Utility Vistra posts quarterly loss on derivative challenges, higher costs

By Vallari Srivastava and Katha Kalia

May 7 (Reuters) - Vistra VST.N swung to a loss in the first quarter on Wednesday, as the independent power producer was hurt by setbacks in its hedging activities and higher costs, sending its shares down more than 5%.

The company said the quarterly deficit was driven primarily by unrealized mark-to-market losses on derivative positions as energy prices increased in the forward periods.

Persistently high interest rates also weighed on the utility, making it more expensive to invest in the construction and maintenance of critical infrastructure.

Vistra's interest costs rose nearly 88% to $319 million in the quarter, while unrealized net loss from mark-to-market valuations of commodities jumped over two-fold to $567 million.

In March last year, Vistra had completed the acquisition of Energy Harbor, and the first-quarter performance this year was aided by "two additional months" of results from the nuclear utility.

Its adjusted core profit from ongoing operations rose to $1.24 billion compared to $810 million a year earlier, helped by higher prices and strong retail performance.

The utility expects load growth to increase at an annual rate of nearly 4% through 2030 with data centers accounting for about 40% of new demand.

Besides new plants, existing assets will also need to increase power generation to meet the growing demand from data centers, the company said.

U.S. utilities are already fielding massive requests for new power capacity, with many receiving inquiries from data center companies for volumes of power that exceeds their existing generation capacity.

The Irving, Texas-based company posted a net loss of $268 million for the three months ended March 31, compared with a net income of $18 million a year ago.