynamics in West Texas, particularly influenced by the electrification of oil and gas loads and data centers. Having an existing site there, our Permian gas site, which we are expanding by adding turbines, makes this opportunity even more compelling. This wouldn’t have been as feasible in other parts of Texas. It’s important to highlight that these circumstances aren’t merely reflective of new build economics. We are constructing these systems at a cost of $1,100 per kilowatt, which is below the rate of a fully priced new build, thanks to preordered equipment and strong relationships with our engineering, procurement, and construction partners, allowing us to deliver at a below-market cost. Regarding the forward price curves, we are observing more activity in ERCOT forwards than we did a year ago, though I believe they still don’t fully capture our conservative load growth forecasts. We aim to form our forecasts grounded in realistic expectations of what can be brought online within a specific timeframe, and our projections are lower than those of the utilities and ERCOT, and we feel confident about them. The forward curves do not yet reflect our anticipated load growth. We remain optimistic about potential increases in power prices based on supply and demand dynamics. In PJM, however, we are not seeing as much energy market activity, although there has been some movement in capacity driven by load growth predictions. The real load numbers haven’t shifted as significantly. Nevertheless, we did notice some improvement in PJM during the last quarter. We think this market is still behind reality regarding energy prices and load growth but appears to be acknowledging the tightening in supply-demand dynamics. We are unsure how coal plant retirements or extensions will affect supply-demand fundamentals in the next 3 to 5 years. However, looking further ahead, load growth will still need to be addressed along with how to handle older assets, particularly since there is more coal to retire in PJM compared to ERCOT. Over time, I believe these supply-demand fundamentals will reveal strength in the forward markets that we currently do not see reflected.

Okay. That's very helpful. And then just one other one around the nuclear upgrades. I think what you described sounds like potentially 600 to 700 megawatts. How would you consider pursuing that? Does that have to come with off-take agreements or contracting of that output to potentially pursue it? Or maybe just to think through, I know you're still evaluating, but maybe just how would that potentially come to fruition?

Yes, Bill, that's the most important point. While it's possibly cheaper than constructing new nuclear facilities, it still comes with significant costs. There is interest in the uprates, particularly from potential data center partners, and discussions are ongoing. However, these are complex issues that take time to bring to fruition. We expect these developments to start in the 2030s, so they won't provide immediate capacity. To Stacey's earlier point, customers are engaging in long-term planning, which aligns with their interests. However, we don't believe the current market conditions would support moving forward with uprates at this time.

I was wondering, could you give an update on the other data center contracting opportunities that I think in the last quarter, you had suggested could come to fruition by year-end? Just any comments as to whether that time frame is still looking possible for certain opportunities? And then any just directional, is it nuclear versus gas or PJM versus ERCOT? Curious any color you might be able to offer.

Sure. The exact timing, I think this has come up on our previous calls and certainly some of our peers have had this question. The exact timing is hard to predict just because it's a complex contract, 2 parties need to reach agreement and 2 parties have to get through their own approval processes because these are material deals for both sides of these agreements. I do think there's possibilities of that, David. I think we have stages of contracts that are much closer to execution, and we've got some that are longer in terms of the development cycle to be able to bring those to market. But I do think that, as we mentioned earlier, the activity level is the highest that it's been. I think that also drives a bit of a sense of urgency on both sides of the equation. I think we want to make sure that we're able to deliver and capture this value. But the other side of the equation is the large customers know that there aren't that many immediate opportunities with which to execute. And so we are seeing heightened activity levels and we certainly hope to be able to give you some more specifics and execute what we call put points on the board by year-end. But I can't predict that specifically. I mean, we're into November; we hit the holidays. But either way, whether it's right before year-end or sometime thereafter, we're signing deals that would be in the 10-, 15-, 20-year horizon. We need to get these right, and that's what we're focused on. Yes. Thank you, everyone, for joining. As you can see, this has been a very active time. And we put a lot of points on the board in the third quarter, as we like to call it. This is an incredibly exciting time for Vistra. We look forward to executing not only on our large and growing base business but our growth initiatives that we talked a lot about on today's call. I want to thank our team for their service, to our customers and our communities, and we appreciate your interest in Vistra, and we hope to see you in person soon. Have a great rest of your day.

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