Earnings Call Transcript
Vistra Corp. (VST)
Earnings Call Transcript - VST Q4 2025
Eric Micek, Vice President, Investor Relations
Good morning, and thank you for joining Vistra's investor webcast discussing our fourth quarter and full year 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. Providing our prepared remarks today are Jim Burke, Vistra's President and Chief Executive Officer; and Kris Moldovan, Vistra's Executive Vice President and Chief Financial Officer. Other senior Vistra executives will be available 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 explains 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.
James Burke, President and Chief Executive Officer
Thank you, Eric, and good morning, everyone. Thank you for joining us to discuss Vistra's fourth quarter and full year 2025 results. 2025 was a transformational year for Vistra. We made several moves that I believe underscore the value of our integrated model. We executed strategic asset acquisitions and entered into long-term power purchase agreements, accomplishments that were made possible by close collaboration across the company, including development, operations and commercial as well as our retail and functional teams. This tightly coordinated execution is a direct result of the focus and discipline of our people and reflects the One Team culture that drives our strong performance at Vistra. These accomplishments demonstrate our ability to deliver industry-leading power solutions to our customers, execute complex transactions and deliver day-to-day operational excellence, all while driving significant value for our shareholders. We remain confident in the ever-increasing customer demand for power, enthusiastic about the growth opportunities that load growth presents for Vistra and eager to continue to partner with our customers to realize those opportunities and serve their needs. We look forward to building on this momentum as we move through 2026 and beyond. Turning to Slide 5. Our integrated business model once again demonstrated its value and effectiveness as we delivered another year of record financial performance. For the full year, we achieved approximately $5.9 billion of adjusted EBITDA and approximately $3.6 billion of adjusted free cash flow before growth, both meaningfully above the midpoint of our original guidance ranges. These results reflect consistent operational performance from our generation, commercial and retail teams. The importance of operating assets safely and reliably was underscored during Winter Storm Fern at the end of January. During the 9-day event, we saw significant cold front impact most of the U.S., including temperatures below 0 in West Texas and the Northeast, and our team and the generation fleet delivered very strong performance. Our team not only operated safely during difficult weather conditions, but also ran our assets extremely well during the event. This, coupled with our commercial risk management approach, enabled us to serve our millions of retail customers and deliver a positive financial outcome, despite the high volatility of both gas and power prices. Moving to growth. We took meaningful steps during the year to expand and strengthen our generation portfolio. In October, we closed the acquisition of 7 modern natural gas generation facilities totaling approximately 2,600 megawatts from Lotus Infrastructure Partners. This transaction added highly efficient dispatchable assets across key competitive regions, including PJM, New England, New York and California. Winter Storm Fern was our first weather experience with these new assets, and we were pleased with their performance and with the value they added to our overall fleet. Building on the Lotus transaction, we recently announced our agreement to acquire Cogentrix Energy, which includes 10 modern natural gas generation facilities totaling approximately 5,500 megawatts of capacity, including 2 plants, Patriot and Hamilton-Liberty that were completed in 2016 with heat rates well below 7,000. Together with the Lotus acquisition, these assets will further diversify our fleet, improve our geographic balance and significantly strengthen our ability to meet the growing demand for dispatchable generation across the country. Owning and operating high-quality dispatchable generation in competitive markets is core to our strategy. We believe strategic acquisitions and asset integrations are one of our core capabilities that continue to deliver value to our shareholders. We also made significant progress contracting long-term nuclear capacity, enhancing the amount and durability of our cash flows. We have now contracted approximately 3.8 gigawatts of nuclear capacity through multiple power purchase agreements, including a 20-year agreement with Amazon Web Services for 1,200 megawatts at our Comanche Peak nuclear power plant in Texas and 20-year agreements with Meta covering 2,176 megawatts of operating capacity and an additional 433 megawatts of upgrades at our PJM nuclear plants, the largest nuclear operation supported by a corporate customer in the United States. We are excited to partner with these world-class companies to continue to provide reliable zero-carbon electricity decades into the future. Overall, these and other actions taken in 2025 continue to strengthen Vistra's ability to reliably and affordably support the nation's growing power needs. Turning to Slide 6. For the eighth consecutive quarter, we continue to see a structurally improved demand environment that supports our long-term outlook. U.S. electricity consumption reached an all-time peak of approximately 4,200 terawatt hours during 2025, up about 2.5% compared to 2024. We expect calendar years 2026 and 2027 to continue to show growth, which would mark the first 4-year period of sustained growth since the 4-year period ending 2007. Demand growth no longer appears to be episodic, but increasingly durable, a dynamic with important implications for the power sector. While the near-term outlook remains strong, we continue to believe the impact of data centers on tightening supply-demand dynamics will not meaningfully begin until late 2027 or early 2028, given most build schedules and interconnect timing. This is something we've been consistently messaging for some time. Load growth is real and significant, but it is likely not at the extremely elevated levels in the rapid timeframe that has been forecasted by many third parties. The fact that we see the load growth coming more slowly than some forecast does not dampen our enthusiasm for the tremendous opportunities in front of us. In fact, we view a measured pace of growth as a positive. It naturally takes some time for supply and demand to go from concept to reality. We believe our company and the markets in which we operate can meet the moment. Our primary regions continue to outperform. We maintain our view that annual peak load growth of at least 3% to 5% in ERCOT and low single-digit growth in PJM is achievable through 2030. Importantly, we expect overall load growth to outpace peak demand, resulting in higher expected utilization across the system rather than short-duration peaks alone, implying the economics of existing generation assets will improve on a sustained basis. Data center development remains robust, and we believe key markets such as PJM and ERCOT will continue to attract a disproportionate share of new load growth. While not every announced project will ultimately be built, even applying conservative assumptions, the level of activity supports the load growth outlook that we've discussed. Recent commentary from hyperscale customers reinforces this view as they continue to emphasize expanding investment in AI and digital infrastructure. Capital spending by the hyperscalers continues to rise to record levels and is expected to eclipse $700 billion in 2026, equivalent to roughly 50% year-over-year growth. This level of investment is notable and provides further support for sustained load growth. Demand growth creates meaningful opportunity for Vistra. Following the closing of Cogentrix, our large modern fleet of combined cycle gas generation assets will total approximately 26 gigawatts of capacity. Importantly, our fleet currently operates at a utilization rate of approximately 60%, and we continue to believe higher energy demand should drive materially higher utilization of existing assets over time, providing a practical and cost-effective way to meet load growth. Taken together, these trends underscore a demand environment that is structurally stronger than prior cycles, and Vistra is well positioned to meet growing electricity needs in our core markets. Moving to Slide 7. The Cogentrix acquisition represents the second opportunistic expansion of our generation footprint over the last 12 months. Similar to the Lotus transaction, it is an acquisition of high-quality dispatchable assets in competitive markets at an attractive price that we believe will drive meaningful per share accretion. As I mentioned earlier, we believe successfully integrating and operating generation assets at scale is a core competency of the company, as we've demonstrated time and again, starting with the Dynegy transaction and continuing with our Energy Harbor and Lotus acquisitions. For Cogentrix, we see similar opportunities to boost the portfolio's earnings profile over time as we get into our normal integration activities. From a financial perspective, we view the purchase price as attractive at approximately $730 per kilowatt of capacity, net of expected tax benefits, and we expect the transaction to deliver mid-single-digit adjusted free cash flow before growth per share accretion in 2027, with a high single-digit accretion on average over the '27 to '29 period. We look forward to closing the transaction in 2026 and welcoming our new team members to the Vistra family. More broadly, we continue to believe that natural gas generation will play a critical role in delivering reliable, affordable and flexible power to U.S. electricity markets. Winter Storm Fern reinforced this view. During the tightest hours, thermal generation accounted for approximately 93% of all power delivered to the ERCOT grid. Once again, demonstrating that when conditions are the most demanding, firm dispatchable resources are relied upon much more than on a typical day. We've seen this story repeat itself time and again during Elliott, Mara, Heather and now Fern. Given this backdrop, we will continue to evaluate future inorganic opportunities that create value within our integrated model. Moving to Slide 8. Our nuclear power purchase agreements represent a significant milestone, not just for Vistra, but for the industry. We have now signed approximately 3.8 gigawatts of nuclear capacity, including uprates under long-term contracts, more than any other power company in the country. These agreements executed with 2 of the world's leading technology companies represent meaningful long-term commitments to the safe and reliable operation of nuclear power generation in the United States. The first agreement, which we announced in September last year, is a 20-year contract with Amazon at our Comanche Peak nuclear plant in Texas. Under this agreement, Amazon will site a facility on our property to utilize the 1,200 megawatts of capacity. Importantly, Amazon also plans to bring one-for-one backup generation, a structure we believe supports future expansion at the site while maintaining reliability across the system. Progress on the site continues to be made, with initial energization still expected in the fourth quarter of 2027 and full ramp expected by the fourth quarter of 2032. The agreement also includes options to explore new nuclear development with a specific focus on possible uprates and small modular reactors. We are excited about this partnership and the long-term potential at the Comanche Peak site. Building on that momentum, in January of this year, we announced long-term power purchase agreements with Meta. The agreements, which are also for 20 years, cover 2,176 megawatts of operating capacity from our Perry and Davis-Besse nuclear power plants and an additional 433 megawatts of upgrade capacity from our Perry, Davis-Besse and Beaver Valley power plants. We expect delivery of the operating capacity at Perry to commence in December of 2026 and Davis-Besse in December 2027. Uprate capacity remains longer dated, with Perry upgrades expected to be online in the fourth quarter of 2031, with each subsequent year seeing an additional upgrade online until all 4 upgrades are completed by the fourth quarter of 2034. From an operating perspective, the plants will continue to operate as they do today with power flowing to the grid for the benefit of all customers. The financial impact from all of our nuclear PPAs is significant, providing the financial backing to operate these facilities for decades to come and in the case of the PJM nuclear sites, to apply for additional license renewals and extend site operations into the 2050s and 2060s. Upon achieving full ramp of all the nuclear agreements, we see a pathway to nearly 25% adjusted free cash flow before growth accretion on an annual basis. From a capital perspective, the Comanche Peak agreement will not require significant incremental spend from Vistra, and the PJM agreements for operating capacity won't require any additional spend. The PJM nuclear uprates will require growth capital over an 8-year period, with the majority of the spend occurring after 2028. We believe these investments represent attractive growth opportunities given the higher capacity, expected improvement in reliability and the enhancements that will allow for an additional operational license extension, all while exceeding our mid-teens levered return requirements. Taken together, these nuclear PPAs position Vistra to support reliable carbon-free power as demand continues to grow while also increasing and extending the earnings profile of our company for the longer term. While these agreements are important for our company, we have more we can do. We still see an opportunity to contract up to an additional 3.2 gigawatts of nuclear capacity across our Beaver Valley and Comanche Peak sites, including potential upgrades of approximately 200 megawatts at Comanche Peak. Continuing with the theme of an enhanced and more predictable earnings profile, let's move to Slide 9. We continue to make meaningful progress in derisking our business, locking in higher levels of contracted revenue while at the same time growing our total earnings. It's important to emphasize this point. We are not trading growth for stability. We are achieving both. Our percentage of contracted wholesale will increase substantially and shift the earnings certainty longer-term and more insulated from changes with tax policy. This is particularly noteworthy as the earnings profile of the business continues to grow significantly on an absolute basis as well. On a consolidated basis, based on the contracts signed to date, when combined with the reliable contribution from our retail business, we expect nearly half of our total adjusted EBITDA to be generated from highly stable earnings sources, with the potential to increase this percentage as we execute on additional opportunities. This will be a meaningful shift in the composition of our earnings, reducing volatility, enhancing visibility and improving our credit profile. We continue to pursue attractive arrangements to serve our customers given the accretion to our business on many levels. Finally, turning to Slide 10. Our 4 strategic priorities remain core to delivering long-term value. With our One Team approach, we've demonstrated superior execution on these priorities. The acquisitions of Energy Harbor, Lotus and soon Cogentrix have proven to be valuable through adherence to price discipline, best-in-class integration and enhancements of scale. Our measured approach to development has enabled us to generate attractive returns, whether through contracted renewables such as Oak Hill and Pulaski or high-return thermal additions like our coal conversions, gas plant augmentations or Permian new build gas units. Turning to the balance sheet. Our prioritization of liquidity and low leverage has placed us in a strong financial position. Combined with the improved earnings profile of the company, we continue to expect leverage to decline and have been pleased to see multiple rating agencies recognize our improved credit profile. While this chart highlights the last few years, I would like to spend a minute on the future and how the continued execution of our 4 key strategic priorities will unlock multiple growth opportunities in the years ahead. Our generation development teams will continue to pursue highly accretive capacity additions. We continue to advance our plans to convert our Miami Fort facility in Ohio from coal to gas. While our targeted 500 megawatts of augmentations at our Texas gas fleet are largely complete, the team continues to study options at our current PJM fleet, which could total approximately 300 megawatts. Further, the team remains hard at work reviewing new PJM plant additions, which would likely involve expanding existing sites. Contracting work also continues. As I already mentioned, we still see an approximately 3.2 gigawatts of opportunities at Beaver Valley and Comanche Peak that can be contracted on a long-term basis. On the thermal side, we continue to make progress in our discussions with customers on new and existing gas solutions. We will continue to provide updates as those opportunities materialize. Finally, our retail team continues to deliver novel products to customers to help them better manage their budget while meeting their power needs. The ability for customers to choose their provider, their electric plan and ultimately have some control over their energy needs is a proven way to address the concerns related to affordability. No matter the product category, customers prefer having a choice, and our team is working hard to make sure that we are the preferred choice of customers from residential to industrial, including the hyperscalers. Ultimately, we believe the combination of these capabilities position Vistra to be the energy solutions provider to our customers by developing and delivering innovative strategies to meet our customers' needs in this growing demand environment. I'm excited about what our team has accomplished and what we can deliver in the years to come. Now I'll turn it over to Kris to provide more details on the fourth quarter and full year results, outlook and capital allocation.
Kristopher Moldovan, Executive Vice President and Chief Financial Officer
Thank you, Jim. Turning to Slide 12. Vistra delivered $5.912 billion in adjusted EBITDA for full year 2025, including $4.290 billion from generation and $1.622 billion from retail. The Generation segment continued to realize material benefits from our comprehensive hedging program. The strong realized revenue across the fleet and 2 months of contribution from the Lotus assets more than offset extended outages at Martin Lake Unit 1 and our Moss Landing battery facilities. The Retail segment continues to perform extremely well, benefiting from strong customer count and margin performance. Although the retail business continues to generate strong earnings in a variety of market conditions, 2025's record result was partly driven by some tailwinds that are not expected to repeat in the future, including some supply cost benefits and gains related to the Energy Harbor acquisition. Over the medium term, we continue to expect retail to achieve adjusted EBITDA in the neighborhood of approximately $1.4 billion. Turning to Slide 13. Based on our expectations for 2026 and our previously communicated range of midpoint opportunities for 2027 as well as the expected contribution in 2026 and 2027 from the Meta PPAs and the closing of the Cogentrix acquisition, we project to generate more than $10 billion of cash through year-end 2027. Our confidence in our outlook and cash generation is supported by our comprehensive hedging program and the downside protection of the nuclear PTC, resulting in a highly hedged position over the coming years. Even after allocating approximately $3 billion to our equity holders through share repurchases and common and preferred dividends in 2026 and 2027 and approximately $4 billion towards accretive growth investments, including the Cogentrix acquisition, the development of the Permian gas units and the PJM nuclear uprates supported by PPAs with Meta, we still expect to have more than $3 billion of additional capital available to allocate through year-end 2027, all while achieving an attractive net debt to adjusted EBITDA ratio of approximately 2.3x by year-end 2027. Although changes in power market fundamentals and customer preferences have expanded the growth opportunity set, the capital framework used to allocate this additional capital remains consistent, balancing shareholder returns, a strong balance sheet and growth through strategic investments. Our share repurchase program continues to produce tremendous value. Since initiating the program in November 2021, we have retired approximately 167 million shares at an average cost below $36 per share, delivering over $20 billion of value for our long-term shareholders. We currently have approximately $1.8 billion of share repurchase authorization remaining, enough to meet our annual share repurchase target through 2027. We continue to believe share repurchases offer meaningful value to our shareholders, particularly in light of the recent deals we've announced as our shares are trading at an attractive free cash flow yield relative to the average of the S&P 500. We expect our share repurchase program will continue to operate utilizing a 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, including the recent share price weakness in January and February. Turning to the balance sheet. We continue to target leverage metrics consistent with investment-grade credit ratings. We believe the improvement in our net leverage levels, combined with the higher earnings visibility from more contracted earnings streams, could position us for additional ratings upgrades potentially as early as later this year. For strategic investments, we will continue to be opportunistic yet disciplined in the deployment of capital. We haven't wavered on our target return threshold, whether for organic or inorganic growth investments, which remains mid-teens or higher on a levered basis. Finally, moving to Slide 14. We are in the early stages of a multiyear execution plan, driving a sustainably higher level of earnings power for our long-term shareholders. You can see on the chart, based on forward curves as of February 20 and a stable share count as of December 31, we continue to see adjusted free cash flow before growth per share to exceed $12.5 for 2026. Given additional actions taken to date, including the Cogentrix acquisition and Meta power purchase agreements, together with a simplifying assumption with respect to the deployment of our cash available for allocation through 2027 to share repurchases, we project adjusted free cash flow before growth per share to increase to approximately $16. Other actions such as the PPA with Amazon and the uprate supported by contracts with Meta won't contribute to our free cash flow until further into the future, but will be meaningful sources of increased contracted earnings. Over the long-term, we believe these transactions as well as the roll-off of out-of-the-money hedges will result in a meaningful step-up in our adjusted free cash flow before growth per share. Despite already delivering on multiple key initiatives, we still have numerous opportunities to further grow and stabilize our business. We see heightened engagement from our customer base across a range of additional opportunities, and we remain confident in our differentiated ability to meet our customers' needs and continue to increase our adjusted free cash flow before growth per share. Of course, share repurchases, and balance sheet management will continue to be an important component of our capital allocation framework. I will now turn the call back to Jim for his closing remarks.
James Burke, President and Chief Executive Officer
Thank you, Kris. 2025 was a record year for Vistra, reflecting strong execution across the business and continued progress against our long-term strategy. Our improving growth trajectory, supported by an increasing level of contracted revenue provides greater confidence in our future cash flows. We enter the next phase of growth with a diversified reliable fleet, a strong balance sheet and a customer focus that positions us well to meet rising demand across our markets. We remain disciplined in how we allocate capital, applying a consistent framework that balances growth, shareholder returns and financial strength. I want to thank our team for their tremendous efforts to deliver value day in and day out for our customers, our communities and our shareholders. One last thing. I regret that I will be unable to participate in the live Q&A portion due to an unforeseen personal matter, but I am proud to share these remarks given the team's hard work and the company's strong performance in 2025 as well as the fast start out of the blocks in 2026. You are no doubt in good hands as my team, whom you know well, including Kris, Stacey Doré, Scott Hudson and Shawn Stuckey will address any questions that you may have. I look forward to connecting with many of you in the coming days and weeks. With that, I'd like to turn the call back to the operator for questions.
Operator, Operator
Today's first question comes from Shar Pourreza with Wells Fargo.
Shahriar Pourreza, Analyst
Just maybe starting off on PJM. Do the rule changes impact the Meta deal if PJM changes how new load gets treated? I guess, could there be kind of incremental cost for Meta? And if PJM tariff changes, is that sort of could be a net positive for additional load contracting like with Beaver Valley as we're thinking about future announcements. So have you seen any impact around future discussions while the rule changes are up in the air? It's a little bit of a 2-part question.
Stacey Dore, Executive Vice President
Shar, this is Stacey. Thanks for the question. The PJM activity, of course, as you know, is very high. There are many moving pieces of the puzzle in PJM right now. We do not believe that any of the current activity affects our Meta deal. That deal is more akin to a typical front-of-the-meter deal. It's not tied to colocation or to any particular load. So we don't believe any of the PJM activity affects that deal. As I've mentioned, there is a lot going on in PJM right now. And of course, all customers and stakeholders are watching the activity closely. We expect PJM to file any time now an extension of the existing price collar for the next 2 auctions. Just this week, PJM did make a filing regarding specific tariff provisions applicable to colocation arrangements. We do think that getting clarity on the colocation tariff provisions will be helpful to the discussions that we continue to have about Beaver Valley and other colocation opportunities. Of course, we're also watching the reliability backstop auction filing that we expect PJM to make in the coming months. PJM is also working on load forecasting improvements and expedited interconnection track for new generation and, in the longer term, possibly additional capacity market reforms. We're actively participating in all of these proceedings. And at the last open meeting, FERC commissioners made clear that they are also paying close attention to these activities, and they are ready to rule on these various proposals, all of which will continue to provide more clarity and investment certainty in PJM. It's too early to tell what will become of all of these proceedings, including the tariff proceedings around colocation that I think you're asking about. But we view the overall backdrop as positive because the administration, the state governments as well as most PJM stakeholders are rightly focused on the same objectives we're focused on, which are getting large loads connected quickly, and that includes support from FERC and the White House for colocation with existing generation, properly allocating costs across load classes and doing what's necessary to incentivize an appropriate amount of new build. And finally, avoiding unnecessary disruption to our existing market and existing resources. These are all the right goals to focus on. We share those goals. But of course, the details will matter, and we'll stay engaged on all of those proceedings to advocate for Vistra's interest. So we do think, at the end of the day, the continuing clarity and transparency around some of these upcoming rule changes will facilitate getting a deal done at Beaver Valley and possibly other colocation deals in PJM. And we continue to see a very high level of interest in Beaver Valley in particular. Pennsylvania is a market that the hyperscalers continue to focus on, and we think that site is very attractive for either colocation or a front-of-the-meter deal; we could do either one at Beaver Valley.
Shahriar Pourreza, Analyst
Got it. Lastly, as we explore the next set of contracting opportunities, do you have an opinion on hyperscaler interest in gas risk? Is there a preferred structure for Vistra regarding existing or new build assets in terms of contract structure? A peer shared a view on a fixed capacity arrangement. I'm curious to know if that's the preferred approach for Vistra as you consider gas contracting.
Stacey Dore, Executive Vice President
Yes. Thanks, Shar. Stacey, again here. So we do think that hyperscalers will contract for new gas build going forward. We are engaged in a number of those conversations as well. And we agree that we think the customers will ultimately take the gas risk there, which we're well positioned to help them manage as well. And so I think the kind of structure you're talking about, with a large fixed capacity payment along with a variable component that includes gas risk, is a structure that we see a lot of customer interest in. Those deals take time. Frankly, new construction takes time. And so we continue to focus on those, but to focus at the same time on the advantage that Vistra has in offering speed to market with so many of our existing sites being available to help to get a data center online. So we continue to have a high level of interest from customers on all of these different arrangements, including colocation with existing new build, colocation with nuclear plants as well, and renewables, PPAs, bridge power solutions and front-of-the-meter retail deals. I think Vistra is uniquely positioned with our large fleet of dispatchable assets and our leading retail, commercial and regulatory capabilities to serve these customer needs creatively and reliably. So we remain very excited about the numerous opportunities ahead of us to enter into more contracts with our largest customers.
Operator, Operator
And our next question today comes from Angie Storozynski with Seaport.
Agnieszka Storozynski, Analyst
So first of all, thank you for showing us longer-term projections of free cash flow per share. I know I've been asking for those for quite some time. So I really, really appreciate it. And hopefully, we will have more of those projections to come in the future. But my main question is about this sort of debate about contracting of existing assets versus bringing your own generation requirements. We're waiting, obviously, for those commitments from hyperscalers to be made about how they're going to power their data center load. And so I'm just wondering how you see that requirement or that push vis-a-vis your large and growing generation portfolio? And then secondly, I'm just wondering, in PJM gas-fired new build, how you think you see the demand for long-term contracts for gas-fired new build ahead of this RBA, if you see any interest to contract for gas-fired new build outside of the RBA?
Stacey Dore, Executive Vice President
Yes, thank you, Angie. This is Stacey. Regarding your first question about contracting existing assets versus new builds, the two significant deals we've announced at Comanche Peak and in our PJM nuclear fleet both involve contracts with existing assets. This shows that there is strong interest from hyperscalers. The Meta deal, in particular, is a strategic approach to purchasing existing off-take and supporting nuclear uprates. At Comanche Peak, we also provide a quick-to-market solution for Amazon. These recent deals highlight hyperscalers' interest in existing assets, and we are engaged in discussions about other existing assets, including Beaver Valley and gas plants. However, there are challenges with interconnection processes when contracting near existing assets for data centers. We are actively working on regulatory processes for interconnection, and most markets are moving to expedite these, acknowledging the need to connect customers. You should continue to see considerable interest in both existing and new builds. I believe that colocation with existing assets offers a speed advantage compared to new constructions. We are involved in discussions with hyperscalers on various solutions. As for your question about PJM new builds, it seems PJM is aiming for a reliability backstop auction as early as this September, which will influence discussions about new builds in PJM, as customers will need to decide whether to participate in the RBA or seek bilateral contracts outside it. The good news is that these rules will be clarified soon, and they haven't hindered ongoing commercial conversations regarding new build options. The market is seeking clarity on the reliability backstop auction rules, and we are actively engaged in the discussions, having submitted our own proposal.
Operator, Operator
And our next question today comes from Jeremy Tonet at JPMorgan.
Jeremy Tonet, Analyst
Sending our best to Jim here. Just want to start off with regards to the 2027 midpoint opportunity. I grant that this isn't something that you normally change, but you seem like some pretty big developments here recently. So why not include the Meta opportunity here? And also post the near-term potential of $16 per share, just wondering if you might be able to provide order of magnitude of some of the further upside drivers there.
Kristopher Moldovan, Executive Vice President and Chief Financial Officer
Thank you, Jeremy. As we've mentioned before, we do not plan to update our guidance or midpoint estimates on a quarterly basis. However, we recently announced two significant transactions involving Cogentrix and Meta since we last shared guidance for 2026 and the midpoint for 2027. Our intention is to wait until the Cogentrix deal closes before providing updates for both years. We anticipate that the Cogentrix deal will finalize in the second half of this year, and at that point, we'll update our guidance for 2026. We believe that will be the appropriate time to adjust both the 2026 guidance and the 2027 midpoint opportunity. Additionally, we have disclosed considerable information about these transactions. Based on that disclosure, it seems reasonable to estimate an addition of around $700 million to $750 million for 2027 from these transactions alone, not accounting for any other influences such as changes in curves. It's important to note that this estimate reflects only the full-year impact of one of the Meta assets, which will start contributing in late 2026, while the second contract will contribute beginning in late 2027. We will provide updates as we progress with the Cogentrix transaction. Regarding the $16 figure, it's essential to clarify what it represents. The adjusted free cash flow per share for 2026 is based on our original guidance and does not factor in Cogentrix or any share buybacks. We are maintaining our share count flat for 2026, and as you're aware, we are already repurchasing shares. Therefore, what we presented is a conservative estimate for 2026, intended to reflect the growth from the transactions we've announced, minus tax benefits, and specifically related to the operating PPAs with Meta. For our projections, we are accounting for the $2 billion we've set aside for share repurchases and have simplified by assuming an additional $3 billion, but this isn't a projection with a specific timeline; it’s just a short-term estimate. Looking ahead, considering factors like hedge roll-offs and PJM nuclear upgrades, we believe our available cash for allocation will grow. If we assume using all available cash for share repurchases from 2026 to 2030, with share prices moderately higher than current levels, we anticipate that free cash flow per share could reach between $22 and $25. This projection does not include potential upside from transactions that could be more beneficial than share repurchases.
Jeremy Tonet, Analyst
Got it. That free cash flow per share with 60% conversion points to a pretty big EBITDA number there. So that's very helpful. And I just want to take a step back. You've talked a lot about the long-term PPA discussions here. But just at a very high level, how would you characterize the level of discussion now versus any point in the past? And just any qualification, I guess, between nuclear versus gas discussions here?
Stacey Dore, Executive Vice President
This is Stacey. Thank you for your question. We are observing a significant interest in power purchase agreements for data centers. We believe that 2026 will be a pivotal year as customers assess what options are genuine and credible after evaluating many alternatives in recent years. This positions Vistra favorably due to our numerous sites, ample land availability, and proven expertise in developing and operating generation facilities. Our partnership with Meta exemplifies this, as it merges the acquisition of operating capacity with funding for new megawatts in our PJM nuclear fleet. We are actively engaging in discussions with major customers about different structures we've been exploring. Our track record demonstrates that we can effectively execute not only on PPAs but also expand our ERCOT thermal fleet by 500 megawatts through upgrades. We successfully executed the Oak Hill solar PPA with Amazon and the Pulaski project with Microsoft, which establishes strong existing relationships. We are also advancing projects including 433 megawatts of nuclear uprates and two coal-to-gas conversions at Miami Fort and Coleto Creek, along with the development of our Permian gas plants in West Texas. In total, combining what we've added to the grid with ongoing projects, we are looking at over 3,600 megawatts of capacity. This is just the beginning, as we aim to secure customer PPAs for both new generation and our existing assets, continuing on this growth path. The demand remains strong, but what differentiates the current environment from a year ago is that customers are now zeroing in on actionable deals, having filtered through what is genuine and credible. This greatly positions Vistra to effectively support these customers.
Operator, Operator
Our next question today comes from Steve Fleishman of Wolfe Research.
Steven Fleishman, Analyst
Best to Jim. Hopefully, everything is okay. Stacey, regarding the new build you've completed and potential further opportunities, how do you assess your equipment and EPC capabilities to meet upcoming needs? Many others claim they are well positioned, so could you elaborate on that?
Stacey Dore, Executive Vice President
Yes. Steve, sure. Happy to do that. So as you know, we have one of the largest gas fleets in the country. We have excellent and long-standing relationships with all of the turbine OEMs, and we're frequently in conversations with third parties and bridge power providers about equipment that, frankly, they are trying to market, including parties that have already purchased turbines and are looking for places to deploy them. Because of our pre-existing development pipeline, we also have ample access to high-voltage equipment, and we have long-tenured relationships with multiple EPC providers that we are currently using for our development projects. So we do not see equipment or EPC as the gating items to building new generation or to developing behind-the-meter interconnections for existing sites. Customers have choices. And when they're ready to sign PPAs, projects can move forward. Vistra is certainly prepared to do that and can offer a variety of both speed to power options as well as long-term new build.
Steven Fleishman, Analyst
Great. I have a separate question for Kris. The free cash flow per share chart you provided was very helpful, and it appears you're on track for 2027. The balance sheet is quite strong. However, the EBITDA growth drivers seem to emerge after 2027, indicating a significant increase in EBITDA, which likely opens up more room on the balance sheet. Could you share your perspective on balance sheet targets beyond 2027 and what your plans are for the cash?
Kristopher Moldovan, Executive Vice President and Chief Financial Officer
Yes, thanks for the question. As we indicated on the capital available for allocation chart, we have $3 billion available until 2027, even at a 2.3x level, which we believe supports strong investment-grade ratings. Moving forward, we anticipate significant cash generation and will maintain a balanced approach to capital allocation. We plan to continue returning capital to shareholders while seizing opportunities, particularly when our stock faces pressure. Maintaining a strong balance sheet remains a priority, and we aim for robust investment-grade ratings, not just to stay on the edge. We believe we can achieve this with growth rather than solely through debt repayment. We will keep an eye out for both inorganic and organic growth opportunities, adhering to our return thresholds, which have remained consistent over the years. While it can be challenging to find growth opportunities that meet our criteria, we have many organic prospects to explore. In the meantime, we can pay down additional debt to prepare for future opportunities.
Operator, Operator
Our next question today comes from Andrew Weisel with Scotiabank.
Andrew Weisel, Analyst
First, a question on nuclear uprates. I think you've talked about potential in the neighborhood of about 600. You've identified the 400 and change with Meta, and I think you talked about 200 today with Comanche. Does that essentially cover the opportunity? Or do you see potential for more?
Kristopher Moldovan, Executive Vice President and Chief Financial Officer
No, I think that covers it. The 433 megawatts with Meta are in process. We still have some work to do on the 200 megawatts, and that's a future opportunity. But for uprates at the existing plants, that covers it. Obviously, we're continuing to look at new nuclear and other opportunities. From an uprate perspective, I think you've got it covered.
Andrew Weisel, Analyst
Okay. Great. Then on the gas side in ERCOT, I believe you're planning to move forward with Permian Power 1 and 2. The news about the batching process potentially impact those? My understanding is you haven't yet decided if you're going to pursue TEF funding. And if you did, they probably wouldn't be eligible for data center contracts. But do those dynamics impact your thinking? Or are you just moving forward despite the potential changes or uncertainty? How are you thinking about that?
Kristopher Moldovan, Executive Vice President and Chief Financial Officer
No, I think we have made our decision regarding those projects. We had several advantages, such as favorable pricing on some of the equipment we ordered, as well as competitive pricing in West Texas and the land we acquired. We continue to view these projects as having high returns. While we are still navigating through a challenging process, I anticipate that we will remain engaged in it. Regarding contracts, there is interest from various counterparties in those assets. Our perspective is that participating in the TEF process does not prevent us from securing some revenue from those assets, but we will evaluate those opportunities and proceed only if we identify a deal that aligns well with the company’s interests.
Stacey Dore, Executive Vice President
Yes. And Andrew, the batching process doesn't affect the TEF units. It's a load interconnection process that's being considered to start studying load requests on a more grouped basis as opposed to one by one, but it won't affect our Permian TEF units.
Andrew Weisel, Analyst
Okay. Great. Then one last one, if I can. On repurchases, can you talk about the flexibility under the 10b5-1 program? You mentioned it, I see you were pretty active year-to-date with $200 million, which is quite a bit ahead of the ratable pace compared to $1 billion for the full year. Can you just explain a bit how that works and what sort of discretion you have over the pace and timing and how to think about the outlook going forward mechanically under the 10b5-1?
Kristopher Moldovan, Executive Vice President and Chief Financial Officer
I can't provide specific details, but we have structured our repurchase programs in a way that allows us to adjust the pace based on trading values. For instance, in January and February, we increased our activity due to the prices we were trading at, similar to what we did last year during periods of price pressure. As prices rebounded, we pulled back and ended up spending around $1 billion last year. Notably, when examining last year's weighted average price, our program outperformed that by nearly $10 a share. Our aim is to be more proactive in response to price pressures, and we continually refine our approach. As we enter open windows, we can make adjustments and keep optimizing the program to ensure it meets our objectives.
Operator, Operator
Our next question today comes from David Arcaro with Morgan Stanley.
David Arcaro, Analyst
Stacey, thank you for the updates on your discussions with potential counterparties. I was wondering if you could provide any insight on the timing for the next round of data center contracting activity for your fleet. I know you've been quite busy over the past couple of months and have seen success. Are we going to have to wait for the backstop auction in PJM before we can expect anything, or is there a different timeline? What is the pace of those discussions? Any additional details would be appreciated.
Stacey Dore, Executive Vice President
Yes. David, well, it's only been 6 weeks since we announced the Meta deal. So you're not giving me a lot of time there. But I'm not going to comment on specific timing. I can just tell you that we have a number of conversations underway. Customers are very motivated to start making some of these things happen because they're anxious to get going with the data center development. So we feel good about where our conversations stand. And as we've always said, when we have an actual contract and agreement to announce, as you've now seen us do twice, we will announce that.
David Arcaro, Analyst
I understand. Regarding Comanche Peak, I’d like to know about the timing or milestones that might influence the uprate opportunity there. Are there any other on-site power opportunities you're considering, such as new generation or backup generation? I’m interested in any insights you can provide on that.
Stacey Dore, Executive Vice President
Yes, thank you, David. Regarding the timing of the uprate, we are still examining the potential uprate at Comanche Peak. However, our immediate priority is to ensure that everything necessary for the data center at Comanche Peak is completed on schedule. That is our main focus right now. The team is still investigating the uprate in the background, and we may have a chance to include it in our portfolio with the same customer. We will keep you updated on any developments in that area. We have ample land at Comanche Peak, and there is certainly potential for new generation at that location. Historically, the company has considered Comanche Peak Units 3 and 4, and there was sufficient land available for that project. We even submitted an early application to the NRC for it before we decided to withdraw around 2015. Additionally, the site has access to gas, providing various opportunities to transform it into a hub for energy and possibly, a data center with Amazon coming on board.
Operator, Operator
That concludes our question-and-answer session. I'd like to turn the conference back over to Kris Moldovan for any closing remarks.
Kristopher Moldovan, Executive Vice President and Chief Financial Officer
Yes. I just want to thank everybody that participated on today's call. As Jim noted in our prepared remarks, we're very proud of what the team accomplished in 2025. And as we've been talking about, we're very excited to execute on the numerous opportunities in front of us. So thank you for your interest in Vistra, and have a great day.
Operator, Operator
Thank you. That concludes our conference for today. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.