Vistra Energy, a retail power provider to 2.9 million customers, announced this week it intends to purchase Crius Energy Trust. DNV GL confirmed to Greentech Media that the acquisition makes Vistra the largest residential retail electric power provider in the U.S. based on number of customers.
A company most recently in the news for its involvement in the record-setting Moss Landing project, Vistra purchased Crius for about $328 million and will assume $108 million of that company’s net debt. Crius, a multi-level energy seller that provides electricity including solar power through a number of brands, has about 1 million customers.
In announcing the deal, Vistra President and CEO Curt Morgan said the Crius portfolio has “a high degree of overlap with Vistra's generation fleet and complements Vistra's existing municipal aggregation and large commercial and industrial portfolio in the Midwest and Northeast markets.”
The move follows on Vistra’s attempts to guard against the instability inherent to competitive markets while expanding its footprint, said Daniel Finn-Foley, a senior energy storage analyst at energy research and consulting group Wood Mackenzie Power & Renewables, who formerly worked as a senior consultant in retail energy markets at DNV GL.
“After emerging from bankruptcy in 2016, Vistra’s strategy has seemed to focus heavily on diversifying its holdings and hedging against the wholesale market volatility that drove its predecessor toward unsustainability in 2014,” he said. “It has diversified its generation fuel mix through the Upton 2 solar system, and broadened its geographic footprint following a merger with Dynegy, a kindred spirit company applying similar approaches to risk following its own bankruptcy.”
The emphasis on overlap in the Crius portfolio, as Finn-Foley suggests, echoes Vistra’s 2017 merger with Dynegy, which had a similar corporate strategy incorporating wholesale generation and retail customers. The companies’ combined portfolios contained over 60 percent natural gas. Coal, nuclear, solar, oil and natural gas make up Vistra’s current power plant portfolio.
At the time of the Dynegy merger, Vistra said the integration would create the “lowest-cost integrated power company in the industry.” The companies said streamlining costs through combined operations would save $350 million a year.
Vistra has several other companies under its wing as well. In 2016 it spun off of bankrupt Energy Future Holdings Corp. under a different name, along with a couple of subsidiaries. It’s the parent company for TXU Energy, a retail electricity provider in Texas; Homefield Energy, a retail supplier affiliated with Dynegy; and Luminant, a power generation business based in Texas with a portfolio made up of natural gas, coal, solar and nuclear.
The Crius acquisition adds 11.6 terawatt-hours of load to Vistra’s portfolio, which the company said would improve its generation-to-load profile. Vistra’s generation capacity currently sits at around 41 gigawatts.
More recently, Vistra has staked a claim in the energy space. Last year it contracted for a record-breaking battery at a former Dynegy plant in California’s Moss Landing and for a smaller system at a solar plant in West Texas.
“Vistra’s diversification strategy has vaulted the company to the front of the fast-paced energy storage market-share race, where its Upton 2 solar-paired 42-megawatt-hour battery and contracted 1.2-gigawatt-hour Moss Landing system put it on the map with pioneering projects in two key markets,” said Finn-Foley.
Vistra now operates in 12 states and six out of seven of the U.S.’ competitive power markets. Crius operates in 19 states plus Washington, D.C., so the acquisition will further expand Vistra’s footprint.
The acquisition deal still awaits the OK from two-thirds of Crius’ “unitholders,” as well as regulatory approvals, but Vistra said the acquisition will likely close in Q2 2019.