The U.S. government plans to lend Vistra Corp. (NYSE:VST) about $4.2 billion to increase output from its nuclear fleet. Much of that new output already has a buyer.
Energy Secretary Chris Wright is expected to appear at Vistra’s nuclear plant on Lake Erie in Ohio on Monday afternoon. The money would pay for upgrades at three or more of Vistra’s four nuclear stations.
“By getting more power out of the nuclear plants we already have, we can deliver more affordable, reliable, around the-clock energy for American families and businesses,” Wright said in a prepared statement.
Vistra shares were up 4.1% at $145.81 late Monday morning, per Benzinga Pro data.
Meta Came First
In January, Meta Platforms Inc. (NASDAQ:META) signed 20-year agreements to buy power from Vistra’s Perry and Davis-Besse plants in Ohio and its Beaver Valley plant in Pennsylvania.
The deal sends more than 2.6 GW to Meta’s AI data centers in the PJM region. Of that, Reuters reported 433 MW will come from uprates. Those megawatts don’t exist yet.
On its fourth-quarter call, Vistra said the Meta agreements cover 2,176 MW of operating capacity. The uprates make up the rest.
The Trade
The loan puts federal money behind megawatts with a signed buyer. A 20-year hyperscaler contract largely removes demand risk, and cheaper government debt cuts the cost of building the extra capacity.
Execution risk is lower, too. Vistra can do the uprates without new licenses from the Nuclear Regulatory Commission, Reuters noted. Operators usually use slightly more enriched fuel or install bigger equipment, such as new main turbines.
The Energy Department’s lending office can cover up to 80% of a project’s cost, CNBC reported. Its UPRISE program aims to add 2.5 GW from existing reactors by 2027 and 5 GW by 2029.
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Joining Constellation and Southern
Vistra joins a growing list of borrowers. Constellation Energy Corp. (NASDAQ:CEG) got a $1 billion loan last November to restart Three Mile Island. In February, Southern Co. (NYSE:SO) was offered $26.54 billion, the largest loan in the office’s history.
Still Far Below the High
VST Stock Price Activity: Vistra shares were up 4.09% at $145.74 at the time of publication on Monday, according to data from Benzinga Pro. Even with Monday’s gain, Vistra stock is about 33% below its 52-week high of $217.10. The 52-week low is $132.66.
Photo: Shutterstock
