Good morning my name is Mike and I will be your conference operator today. At this time I would like to welcome to the Vistra Energy First Quarter 2017 webcast and conference call. [Operator Instructions]. I will now turn the call over to Molly Sorg, Vice President, Investor Relations. You may begin your conference.

Thank you, Mike and good morning everyone. Welcome to Vistra Energy's first quarter 2017 investor conference call which has been broadcast live via webcast from the investor relation section of our website at www.vistraenergy.com. Also available on our website are a copy of today's investor call presentation or 10-Q and the related earnings release. Joining me for today’s call are Curt Morgan, President and Chief Executive Officer, Bill Holden, Executive Vice President and Chief Financial Officer, Jim Burke, Executive Vice President and Chief Operating Officer and a few additional senior executives available to address questions in the second part of today’s call as necessary. Before we began our presentation, I encourage all listeners to review the Safe Harbor Statements included on slide one and two which explain the risk of forward-looking statement and the use of non-GAAP financial measures. Today’s discussion will contain forward-looking statements which are based on assumptions we believe to be true only as of today’s date so which are subject to certain risk and uncertainties that could cause actual results to differ materially from those projected or implied by such forward-looking statements. Further, our earnings release, slide presentation and discussions on this call will include certain non-GAAP financial measures. For such measures reconciliation to the most directly comparable GAAP measures are in the earnings release and in the appendices in the investor presentation. I will now turn the call over to Curt Morgan to lead our discussion.

Thank you, Molly, and good morning to everyone on the call today. We appreciate your interest in our company. Before we jump into the slides I would like to make a few opening remarks. In addition to Bill Holden you Jim Burke will be joining us. We would like to begin what we expect to be a series of discussions during our earnings calls on topical matters relevant to Vistra and the overall power industry. On this call Jim Burke our Chief Operating Officer will cover our retail business, a topic of much interest from current and perspective investors and equity analysts. It is our hope that you will enjoy these periodic topical discussions and of course we hope these discussions will assist the market in understanding the value proposition for Vistra Energy. It is our view that our retail business is the cornerstone of Vistra today and in the future. Our retail operations combined with our high performance integrated power generation fleet and commercial team and our very strong balance sheet and industry leading conversion EBITDA to free cash flow as compared to our peers leads to what we believe is a unique and attractive investment opportunity in Vistra. With that we will begin our discussion today on Slide five of the deck that we have sent out with a brief highlight of our first quarter results. Adjusted EBITDA for the quarter was 276 million, a strong quarter despite headwinds from a mild Texas winter. Even though first quarter results came in marginally lower than we would have expected in a normal weather year we are reaffirming our full year adjusted EBITDA and adjusted free cash flow guidance ranges for 2017. We are comfortable with our previous guidance ranges for the full year 2017 with our highest EBITDA and…

Thank you, Curt Morgan. Let's start with some fundamentals on the ERCOT retail market and specifically why we believe it is the most attractive market in U.S. Now turning to slide 10, ERCOT was a large and growing electricity market, it represents about 31% of the competitive served load in the U.S., about 250 kw hours and the consumption per residential customers 32% higher in ERCOT in the rest of the country. Moreover its projected to continue to grow, it's been growing at 1% to 2% annually and we expect that to continue with the strong economy. Many other markets are actually shrinking. One thing to note about other markets that is a positive for them they actually have competition in many markets in electric and gas. ERCOT is honestly focused on the electric competition. Nevertheless the electricity market structure and ERCOT is in our view the most constructive for retail competition particularly those with a strong set of capabilities. For example in ERCOT the retail electric provider has full ownership of the customer relationship including performing the billing function in customer service with the exception of outages which is handled by the wireless company. This ownership gives up the direct customer relationship that allows TXU Energy to proactively manage the customer experience for example. We just launched the free night and solar days plan that Curt mentioned. We have the systems to handle the time of use build, manage the 15 minute interval data, display that usage on mobile devices and gauge the customer on usage patterns. In other markets these plans would be challenging to manage if you could even launch them given the interface for billing and services is largely through the regulated wireless company. In addition these regulated companies offer a default to provider of last…

Thanks, Jim. Good morning to everyone. Since we allocated the portion of the call today to the retail discussion I'll be brief with our financial comments. Turning to slide 14, Vistra Energy delivered adjusted EBITDA in the first quarter of 2017 as $276 million of which Luminant contributed 96 million and TXU Energy contributed a 177 million. As Curt highlighted in his remarks the mild first quarter weather had minor impact on Luminant as we were largely hedged for the quarter and operated with high commercial availability. TXU Energy's result were affected by lower volumes that resulted from the mild weather in the quarter but the impact of the lower volumes was partially offset by TXU Energy's strong margin management and the customer account performance. We remain comfortable with our 2017 guidance ranges and still expect full year adjusted EBITDA in the range of 1.35 billion to 1.5 billion and adjusted free cash flow in the range of 745 million to 925 million. Turning to slide 15, we have updated our hedged profile and related sensitivity as of April 21, 2017. As you can see we're nearly fully hedged for this year materially mitigating the impact of natural gas and heat break movements to our financial results. And finally as you can see on slide 16 we have had no changes to our capital structure since our March 30 earnings call and our leverage remains the lowest among our peers in the industry. We're always mindful of our total leverage and we'll continue to be diligent and are now at the growth opportunities to ensure that we are transacting at the right value while maintaining a healthy balance sheet that will provide flexibility to allow us to stay on the right side of market cycle in the years to come. With that Operator we're now ready to open the lines for questions.

[Operator Instructions]. Your first question is from Ian Zaffino from Oppenheimer.

This is Mark on for Ian. So I guess I'll follow on the acquisition of Upton Solar asset, are there any specific asset types that you guys are looking more deeper into for additional solar or are you guys still open to I guess like what the market is offering or maybe CCGT assets given the heat environment environmental currently.

So I'll start with the last part of that first. We're and I think we have expressed this pretty clearly in ERCOT that we're interested in additional combined cycle plants and I'll just say that we're actively looking at opportunities in ERCOT. We think this would be a good time to acquire and so we'll see if that proves out but we're going to try to remain as I've said we're going to remain disciplined around this, it's not something we have to do but something we certainly would like to do and we think we're matching up with a good time in the cycle they will do it. As far as additional total projects I want to be very clear that this was largely driven out of demand from our retail side of our business that we see and so we started this project around that. We would not have built this on a merchant basis wholesale business and so I think what we're going to wait and see is if the demand is actually even greater than what we think it is and what we know now could we do another project, yes, but it's not the beginning at this point in time is you know a Vistra Energy build-out in Texas of merchant solar projects. We wanted to dovetail with our integrated business and the integrated economics are quite compelling.

And then just a little bit on the private equity activity, are there I guess any specific assets that they are looking at or is it, they are kind of going forward anything that attracted to them as well? Thank you.

So broadly speaking what we have seen previously is some of the smaller single asset may be some of the sale of assets that, coal plants, CCGTs coming out of some of the utilities. We did notice the private equity firms were heavily involved in those, they were more bike sized, probably more to their liking and we also know the private market valuations transactions were significantly higher than where the public market values were and are and so I think for a couple reasons we would not choose necessarily to buy individual assets, one we think the valuations are too high and we've got a tough way to sort of build out the kind of scale you want to be able to compete in markets like PJM and [indiscernible] and have been in those markets for a long time. You need to have a seat at the table if you're just one of many -- one asset in large markets you really don't have a lot of opportunities to influence things and I think that's very important. What we've seen recently though I think was a bit of a departure. I'm not sure how it all happened whether [indiscernible] was approached by a private equity firm or whether they approached it private equity, I don't know that really matters but we have now seen the private equity firms at least we see the same rivers everybody else does that there is a process going on Calpine is in it and they have thrown themselves into that put themselves in play and that they're taking a look at whether they sell the company, that's their decision, their boards decision but what I think you did change potentially is that the herd tends to move together and would that mean that other publicly traded IPP's might also look at that and be involved in that. What I said earlier and I will say it is -- we're not going to get caught up on some furore of a competitive process and overpay just to go outside of ERCOT, we're pretty comfortable with our position if there's a compelling value opportunity for us, we will absolutely look at that and we'll see where that goes but I think that's really where we are on that issue.

The next question is from Mike Weinstein from Credit Suisse.

I wanted to ask about net attrition in the retail business, if most customers are sticking or have 92% have already chosen the suppliers, so they're choosing you by choice even in your own territory. If most customers are sticky how does the negative attrition rate flatten over time and I see it is flattening but how does it eventually go away without people switching as much as they used to?

Well it's a good question Mike. I would say there's a couple things underneath really any of the retail businesses in Texas .First of all, Texas is a very active marketplace so I think one of sort of mysteries around Texas is are people going to wake up to choice. People have been choosing for the 15 years and market cycle, people come in with new offers and they make a splash and some people might be interested in it but the market had a fundamental churn rate underneath it because there are 7 million meters about six of those are residential we obviously have a very intense focus on the residential segment, it's not the easiest to serve but it’s a segment we do well but there's nearly 3 million moves and switches every year in ERCOT really regardless of how much activity we TXU Energy might be generating. So we have to be active, you have to have a ground game, you've to have an air waves game, you have to have a digital game and you have to sort of meet the customer at their moment of choice. So people are constantly moving to Texas, they're moving from apartments to homes, they are moving between cities. That's really the most frequent move activity. So when you think about churn it isn’t about people sitting at home deciding today is a good day to switch my provider. There's usually a life of it, and when a life event happened it's a chance for people to reconsider all their choices not just electricity. So I don't know if churn will ever go to zero, I can tell our goal as a company is to be as flat as we can and also grow, but when you are the market share leader and one of the most profitable retailer in Texas it is hard to be a share leader, a profit leader and grow. So we look at maintaining sort of our shares in this market as a really good position to be and we're going to look for growth opportunities more tactically.

Yes, so Jim I will add something to this. One when we think about capital allocation and growth we also are looking at the retail side and I think in our segment the sort of brand loyal type segment I think the way that we would have to grow that I think we think the economically is wait for the right time of the cycle do an acquisition. However the other thing we've done is we've entered the market in different light with different brands that actually -- so those brands are getting at the different needs of the different customer segments and so we had this -- I think you guys know we had four change, we just announced Energy Express and we'll look at that -- we'll continue to look at brands and how we fill out the needs of customers and we do believe over time as we fill that out we will ultimately grow a customer base on an overall basis but I think when you're talking about the TXU Energy brand, the only way to really I think to grow that is to buy somebody who is in that segment of the market and then over time rebrand TXU Energy, we're open to that. We don’t think this is the right time to buy retail because of where wholesale prices are and there is not a lot of fear in the market but when we see another price spike which I know that everybody -- don't hold your breath when we do which I believe will happen in Texas that will shake the tree a little bit as it always does in Texas and that's when the right time to look at retail acquisitions.

So if I hear you right I mean it would be wrong to maybe focus too much on customer counts when you're more focused on margin per customer?

Yes exactly, right. You see that on Jim's slide, slide 12, while we have had a decline net attrition our EBITDA has been really been stable and interestingly in the last two years we've been over $800 million a year and yet we've been and this is what I think the unique side of it is with our innovation and product offerings was actually gotten that net attrition out to 1%. So we think that are probably what we can see in the future out of this business but I think growing customer count overall will probably come by positioning different brands along sort of the chain and we're doing at by introducing new brands and we will probably will do another one either through an acquisition or will start up an organic brand to try to compete with different segments in the market.

On the other side of the business, can you talk about how the cost of scrubbers environmental controls has been changing over the past few years where it sits now, like how is that affecting your analysis and without revealing how the analysis is actually turning out I understand that’s one of the process, but how is it affecting the analysis of plant retirements?

Well a couple of things on that, we really haven't seen much of a change but we actually haven’t been actively out there trying to hire somebody to put scrubbers on to this. I can just assure you that they're probably $100 million plus a pop. We're not putting scrubbers on some of the older plants, if that were to rear its head in the near term I think that would make a decision pretty easy of what we do with these coal plants. I think this kind of cool off a little bit in the EPA process, but they are still as you guys I mean as you guys -- you always do is read our financials and we will go in the legal section. I mean there is still a bunch of tax on our coal business and we're going to have to play those out. But I think we would generally say there's less pressure and probably the time to implement anything out of having EPA has moved out in time but that's not really the driver, the driver for the challenge in our business [indiscernible] one is an overbuilt market and so depressed heat rates and gas prices have been I guess you could say historically low and so when you combine those two things that combined for a really tough market and that's what's putting pressure on our coal fleet and as they age just the pure maintenance and outage CapEx is high. We have been trying to manage that as best we can but you've got to put money in the power plant you can't starve them or you will start having very significant forced outages but more important to me is you can start to create safety issues. So this is why it's really important when you decide whether you are going to stay at a plant, if you're going to do you also have to then agree that you're going to put money into it and that’s the challenge for us right now in this current heat rate and gas price environment some of these coal plants are challenged.

And if these plants are I assume are less efficient than new plants, so if they retire the average heat rate for the region should actually go down right, would that be harmful situation to margins overall or?

No I don't think that -- I don’t believe that’s the case, they are run predominantly in the summer and so what it does is it takes capacity out. They're coming in and they're actually coming at a lower heat rate. So when you have higher demand you've got 12, 14 heat rate peaking plants and gas steamers that are coming on and selling the price, this takes out the wedge and you get quicker into that part of the stack which means your selling price at a higher heat rate. So it actually has exact opposite of what you were saying.

I see, it pushes the whole curve steeper is that what you're saying really.

Yes, it does. It gets into the higher heat rate or [indiscernible].

The next question is from Julien Dumoulin-Smith with UBS. Your line is open.

First quick question, I noticed the CapEx reductions, can you elaborate a little bit more of the source of those and then also try to tie it to the extent to which you can tie those back into the ongoing O&M reductions that we've been talking about. To what extent is this kind of a sneak peek or does -- is this really kind of separate and distinct from your other efforts here?

Yes, you're talking about the operational performance? Bill?

Yes, I think just to the last part of I think it is separate. And just to put this in context you know the total reduction in CapEx that we're forecasting for 2017 is 48 million. There's two components of that, one is in the non- recurring capital expenditures which is lower by 15 million that’s principally related to the cost associated with the consolidation of our corporate headquarters. The other 33 is related to CapEx that the legacy plants, those dollars essentially are being re-classed from capital expenditures to O&M, as you may recall that is part of the fresh start reporting valuations of those plants came in essentially at zero value. So they're now recorded at zero book value on the balance sheet. So the result of that is what would have previously been CapEx of those plants is now being classified as O&M. So if you look forward I think if you assume no changes to the composition of the fleet then I think you would expect this change would carry over in the form of lower CapEx but wouldn't necessarily be a change in cash to the extent the spend continues as most dollars would show up and O&M instead. The one other point I would add is just given the work that Curt mentioned that we're doing around the plants to make sure we can get to the right conclusion on their future. You should expect in the short and intermediate term we are managing very tightly the expenditures on those plants and make sure that they pay back given the uncertainty around the futures.

Got it. But just to understand reaffirmed your EBITDA range to the extent to which that the CapEx was reclassified into O&M, is that kind of an implicit improvement in your EBITDA guidance given that you're now reflecting higher O&M in that guidance range? Or is that again within the noise?

I think it is generally within the noise and we were moving -- CapEx is now going to be O&M but Curt mentioned other things that we have in process and I think those things sort of balance each other out.

Also make sure Julien what you said its actually that we will be pushing us you would think all things being equal to lowering EBITDA--

Having that the expense is classified.

Yes, the expense is classified and O&M. But we're confident even with the first quarter be a little bit below where we would like to come in and with that we're still confident that we are in the range and we're still confident that we're still think that this point is a good place for us.

Got it. My point rather was that the guidance being reaffirmed at that level was an offset that was giving you that confidence but I'll leave that aside. Coming back to the solar project, I just want to clarify the 180 megawatts is this separate and distinct from the 116 you talked about a couple of years ago with Sun Edison, also Upton category is this the very same project and related to that how do you think about the economics and the return profile and or EBITDA contribution from this investment?

Yes. So the Sun Edison project, I wasn’t here, so if you remember this.

Yes, Julien this is Jim we did have that project, if you remember just a PPA type structure and that project we effectively terminated and so this initiative came about as part of the effectively the same opportunity but with a new partner and obviously we're taking an ownership position and it's actually bigger as you noted. So economics are improved for us because the solar economics have continued to improve overall to see the net PPA was originally structured.

Got it. What about return profiles, how should we think about like total size of investment and EBITDA contribution or something like that?

Julien I just want to make sure I have my numbers right, so the investment is about $240 million. We expect to project, finance the deal so we will be I think around $130 million equity investment we think that's the kind of the leverage there. And I think was there anything else in that? And then on the returns we typically will go out tell people what our returns are but I will tell you that on an unlevered and levered basis we typically look at significant headroom between our cost of capital and our hurdle rate, on an unlevered basis somewhere in the 500 to 800 basis points higher and then on a levered basis about sort of 1000 basis points higher than our cost of capital and so I can tell you the mat was exceeded that return criteria. I'm not going to give what our cost of capital is that most people can probably you know [indiscernible] going back into what it is but the bottom line is very attractive returns.

The next question is from Michael Sullivan from Wolfe Research.

So just maybe firstly on the capital allocation plan and some of these opportunities that you guys are looking at maybe on the asset level basis, just wanted to get a sense is there any predetermined or idea of a time horizon there and if you don't see a compelling opportunity when you could potentially start to look at a dividend or share repurchase program?

I think the ideal for is near term and when I say near term I think we are you know looking between you know sort of now and the end of the year that we will hopefully find some opportunities. There's a number of reasons for that but you know I think that’s the sweet spot in our mind of when we believe we will be able to find opportunities and be able to transact and so I think that's where we are. So then you could -- we're constantly thinking about -- so I should say we always think about whether we should buy back or stock, the one thing that prohibits us at this point in time from buying back our stock is part of the tax matters agreement when we exited bankruptcy with AFH is that typically when you do the busted three--

Right and then the tax we spin off that was affected as part of the--

Yes for the number but when you step up the bases to be try to be simple because this is esoteric stuff but that there is about a two year grace period typically before you can buy-back your stock and it gets in all kinds of reasons, why that is the case but let's just it's sufficed to say that is the case, everybody knew what was going in. However there are pass where you can work with EFH or with IRS to try to find a path forward where you can do it sooner than that, we believe the best approach on this right now because part of it -- if we deal with AFH we thought we could part of the oncore transaction that clearly is uncertain and so we decided to now go to the to the IRS but it's going to take six months to come up with the answer. We believe we have a very good chance of being able to buy back our stock. We started this a little bit ago and so we hope to be able to be in a position to at least repurchase stock after that six month period which actually is not a bad time frame with what I talked about in terms of acquiring assets in ERCOT. And then just a dividend policy you know I think that will happen you know that's probably 2018 fodder, but we'll see how quickly things move. I also believe we can do, I don’t want to make this completely mutually exclusive. So I think we're really trying to just make sure that we understand the opportunity set from a growth standpoint but I think once we've kind of work through what we think is a good time in the cycle I think we believe ultimately that we'll be able to potentially do both and we will look to do that and our cash flow conversion from EBITDA to free cash flow is quite good and with unlevered balance sheet by anybody's opinion. I think we will be able to potentially do that but that's something the board will have to talk about it and will have to figure out how we do that.

And then secondly just and this may be both kind of tied to really the seasonality of the business but just want to check just on the free cash flow first that the negative 48 million for the Q1 that's kind of typical for Q1 for you guys and then secondly you showed this realized versus settled prices in prior years for the whole year you guys have averaged about 80% and then in Q1 its only about 50% higher. So just on kind of both of those topics just want to get a feel for how much of that is driven by seasonality and if there's any other kind of external factors involved?

I'll take the one on the free cash flow and then on the realized prices I will turn it to Jim, but I think you had it right. Most of the adjusted free cash flow for us would typically be realized and the second through fourth quarter as opposed to Q1. But there are a couple of items also that tend to occur every year in Q1 that are large uses of cash because they're paid in Q1 and that would be property taxes for example we paid 96 million of property taxes at the beginning of the year and those are only paid generally once a year, so they just happen to show us in Q1 and then consistent with the way most companies handle incentive compensation, all of the annual incentive payments are paid during Q1 as well and so that was a little over $80 million of cash. So I think those are probably the two largest items in addition to just the seasonal profile of the business.

Michael you asked the question about realized prices, there are different opportunity set if you will for realizing prices greater than settled prices typically more in the summer months than the first quarter but I would also have to just say that generally speaking you know this '17 and '18 with new build is coming on has been what I will call has been less volatility and overall lower wholesale prices so you can't ignore that back. So I would expect this to come in with what I think is 55% plus realized prices for '17 above settled, I don't know that we will hit 80% but we'll still be above that but I wouldn’t be surprised to see something lower than 80 just because of the overall volatility and the overall just lower heat rate and price environment. So I think that’s the big driver. Higher volatility obviously is our friend and we take advantage of it, we've just seen this has been a more lower volatility period of time.

The next question is from Ali Agha from SunTrust.

I understand the points you made being very disciplined in terms of allocating capital, looking for acquisition opportunities but from a strategic perspective when you think about either A, expanding into taxes or B, diversifying out of taxes strategically what is more important to you right now?

We have emphasized ERCOT over-looking outside of Texas for a number of reasons from -- I believe one that with the integrated nature of our business you know the margins we can get from the wholesale group to the retail group are higher. We also obviously know this market as well as anybody and so we think that we have good visibility into where the market is going to go and we're major player in where it goes ultimately. But I think probably more importantly is the market is cycling and when you have bankruptcies and strategic players wanting to get out and you see the market beginning to turn not a lot of investments being announced and we wouldn't expect any in the future frankly zero on the combined cycle, plant side of things that you see that the market has finally reached a point where there is a capitulation and that's usually a good sign that we're going to go into a phase where there is disciplined investment in the market because people are seeing what happens when you're undisciplined and invest in the market and so I think that is a key element and so that goes hand in hand with we think attractive pricing in the marketplace which is why we've been more, we just think the better opportunities are here. We also I know PGM, I have competed in it, ISO New England quite well, all those markets. I would say that if you just take those markets separately number one PGM unfortunately there are still -- developers are still successfully selling the story of a long term basis differential advantage and each technology turbines are continue to be put-in in the Marcellus and Utica area sort of at a record pace, all with the…

And one other question I had and you alluded to that, its an interesting time for you to be fully listed here at a time when your closest peers are sort of floundering and perhaps looking at the private market. When you look at those valuation differentials you talked about as well. Longer term do you think that public market is the right forum for an IPP business?

That’s a excellent question one that I have pondered. I mean you probably know that I came out of private equity Energy Capital Partners and I like that that because you had access to capital when no one else did and you were on the right side of the cycles and when markets got tough if you had -- and you had debt you had a cure, you know you could access capital instantly where as you guys know, if you're under a financial stress you're in distress you can't access equity markets in the public market. But I will go back to say this, I think we did this to ourselves and we created that situation. I still think you can be successful as a public market company, but I think you can't carry the kind of leverage that these companies have been carrying. I think that is the one thing I would say has been the reason -- the reason that we put ourselves in that place and when you get into a vicious cycle because when you're over levered and the cycle is good you then think you can put more leverage on because your stock price is up, your equity value is up and you think you debt capacity and so you finance acquisitions and growth at the height of the market because the stock prices are correlated heavily with commodity prices and you're out there buying at the absolute wrong time to be buying it's when prices are at the highs and then when the market the bottom falls out you've got too much leverage and then you're faced with the prospect of actually having to sell some of your core assets, that’s a business cycle and not the one, and when I was in private equity we were on the other side of that cycle. We were buying when they were selling and so -- but I don't think that’s a product of private equity or public I think that is a product of the fact that we have been over levered and that has created an environment where the only time you really feel like you can do something is at the top of the cycle but that's not the time to be doing which is why we were so focused to try to keep our leverage down for our business and so that we can be opportunistic that we can do that. So I think you can be successful as a public company here if you do it right.

The next question is from Mitchell Moss from Lord, Abbett & Co. LLC.

Just wanted to discuss which one of the Waha gas basis, lot of us familiar with some of the pipelines that are going to be build, do you see some of the gas going into sort of the North Texas Houston area or is most of the take away going further west?

Well right now or do you mean?

Once the pipeline is built I guess.

Yes, the pipelines are really trying to find their way to Mexico in a big way and they're also trying to find their way east and south potentially to Gulf Coast, LNG export but that’s where they are trying to find their way to and not so much west.

Okay. So I guess there could be -- are you saying there could be some pressure then on Houston ship channel prices as well as that gas moves in?

Not really because so you guys know this -- I mean if you go down in the Houston area it's like spaghetti city and what's going -- in regard again we're talking about the benchmark still Henry Hub, what is likely to happen is that thing will equilibrate rather quickly in that part of the world because it can move north, south, east and west. What might, if there were some -- if somehow gas trapped in the Houston ship channel which we cannot come up with that scenario, we just don't see it. You might see something like that but that scenario just really doesn't exist that we can see with all of the pipeline down there and the way things are done typically work it will find a way to equilibrate across Texas and up into Henry Hub over into Louisiana and it just will and so there is enough pipe that it can happen naturally, you don't really need a lot of build out once the gas gets down.

Okay. Just on modelling, looking at slide 20, I'm pretty familiar with the Forney and Lamar assets from before Vistra acquired them and I'm trying to understand the 6600 heat rate because I know that part of the capacity for both the plants is sort of peaking in dock [ph] firing. So can you just give us a sense on what megawatts or how we should think about the heat rate numbers for the full plant specially also because 6600 seems to be you know sort of a new build-ish number and these plants are also I think 12 or 13 years old.

When we purchased together and you're always trying to figure to figure out what benchmark is the most relevant one to use, this is the heat rate without the debt firings so below -- but we also want to assure the full capacity we want to get the chart too busy. So that heat rate its most efficient use without the [indiscernible] that heat rate would degrade it. I think the heat rate on Forney is around 8500 and about 8000 at Lamar, I don’t know if you knew that but that’s what it is. These are [indiscernible] so they fire at higher temperatures which allows for a lower heat rate and we've got a good success on the heat rate side of thing, so that was next step before they went in the age of technology to really bring down the heat rate. I think the all-in heat rate if you're doing the CT peak firing the supplemental duct firing [ph] you'll get into the 7100, 7200 overall for the whole unit and as maybe more in line with what you were thinking about max capacity.

Okay. And when I think about how many megawatts is the duct firing or how many megawatts is sort of the base configuration something you know just to figure out how much is actually at the 6600 heat rate?

I don’t remember, do you guys?

I can follow-up offline if that’s--

We can get around 340, its around 55 to 60 at Lamar.

The next question is from [indiscernible].

Just in-line with the questions about leverage, what do you think is the ideal leverage that you would like to target?

I think we have said before I think we still stick by it and Bill if you want to jump in too but I think what we've said is this is our gross basis and we will talk a little bit about that but on a gross basis we have said we'd like to be in the three to four times and so we will pick the midpoint of that, we think that 3.5 on an ongoing basis. Now that all depends on whether we buy something to get to the 3.5 that we feel good about and creates value, we have also said that we would be willing to go above slightly above the full range for a compelling transaction with the idea though given our cash flow that we have that within a year we'd be down on gross basis in the low 3s. Generally speaking we've got about a turn I guess or so roughly from gross to net that could vary over time but let's just say that, but that's not how we feel about and the reason we feel strongly about what I've just went through the whole [indiscernible] why we think lower leverage is important in our sector but we also believe it leaves us the ability from a dry powder standpoint to be opportunistic and look for opportunities to grow our business. We don't want to be casted out and then be faced with the prospect of even having to divesting. I think we feel like that on an ongoing basis that’s kind of three to four range well just say 3.5 feeling very comfortable on a gross basis.

And there are no further questions at this time. I will turn the call back over to the presenters.

Well thanks for your time and we look forward to seeing you somewhere along the way until our next earnings call for Q2. As we said before we appreciate your interest in our company and look forward to the future. Thank you.

This concludes today's conference call. You may now disconnect.