Vistra Corp. (VST) Earnings Call Transcript & Summary

All right. Great. Last and final panel today of the conference. And before I forget, I just want to thank everybody for spending 3 days with us, particularly with me. It's been a long 3 days, but enjoyable and so appreciate the time and support. And last but not least, we've got Vistra management here with us, Curt Morgan, CEO of Vistra; Jim Burke, CFO of Vistra; and Molly Sorg, who's IR. Before we let them start, I'm just going to ask our poll question. So go ahead. What's the long-term future of the IPP sector? Status quo, shifts to clean energy focus, goes fully private, becomes part of big oil, reregulate and becomes part of utility sector. Don't laugh at the last one. So everybody is on, feel free to answer. We'll give 10 seconds, and we'll give you the answer at the end. Great. Well, Curt and Jim, welcome. Thank you.

Hey, thanks, Steve. Good to see you.

And before we get started real quick, I just wanted to say thank you for joining us. And just a quick reminder that today's discussion may contain forward-looking statements, which as of today, we believe to be reasonable, though, of course, are subject to uncertainty and risks as described in our filings. So Curt, we can get started. Thanks.

Yes. Great. Thanks, Molly. And so Curt, just to get us started, it would be great to get a brief snapshot of the Vistra story and kind of key messages today that you'd like to get across to investors.

Yes. Thank you, Steve, again, for inviting us. I really appreciate it. So it's hard to tell our story without -- unfortunately, I have to go back and talk about what happened in Texas, because I think it's important to know kind of where we've taken the company since then. We actually had some momentum at our back going into February, and we were getting ready to repurchase a significant amount of our shares. We still continue to believe we're undervalued. We did it at that point in time, of course, Yuri hit and it was a significant blow to the company. And -- so we had to claw our way back. The good news is that we had our leverage in the right place. And we've been able to come back strongly. The business is performing well, but we know we have work to do. We spend a lot of time with our Board going through where we would like to take the company from a strategic perspective, and there's a number of actions that we are executing on. And we've also just done some things from the business standpoint. For example, Steve, we had $0.5 billion of self-help initiatives to try to claw back some of the couple of billion dollars that we lost. We're tracking well on that very well, I might say. Today, the Public Utility Commission of Texas approved the securitization process. That will also be a significant amount of money, roughly in the quarter of that $2 billion loss could be recovered through securitization for us. That's a huge shot in the arm as well. And so we're making real progress with our company to get back on our feet. We borrowed a couple of billion dollars in the meantime. And so we'd like to ultimately pay that or most of that down. But I think, Steve, probably our biggest focus right now are 2 things. One, we want to buy our stock back. We think we're very cheap. And so we're very focused on getting ourselves to be able to do that. And secondly, we want to grow out our Vistra Zero business. And it hasn't been any secret that we've said that in order to compete in the renewable and battery business, we have to have an appropriate cost of capital, and so we also mentioned that we were going through a process of achieving that. We think there's a real opportunity by contributing a significant amount of our renewable and battery assets into an entity and then doing a capital raise. And then with the cash that's generated from that business as well as project financing, we think it can sort of self-perpetuate itself. And the other thing that's very interesting about us is that we think we can accelerate the roughly 4,000 to 5,000 megawatts of pipeline and where we might have thought that was going to be over -- between now and 2030, we think most of that could be done between now and 2025. And then we're obviously outsourcing other things. Our company has a tremendous capability around this. I mean we're good -- we operators we're good at constructing things. We have a tremendous commercial capability, and so why not us. And so we think that's important. But what we didn't want to do or what we're trying not to do is have to spend that $0.5 billion of free cash flow every year that we said we were going to dedicate to growth, and we think this is the way to do that, but also get the right cost of capital. And now that $0.5 billion can go to buying our shares back. And that -- we feel that's incredibly important part of the story. Unfortunately, today, I don't have a big announcement to make, but I think we're on the precipice of being able to roll out our full capital allocation program and all the details behind it, and we're in the middle of doing a number of different things to be able to do that. So while we took a big hit, and it was not something obviously we're very proud of, what I am proud of is how this company has thought through it, stayed together. We got our feet back underneath this, and we have some -- certainly some things, tailwinds in a number of different areas. Clearly, the commodity -- the energy commodity complex is shifting and changing and we can talk about that. But I think we're well positioned for that as well. So that's kind of where we stand right now, Steve. Happy to take on any questions along the way. Jim, I don't know if you want to add anything to that, but that's kind of where we are.

Curt, I think you covered it well. We can jump on to the questions.

Yes. No, that's great. I'm just going to ask a couple of questions, and then we've got a lot of folks on the line and leave it to the audience to ask things. And just for everyone to know, there's a question box on your screen and you can throw questions there or send an e-mail or Bloomberg and the like. But I guess, Curt, first on the -- there's been a lot of debate in the market on your hedging position and the impact of the recent market moves in natural gas and power. So if you could maybe best clarify how the moves and commodity prices have affected '21, '22, '23 type outlook, so maybe at least a big picture framework of how to think about that?

Yes. So '21 -- and you know this, Steve, going into any year, we're pretty well hedged. And so there hasn't been a real big impact. In '22, frankly, we were pretty well hedged. We use outright power in PJM, ISO New England and other markets, and we tend to hedge with gas and heat rate in Texas. That's what -- where the liquidity is. We're very hedged on gas, and then on heat rate and going into '22. We're pretty well hedged around the shoulder periods, and we still have some length in the summer. We were hedging some of that. As you know, we got a little tailwind a month or 2 ago, and we were hedging into that. That has dissipated as we had a pretty mild summer in Texas. And so we've seen a really interesting phenomenon go on where we've seen gas prices rise significantly, as you well know. And then we came out of a weak summer until we saw heat rate come down and we see spark spreads compress. Ultimately, what I've seen in markets in the past in that instance is that we will see that equilibrate at some point in time. And I will say this, too, Steve, you may remember this, that when we came out with our guidance for 2021 and we gave a view toward 2022, the market curves have we marked '21 to the curves, we'd probably have been a little bit below $3 billion. And of course, we -- our guidance was based on our fundamental view. It was actually in between fundamental view and market. What we -- even though we've seen some compressed spark spreads, they're higher than they were as we were going into 2021. And so we've actually seen market move closer to our point of view, which has been the case for the last 5 years that I've been here -- 5 or 6 years I've been here. But we -- admittedly, we saw a pullback here recently. I think those -- there were 2 things that really happened. One is we just had that mild summer. And two, we saw gas move up. I think there's a lag effect on the gas move and then I think it's going to take a couple of tight days potentially in the winter and maybe in the spring and summer to get people to realize that we still have a relatively tight market in Texas. But overall, we're pretty well hedged in '21, '22. We're open in the summer. I think the other thing to manage risk of Yuri and to manage that kind of risk, we're going to take about 1,000 megawatts, both into the winter and summer peaks, a little more legs going in. That will certainly widen the distribution of outcomes for us. But we think that insurance for holding out that extra megawatts is worth having, given the risk that we saw over time. Now I will say that we may be able to manage that risk down and that would mean we would release more to hedge with all the things that we're doing, investing in weatherization and other type issues, so we'll see.

So just to frame the '22 then, is it fair to say that you're still within those ranges. So there's no weather that's up a little bit, down a little bit versus maybe, I don't know, what consensus says or something in terms of cash flow production of the company, not a meaningful move in terms of kind of the whole ability to return cash and all that?

Yes, right. I think we're within that -- we're within that the normal range that we would have. We're within that range. Yes.

Okay. And then how about...

And Steve, one other thing I want to mention to people, too. I think you know this, but we're a company that's long natural gas equivalents. I mean we can convert our power position to a natural gas equivalent. And if this new -- what we think may be a new sort of regime in terms of gas, in terms of how it's going to be managed and the pricing and the volatility, longer term in '23 and beyond, this is good for our company to have higher gas prices. We're not betting on it, and we're not building plans around it. But the fact is, is that higher gas prices are good for our business.

Okay. So I think that's -- I'm sure there'll be some questions on that. Let's move on to another question. So just on the renewables side of your business, there's been, I think, 2 event updates probably since your Q2 call. There's the Moss Landing battery event that occurred and then also the Illinois law. Maybe there's some other updates since then. But could you maybe touch on both of those and how those fit into your strategic plan?

Yes. I'm going to talk about Illinois real quick, Jim, then I'm going to turn it over to you on the Moss 300, because Jim's staying close to that. We all are, but Jim is closest to it. In fact, we're meeting with LG today around that. But in Illinois, 3 years ago, and I -- we had an idea that to convert these old coal sites into solar and batteries to help the communities but also obviously, to make money. And it was nothing at that point in time, and we worked it and we were able to get in the Omnibus bill, and I think our team did an excellent job in working with the elected officials to make this a reality. But we've got 425 megawatts now of solar and batteries at our current sites, and we get paid a certain price for RECs on the solar, and then we get a separate payment for 10 years, and that's for 20 years, by the way. And then for 10 years, we get paid a separate payment for the batteries. And it's a fair deal. It meets our hurdle rates or exceeds it. And I think it's good for the state of Illinois. And so we're very excited about that. I mean that was not something that was a program that Illinois had. That was a program that we brought to them and convinced them that it was the right thing to do to help the downstate Illinois areas that were hurt by the fact that coal plants were shutting down and we were successful. So it's a big piece of our Vistra Zero platform that we're building out. And I'll turn this over to Jim on Moss 300. What I will say also is that we're making progress on additional batteries at the Moss Landing site as well. I can't really say much more than that, but I think we are working extremely well with PG&E, and they've been great partners for us, and we're hoping that we can help state of California with some more batteries there, but we are making progress there. Jim, I'll turn it over to you for Moss 300.

Perfect. Steve, you mentioned we had put out 2 notices on Moss and then we just put out a third. And so we've been methodically going through root cause. Obviously, people want to know the situation as soon as possible. And there's a lot of attention on batteries because California has put major emphasis there, and it's a big part of our growth platform. So we feel the need to share as soon as we feel we've got the right view to share and the update that we're providing today is that we've broadened the root cause to include multiple systems, not just the battery, so the control systems, communications, ventilation, safety systems. And one of the areas we're focused on is the water-based heat suppression system, which is the technology to help control battery temperatures and any risk of a runaway situation. Good news is that the initial data shows that the operating temperatures of the batteries in the areas that we've been able to inspect, they're within normal limits at the time the safety systems deployed. So we know there was some smoke. We're not sure of the source of the smoke. We know the safety system is deployed. As you know from earlier updates, no safety incidents, no need for outside assistance to address the issue. And we have a low single-digit percentage of batteries that are affected. But it appears to be something we've got to get to the initiating event, but the batteries appear to have been operating within their design limits, within their operating limits at the time. So there's more to learn. And the regulators are interested. We're interested. Obviously, our customer, PG&E is interested because there's a lot of batteries going in, and we want to help on the ultimate design and resiliency of these systems. So we think this is a good update. We're going to try to see what we can do to return part of the site sooner. We know we have Moss 100 next to it, operating as normal, no issues there. So I think we're more optimistic given our root cause analysis and where we are. And obviously, it's been a busy 3.5 weeks to get to this stage. And so we'll share more when we get to the estimated kind of time to restore.

Great. And my last question is just on the strategic repositioning of the renewables growth part of the story. And so first part is tied to just segueing from [ Moss' ]. How, if anything, is that event impacting the timing of your kind of finalizing a strategic partner and constructor?

Yes. So Jim, I'll take the chat. But so it did slow us down. We had to step back. Moss 300 is a big piece of that. And so we had to step back and get a better sense of what we had, and we didn't know initially. Now that we know that it's very limited and we don't think it has -- it's related to the batteries, and we think it's imminently fixable in relatively near term, we feel pretty comfortable, Steve, that we can move forward on that. But I think as you might expect, we wanted to make sure before we launched a process that we had a better handle on what we had at that -- and we just didn't have it 2 weeks ago. And I think we have a better handle now. And so I feel like it's going to provide us an opportunity to move forward on that process.

Okay. And then the other thing on the strategic partner and structure for the renewables. How much are you -- are you looking for kind of the lowest cost of capital, a capital provider to work this? Or are you looking more for somebody who's going to provide some renewables expertise in some way or both? Could you talk a little bit about what your main goal is with a partner in structure?

The good news is, is that both of those are available in the same package with certain companies. So I think they're both important to us. So we're not necessarily interested in a pipeline from anybody. We've got our own pipe that we don't need that. And anybody that would bring that to the table would want market pricing and probably more than that. So what we're more interested in is getting a good cost of capital. We're not bottom fishers and waiting for the lowest number, but at the same time, we want a fair cost of capital. But we also think reputation of whoever we bring in is important as well because I think it's validation. They're going to do a deep due diligence. And I think it gives people comfort that a very educated and savvy group came in and said, yes, this is something I want to put my money behind. So I think it's really both, Steve.

Okay. And just to set realistic time lines for this processes, what's a realistic time line to kind of have an announcement of this? Is it by the end of this year, early next year, or you just don't know or...

I think by the end of the year, I think that's realistic. And we also hope to bring or to provide more information along the way. Even at our November 5 call, we'll probably have some more information at that as well. But I think to have a really a buttoned-up process that everybody gets a chance to do due diligence and -- and, of course, you know everything has to be papered up as well. And so to get that, I think we're thinking before we get into the holiday season in December, right before the holiday break.

Yes. Great. Okay. So I'm going to go to questions, and we've got a lot of them, so bear with me. So you might have already answered this one, but do you still expect to hold an Analyst Day like event prior to Q3 earnings? I assume probably not.

No, no, no.

No? Yes. But would you do one when you end up announcing the partnership and...

Yes, I think we're going to give strong consideration to that. It just really depends how much we could give even on the November 5 call. But Steve, you know this, I mean, I hate doing these things on earnings calls because, first of all, you guys only have a finite amount of time on -- because you've got other people to listen to, not just us. So my preference would be is to -- talk what we can about capital allocation on the 5th of November on the earnings call, but make it pity. And then when we do have something where we can pull it all together and talk about why we think this is the right way to go with the company that we do something aside from that. And it won't be half a day. We're talking about maybe an hour type event outside of the earnings season might be the better way to do that.

Makes sense. Okay. Great. Here's a good question. You mentioned Vistra Zero. Does that include Comanche Peak?

Right now, we're not -- it's a very good question, by the way, and we went back and forth on this. I mean I think obviously, Comanche Peak being zero carbon. But as it relates to this process we're talking about, we were not putting Comanche Peak in that. But obviously, we do think of it as a zero carbon source of power.

How much is the mild summer affecting your 2021 outlook?

It's had an impact because we have -- we always go in with an open position. I'm not prepared yet because there were some -- still going through some numbers here to say, what the numbers look like and of course, on the Q3 call, we're going to talk about guidance. And so within that discussion, we will talk about where we are and we got a number of things we're working on that could be offsetting to that. So -- but just from a pure energy gross margin standpoint, it has definitely had an impact on our earnings, but I also believe there are other things that are moving the opposite direction. So I'm not prepared to really say what it's going to do to our guidance for '21. But just if you isolate that event, it definitely had a negative impact. We also saw some upside in other markets. So there's been kind of a mixed bag.

Can you give us an example of some things that maybe have gone better?

Well, one, I just gave you one, which is we've seen some...

Some other market.

Yes, some other markets. I think that's probably the most notable. And then the others, I would talk about, Steve, are really embedded in that $500 million of self-help, which is a big number because remember, we didn't throw securitization in ours. NRG, I think, included securitization.

That's right.

I mean we would -- if we put that in there, we would have blown this thing out of the water. But in terms of -- this is truly cost savings, other commercial value-creation opportunities. And so we've already put $0.5 billion of that money just to get back to our guidance because we were trying to claw back as much of that loss as we could.

And I think you said the securitization represents about 25% of the $2 billion loss...

Yes, it's in that range, yes. It's in that range, yes.

That helps give a sense because you haven't really given the exact like uplift portion.

No, we haven't. No. But I think it's -- this -- I'll tell you what we try to do on this. We did not want to hype this at all because there was a lot going on inside of it, and there still can be, but it's been approved by the PUC. Now that we've gotten the approval by the PUC, I think it's fair for us to talk about it. And that's kind of the general range. There are still a couple of decisions that need to be made about who opts in and who doesn't because that affects the total -- how the total package gets allocated, but we feel pretty comfortable with that kind of range.

So we have a couple of different people asking about 2023 and how the commodity moves have impacted your outlook out there and how much you might have already hedged in 2023? Could you maybe give a broad picture of how the move of gas and power has kind of impacted potential out there?

Yes. Jim, can I ask you to comment on that?

Sure. Yes. I'll start with where Curt started earlier in the conversation as we were starting the year, obviously, the whole complex has moved up considerably. And we are long from a natural gas exposure. So that has -- I think when we put out our 2Q guidance, Steve, and this has generated some of the questions is that was a peak for some of the spark spreads that we saw in the market. I know we started to see some of the spark spreads compress some. So when we look out to '23, we're certainly less hedged in '23, as Curt mentioned. So we're in the sort of 20% to 30% range hedged on power. We're a little bit higher than that out on gas. But I think folks need to remember, we start with a fleet, but we also start with a retail business. And the retail business is a good portion of our -- of what we do as a channel from our length. So we're always selling forward through retail. In addition to that, we'll sell forward potentially gas as a proxy for power. So I know sometimes it's hard to convey did we capture everything in the latest move, but we actually have a base operating business that is actually a length, a channel for this length that's going to ratably kind of work its way through. So it's not always the depth in the market to be able to capture the peak on any one of these moves, but we certainly have much more exposure to price moves in '23 than we do in '22 and the general move up, there's still backwardation in the market, right, from '22 to '23. That's the case. But we definitely have much more room to move in '23, given our hedge percentages.

Okay. And so a couple of questions on '22 that between the hedging. Given you're fairly hedged for '22, does the $3.4 billion EBITDA for that year still hold despite the spark spread compression? And also, can you offset some of the lingering C&I bill credits from Yuri in '22?

So yes, so it's roughly a little bit below $3.2 billion, if you take in the bill credits. So -- but we were -- when you exclude those, we're roughly around the range of $3.4 billion. And I'm getting ready to go through our planning process here, and we've had some tailwinds, as you know, with the commodity prices, but we've also had some headwinds with outside of ERCOT, our Crius and Ambit retail businesses have had a little bit of headwinds just because -- remember, those businesses were either door-to-door sales. In the case of Crius and Ambit, it was face-to-face multi-level marketing. And those have been affected by the longer tail on COVID than what any of us expected. So we've had a few things go back and forth. But from what I can tell that we're still in that same range for 2022, I'm going to see the numbers, and we will obviously give guidance on the November 5 call. And so I don't want to get very specific on this because I haven't seen the final numbers rolled up, but I still feel pretty good about where we were in 2022. And we'll also give a nod as we normally do to 2023 when we give 2022 guidance. So we'll give a directional nod to that. But I think overall, the company is still right around that, which we've always said $3 billion plus EBITDA and $2 billion or a little bit less on the free cash flow, I think we're still in that range.

A couple of questions on capital allocation. Is the renewable -- should we think about the renewable financing tied to the capital allocation? Or is it separate and incremental to the base capital allocation?

I think it's separate, but it impacts the base capital allocation. As I was saying before, we don't have to put the $0.5 billion a year, and then that frees that money up. And I think that goes to predominantly share repurchases. So that's -- I think that's the big change. But I look at it separately.

And just, Curt, on that. So we've seen in the past when companies work with a partner that sometimes that partner will do like an earn-in or something where they will basically pay for their partnership by putting the money into the business to grow? And is that the way that this potentially would work, so that you don't have to put the capital up?

Yes. So yes, yes. So we're putting in -- we'll be putting in the assets in the pipeline, and we'll be raising money. I do want to say, Steve, that, #1, we're going to maintain a very high percentage of the, if you will, the common equity ownership and the governance of this. And so you can think about the capital raise on the front end as being maybe a little bit different type of structured product. And we're not looking for in a true sense of a word, a joint venture partner, where we're 50-50 equity partners. My own experience is those don't end well. And the decision-making in those things is not streamlined. And then, of course, people's strategies change over time and then it doesn't end well. So that's not what we're doing here. I think what we're trying to do really is to raise what we believe is cost-effective capital and to capitalize our investments so that we can compete. And I think that's as simple as it gets. But I think you should expect us to be the common equity owner in this venture.

Just -- I don't know how much you've gotten to this aspect. But at a high level, if you're raising more project debt, as I think you mentioned and financing from this partner, it may affect the overall kind of accounting metrics of the company in terms of debt to EBITDA, things like that, even though it's tied to your projects and probably non-recourse and the like. And I remember going back to the old days of NRG, people having a hard time differentiate between stuff that was renewable, that's more highly levered in the core base of the company, conventional that was not. Just how are you thinking about making sure that, that doesn't get convoluted in people's heads?

Yes. Look, that's a really good question. And I think I sort of stubbornly didn't want that complexity. And so that's why we were thinking about doing this on balance sheet with the same level of leverage and do everything at the parent. The reality of that, Steve, is you can't compete by doing it that way. So we are adding a bit of opaqueness, if you will, to do it through this business. And I think we're just going to have to try to explain how that works. The one thing I would say is that the credit rating agencies have grown up on this issue, and they kind of see through it. And they don't necessarily subscribe to the idea that a company like us is going to walk away from these projects. So they tend to put it into the metrics, and they tend to rate you. What that means is, is that it is going to create more leverage because we're going to have a higher percentage of those projects financed. What also it means though is that the cash flow streams from these businesses are much lower risk because we either got them under PPA with a third party or with TXU Energy or we're getting a REC payment in Illinois or another type of payment or we're getting an RA payment in California. So the risk profile changes. What we need to do is make sure that our investors as well as the credit rating agencies understand the changing risk profile of the business as well. If they miss that, and they don't think that there's a material change in that, then they're just going to see higher leverage. And could that potentially affect our credit ratings? Maybe, but I think we can explain to them and show them in cash flow streams that we're a lower-risk company because of the way that we're kind of contracting for these assets, which should, in turn, allow us to carry a little more leverage. And so even though our credit rating -- I mean, our credit metrics might go up, they still qualify for healthy credit ratings.

I mean how -- I mean, realistically, I guess if you talk about doing this build-out by 2025, like how much of the company overall could be contracted renewables?

I don't know that. I have not done that. That's a good question. I'll take that one away unless Jim has the answer to it and give you that. But that's a very good question. I have not done that math, so...

A lot of moving parts to it. But when you come out with the plan, it would probably be helpful to know.

Yes.

Yes. Yes. No, that's a great question.

And Curt, if I could add, Steve, to your question about leverage, we're clearly taking into consideration that this debt, we're expecting it to be consolidated if we do a project financing. And so we would continue to expect to do some debt pay down in '21 because we did borrow, as Curt mentioned, during Yuri. So we want to make sure we maintain a strong balance sheet. And so we're trying to take the full picture view. But at the same time, this entity ought to be able to be set up to be a little bit more self-sustaining between some of the contributions from a partner and project level financing, we shouldn't have to continuously support it, as Curt said, with the contribution, the size we talked about a year ago.

Okay. And just somebody asked just roughly what leverage are you targeting now? Is it 3x?

Yes. Well, Jim, you look like -- I'll let you take that and I have anything to say, I'll say.

Yes. Well, we have -- Steve, I think that will be part of our November discussion on capital allocation because we want to see how these financings and the work that we're talking about with projects, how that appears to be trending. But I think we already showed that having a strong balance sheet was helpful. We were able to access the market. So I think we want to maintain a strong balance sheet. We were heading towards IG. That obviously has been pushed back in time, but we still think the priority of a strong balance sheet is important, whether that ends up being 2x, I mean, 2.5x or 3x or 3.5x, I think it could ebb a little bit with some of the bulkiness of the projects that we have because the queue that we have, some of them have customers on the other side. So I think we could see this ebb a little bit. But I think long term, we still see ourselves as in solid credit ratings. It's important to us. And I would say the IG goal was not immediately in front of us at this point. And so we want to make sure that the rise in commodity prices, we have plenty of liquidity because there is liquidity used to run this business, and that's a right way of risk because the commodity complex is moving up, but we also want to be able to finance the project. So when we get to November, I think we'll have a better sense of the capital allocation strategy, including the leverage targets that we'd be able to share at that time.

And Steve, so we're going to have higher than 2.5x though if we're going to consolidate project-level debt, and we know that. But that's why it's important that we also -- that the people are aware of the lower risk of the cash flows from those businesses. If we don't, we're just going to have higher credit metrics. So I think we can do that, but we are going to carry more leverage going forward with project financing. That's just the reality.

Makes sense. So kind of ironic, I've got 2 somewhat opposite questions. One is, are the tight energy markets causing any rethink of the timing of your 600 to 800 megawatts of coal retirements? And then the opposite side of the question is, are you making any ESG progress with the rating agencies for that, given your sustainability report and the coal shutdowns that you've announced? So you can see 2 different views there, so take it.

Well, this is the life of an IPP CEO, should we or should we not. Look, we're still on our path. I mean a lot of these plants, while they might be able to make a little more money at the higher price, I mean, the amount of money that we would have to put into them so that they could continue to operate is just overwhelming. And so I don't really see -- I could see us maybe staying around a month or 2 or something to try to eke out a few dollars here and there. But I think by and large, it's not going to -- those plants that we've scheduled to shut down are going to shut down. I will say that we've said that some of these plants are going to be by 2027, but they could be earlier. Could some of this higher pricing -- some of them we may have thought we were going to shut down a little earlier, maybe we hang in there. But Zimmer, for example, that we announced, that plant is basically on its last leg. And you'd have to put a lot of capital for it to be an asset that you could count on. What I will say, though, is it does impact the view on like Oak Grove and Martin Lake in Texas, which are viable regardless, but the amount of money that we can make with a higher gas price environment is significantly more. Same way with Comanche Peak. If you have a higher -- because of the fixed price fuel that they have, they can make more money. So you could argue in the long run, higher gas prices will be very good for them. But I don't really see it changing our opinion about any of the coal plants. And we're committed to pivoting the company. And that's why we want to accelerate some of this green investment, too. I mean -- and we need -- we want our cake and eat it too, and we think there's a way to do that.

Great. Just a quick question, just any update on the Coke litigation?

Nothing. Actually, I got something on my calendar on that, but I don't -- I haven't had it yet, but what strikes me is it's not a big deal because there hasn't been any urgency behind it. So we have not had really any movement on that one way or another.

Okay. And then -- sorry, there's just been a lot of questions. So just a question on how much you're watchful are concerned about supply chain and cost inflation issues on renewables and thinking about your strategy there?

Very, very little. I don't know that I'm -- I'll say concerned, but we got a heightened awareness around in this and especially for some of our outages in 2022 as you get even later into 2022, but also in the spring, making sure we're getting supplies. So our team has done a heck of a job making sure that we haven't had issues with that, but you can see it just as well as we can. I mean it's very challenging out there. I don't have any hot buttons on it yet, but it's something we have to stay on top of. And then the cost -- this is why we've tried to build partnerships with a number of companies like Siemens and Westinghouse and Fluor. And on the renewable side, we're working a couple of those as well because it's really important. Of course, LG is an important partner of ours, which is why their batteries are so important to us. And I think this is the time when it really pays to have access and good partnerships. And I think so far, that has worked well for us. The one area I'd say that we are managing is labor in the Powder River Basin has been tight, in particular the 8,800 Btu coal. And then the railroads have also had issues. Of course, it's also the harvest season for farmers. So that's putting pressure on railcars. And so we're working well, though, with the BN, very good relationship. They're just out in Fort Worth, which is very close to Irving. And I think we're going to be able to increase some of our cars. But we may miss some of the low margin -- we may have to hold back a little bit in some of the low-margin periods in order to preserve our coal to be ready for this winter. So it's real, Steve. This supply chain stuff, I'm just shocked that it came so quickly and people were caught that much off guard. But we see it, too, right, in our power plants and others. Getting good labor at a reasonable price is not an easy thing. But that -- those are the areas, I think, that we are most concerned about.

So I know we're at the end of our time. There's one -- more of a comment here than a question, I think is a good way to wrap up. It says it was heartening to see Curt and Jim purchasing shares in May and aligning themselves with us as shareholders. Hopefully, they'll buy more.

Well, we will buy more, and that's our job. I will tell you guys that I have and I think Jim -- I went back, I know Jim does, and Scott Helm, by the way, let's not forget our Chairman. But we have a significant amount of our net worth. Now I'm not talking about what the company gives us, I'm talking about our own money in this business. And that's the way it should be. And we're committed to try to get this right, and we're open-minded about how we do it. And so that alignment is important to us as well and how this company does. I mean Jim and I both will either do well or not do well based on that because we put a lot of our own money into it.

Great. Well, I'm going to give you the floor to wrap up, Curt. But before that, let's get our pole answer for you, so.

I was going to answer that, by the way.

Well, you can still. What's the long-term future of the IPP sector? And the winter is shifts to clean energy focus, 48%; goes fully private, 29%; status quo, 13%; big oil, 7%; reregulates, becomes a utility, 3%. So what do you think, Curt.

I think that makes all the sense in the world to me. I would -- that's kind of how I would have thought about it. I will say this, though, that if somebody wants to reregulate us, I'm all ears because when I look at the regulated utility multiples and I look at ours, it's pretty easy to say, throw me into that broader patch. But I think it's a low probability, obviously, of that happening. But I think that's right, and I think that's what we're trying to do. And so we'll see if we're successful.

Well, I'll leave you the floor to wrap us up.

Well, again, thank you very much for inviting us. And I really appreciate the opportunity, and thanks for everybody that's listening in. I really believe that the company has rebounded got -- as I said, we got our legs underneath this, and I'm excited about what we're getting ready to do. I wish I could tell you everything right now, but I can't. And -- but I will -- we will soon. And I think also we just talked about it, this company and its senior leadership are aligned with the shareholders, which is the way it should be. And we're going to do everything we can to create value. And we're an open-minded group. We don't think we have all the answers and so we like to listen to what our investors have to say and we've made a lot of changes based on that feedback, and we continue to listen to that. But at the end of the day, what our job is, is to execute. And I think our execution has been good, except for Yuri, and that really set us back. We've now invested $50 million this year, another $30 million next year and making sure that we're completely weatherized as a company. We've changed our risk management policies and because of that -- and we are -- you guys should know, we have a big seat at the table in the state of Texas when we talk about market reforms. And we didn't really talk much about that, Steve, but there are some really good ideas, including the changes to the operating reserve demand curve or better known as the ORDC, that are going to be bullish to companies like ours that have dispatchable resources. So ultimately, I feel good about where we are, but we've just got to perform. And then I want to buy our shares back because at the end of the day, we're cheap. And maybe, Steve, we just have too many shares outstanding given the sentiment of the markets out there, and there's a couple of ways to re-rate. One is to do what we're doing, which is to invest in renewables and eventually that will pile up. The other one is to buy in our shares and to be owned by people who are true believers in the value creation of this company. Either way, we're going to try to do both. And I think at the end of the day, we'll realize the value of this company. And if there are other things that come along the way that present an opportunity to create more value quicker, we'll consider those as well.

Great. Thanks, Curt, Jim, Molly. Good to see you. Thanks, everyone, for joining.

Thank you.

And have a great day. Thank you.

Thank you. Thanks.