Vistra Corp

4. GOVERNMENT ASSISTANCE

Inflation Reduction Act of 2022 (IRA)

In August 2022, the U.S. enacted the IRA, which, among other things, implements substantial new and modified energy tax credits, including recognizing the value of existing carbon-free nuclear power by providing for a nuclear PTC, a solar PTC, and a first-time stand-alone battery storage investment tax credit. The section 45U nuclear PTC provides a federal tax credit of up to $15 per MWh, subject to phase out as power prices increase above $25 per MWh, to existing nuclear facilities from 2024 through 2032 subject to an annual inflation adjustment. The Company accounts for transferable ITCs and PTCs we expect to receive by analogy to the grant model within International Accounting Standards 20, Accounting for Government Grants and Disclosures of Government Assistance.

Transferable PTCs

In the year ended December 31, 2024, we recognized transferable nuclear PTC revenues of $545 million and transferable solar PTC revenues of $11 million. Our nuclear PTC revenues are an estimate based on gross receipts generated from qualifying nuclear production in 2024 and reflect our determination that we will meet the prevailing wage requirements necessary to earn the five times multiplier at all of our nuclear units. Our computation of gross receipts includes settled spot energy revenues and capacity revenues at each nuclear unit, and excludes any hedges. Treasury regulations are expected to further define the scope of the legislation in many important respects over the next year, including interpretive guidance on the definition of gross receipts for the nuclear PTC. Any interpretive guidance on the definition of gross receipts which differs from the interpretation used in our estimate could result in a material change to PTC revenues attributable to 2024 and would be reflected as a change in estimate in the period in which the guidance is received.

Transferable ITCs

In June 2023, our 350 MW battery ESS at our Moss Landing Power Plant site (Moss Landing Phase III) in California commenced commercial operations. As a result of Moss Landing Phase III meeting requirements to be placed in service in June 2023, we recognized $154 million of transferable ITCs associated with the project in other noncurrent assets in the consolidated balance sheet. In September 2024, we recognized an additional $2 million of transferable ITCs associated with the project and reclassified the $156 million of credits to other current assets.

In December 2024, our Baldwin 68 MW solar /2 MW battery ESS and Coffeen 44 MW solar /2 MW battery ESS facilities in Illinois met requirements to be placed in service. As a result, we recognized $57 million and $45 million of transferable ITCs associated with the projects, respectively, in other noncurrent assets in the consolidated balance sheet.

Sales of Transferable PTCs and ITCs

In October 2024, we sold $156 million of transferable ITCs and $10 million of transferable solar PTCs generated in 2023. Vistra received cash consideration from the sale in October 2024.

In January 2025, we sold $200 million of transferable nuclear PTCs we recognized from qualifying 2024 nuclear production. Cash consideration from the sale will be received in installments through July 2025 with an initial payment received in January 2025.