Vistra Expects Growth in PJM and ERCOT Contracts Amid Diverging Markets, Q2 2026

PJM vs. ERCOT contracting dynamics and Vistra’s posture

1) Relative dynamics: PJM vs. ERCOT (how “tight” the market and the queue/study process differ)

Vistra’s management characterized the two markets as starting from different levels of “tightness” and operating maturity, which affects how customers contract and how quickly transmission/resource studies can clear.

• ERCOT is described as “less tight at the moment than the PJM market,” and Vistra links that to observable differences in ERCOT forwards and real-time settles versus PJM. ¹
• In ERCOT, customers are “just trying to get through the study processes,” and ERCOT had adopted a BAS approach to slow things down initially and then study as much as realistically possible at once to give clearer guidance—though Vistra notes that approach will pause for a few months (for reasons discussed on the call). ¹
• In PJM, the study process is “much more localized,” with criteria that are still not fully settled in ERCOT (the excerpt specifically references items like wires to cost, minimum takes, credit, and other details). ¹
• Vistra also emphasizes that utilities differ in how they prioritize studies and load, and that Vistra’s assets have unique characteristics in each market, so contracting and development discussions aren’t “one-size-fits-all.” ¹

Bottom line on relative market dynamics: Vistra sees PJM as the tighter/more mature contracting environment today, with ERCOT currently softer, and both markets still involve regulatory/queue/study friction—but ERCOT’s study approach differs in mechanics (BAS pause) and PJM’s process differs in how it localizes and finalizes certain criteria. ¹

2) Vistra’s contracting posture: what customers want and how Vistra frames deals

Vistra’s contracting posture is largely shaped by (a) customer willingness to contract on imperfect clarity, (b) the product mix customers require (energy + capacity), and (c) how market design/regulatory uncertainty affects deal structure.

2.1 Customers are contracting in both markets despite regulatory uncertainty

• Vistra says it has “a lot of interest in both PJM and ERCOT” and is in active discussions in both markets across existing resources and new build. ¹
• Management states both markets have “regulatory uncertainty and things in flux,” but customers “don’t need perfect clarity in order to contract,” and Vistra expects contractual provisions to address risk. ²

2.2 Contracting demand is “energy + capacity” oriented, not energy-only

• Vistra reports “robust customer appetite for both energy and capacity,” because to power data centers customers need both and they are interested in locking in cost as prices rise. ³
• Vistra doesn’t see a “big increase” in appetite for energy-only deals, although it remains open to whatever customers want. ³
• This aligns with management’s broader view that the contracting “toolkit” is multi-product rather than a single standard form. ³

2.3 Deal structures: RBP vs bilateral; and the “carrot” preference for flexibility

In PJM-focused discussion (RBP vs. bilateral), Vistra’s posture can be summarized as: engage across contracting pathways, but prefer approaches that incentivize flexibility rather than impose mandates.

• Vistra frames bilateral discussions as supported and workable: it calls bilateral a “willing buyer, willing seller marketplace,” where completed bilateral deals can potentially reduce required RBP procured amounts “over time.” ⁴
• Vistra’s management notes that the RBP itself likely involves batteries/peakers/CCGTs bidding into it and that there may be pressure around the effective cost spread needed versus the $555 per megawatt day reference point (i.e., need for spreads for certain projects to work). ⁴
• Vistra highlights a key tension: power markets can be “still lower than where new build would require… to earn an adequate return,” so whether returns come more from RBP or bilaterals is “to be seen.” ⁴
• Vistra also states it does not support “bring your own new capacity mandates” and expects customers in PJM already discuss bilateral agreements for new build rather than needing mandate-driven outcomes. ⁵
• Vistra repeatedly emphasizes incentives (“carrot approach”) over blunt “stick” approaches in grid flexibility/DR-type proposals, arguing that incentives should compensate customers for flexibility attributes. ⁶

Bottom line on contracting posture: Vistra is active in both PJM and ERCOT, expects customers to contract even amid uncertainty using contractual risk provisions, sees energy + capacity as the core need for data centers, and in PJM specifically is positioned to participate under both RBP and bilateral frameworks—while opposing mandate-heavy “bring your own” capacity requirements and favoring incentive-based structures for flexibility. ¹²³⁴⁵⁶

3) Which market Vistra plans to secure more contracts in

Based on the excerpted discussion, Vistra does not indicate it is abandoning either market; instead it emphasizes optimism and active pipelines in both.

• Management says Vistra “continue[s] to see really high interest in both of our largest markets, ERCOT and PJM,” and that it feels “very optimistic about our opportunities in both PJM and ERCOT.” ²
• It also says it is in active discussions in both markets across multiple sites for existing resources and new build. ¹

Answer: Vistra plans to secure more contracts in both PJM and ERCOT, not just one. ¹²
However, the qualitative emphasis differs: management describes ERCOT as less tight currently than PJM, which may affect the immediacy of contracting economics/price levels, even while interest remains high in both. ¹

4) How trends differ between PJM and ERCOT (demand growth, peak outcomes, and forward pricing)

Vistra ties market trends to (a) load growth and (b) different forward price directions/curves, which then influences where contracting and expected economics may be heading.

4.1 Demand/load trend: both markets reaching new peaks

• Vistra reports structurally improved demand and notes both PJM and ERCOT hit new all-time summer peak loads in July, with PJM over 168 GW and ERCOT over 91 GW. ⁷⁸

4.2 Forward pricing trend: PJM strengthening; ERCOT softening

• Management says “recent demand trends combined with strong weather have driven strength in PJM forward pricing,” while “the power price environment in ERCOT has softened recently.” ⁷
• In the 2027 outlook discussion, Vistra says “ERCOT forwards are meaningfully lower” and that this headwind is partially offset by “some higher prices in PJM.” ⁹
• Management reinforces that for 2027, current ERCOT forward curves are meaningfully lower than on Oct 31, 2025 (the basis for its 2027 midpoint opportunity range). ¹⁰

Net effect on contracting expectations: Both markets have strong load/demand signals, but the financial backdrop for new contracting economics is different—with PJM forward pricing stronger and ERCOT forward pricing softer, which can influence both the terms customers seek and the rate of optionality needed to structure deals appropriately. ⁷⁹¹⁰

5) Summary: relative dynamics + Vistra’s contracting posture + where contracting focus goes

• Dynamics differ: PJM is described as tighter than ERCOT at present, and the study/queue mechanics differ (ERCOT BAS approach and pauses; PJM more localized study process). ¹
• Vistra posture: Active in both markets across existing and new build, expecting customers to contract even without perfect regulatory clarity via contractual provisions, with robust appetite for energy + capacity (not mainly energy-only). ¹²³
• Policy/framework stance (notably for PJM): Support bilateral pathways; engage with RBP as it evolves; oppose “bring your own new capacity mandates”; prefer incentive-based flexibility (“carrot approach”). ⁴⁵⁶
• Which market for more contracts: Vistra indicates high interest and optimism in both PJM and ERCOT, implying contracting expansion in both. ¹²
• Trend divergence: Both markets have strong load growth/peaks, but PJM forward pricing strengthened while ERCOT forward pricing softened, and Vistra’s 2027 outlook explicitly references ERCOT forwards headwinds partially offset by higher PJM prices. ⁷⁹¹⁰⁸