Vistra Corp. (VST) Earnings Call Transcript & Summary

Good day, and welcome to the Vistra Corp. Second Quarter 2026 Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Eric Micek, VP of Investor Relations. Please go ahead.

Good morning, and thank you for joining Vistra's investor webcast discussing our second quarter 2026 results. Our discussion today is being broadcast live from the Investor Relations section of our website at www.vistracorp.com. There, you can also find copies of today's investor presentation and earnings release. Providing our prepared remarks today are Jim Burke, Vistra's President and Chief Executive Officer; and Kris Moldovan, Vistra's Executive Vice President and Chief Financial Officer. Other senior Vistra's executives will be available to address questions during the second part of today's call as necessary. Earnings release, presentation and other matters discussed on the call today include references to certain non-GAAP financial measures. All references to adjusted EBITDA and adjusted free cash flow before growth throughout this presentation refer to ongoing operations adjusted EBITDA and ongoing operations adjusted free cash flow before growth. Reconciliations to the most directly comparable GAAP measures are provided in the earnings release and in the appendix to the investor presentation available in the Investor Relations section of Vistra's website. Also, today's discussion contains forward-looking statements, which are based on assumptions we believe to be reasonable only as of today's date. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected or implied. We assume no obligation to update our forward-looking statements. I encourage all listeners to review the safe harbor statements included on Slide 2 of the investor presentation on our website that explain the risks of forward-looking statements, the limitations of certain industry and market data included in the presentation and the use of non-GAAP financial measures. I will now turn the call over to our President and CEO, Jim Burke.

Thank you, Eric. Good morning, and thank you all for joining us today to discuss our second quarter 2026 results. We remain on track to achieve another record result in 2026 as the business continues to perform very well. Within the geographies we serve, we are observing a structurally improved demand environment with both PJM and ERCOT hitting new all-time summer peak loads in July. This recent experience reinforces our focus on operational excellence, delivering power to our customers in a reliable and safe manner when it's needed most. Data center development activity remains strong, and we continue to be in active negotiations with large load customers as they seek to meet their power needs both in the short- and long-term planning horizons. With our large, diversified and flexible fleet, our development capabilities, innovative retail franchise and experienced commercial team, we believe Vistra is well positioned to deliver on these opportunities. The activity level we see today reinforces our view that the long-term expected improvement in power market fundamentals is underway, and we remain excited about the growth opportunities ahead. Turning to Slide 5. The team has worked hard across the business, building on the first quarter momentum to deliver strong first half results for the company. We achieved second quarter adjusted EBITDA of nearly $1.8 billion compared to second quarter of 2025 of approximately $1.35 billion, representing an over 30% increase year-over-year. At the core of these results are the 7,000 team members across the organization whose close collaboration and consistent execution across generation, commercial and retail highlights the One Team culture that is central to our success and reflects the strength of the integrated business model. Operationally, the team successfully completed our annual spring maintenance cycle positioning the fleet for strong performance through the critical summer period. To provide some perspective, the nuclear fleet successfully completed planned refueling outages for 3 of our units, and our gas and coal fleet successfully completed 92 planned outages in preparation for the summer run. This preparation was evident during the recent heat waves in Texas and PJM where we achieved commercial availability of over 97% across the entire fleet. Moving to the outlook. We are reaffirming the guidance ranges for 2026 adjusted EBITDA and adjusted free cash flow before growth and maintaining the range of potential 2027 adjusted EBITDA midpoint opportunities. Kris will cover this in more detail later. Finally, we are also pleased to announce our partnership with KKR, NVIDIA and the Kuwait Investment Authority to be a founding investor in Helix Digital Infrastructure. Helix will focus on combining power solutions for data centers with land and other digital infrastructure, creating a rack to grid one-stop shop solution that customers increasingly prefer. As part of this solution, the Helix platform will seek to leverage our deep expertise in power markets, our proven commercial track record and our generation capabilities to deliver tailored energy solutions. Vistra's role will be twofold. First, as a founding investor, Vistra will commit up to $1 billion to be invested over time with any amount in excess of $500 million, subject to the achievement of certain milestones. This aligns our participation in what we expect to be a leading digital infrastructure platform. Second, Vistra will serve as the preferred power partner, allowing us to participate in Helix development projects, either through contracted newbuild projects or through new contracts with existing assets. We believe this structure creates an additional avenue for growth and broadens our participation in a thoughtful manner as the digital economy expands. And importantly, we retained significant optionality to develop projects with Helix where it makes sense to do so while continuing to develop projects on our own as well. We're excited about the potential this platform brings to our company, and look forward to working with the team to execute on this strategy. Turning to Slide 6. As we have outlined on previous calls, we see a structurally improved demand environment in power markets that supports our long-term outlook. We believe annual load growth of at least 4% to 6% in ERCOT and 2% to 3% in PJM through 2030 remain reasonable estimates for these markets. In July, we've also seen new all-time peaks in load in both PJM and ERCOT with PJM hitting over 168 gigawatts and ERCOT hitting over 91 gigawatts. While data centers will be an important driver of load, particularly in 2028 and beyond, we believe a significant component of this growth is from sources other than data centers. This includes industrial reshoring, increasing electrification, population growth, particularly in Texas and broader economic expansion. Importantly, despite the strong level of growth, the performance of power grids during these recent summer peaks demonstrates that the power grids in our key markets are able to meet this growing demand. As a diversified company with multiple forms of generation across the country, Vistra is well positioned to benefit from strengthening fundamentals across markets. Although recent demand trends, combined with strong weather, have driven strength in PJM forward pricing, the power price environment at ERCOT has softened recently. We view this as normal with variability expected as load additions are lumpy and weather impacts can change year-to-year. We believe long-term growth fundamentals remain on track across our key markets, and our team is committed to delivering on our strategy given this growing load environment. This quarter has demonstrated strong execution across our business. Not to be left out of the discussion, we have been very active on many fronts related to the regulatory process and advocacy in our key markets. While there is still more to finalize, overall, we are encouraged by the direction of travel. I kept my opening remarks brief, recognizing that we will have an opportunity to provide our perspective on this topic in Q&A. With that, I'll turn it over to Kris to provide more details on our second quarter results, our outlook and our capital allocation.

Thank you, Jim. Turning to Slide 8. Vistra delivered second quarter adjusted EBITDA of $1.767 billion, representing a more than 30% increase compared to the second quarter of 2025. This strong performance was driven by contributions across both our Generation and Retail segments, reflecting the benefits of our integrated business model and comprehensive hedging program. Our Generation business delivered approximately $994 million of adjusted EBITDA in the quarter compared to approximately $593 million in the second quarter of 2025. The year-over-year improvement was primarily driven by favorable hedging activity, resulting in the company's average realized prices being approximately 5% higher on a per megawatt hour basis compared to the same quarter last year. Higher capacity revenues in PJM, optimizing the run profile of our flexible gas generation assets to capture margin opportunities, the restart of Martin Lake Unit 1 and contributions from the assets acquired from LOTUS in the third quarter of 2025. Retail also had a strong quarter, contributing approximately $773 million of adjusted EBITDA, compared to approximately $756 million in the second quarter of 2025. As a reminder, the second and fourth quarters are typically the strongest quarters for retail given seasonal timing of margins. Turning to Slide 9. We are reaffirming our 2026 adjusted EBITDA guidance range of $6.8 billion to $7.6 billion, and our adjusted free cash flow before growth guidance range of $3.925 billion to $4.725 billion. Given our performance through the first half of the year, we are confident in our ability to deliver at or above the midpoint of these ranges. Looking forward to 2027, current ERCOT forward curves are meaningfully lower than they were on October 31, 2025, which formed the basis for the 2027 midpoint opportunity range we provided on our Q3 2025 earnings call. However, due to several offsetting factors, including higher prices in PJM, the support from our comprehensive hedging program and the downside protection afforded by the nuclear PTC, we are maintaining our 2027 adjusted EBITDA midpoint opportunity range of $7.4 billion to $7.8 billion. As a reminder, that range excludes any contribution from the pending acquisition of Cogentrix and the premium above market we expect to receive under the long-term power purchase agreements at our PJM nuclear sites with Meta. Finally, turning to Slide 10. Our forecast indicates that we will generate more than $10 billion of available cash in 2026 and 2027. We have been opportunistic, yet disciplined in allocating this available cash. We have allocated approximately $3 billion to our equity holders in 2026 and 2027 through share repurchases and common and preferred dividends. Notably, our share repurchase program continues to create significant value. Since initiating the program in November 2021, we have retired approximately 171 million shares at an average cost of approximately $38 per share. We currently have approximately $1.2 billion of share repurchase authorization remaining, which we expect to exhaust no later than the end of 2027. I am also pleased to report that with the amount of repurchases through August 3, we have returned over $6.5 billion to our shareholders through share repurchases since initiating the program in late 2021, well ahead of the target we communicated at that time of at least $6 billion through year-end 2026. Pursuant to the opportunistic design of our 10b5-1 trading plan, our repurchase activity through July continued to run ahead of pro rata pace given the elevated free cash flow yield indicated by our share price. We will continue to evaluate our allocation to our shareholders with the flexibility to allocate additional cash to share repurchases in 2026 and/or 2027 should market conditions warrant. In addition to allocating significant amounts directly to our equity holders, we also expect to allocate approximately $4.5 billion to $5 billion to accretive growth investments, including the Cogentrix acquisition, the development of the Permian gas units, the PGM Nuclear uprates supported by power purchase agreements with Meta, the development of the Oak Hill 2 solar facility supported by a power purchase agreement with a large investment-grade counterparty and now our capital commitment to Helix. Although we cannot predict the amount or timing of any potential capital calls by Helix, we believe it is prudent to allocate a portion of our available cash to cover any such requests. Even after these significant allocations directly to our equity holders into growth, we expect approximately $2 billion to $2.5 billion of additional cash available to allocate through year-end 2027. As always, we will be disciplined in how we allocate this remaining capital, balancing return of capital to our shareholders, strategically investing in attractive organic and inorganic growth opportunities that meet our mid-teens levered return threshold and further strengthening our balance sheet. Speaking of the balance sheet, we have achieved investment-grade credit ratings from 2 of the major credit rating agencies. However, we don't plan to stop there. Our long-term goal is to achieve mid-investment-grade credit ratings at all 3 major credit rating agencies. We believe we can achieve these ratings primarily through disciplined EBITDA growth, but we will also consider allocating some of our available capital to additional debt paydown as necessary or appropriate. We believe mid-investment-grade credit ratings would allow us to maintain financial flexibility to continue to opportunistically grow our business and would position us well for long-term value creation. In closing, we are pleased with our second quarter results and the momentum we have built through the first half of the year. We continue to see load growth materializing in our primary markets and we believe our integrated business model positions us well to deliver significant value to our stakeholders. With that, operator, we're ready to open the line for questions.

[Operator Instructions] The first question today comes from Shar Pourreza with Wells Fargo.

It's actually Constantine here for Shar. I just wanted to get your view on Texas, the data center audits potential delays at 0. Have there been any commercial or counterparty concerns that you've heard just from existing or potential customers. And as we kind of get through this uncertainty, especially with the curve impacts that we're seeing, is there any kind of pressure on near-term outlook mitigation strategy for hedging, especially for '27, '28 portfolio is a little bit wide?

Yes, sure. There's a lot there. I appreciate the question. Let me -- let me start by framing it first as we put out a load forecast a little over 2 years ago in May of 2024 with an expectation of 115 to 120 gigawatts of load in ERCOT in 2030, that's still what we're projecting. So from a long-term fundamentals of the business, we haven't actually changed our forecast for ERCOT, even though the queues have certainly grown. And I think that's part of the challenge of what policymakers are balancing is I think the concerns around generation supply are overstated when you look at a lot of the media reporting. And I think the demand is overstated when you look at the interest that's being expressed in these queues. So policymakers are saying, we need better information to make decisions because they're going to prioritize reliability and affordability for customers, and we support that. We fully support it. So I do think in the near term, I think the audit is going to probably pause some of the reviews for a couple of months. We don't know exactly the time frame. The key project that we have in our portfolio at Comanche Peak, we're looking to energize at the end of 2027. We don't see that being affected at this point, and we support the conversation that the governor is wanting to have with the data center community to make sure that Texas does this right. So I don't think it's a concern in the intermediate and long term. I think, and we'll talk, I'm sure, at some point in the Q&A about the forward pricing. But what you see right now is the grid has more supply on it. This load that we expect to hook up, we expected to hook up in the '27, '28 time frame. So 2026 being soft is not that big of a surprise to us. That's also why we do the comprehensive hedging that we do. So I'd like to see the queues call at the end of the day, I think everybody, if we raise the criteria and raise the bar on what is being proposed from the data center load an ERCOT Q that has at times been expressed is over 400 gigawatts. We think it's somewhere in the 12 to 15 gigawatts by 2030. So when you have numbers overstated by more than 20x, it causes problems for policymakers. So we support the thinning of the queues and getting the better realistic decisions to make sure we can all move forward.

Excellent. Appreciate that. And then maybe just shifting to some of the commercial contracts. There have been multiple data points recently from peers around new projects -- project, IRR, pricing, margin expectations on existing gen. Do you have a view here to long-term contracting still focus on the new build cost kind of in that 90% range? Or is there room for clean premium speed market, et cetera?

Yes. There's a big spread. Obviously, that's one of the ironies of this discussion again from a media standpoint. There's a view that power prices are too high, they need to come down. Depends on what you're measuring off of. Year-to-date, ERCOT wholesale prices have been $30 a megawatt hour. They were $30 a megawatt hour last year. $30 is not going to get new stuff built. That's part of the dilemma. I think even when we talk about PJM and talking about a cap on the RVP of $555 million that might get some things built, but there's still a lot that may not get built if you're looking at that as a hard cap. Now there's a range with that $555. So some things can be above it, if something is clear below that. But in our role as investors and also owner operators, the price of equipment, in some cases, has doubled, if not tripled. So what was an acceptable price to build that a year or 2 ago is no longer an acceptable price. So I think the challenge is going to be from a contracting standpoint is when the customers, the large load customers, they are in contracting with existing and they are in contracting at a premium with existing because it's still a discount to what new build would require, whether you're doing a bilaterally or you expect to do it on your own. So as a behind the meter or Island is. So there's a big spread there. That's why I think our large base load position -- there's a big spread between what we're currently receiving in a day ahead spot-type market versus what new build looks like. So we still see that interest level from the customer base. And I think you're going to see customers still contracting for new because there's areas of the country they want to be, and they're looking for speed and there's going to be customers that are contracting with existing. So that our views on that have not changed. And as far as margins and premiums, our views on that haven't changed. I think the cost of new build has continued to tick up. If there's anything that's changed, that's kind of been where we've seen the pressure.

And the preference for Vistra is still kind of the hybrid solution. So make some new plus existing capacity for this sort of deal?

Yes. Look, we have been a bit of an all of the above. It really is customer driven. And some customers are going to put more of a preference on new and additionality. Others are going to look more for speed and where can they get hooked up. So colocation, for instance, can bring a speed advantage to hook up that even a new build, even if it were islanded might still take more time. So yes, we're going to be in all forms of that. We have to get a return that we think is attractive for our shareholders, but we have the capabilities to be in all of those solution sets, and I'd expect us to continue going forward.

The next question comes from Jeremy Tonet with JPMorgan.

Interesting times across both PJM and ERCOT. I was just wondering if you could talk about the relative dynamics between the 2, and you're looking to secure more contracts, I guess, how the conversation trend compares contrast between the 2?

Yes, that's a great question. I'll start off, and I'm going to ask Stacey comments as she is in the middle of these discussions on a daily basis. The 2 markets are starting in slightly different places. So as you know, with Texas and you can see it in the forwards, you can see it in the real-time settles. The Texas market is just a lot less tight at the moment than the PJM market. And what we have here is a situation where customers are just trying to get through the study processes, ERCOT took an approach to do that sort of slow things down for a moment and then study as much as you can realistically want to give clear guidance to people. Now that's going to pause for the reasons we just covered on the call for a few months, but the approach is still the same. In PJM, there's still a process that's much more localized in terms of how the study process works. And obviously, even the criteria that's being used around some of the wires costs and whether there's minimum takes and credit and other things that are still not yet settled in ERCOT. So the markets are at different levels of maturity in terms of how different utilities are prioritizing the studies and the load, and we have to work with customers on that. Of course, our assets would have some unique characteristics in each market. But since we're having conversations across both those major markets, I'm going to let Stacey provide more color on how she sees these developing.

Yes. Thanks, Jim, and thanks for the question, Jeremy. We continue to see a lot of interest in both PJM and ERCOT. We're in active discussions in both markets across multiple sites and both about our existing resources as well as new build. And both markets have their own share of regulatory uncertainty and things in flux. So I think at this point in time, it really comes down more to where are individual customers looking to expand their presence and each customer is a little bit different in that regard. They have their own zone-type goals. And when they come to us, they kind of share with us where they're looking to locate their data centers, and we continue to see really high interest in both of our largest markets, ERCOT and PJM. And I'd say the regulatory uncertainty, of course, customers want more clarity. And as we move along, we're getting more clarity. We're seeing a lot of progress at FERC. As Jim started this -- the Q&A session off with, we're also supportive of Governor Abbott's attempt to kind of [ find ] the queue and ensure responsible development. And you've seen customers come out in support of Governor Abbott's efforts. So those are positives. Those are actually helping us move towards clarity. And at the same time, as we've seen with even the contracts we've executed to date, customers don't need perfect clarity in order to contract. You can find ways to deal with those risks through contractual provisions. And so they're not waiting on perfect clarity, but obviously, the more clarity, the better. So we continue to feel very optimistic about our opportunities in both PJM and ERCOT.

Got it. That's helpful. And then dialing into PJM a little bit more. Just wondering, as PJM continues to evolve here and we step towards the -- wondering what Vistra's strategy would be here at the relative level of appeals here? And also how [indiscernible] compares to bilateral discussions if there's a preference one way or the other?

Yes. So I believe the bilateral discussion which is something we've been supportive of even under current market conditions, unrelated to whether we're specifically talking about an RBP and the other framework around this IRAS, which I'm sure we'll talk about. Setting that aside, the bilateral conversation is something that we have real possibilities with customers. We have good sites. We have some opportunities to develop these with their interest. Again, that has to meet their needs from a speed and a cost standpoint. So that's a willing buyer, willing seller marketplace. But any bilaterals, as you know, that get done that meet the hurdles could drop the required RBP procured amount. And ultimately, over time, I think if energy markets and bilaterals can continue to develop adequate returns, even less dependence on a capacity market, I think with overall be helpful for clarity of what kind of returns people can expect in these various markets, including PJM. So we're active in those discussions. When we think about the RBP itself, there's realistically batteries, peakers, CCGTs that you could see bid into that. Depending on where people are with their cost of equipment and EPC and when they got some of that locked down the $555, there's going to probably need to be a spread around that $555 a megawatt day for certain projects to work. And so there's going to be pressure there. I think the bilaterals, you're going to see some pressure on that. So that is, again, the conundrum of power markets today are still lower than where new build would require power markets to be to earn an [ advert ] return. So whether that's going to come through the RBP or come through bilateral remains to be seen.

Got it. That makes a lot of sense since you brought up IRAS. Maybe any thoughts you could share there, how you see things unfolding from this point?

Yes. I'm going to start off, but I'm going to turn it over to Stacey to give some of detail and tracking all of these dockets and how this is unfolding. I just would like to say that our discussions with customers have been evolving over the last 2 years, and we've mentioned this that large load customers are willing to be part of the solution. They're willing to offer some flexibility. Our DNA is a choice-based DNA. I mean we like customers to have incentives to be flexible, whether that's speeding them up in the interconnect queue, being able to ramp their load faster, maybe getting a discount on wires or capacity if they offered in DR. So we're much more of a carrot approach because certain customers are making investments to be flexible, they should be compensated for it in some form, either actually or with speed. Some of these dockets and we understand why go much more to a stick approach, and it effectively says if you don't do these things, you're at risk of disconnection. I think that's a much more blunt instrument. And I think this idea that you might actually be required to curtail before those that were paid to be curtailed, that feels odd to me. That's not the way markets should clear. You should actually have spectrum of benefits or attributes that customers are willing to be paid for. And I think we've got to work on this, and we're going to weigh in on this as I'm sure many of the stakeholders in the process will weigh in, and it's not filed yet. So we don't know all the details. But obviously, there'll be a lot to unpack when it comes in. So I'm going to let Stacey add any comments to this.

[indiscernible] the only thing I would add, really, and I think Jim covered it well is we obviously have said for a long time, we don't support bring your own new capacity mandates as we referenced even in this discussion today. Customers in PJM are already in conversations about bilateral agreements for new build, and we should let the market drive the incentives to do that rather than using kind of the stick approach. So we will be weighing in on that proposal when it gets filed at FERC, many others will be as well. We do continue to believe that data center flexibility is a key asset really for the grid, and it should be encouraged, but it should be encouraged with incentives and it should also be recognized as a valuable resource that can be used during times of grid tightness. And so we need to kind of wait and see what the proposal says and see what provisions are really specified in that proposal before we respond. But we do have some concerns about it. We think customers have some concerns about it as well. And frankly, it may actually even give some advantage to co-location with existing resources, we believe, at the end of the day because there's still a speed advantage to avoiding some of the transmission build that's necessary often to connect front of the meter, and typically in these colocation conversations, customers are bringing back up generation anyway. And so we actually see it as potentially driving customers to be even more interested in co-location with existing resources.

The next question comes from Michael Sullivan with Wolfe Research.

I wanted to ask a little more on the Helix platform and just how you see that playing out, had a big announcement and you put some money into it this year. How does that materialize through time? Maybe some color on what the milestones are that would require putting more money into it. And then like how does that work at the same time you've been working through some of these existing commercial discussions?

Yes, Michael, thank you for that. It's -- first of all, it is considered an additive proposition for Vistra. So as we looked at the extent of the customer conversations we were having and I've even mentioned on previous calls, we've added staff to have conversations, and Stacey would say she's still short staffed to have conversations. So it's part of extending our -- what I'd call our channel or our capability to actually evaluate more deals and it's focused on both existing assets and new assets and then bringing a simpler solution for customers. So they can talk about the infrastructure of a data center and where it gets its power. And today, they're having to string all these conversations together. And it is complicated and they go in fits and starts. And so being customer focused, our partnership, obviously, led first by KKR is helping us to bring a platform to a customer conversation. It is an option for Vistra to participate on any of these. So if we want to use an existing asset to support a deal like this, that's our opportunity, it's not a requirement. But we're excited about it because the more deals you can evaluate the better chance you're going to find something that's meeting the spectrum of customer need as they evaluate their business over time. In addition, there's some criteria that if there are certain milestones met and the deals are actually coming and they're valuable to Vistra, then we put in an additional $500 million, and we'd be excited to do so because we wanted the interest to be aligned. That was important for us. That was important for KKR and the other partners is that they're skin in the game. So, we're excited about the opportunity. We think this is, again, a customer orientation, and we view that the chance to market our current assets as well as develop some new ones with someone who has a much greater access to capital in a sense that if it's required to do things like powered shells, powered land, that's something we don't believe our shareholders are expecting us to put a lot of capital in, given our core business, but having a partner who can is very complementary, and that's how we see it unfolding.

Okay. Great. Very helpful. And then, Kris, I think you mentioned just in terms of the financial outlook, midpoint or better in '26, maybe just a sense of what's driving that. And then for '27, the midpoint opportunity, you mentioned the ERCOT softness and some of the offsets there. Should we just think about that as kind of netting out to a similar place or any kind of like upward or downward bias or around that range?

Yes. Thanks, Michael. I think on 2026, obviously, what we talked about in the prepared remarks were the start that we've had to the year positions us well. And we see ourselves we don't typically -- it's not typical for us to change guidance absent if there's a deal has closed or something at this time of the year, we're still getting through the summer. But we still feel good about the full year and that we'll be at or above the midpoint, and we have confidence that, that will be the case. As we turn to '27, as you mentioned and as we mentioned in the prepared remarks, the ERCOT forwards are meaningfully lower. There are -- that headwind is offset by some higher prices in PJM. And we do have the hedging program and the downside protection of the PTC. I would say that they don't fully offset the ERCOT headwind. So we're -- we would be trending towards the lower end of that range. But of course, we have announced 2 significant transactions that aren't included in that and that's Cogentrix and the Meta PPA, they're still excluded. So our current expectation is that we'll provide a guidance update for 2026 and 2027 on the third quarter earnings call. If Cogentrix hasn't closed at that time, we'll wait and likely provide an update to earnings for 2027 on our next earnings call after it closes. Again, with those 2 transactions, though, as you look to 2027 that we have not included based on our previous disclosures, you could reasonably conclude that they'd add roughly $700 million to our midpoint opportunity, absent any other impacts. And those impacts could obviously be further curve moves or what we learn about the hedge levels with respect to Cogentrix among some other things. So we're excited about 2026, and we feel that we have an opportunity to get back to where we want to be in 2027.

The next question comes from James West with Melius Research.

I was curious to dig in a little more on Helix. Clearly, deep pocket is a good term to use to describe your current partners. But you also described yourselves as founding partners, which maybe suggests additional partners are coming in. So that's kind of the first part of the question. And then the second part is, how are you thinking about this entity and its capital raising abilities going forward? Is it going to be from these platform companies -- sorry, the infrastructure companies that you have and the investors that you have? Or do you think this is something that could be a publicly traded entity over time? I mean how are you guys thinking about the evolution here?

Yes, thanks. I think we do. We are a founding investor, and we do expect that they will continue to add more investors over time and substantially increase the amount of the capital that they have access to. I think from how we utilize that, the best word is we have a lot of flexibility in every deal. There will be deals where we could potentially -- each deal will be different, and we could access some -- we could bring them in as an equity partner in any kind of new build power that we do. We could do that all of ourselves. We could search other opportunities to finance those. So I think each deal will be different. It is -- we do expect to work with them and -- but on the power side, it will be a negotiation each time about how we go about financing our portion of any transaction that we get involved in.