Energy is priced in CAISO utilizing an LMP methodology. The capacity market is comprised of Generic, Flexible and Local Resource Adequacy (RA) Capacity and is administered by the California Public Utilities Commission.Commission (CPUC). Unlike other centrally cleared capacity markets, the resource adequacy marketmarkets in California is aare primarily bilaterally traded market.markets. In 2020, the CPUC introduced a central procurement entity for Local RA Capacity effective for the 2023 compliance year. The central procurement entity runs a pay-as-bid auction for Local RA Capacity. In November 2016, CAISO implemented a voluntary capacity auction for annual, monthly, and intra-month procurement to cover for deficiencies in the market. The voluntary Competitive Solicitation Process, which FERC approved in October 2015, is a modification to the Capacity Procurement Mechanism (CPM) and provides another avenue to sell RA capacity.

— Our wholesale commodity risk management group is responsible for dispatching our generation fleet in response to market needs after implementing portfolio optimization strategies, thus linking and integrating the generation fleet production with our retail customer and wholesale sales opportunities. Market demand, also known as load, faced by electric power systems, such as those we operate in, varies from moment to moment as a result of changes in business and residential demand, which is often driven by weather. Unlike most other commodities, the production and consumption of electricity must remain balanced on an instantaneous basis. There is a certain baseline demand for electricity across an electric power system that occurs throughout the day, which is typically satisfied by baseload generatinggeneration units with low variable operating costs. Baseload generatinggeneration units can also increase output to satisfy certain incremental demand and reduce output when demand is unusually low. Intermediate/load-following generatinggeneration units, which can more efficiently change their output to satisfy increases in demand, typically satisfy a large proportion of changes in intraday load as they respond to daily increases in demand or unexpected changes in supply created by reduced generation from renewable resources or other generator outages. Peak daily loads may be satisfied by peaking units. Peaking units are typically the most expensive to operate, but they can quickly start up and shut down to meet brief peaks in demand. In general, baseload units, intermediate/load following units and peaking units are dispatched into the ISO/RTO grid in order from lowest to highest variable cost. Price formation is typically based on the highest variable cost unit that clears the market to satisfy system demand at a given point in time.

As of December 31, 2020,2023, we had approximately 5,3654,870 full-time employees, including approximately 1,6401,200 employees under collective bargaining agreements.

In May 2015, the EPA finalized a rule requiring 36 states, including Texas, Illinois and Ohio, to remove or replace either EPA-approved exemptions or affirmative defense provisions for excess emissions during upset events and unplanned maintenance and startup and shutdown events, referred to as the SIP Call. Various parties (including Luminant, the State of Texas and the State of Ohio) filed petitions for review of the EPA's final rule, and all of those petitions were2020 rules have been consolidated in the D.C. Circuit Court. In April 2017,Court, where we have intervened in support of the D.C. Circuit Court orderedEPA. We are in compliance with the caserule, and the retirements of our Monticello, Big Brown and Sandow 4 plants have enhanced our ability to be heldcomply. The EPA is in abeyance. In April 2019, the EPA Region 6 proposed aprocess of reconsidering the BART rule, to withdrawand the SIP Call with respect to the Texas affirmative defense provisions. We submitted comments on that proposed rulemaking in June 2019. In February 2020, the EPA issued the final rule withdrawing the Texas SIP Call. In April 2020, a group of environmental petitioners, including the Sierra Club, filed a petitionchallenges in the D.C. Circuit Court challenginghave been held in abeyance pending the EPA's final action with respect to Texas. Briefing is currently underwayon reconsideration. In May 2023, a proposed BART rule was published in the challenge toFederal Register that would withdraw the EPA's action with respect to Texas. In October 2020,trading program provisions of the EPA issued new guidance on the inclusion of startup, shutdownprior rule and malfunction (SSM) provisions in SIPs, which is intended to supersede the policy in the multi-state SIP Call. The guidance provides that the SIPs may contain provisions for SSM events if certain conditions are met. The EPA SSM guidance is subject to the Environment Executive Order discussed above.

In December 2018,June 2021, the Sierra ClubIllinois Attorney General and the Vermilion County State Attorney filed a complaint in Illinois state court with an agreed interim consent order which the IPCB allegingcourt subsequently entered. Given the disposalviolation notices and storage of coal ash at the Coffeen, Edwards, and Joppa generation facilities are causing exceedancesenforcement action, the unique characteristics of the applicablesite, and the proximity of the site to the only national scenic river in Illinois, we agreed to enter into the interim consent order to resolve this matter. Per the terms of the agreed interim consent order, DMG is required to evaluate the closure alternatives under the requirements of the newly implemented Illinois Coal Ash regulation (discussed below) and close the site by removal. In addition, the interim consent order requires that during the impoundment closure process, impacted groundwater standards.will be collected before it leaves the site or enters the nearby Vermilion river and, if necessary, DMG will be required to install temporary riverbank protection if the river migrates within a certain distance of the impoundments. The interim order was modified in December 2022 to require certain amendments to the Safety Emergency Response Plan. In June 2023, the Illinois state court approved and entered the final consent order, which included the terms above and a requirement that when IEPA issues a final closure permit for the site, DMG will demolish the power station and submit for approval to construct an on-site landfill within the footprint of the former plant to store and manage the coal ash. These proposed closure costs are reflected in the ARO in our consolidated balance sheets (see Note 22 to the Financial Statements).