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Utilities may need to evolve rapidly; investors shun Appalachian gas drillers

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Utilities may need to evolve rapidly; investors shun Appalachian gas drillers

Top News

Utilities may need to look more like tech giants to grow

The staid U.S. electric utility sector may need to evolve rapidly to develop home energy services offerings attractive to retail customers or risk seeing that avenue for growth cut off by more agile consumer-facing technology firms.

Investors shun Appalachian gas drillers despite pledges of discipline

Investors are not reacting positively to Appalachian shale gas drillers' pledges to cut spending while producing more gas in a glutted market, sending share prices for the top 10 publicly traded Marcellus and Utica shales drillers lower in the new year.

Cloud Peak CEO finds exports only option for growth as US coal market calms

Two weeks after announcing an export deal to supply two new integrated coal gasification combined-cycle coal-fired power plants in Japan, Cloud Peak Energy Inc. CEO Colin Marshall told S&P Global Market Intelligence that the global market offers the only room for real growth as domestic demand for thermal coal levels out.

Power

* Florida Power & Light Co. could become the first U.S. utility permitted to operate a nuclear plant for 80 years. The NextEra Energy Inc. subsidiary is seeking a second 20-year operating license for the two units at its Turkey Point nuclear plant.

* The Trump administration has withdrawn the nomination of Kathleen Hartnett White as head of the Council on Environmental Quality on her request, The Washington Post reported.

* A new study commissioned by the U.S. Department of Energy recommends that federal agencies be allowed to enter into 30-year power purchase agreements with operators of small modular reactors to help encourage development of the technology.

* Steve Kopec, a home contractor and the husband of a former Trump household aide, has been appointed as a special assistant at the Environmental Protection Agency's Region 2 office in New York, Politico reported.

* The Massachusetts Department of Public Utilities issued an order approving rates lower than initially requested by Eversource Energy subsidiaries NSTAR Electric Co. and Western Massachusetts Electric Co. The DPU said the order will also lead to investment in clean energy technologies, reductions in greenhouse gas emissions and improvements in infrastructure resiliency.

* Tesla Inc. has been tapped by Australia for a virtual power plant project, Bloomberg News reported.

* The Oklahoma Municipal Power Authority has filed a complaint over what it alleges as an unjust and unreasonable formula rate used by Oklahoma Gas and Electric Co. to determine transmission service charges in Zone 7 of the Southwest Power Pool.

* A new study by University College London found that industrial electricity prices in the U.K. are 33% more expensive than their European counterparts, according to the Financial Times.

Natural gas/Oil

* New Jersey Gov. Phil Murphy has declared his support for banning hydraulic fracturing in the Delaware River Basin.

* Staff of the Federal Energy Regulatory Commission found that a WBI Energy Transmission Inc. project to remove natural gas from a Wyoming gas storage field and then shut it down would provide operational and environmental benefits with minimal environmental impact.

* Breitburn Energy Partners LP received a $1.8 billion cash offer from Lime Rock Resources, Reuters reported.

* Shrugging off unimpressive downstream financial results in the fourth quarter of 2017, Chevron Corp. said it will continue to focus on expanding its upstream assets, increasing production and improving cash flow to bolster its bottom line.

* Attorneys general of 12 states called the proposed offshore drilling program a "disregard for vital state interests, economies, and resources" in their letter to Interior Secretary Ryan Zinke. The attorneys general also announced plans to submit formal comments on or before March 9 if the draft proposed program is not terminated.

* Separately, Zinke had scheduled meetings with South Carolina Gov. Henry McMaster and North Carolina Gov. Roy Cooper last Friday and Saturday, respectively, to discuss the proposed offshore drilling program, The Associated Press reported. Both governors are opposed to the plan.

* Exxon Mobil Corp. sees "little risk" from aggressive climate policies to its investments, emphasizing that oil and natural gas will "continue to play a critical role in meeting the world's energy demand," The New York Times reported.

* ConocoPhillips sold its Kenai LNG facility in Alaska to Andeavor, marking its exit from the Cook Inlet region, according to Reuters.

* President Donald Trump will again ask to eliminate the U.S. Chemical Safety Board in his 2019 budget proposal, Bloomberg News reported, citing "a senior government official familiar with the plan."

Coal

* A federal bankruptcy court approved the sale of many of Armstrong Energy Inc.'s assets to an affiliate of Murray Energy Corp., and approved Armstrong's reorganization plan.

* Extending tax credits, easing regulations on bonding and mine safety, and erasing utility requirements for renewable energy usage are among the coal industry's state legislative priorities this year.

* The Interior Department apologized for a claim by Deputy Interior Secretary David Bernhardt in an opinion piece in the Grand Junction (Colo.) Daily Sentinel that the Obama administration blocked the approval of West Elk and King II coal mines, The Hill reported. Both projects were excluded from the moratorium imposed by the previous administration on new leases for coal mines.

Commodities

* Following a 1.0-cent slump to a finish at $2.846/MMBtu ahead of the weekend, NYMEX March natural gas futures attempted to trade in shallow positive territory overnight leading up to the Monday, Feb. 5, open, as technical buying ran against fundamental pressure. However, the market ultimately turned lower again. At 7 a.m. ET (1200 GMT) the contract was 1.0 cent lower at $2.836/MMBtu.

* Price activity for day-ahead power could unwind in the week's opening session Monday, Feb. 5, as traders consider predominantly softer demand outlooks for Tuesday.

* The clearing price in the upcoming 12th annual ISO New England forward capacity auction could come in lower than the prior year's $5.30/kW-month due to a number of new market developments.

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New from RRA

* A final resource assessment issued Feb. 1 by the Connecticut Department of Energy and Environmental Protection, or DEEP, and the Connecticut Public Utilities Regulatory Authority, or PURA, permits the Millstone Nuclear Power Station to compete in the state's renewable energy procurement, "with certain conditions to ensure that the state's ratepayers are protected from paying above-market costs for resources that are not verified to be at risk of retirement."

Quoted

"We are now left with the prospect of wondering whether our state approval process is capable of allowing potential solutions to move forward," said Mike Skelton, president and CEO of the Greater Manchester Chamber of Commerce, tweeting about the New Hampshire siting board's decision to reject Eversource Energy's Northern Pass transmission project.

The day ahead

* Hess Midstream Partners LP will hold its earnings conference call at 4:30 p.m. ET.

* Early morning futures indicators pointed to a lower opening for the U.S. equity markets. To view more SNL equity market indexes, click here. To view more SNL Energy commodities prices, click here.

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