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Appeals court set to hear CPP case; Rice Energy in $2.7B play for Vantage

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Appeals court set to hear CPP case; Rice Energy in $2.7B play for Vantage

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Clean Power Plan on trial: The numbers

The U.S. Court of Appeals for the District of Columbia Circuitwill hear oral arguments in West Virginia v. EPA (No. 15-1363) on Sept. 27, andthe following story is part of a preview of that court action. The recapped the history ofthe Clean Power Plan, while the secondreviewed the panel of judges assigned to the matter and the third looked at the many parties to the case.

Japanese investors, searching for yield, find renewed interest in USpower deals

At a time when many are exiting the U.S. merchant power space,Japanese investors are aggressively moving in, leveraging years of technical reconnaissanceand are hungry for returns to grow their portfolios. Japanese trading houses, andincreasingly Japanese utilities, have made inroads into the U.S. energy industryover the last half century, gaining operational expertise and a strategic marketview through periods of boom and bust.

Rice Energy to buy private firm Vantage in $2.7B Marcellus-focused deal

Rice Energy Inc.agreed to buy Vantage Energy LLCand Vantage Energy II LLC for about $2.7 billion, vaulting it into the top ranksof Appalachia's shale gas drillers. The deal includes about 85,000 net core MarcellusShale acres in Greene County, Pa.; rights to the deeper Utica Shale on about 52,000net acres; and 37,000 net acres in the Barnett Shale, Rice said in a Sept. 26 newsrelease. Separately, Rice sold$1.02 billion worth of common shares at $25.50 apiece to help fund the deal.

Company seeking permit for surface coal mine in Kentucky

Premier Elkhorn Coal LLC is seeking to construct infrastructurerelated to a new surface coal mining operation in Kentucky. According to a publicnotice published by the U.S. Army Corps of Engineers, Premier is seeking a permitto construct a permanent excess disposal fill, an instream sediment control pondand three haul road stream crossings. The proposed operation, the permit states,would mine 3.3 million tons of coal from a 280-acre mine area.

Power

* EmberClear Corp.is planning to build a 1,000-MW natural gas-fired power plant in Harrison County,Ohio, the ColumbusBusiness First reports. The company expects to begin construction of the$900 million Harrison Power Project in late 2018 and achieve commercial operationearly 2021. The news comes a few days after the Ohio Power Siting Board Advanced Power AG's 1,105-MW dual-fuel, combined-cycle plant.

* In the first of three debates betweenthe two major party presidential candidates, Democratic candidate Hillary Clintonon Sept. 26 reiterated her callfor renewable energy development, making an appeal for becoming a "clean energysuperpower of the 21st century." Republican candidate Donald Trump dismissedthe economic potential of solar development, alluding to the U.S. Department ofEnergy's loans to failed solar panel manufacturer, Solyndra Inc.

* SolarCity Corp.is facing a lawsuit from SunPowerCorp. subsidiary CogenraSolar Inc. and Khosla Ventures for allegedly "misappropriatingtrade secrets" concerning shingling technology that helps develop efficientsolar panels, BloombergNews reports. SolarCity, which is in the middle of a $2.61 billion acquisition by TeslaMotors Inc., refuted such claims, saying it "independentlydeveloped" the technology to increase the efficiency of panels.

* FERC has signed off on a settlement that puts to rest enforcement staff's allegationsthat Maxim Power Corp.and several subsidiaries engaged in three schemes that violated the agency's regulationsprohibiting electric energy market manipulation. Under the settlement, Maxim Powerand its subsidiaries will pay a $4 million civil penalty to the U.S. Treasury anddisgorge $4 million to the ISO NewEngland Inc. to resolve charges that they offered power produced bya dual-fuel generating plant in a way that manipulated New England power marketsduring July and August of 2010.

* CapX2020 partners have energized the final phase of the Hampton-Rochester-LaCrosse345/161-kV transmission lines. The 156-mile link runs between Hampton substationnear Hampton, Minn., the North Rochester substation north of Pine Island, Minn.,and the Briggs substation north of La Crosse, Wis., according to a news release.The project is jointly owned by XcelEnergy Inc., SouthernMinnesota Municipal Power Agency, Dairyland Power Cooperative, Rochester Public Utilities and WPPI Energy.

* Williams Capital Group LP raised its price target on 's stock to $80 per sharefrom $76 per share. "Our target price now reflects a P/E of 17.0x our 2018recurring EPS estimate and a total return potential of over 9.4% over the next 12months, including the current indicated annual dividend yield of 3.06%," thebrokerage wrote in a note to investors.

* The TennesseeValley Authority has resumedoperations at unit 1 of the WattsBar nuclear power plant in Tennessee, according to a TVA statement.The unit was taken offlineas a precaution following a fire at the facility's new unit 2, which is expectedto become commercially operational in the near future.

Natural gas

* For the past two years, oil and gas industry observers havebeen waiting for a surgein upstream M&A activity.Now that a price rebound appears to be occurring, the long-anticipated jump in M&Amay finally be coming,a Deloitte executive said.

* Developers and federal regulators have different ideas on whetherto route a natural gas pipeline that would support the proposed through the DenaliNational Park and Preserve. In comments submitted to FERC, the U.S. EPA Region 10office said a proposed alternative that would route the mainline of the Alaska LNG project through thenational park is the "least environmentally damaging" option because itcould reside in existing rights of way along the existing George Parks Highway.

* Sunoco LogisticsPartners LP sold $567 million worth of common units to help fund a portionof its proposed acquisitionof Permian Basin crude oil system from VitolGroup, according to a news release.

Coal

* Colorado SpringsUtilities has completedan environmental upgrade project at the MartinDrake coal-fired plant in El Paso County, Colo. The scrubber projectwill help the company comply with U.S. EPA's new air quality regulations, whichwill go into effect December 2017.

* A coal mine employee diedin a vehicle accident early on Sept. 23 after his shift ended near an minein West Virginia's Raleigh County. Matthew Davis was fatally injured near the SlipRidge Cedar Grove mine while traveling with his friend and co-worker Billy Ballengee.The latter was injured but survived in the accident.

* WestmorelandCoal Co. is set to ceaseproduction at its Jewett Mine in Texas, leaving 250 people unemployed,after NRG Texas Power LLCsaid it would terminatea lignite supply agreement on Dec. 31, two years earlier than scheduled, FuelFix.comreports.

Commodities

* Hot weather and rising natural gas prices boosted July coalburn and resulted in an above average coal stockpile draw, even as the generation market sharebattle for the seventh straight month. The latest governmentfigures have coal's share of U.S. power generation at a significant deficit to thatof natural gas through the first seven months of the year as coal-fired generationfell by 17% versus the same period in 2015.

* Forward power prices were mixed but mostly muted during the week ended Sept. 23 asgains in natural gas futures implied modestly higher fueling costs and the onsetof fall weather suggested soft demand. In gas futures, the front-month October contractopened the review week Sept. 19 with a modest 1.4-cent loss to settle at $2.934/MMBtuas moderating weather failed to inspire higher moves.

* After ending the week's opening session up 4.2 cents at $2.997/MMBtu,October natural gas futures extendedhigher overnight ahead of the Tuesday, Sept. 27, open and options expirationat the close of business, as the anticipation of elevated demand and an ongoingerosion of inventory overhangs continued to fuel upside momentum. The contract waslast seen 1.5 cents higher at $3.012/MMBtu.

* Day-ahead power prices could be mixed to higher Tuesday, Sept. 27, as varied demand projectionsfor midweek collide with ongoing gains at the natural gas futures arena. Rising4.2 cents in the prior session, October natural gas futures, which roll off theboard at the close of business Wednesday afternoon, were extending slightly higherearly Tuesday, climbing back above $3.00/MMBtu to $3.014/MMBtu, up 1.7 cents.

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New from RRA

* American ElectricPower Co. Inc.'s long-term strategy is to reduce the size of its competitive energy business and ultimatelytransition to a fully regulated energy company focused on infrastructure investmentand energy innovations.

* American Water stands out from its water utility peers, notonly as the lone large-cap name in the group, but also for its within orabove its targeted 7% to 10% EPS growth rate and superior stock price performance.Year-to-date, American Water (+29.5%) has performed well, on the heels of strongstock performance in 2015 (+12.1%).

Quoted

"We believe the company will need to consider spinning off,shutting or selling [FirstEnergy SolutionsCorp.] assets to improve credit metrics," UBS Securities analystJulien Dumoulin-Smith saidin a report about FirstEnergy Corp.

The day ahead

* Rice Energy and RiceMidstream Partners LP will host a joint conference call at 10 a.m. ETon Sept. 27 to discuss the proposed $2.7 billion Marcellus-focused deal.

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