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FERC affirms ALJ decision in transmission ROE case; Cheniere bids for Cheniere Partners Holdings

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FERC affirms ALJ decision in transmission ROE case; Cheniere bids for Cheniere Partners Holdings

Top news

FERC affirms ALJ decision lowering MISO transmission owners' ROE

Agreeing with a FERC administrative law judge's determinationregarding anomalous market conditions, FERC on Sept. 28 ruled that the base rateof return on equity currently approved for most transmission-owning members of theMidcontinent Independent System OperatorInc. is unjust and unreasonable and should be reduced to 10.32%, effectiveimmediately.

Pa. Supreme Court decision keeps gas industry regulation in local hands

The Pennsylvania Supreme Court on Sept. 28 struck down as unconstitutionalmore portions of the state's Act 13 governing the natural gas industry and reaffirmedthe right of towns and villages to use their zoning codes to regulate where thegas industry could operate. Following the decision, private gas storage operatorscannot exercise eminent domain for projects and doctors cannot be forced to signnondisclosure agreements to obtain chemical trade secret information to treat patientsexposed to fracking chemicals.

Ky. coal head exits 'partisan' fight over energy policy with advice forsuccessor

Over six years after taking the helm of the Kentucky Coal Association,Bill Bissett is leaving behind an energy debate that he said has grown more contentiousand partisan in recent years, with a call for greater cooperation and an "openmind" for whoever comes next. Bissett will exit his position from the KCA onNov. 1, with a replacement yet to be chosen. Whoever succeeds him, Bissett said,must approach the role with an open mind about the industry, the commonwealth andthe larger debate over the country's energy future.

Power

* Fortis Inc.has soldUS$2 billion of senior notes to help fund its planned US$11.3 billion acquisition of ITCHoldings Corp. The offeringcomprised of US$500 million of 2.10% notes due 2021 and US$1.5 billion of 3.055%notes due 2026.

* Supporters and detractors of the Clean Power Plan think theU.S. Court of Appeals for the District of Columbia Circuit appeared to agree withthem as it delved into state and industry groups' legal challenge of the U.S. EPA'scarbon-cutting rule, making the Clean Power Plan's fate difficult to predict.

* A word of advice for upstart renewable energy developers lookingto grow is to take on the bulkof upfront project costs, avoid leaning too heavily on available private equitycapital and generate some cash on your own, according to a group of establisheddevelopers and financiers.

Natural gas/midstream

* Cheniere EnergyInc. has madean offer to acquire Cheniere EnergyPartners LP Holdings LLC in a stock-for-stock exchange. Cheniere isoffering 0.5049 shares for each outstanding publicly-held share of Cheniere EnergyPartners Holdings, subject to negotiation and execution of a definitive deal. Theproposed offer represents a value of $21.90 per share of Cheniere Energy PartnersHoldings, or a premium of about 3.0% over the closing price its shares on Sept.29.

* Extraction Oil & Gas Inc. expectsto raise up to $600 million from its initial public offering. The Denver-based independentoil and gas company is offering 33,333,333shares at an anticipated initial IPO price of between $15.00 apiece and $18.00 apiece.It also plans to grant the underwriters a 30-day option to purchase up to an additional5 million shares.

* An Enbridge IncomeFund Holdings Inc. affiliate agreedto sell its liquid pipelines assets in the South Prairie region in Saskatchewanand Manitoba to Tundra Energy Marketing Ltd. for C$1.08 billion. The assets forsale are Enbridge's liquid pipelines and facilities in southeast Saskatchewan andsouthwest Manitoba, according to an EnbridgeInc. release.

* AltaGas Ltd.has won approvalfrom British Columbia regulators to build its proposed North Pine liquids separationfacility that will serve producers in the Montney region. The company expects tomake a final investment decision on the project in the last quarter of this year.The facility is expected to process up to 20,000 bbls/d of C3+ and handle up to20,000 bbls/d of C5+.

* Chesapeake EnergyCorp. has sold$1.1 billion of its 5.5% convertible senior notes due 2026 for general corporatepurposes, which may include debt repurchases and the repayment of its credit facilityand senior notes with near-term maturities. The notes were sold in a private placementto eligible purchasers.

* Exxon Mobil Corp.is facing a civil lawsuitfor allegedly polluting the Mystic river from its Everett facility in Massachusetts.The lawsuit, which was filed by Conservation Law Foundation,focuses on Exxon's violations of both the federal Clean Water Act and the ResourceConservation and Recovery Act designed to protect the health and safety of waterfrontcommunities in the face of climate change.

* DTE Energy Co.has sold $600 million worth of equityunits to fund its proposed $1.3 billion acquisition of midstream gas assets in the Appalachian Basin.In a statement,the company said it will pay a total annual distribution on the units at a rateof 6.50%, consisting of interest on the 2016 series C remarketable senior notesand payments under the related stock purchase contracts.

Coal

* Total U.S. coal rail traffic for the week ended Sept. 24 showeda 13.9% decline year overyear to 87,486 carloads, according to data from the Association of American Railroads.Coal rail traffic declined through the week, with year-to-date settling in at around25.8% lower than the same period last year, a strong indication of what could bethe largest annual coal production decline on record.

* Germany's power producers, including Steag GmbH, could be preparingto retire their coal-fired plants ahead of schedule as margins shrink to their "lowestlevels in at least five years," according to BloombergNews. Steag may accelerate retirement of at least five of its 13 coal plants.

* Congressional supporters of carbon capture and storage saidthat the U.S. needs to do moreto develop the technology to address worldwide carbon emissions at a Capitol Hillevent Sept. 29, suggesting that other countries could not be relied on to "stepup to the plate."

* The share of coal-fired capacity in UK's electricity mix droppedto a record low of 5.8% during the second quarter, while the share for natural gas-firedgeneration grew to 45.2%, according to officialdata.

* Coal stocks at China's coal-fired power plants increased by5.28 million tonnes, or 10%, to 56.06 million tonnes in September since the endof August, Reutersreported, citing China's National Development and Reform Commission.

Commodities

* Officials from the Regional Greenhouse Gas Initiative participatingstates, including Maine, are activelyworking toward integrating proposed changes to the cap-and-trade programwith potentially changing power market dynamics in the region.

* As the Organization of the Petroleum ExportingCountries was meeting Sept. 28 in Algiers, Algeria, to discuss curbing oil production,a group of industry experts were gathered in New York City discussing the in thecoming years. While WTI and Brent front-month oil futures prices currently remainbelow $50/bbl, many pundits are looking for higher prices, perhaps as high as $75/bblfor Brent prices, in 2017.

* After ending its first day in the lead slot Thursday down 4.3cents at $2.959/MMBtu, the fresh front-month November natural gas futures contractremained anchored overnightahead of the Friday, Sept. 30, open, by robust inventories and the anticipationof moderating weather moving deeper into the fall season that should dampen demand.Extending losses to trade as low as $2.931/MMBtu, the contract managed to push intoshallow positive territory at last look, trading 0.6 cent higher on the sessionat $2.965/MMBtu, in muted trade.

* The price of power at the daily markets in the week's closingsession Friday, Sept. 30, on the back of expectations for stronger demand comingoff the weekend, though the upside could be limited by recent weakness at the naturalgas futures arena. Losing 4.3 cents in the prior session, the new front-month Novembernatural gas futures contract was edging slightly higher early Friday ahead of theopening bell.

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New from RRA

* On Sept. 29, the North Carolina Utilities Commission , apparentlywithout significant modification, thereby approving Duke Energy Corp.'s proposed acquisition of The NCUCapproval is the last that is required, and the transaction is expected to closeon Oct. 3.

Quoted

"EPA just kind of picked this number. It could have justas easily left out the obvious outlier year, which is 2012," Wisconsin SolicitorGeneral Misha Tseytlin saidin questioning why the U.S. EPA chose the year 2012, marked by an unusually highamount of wind capacity added, as its baseline year in developing the Clean PowerPlan's goals.

"If you're making guitars in Harlan, Kentucky and that'syour livelihood, you're going to use electricity to do that … so I've always arguedthat it doesn't have to be coal or economic development – to me it can be coal andeconomic development," saidBill Bissett, outgoing president of the  KentuckyCoal Association?.

The day ahead

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