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Bill halts VC Summer cost recovery; US offshore drilling to face tough market

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Bill halts VC Summer cost recovery; US offshore drilling to face tough market

Top News

SC House overwhelmingly passes bill halting VC Summer cost recovery

The South Carolina House of Representatives voted 119-1 on Jan. 31 to pass a bill that temporarily halts South Carolina Electric & Gas Co.'s ability to charge ratepayers for the abandoned V.C. Summer nuclear reactors.

After praise and panic, US offshore oil, gas plan to face tough market test

The U.S. plan to open nearly all offshore waters to oil and gas leases landed to cheers from industry groups and fervent objections from state officials, but some industry experts said it may not amount to much in the face of onshore competition and a possible resurgence of drilling in the Gulf of Mexico.

Energy department adviser assures US coal industry he's 'here to help'

A top assistant to U.S. Energy Secretary Rick Perry reassured the West Virginia coal industry the department has efforts underway to aid the sector, including a follow-up to a failed effort to provide greater financial support to coal-fired and nuclear power plants.

Power

* The Nuclear Energy Institute, the leading trade group for the nuclear power industry, has had a rough 2018 so far. First, the Trump administration's grid resiliency proposal to shore up nuclear (and coal) revenues was flatly rejected by the Federal Energy Regulatory Commission.

* The Trump administration is planning to seek a 72% reduction in budget assigned to the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy in fiscal 2019, The Washington Post reported, citing draft budget documents. The administration will ask Congress for a spending of $575.5 million, down sharply from the office's spending level of $2.04 billion for the current fiscal year.

* The Trump administration has delayed the implementation of the 2015 Clean Water Rule by two years to give the U.S. Environmental Protection Agency and U.S. Department of the Army more time to reconsider the rule. "The 2015 WOTUS rule developed by the Obama administration will not be applicable for the next two years, while we work through the process of providing long-term regulatory certainty across all 50 states about what waters are subject to federal regulation," said EPA Administrator Scott Pruitt.

* Canadian Prime Minister Justin Trudeau is set to announce "sweeping regulatory reforms" for the energy sector within days, including changes to the National Energy Board Act and the Canadian Environmental Assessment Act 2012, the Financial Post reported.

* Colorado Gov. John Hickenlooper unveiled a revised version of the Colorado Climate Plan that calls for proposing a new state GHG-reporting rule by Dec. 30 that mirrors a federal rule, working with utilities to maximize the use of renewable energy and implementing the statewide Electric Vehicle Plan to build out key charging corridors, among other things.

* New Jersey Gov. Phil Murphy signed an executive order that directs the state Board of Public Utilities to fully implement the Offshore Wind Economic Development Act to help achieve a goal of 3,500 MW of offshore wind energy production by 2030, according to a news release.

* The U.S. DOE's days of attempting to meddle in the power markets to benefit fuel sources the administration looks favorably upon are probably over, an attorney with Akin Gump said Jan. 30 during an energy policy briefing on the year ahead.

* Two Boston-area investment advisors pleaded guilty to using approximately half a million dollars from their clients' funds without their knowledge or consent to make investments in wind farm project to pay personal expenses, including college tuition payments and credit card bills, according to federal prosecutors.

* Apex Clean Energy's planned 201-MW Lighthouse Wind Project could be in limbo after the town of Somerset, N.Y., approved new zoning requirements that impose a ban on the construction of any structure taller than 150 feet and prohibit any wind turbine that would generate electricity to be sold off-site, among others, The Buffalo (N.Y.) News reported.

Natural gas/Oil

* Although the midstream sector's financial performance appears on an improving trajectory, some equity analysts said that pipeline master limited partnerships with complicated structures are relatively unattractive to investors.

* Wood Mackenzie Ltd. estimates that the U.S. government's recently approved federal tax rate cuts could result in an approximately $190.4 billion boost to the country's oil explorers, Bloomberg News reported.

* Avangrid Inc. struck a deal to sell its natural gas trading business, ENSTOR Energy Services LLC, to Castleton Commodities International LLC subsidiary CCI U.S. Asset Holdings LLC for an undisclosed sum. The deal does not include the company's Enstor gas storage business.

* Enterprise Products Partners LP is positioned to profit from booming international demand for U.S. petroleum products with projects that include a new ethylene facility on the Gulf Coast that will be capable of exporting 1 million tons annually.

* The U.S. Bureau of Land Management state offices saw an 86% increase in 2017 oil and gas lease sales to approximately $360 million, representing the highest number of sales in about 10 years, according to a news release.

* BP Plc expects natural gas to replace coal in the early 2030s and oil around 2040 as the world's primary energy source, with overall gas demand growing about 1.6% a year for years to come, Reuters reported, citing a company executive.

* Connecticut Gov. Dannel Malloy proposed to increase the gas tax by 7 cents to help stabilize the "Special Transportation Fund" and allow for critical investments in the state's transportation system to take place, according to a news release. The increase will be implemented over a four-year period.

Coal

* A Canadian court rejected a challenge to a planned terminal near Vancouver that would handle U.S. export coal, paving the way for the project to move forward.

* The Center for Biological Diversity is suing the U.S. Environmental Protection Agency over its delay of a regulation that would have required coal-fired power plants to treat and limit discharges of toxic metals into the water.

Commodities

* The natural gas inventory report to be released at 10:30 a.m. ET on Feb. 1 by the U.S. Energy Information Administration is expected to show a step down in the rate of storage erosion following the 288-Bcf pull reported for the week ended Jan. 19.

* In light trading, secondary market prices for California carbon allowances slipped to end January amid lackluster buying interest. As of Jan. 30, the February 2018 vintage 2018 California carbon contract was pegged in a bid-and-offer spread of $14.90/tonne to $14.93/tonne.

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New from RRA

* On Jan. 30, the Minnesota Public Utilities Commission voted to authorize Minnesota Power Inc. an estimated $12.6 million permanent electric rate increase, premised upon a 9.25% return on equity (53.81% of capital) and a 7.064% return on a rate base of roughly $2 billion for a calendar-2017 test year.

* The Office of People's Counsel filed testimony with the Maryland Public Service Commission recommending that the commission reject AltaGas Ltd.'s proposed acquisition of WGL Holdings Inc., despite enhanced commitments contained in a settlement filed last December.

* In a rate case filing submitted on Jan. 30, Great Plains Energy Inc. subsidiary KCP&L Greater Missouri Operations Co. proposes to implement a $19.3 million, or 2.6%, electric base rate increase, including the "rebasing" of fuel related costs in the fuel adjustment clause.

Quoted

"The good news is I'm with the federal government and I'm here to help," said Doug Matheny, a special adviser to U.S. Energy Secretary Rick Perry, speaking at the West Virginia Mining Symposium in Charleston, W.Va.

The day ahead

* The EIA natural gas storage report is due out today.

* Early morning futures indicators pointed to a mixed 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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