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ILLINOIS POWER PLANTS PUSHED TO THE BRINK

As a result of longstanding and unresolved capacity market design flaws, regulatory uncertainty, and economic pressures, the downstate electricity market is at a tipping point and drastic changes are imminent. As much as 75 percent of Vistra Energy’s subsidiaries’ electric generation capacity serving the MISO Zone 4 market is at risk of being shut down by the end of the year. The at-risk power plants produce nearly 5,500 megawatts and account for 40 percent of the available summer capacity in MISO Zone 4.

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A REASONABLE  AND RESPONSIBLE PLAN FORWARD

In addition to supporting the regulatory change pending before the Illinois Pollution Control Board, Vistra and its subsidiaries are supporting a new, comprehensive transition plan for downstate power plants over the next decade, the Illinois Coal to Solar and Energy Storage Act of 2019. This visionary transition plan for downstate electricity generation benefits consumers, plant employees, and local communities. It substantially reinvests in Illinois’ downstate power plants to meet the state’s evolving energy goals and mandates by:

1

Redevelop Downstate Coal Facilities into Utility-Scale Solar And Battery Energy Storage

2

Meet Illinois’ Commitments to Emission Reductions and Paris Climate Agreement

3

Increase Grid Stability, Reliability And Renewable Resources Through Battery Energy Storage

4

Responsibly Retire Existing Downstate Coal Plants

THE ELEMENTS OF THE PLAN

The Illinois Coal to Solar and Energy Storage Act of 2019 is a visionary and comprehensive transition plan for downstate generation that benefits consumers, plant employees and communities, and substantially reinvests in Illinois’ downstate power plants.

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To spur this redevelopment and transition away from coal and toward clean, renewable energy sources, the Illinois Power Agency will award 15-year contracts for utilities to procure renewable power that will be built at existing coal plant sites. Between 2021 and 2022, approximately 500 MW of utility-scale solar and energy storage will begin operation at existing coal facilities across downstate Illinois. Union labor will construct and operate the new facilities.

There are two historic emission reduction commitments in the proposal. As a condition of being selected to develop utility-scale solar and energy storage sites, Vistra’s subsidiaries will commit that by 2030 total CO2 emissions from their fleet of Illinois power plants will have been reduced by 75 percent compared to 2005 levels. Additionally, for each megawatt of new renewable capacity installed at coal plant sites, five times as many megawatts of coal-fueled generation must be retired by Vistra’s subsidiaries by no later than 2030.

To further enhance the grid’s stability, reliability and ability to best utilize renewable power, the Illinois Power Agency is given authority to provide 10-year grants to support the development of standalone energy storage facilities of 40 MW to 80 MW capacity at existing coal plant sites that do not have sufficient suitable land to construct utility-scale solar generation of cost-effective scale. These facilities are required to come online by 2024 and will be constructed and operated by union labor.

If the downstate market quickly loses a substantial portion of its baseload generation capacity with nothing online to replace it, families and businesses will potentially endure years of uncertainty and extreme electricity price turbulence. The Coal to Solar and Energy Storage Act keeps otherwise uneconomic power plants open through 2024, rather than closing quickly. This provides time for sufficient renewables, transmission, or energy efficiency projects to come online. While the entire fleet cannot be retained during the transition period, it is estimated that approximately 60% of the at-risk MISO Zone 4 electric capacity could be supported and retained by this program during the next five years. Plants that accept the transition assistance must retire their coal generation no earlier than 2025 and no later than 2030.

RESPONSIBLY RETIRING EXISTING DOWNSTATE COAL PLANTS

Vistra and plants at its Illinois subsidiaries account for nearly 5,500 MW of electricity capacity in the MISO Zone 4 market. This is approximately 40% of the overall available summer electric capacity in the market. But, due to longstanding factors, Vistra’s Illinois affiliates have determined as much as 75% of their total in-market electric capacity is at-risk of imminent closure. By keeping otherwise uneconomic plants online through 2024, this provides sufficient time for new renewables, transmission, and energy efficiency projects to materialize while also providing more stability for grid reliability and power prices.

PROVIDING AN ORDERLY TRANSITION PROCESS FOR ENERGY WORKERS AND PLANT COMMUNITIES

This new energy future will not come without a difficult transition for plant employees, their families and local communities. Energy workers and their families deserve an orderly retirement process with as much notice as possible.

While it is not economically feasible to continue to operate the entire downstate fleet, the transition plan will keep open power plants that are at risk of imminent closure through 2024. This will provide short-term certainty in the market and advance notice to workers, union officials, families and communities who will have to deal with the permanent loss of jobs.