The CEO of Vistra Corp. Curt Morgan says his company is preparing its plants for winter, but he has concerns on rising energy prices, oversight of the Texas natural gas industry, and a plan to decarbonize the power sector that is on the verge of collapse in Congress.

“I guarantee you I’m not getting any vacation cards from any of the gas guys,” Morgan told reporters Friday at the Midlothian Power Plant, a gas-powered facility southwest of Dallas.

The fate of the Clean Electricity Performance Program, or CEPP, remains uncertain in Congress given the potential lack of support from Senator Joe Manchin (DW.Va.). The New York Times reported that the plan would likely be abandoned. The program would pay electricity providers who increase annual clean electricity sales by 4% (Climate wire, September 30). Vistra’s chief executive suggested that his company could support the proposal if certain changes were made.

Morgan, 61, also said natural gas remains essential for the electricity sector, and he feared efforts to eliminate carbon emissions would go too quickly nationwide. Texas-based Vistra has zero carbon emissions goal linked to 2050 as long as technological progress and public policy and market conceptions are favorable.

Above all, Morgan said the United States must work to avoid the kind of energy crisis Texas experienced in February. That’s when millions of Texas customers lost power for hours or days as a frost crippled the state. More than 200 people in Texas have died from the winter storm, according to a state count. Morgan lamented that the Texas gas system was no better prepared.

“Gas players are profiting from the malfunction of their own system,” said Morgan, describing how the surge in gas prices from February will increase the costs of energy consumers over time.

Texas lawmakers have raised concerns over a proposal from the Railroad Commission of Texas suggesting that some gas producers may choose not to suffer from inclement weather. The commission has since issued an advisory to the gas industry telling it to prepare for winter (Energy wire, October 12).

Andrew Keese, spokesperson for RRC, told E&E News via email that “the agency is getting ahead of the curve and taking proactive steps to work with operators for the upcoming winter season.” Todd Staples, president of the Texas Oil and Gas Association, said in a statement that “the oil and gas industry is working with a sense of urgency to prepare.”

Morgan de Vistra spoke to E&E News on Friday to discuss federal policy debates, decarbonization and next winter in Texas.

How do you see the CEPP?

We are open to CEPP. However, the way it’s put together right now, we think there are some issues in terms of compliance and the ability to actually make it happen across the industry.

What we are more in favor of is simply a direct carbon levy. And we think it’s transparent, and most economists think there would be more and more efficient decarbonization if we just put a price on carbon.

Would it be at the scale of the economy for a carbon tax?

Yeah, economy wide.

Can you say bluntly: “We do not support CEPP”?

No, I can’t say that. We could support CEPP with some modifications. It’s not our # 1 choice. However, some modifications would need to be made.

For example, it has a reduction of 4 percent per year in carbon, basically. There should be something where there can be a longer period you can average over that period. In one year you could go down 4%, then the other year things could go up, and yet overall you are reducing your carbon footprint.

Are you worried about your retail or power generation business or both if there was a CEPP?

We try to see it more optimistically. I think we think we can work within this framework.

Obviously, this will have an impact on our fossil fuel fleet. But it would be more on the coal side, which we have already been in the lead [of] in terms of announcing coal withdrawals.

Especially during this decade we [don’t] really see such a big impact on our business if this were to be put in place. But we do expect some longer term effect, whether it’s CEPP or some other mechanism.

There was talk last week of a global energy crisis. Do you have any concerns?

Natural gas power plants are the marginal units and they set the price of electricity, so higher natural gas prices are good for our business. Having said that, I still worry when we see the prices of energy products rising as quickly as they have and are at this level because it has an overall impact on the economy.

I think those who would like to see the economy and in particular the electricity grid decarbonized, which we are in favor of, I think have a timetable in mind. The most ardent supporters of this program have a timeline in mind that I think will impose an unnecessary tax on the American people because they increase the cost of energy products.

This country has huge reserves of natural gas, but [the] the number of platforms is decreasing in our country [from past years]. Asset managers who control the money in the economy are forcing many of these companies not to invest in fossil fuels. And a lot of their boards are making that decision, as well as management.

This obviously leads to a tightening in the supply of and demand for energy products, which in turn increases the price. But I see it as an artificial change because we have a lot of oil and gas in this country. It’s just a choice not to invest in it.

It worries me that we are creating an artificial shortage that is not necessary, and I think we are going to have to balance the need to have a strong economy and that people do not have to pay too much for energy products with it. decarbonization of the economy.

You said that President Biden’s push to decarbonize the U.S. electricity sector by 2035 is too fast and could come at an extremely high cost. Is that still what you say?

It really is. But I also see it now in oil and gas production.

I get really worried when we see higher electricity prices, higher natural gas prices, higher pump prices, chemical feedstocks. There is so much going on in the economy.

And we are all talking about decarbonization, but we have to do it in a way that doesn’t bring the economy to its knees. And that’s what worries me. We can do more damage with the solution to decarbonize the economy than real carbon does to our economy.

We have a lot of resources in the country. There should be no reason for natural gas to be $ 5.50 or $ 6 [per million British thermal units]. The correct price of gas is probably in the [$2s].

2050 a better timeframe for decarbonization?

I don’t think any of us know for sure. But in my mind, that gives us enough time to develop new technologies.

You criticized the Texas natural gas industry. What do you think of the power of Texas this winter?

I still have some concerns because everything that was in [recent] the legislation will be applied [before this winter].

I don’t like oil and gas companies. I just think that the rules of the road are not well articulated, and they are certainly not put in place to ensure that the integrated gas and electricity system [works]. This is my biggest problem.

And I think it’s directly at the feet of the regulator of the gas industry.

The Texas Railroad Commission?

Yes. And that’s who’s supposed to step in and take a look at that and say, “OK, this is what we need to do to make sure our system is working. ”

Producers or pipeline companies or processors, I have no problem with any of them. I think they should alter. I think that’s part of the game. They don’t have the proper supervision, and that’s what worries me the most.

And I think historically the Railway Commission has been more of an advocate than a regulator. But we need them to be a regulator now.

Do you think the Texas Public Utility Commission is going in the right direction?

I absolutely do. I think we have a good PUC. I think they understand. These guys get together all the time and hold hearings, and they move forward quickly, but they do it in a thoughtful way.

This is how a real regulator should work. They are not an advocate for my business or any other business. They are an advocate for the system and for making the system work.

Some people have argued that large companies like Vistra have more influence over the PUC. Do you agree?

I don’t think this is true. I’m going to go see – I hope to go see – the commissioners. We have a few new ones that I haven’t even seen yet. The reason I haven’t seen them is because their calendar is full.

We do a lot of analysis and we do a lot of work, and we are able to provide that and demonstrate our views on certain market designs. Maybe that gives us a little more influence, but that’s strictly because we’re doing the job, right? We provide them with the necessary information.

But in terms of access or our voice being heard more, I haven’t seen it. I don’t feel like I have more access than anyone else.

This interview has been edited and condensed for clarity.

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