Despite finding strong support from those within the industry, a Trump administration plan to help boost coal and nuclear plants found few fans this week while new financing failed to quell worries about the future of Murray Energy Corp.
The proposal is the latest effort from the Trump administration intended to bolster the ailing coal and nuclear industries by forcing grid operators to buy power from at-risk power plants.
While the plan was applauded by some power and coal companies facing the biggest financial fallout from a shifting U.S. power grid, it was largely shunned by much of the energy industry, including both natural gas and renewable advocates.
"Unprecedented government intervention in the energy markets to support high-cost generation will ... hurt customers by taking more money out of their pockets rather than letting people keep more of what they earn — a key priority of this administration," said Todd Snitchler, American Petroleum Institute's market development group director.
One of the more outspoken supporters for the administration's proposal continued to try to find its footing in an evolving energy landscape this week. Murray Energy announced that it recently entered into a transaction support agreement with holders of its 11.25% senior secured notes due 2021 and lenders of its existing term loans to extend maturities and improve the company's balance sheet.
According to Moody's, the move will improve cash flow and extend maturities but will likely be labeled as a limited default by the rating agency. The financing agreement failed to allay the concerns of other analysts about the company's future, including S&P Global Ratings, which lowered Murray's corporate credit rating to CC from B-.
"We consider the exchange offer tantamount to a default because it implies investors will receive less value than the promise of the original securities and because the offer is distressed, rather than opportunistic," the rating agency said June 6.
Another U.S. producer seeking solutions in a challenging market landscape was Cloud Peak Energy Inc., which announced that will close its Gillette, Wyo., office and move operations to Cordero Rojo. President and CEO Colin Marshall told employees in an email the move is intended to help keep the company "viable."
In addition to the administration's plan to assist coal plants, the industry also saw assistance from Washington in the form of financial support for coal-related technologies. This week, the federal government signed a deal with Ramaco Carbon, LLC creating a collaboration to develop "high-value products" from coal, while the U.S. Department of Energy awarded the University of Wyoming nearly $10 million to test if 50 million tons of carbon dioxide can be stored underground at a utility-scale site near the Dry Fork Station in the northeastern part of the state.
U.S. producers continued to find relief in the seaborne market, with exports through the Hampton Roads port facilities in Virginia up 18.5% year over year to 3.8 million tons in May. However, the month's output marked a 12% decline from the previous month, according to data obtained June 4 from the Virginia Maritime Association.
Employment at coal operations controlled by the family of West Virginia Gov. Jim Justice was highlighted for two very different reasons this week. Bluestone Coal Corp. announced it plans to hire 250 employees for its metallurgical coal operations in the state, days after Bluestone Industries Inc. called for the dismissal of a class-action lawsuit alleging bounced checks to former employees.
This week saw the industry's fifth fatality of 2018 with the loss of Ronald Taylor, 43, at an underground facility in West Virginia. Taylor was riding on a mantrip that struck a steel object in the roadway at the Morgan Camp mine, operated by Carter Roag Coal Co., according to a preliminary report from the state's Office of Miners' Health, Safety and Training.
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