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NextEra, Hawaiian Electric terminate merger; Republicans call coal-leasing review 'prejudiced'

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Essential Energy Insights - February 2021

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Message in a (Word)Cloud

Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021


NextEra, Hawaiian Electric terminate merger; Republicans call coal-leasing review 'prejudiced'

Top news

hasterminated its bid to acquire HawaiianElectric Industries Inc. for $4.3 billion, according to a July 18news release. "As a result of the [Hawaii Public Utilities Commission]'sorder, we haveterminated our merger agreement," NextEra Energy Chairman and CEO Jim Robosaid in a statement that refers to the July 15 vote by the state regulator.

Minnesota-basedelectric power cooperative GreatRiver Energy will retire its 189-MW, coal-fired Station in Mercer County,N.D., by May 2017, ending the life of the plant after about 50 years ofoperation, the company said July 15. Stanton has become uneconomic to operatein the face of low power prices in the region, according to a Great RiverEnergy statement.

Thefirst previews of Appalachia's spring show drillers trying to balanceproduction growth with disciplined spending and balance sheet preservation.Antero Resources Corp.and Gulfport Energy Corp.both released second-quarter operations updates results July 14, marking theoutlines of how operations in the Appalachian shales progressed during thesecond quarter. Antero kept drilling like it was hurricane season 2008, whileGulfport hibernated until summer weather arrived in June.

U.S.Republican senators are demanding that Interior Secretary Sally Jewell end themoratorium and government review process on the federal coal-leasing program,calling the process "compromised" and "prejudiced."

Power

*Former Hawaii Public Utilities Commission Chairman Hermina Morita is challengingthe legality of PUC Commissioner Thomas Gorak's to replace Michael Champley.In a lawsuit, Morita argued that Gorak had no legal right to take officewithout the Hawaii State Senate's approval of his nomination. The suit seeks toremove Gorak from the office he claims to hold "to protect the integrityof the PUC."

*U.S. Sen. Jeff Merkley,D-Ore., is planningto introduce a set of bills over the next several months that would requirethe country to procure 100% of its energy needs from renewable sources by 2050."We must end our use of carbon-emitting fossil fuels and we must startnow," Merkley said in a statement. "It's a big goal, but it's one wecan and must achieve."

*Summit Power Group LLChas secured more time to arrange a way forward for the proposed project,which is already facing cost overruns and delays. The U.S. Department ofEnergy, which has so far shouldered $118 million in costs, was expected to backout from the integrated gasification combined-cycle project, but is currentlyunable to do so due to a loophole that gives developers more time for talks, BloombergNews reports.

*SolarCity Corp hasincreased its borrowing limit by $110 million, to $760 million after adding newlenders to its existing debt aggregation facility. The company saidit also raised $345 million in tax equity from four separate partners in Juneand July to finance new solar projects.

*Grand River Dam Authorityestimates that a recent fire incident at unit 2 of in MayesCounty, Okla., could result in up to $200 million in damages, The Oklahoman reports.

Natural gas/midstream

*FERC found problemswith a New York request to hold Constitution Pipeline Co. LLC accountable fortree clearing along the route of its stalled natural gas pipeline project, andthe commission refused to stop the project as the state had asked. Thecommission did say, however, that it would have its staff to look into therequest to see if it has any merit.

* is seekingFERC approval to build and operate new natural gas liquefaction and exportfacilities on the Brownsville Ship Channel in Cameron County, Texas. The -linked company asked the federalagency to approve its application by March 30, 2018.

*The U.S. Court of Appeals for the District of Columbia Circuit has denieda petition by environmentalists to review FERC approval of 's export terminal on the Chesapeake Bay in Maryland. The petitioners hadcontended that FERC "failed to consider several possible environmentalimpacts that the Cove Point conversion project may have, and thus did notsatisfy its obligations under the National Environmental Policy Act."

*The U.S. EPA has issuednew rules to reduce methane emissions from municipal solid waste landfillsby an estimated 334,000 tons a year, beginning in 2025. The agency estimatesthe climate benefits of the rules at $512 million in 2025.

Coal

*North Carolina Gov. Pat McCrory has signed a bill that allows to safely drain andcover some coal ash ponds and requires the company to prove to state regulatorsthat it provided water connections and repairs to customers. "This new law is asignificant improvement over the bill I vetoed," McCrory said in a statement.

*Early coal mine production data suggests production is down another 14.8% compared to the priorquarter and down 19.3% compared to the year-ago period. S&P Global MarketIntelligence's analysis of early coal mining data published by the U.S. MineSafety and Health Administration includes 204 coal mines that reported coalproduction of 64.2 million tons in the second quarter so far. According tocomplete first-quarter data, 577 coal mines reported 173.1 million tons ofproduction in the prior period.

Commodities

*Prices of propane wereable to avoid steep lossesin the week ended July 15 in spite of weakening fundamentals that includedcontinued gains in inventories and more cancellations of export cargoes.

*After a finish 2.9 cents higher at $2.756/MMBtu ahead of the weekend, Augustnatural gas futures extendedgains in overnight trading leading up to the Monday, July 18, open,as revisions to weather outlooks that show heat engulfing the entire countryfueled anticipation of stronger demand and smaller storage injections thatshould further erode inventory overhangs.

*After posting slight gains on July 15, power dailies could open the newworkweek on a mixed noteMonday, July 18, as expectations for diverging but generally weaker demandcollide with an ongoing uptick at the natural gas futures complex. At lastglance, August natural gas was trading 3.0 cents higher at $2.786/MMBtu,extending the 2.9-cent gain posted ahead of the weekend.

New from RRA

*On July 14, indicatedto the Michigan Public Service Commission that , as permitted byMichigan statutes, a $170 million (4.2%) interim electric rate increase Sept. 1.

Quoted

"Overall,I think utilities should be rewarded for moving more into gas investments,"Morgan Stanley analyst Stephen Byrd said."The returns tend to be good."

The day ahead

* Earlymorning futures indicators pointed to a higher opening for the U.S. equitymarkets. To view more SNL equity market indexes, click here.To view more SNL Energy commodities prices, click here.