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PM Edition: DTE investors cool on $2.25B deal; FERC members spar over outlook

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


PM Edition: DTE investors cool on $2.25B deal; FERC members spar over outlook

Top News

DTE investors unenthusiastic about Haynesville midstream acquisition

Investors in DTE Energy Co. reacted coolly to the company's agreement to buy gas gathering assets in Louisiana's Haynesville Shale for $2.25 billion, despite management's reassurances about the location and the credit quality of the sellers, Momentum Midstream LLC and Indigo Natural Resources LLC. But DTE CEO and director Jerry Norcia said during an Oct. 18 conference call that the investment is an attractive asset with a strong underlying resource that is connected to a growing market, provides solid cash flows as well as growth opportunities consistent with the company's long-term investment strategy.

FERC members spar over political 'scrubbing' of staff reports

FERC member Richard Glick, a Democrat, dismissed allegations by his two Republican colleagues that he tried to "scrub" the agency's 2019-2020 Winter Energy Market Assessment. Glick further questioned the report's conclusion that coal- and oil-fired generation continues to play an important role in maintaining electric reliability during the winter, especially in the Northeast, where winter demand for natural gas can exceed pipeline capacity.

Schlumberger to reassess US land strategy after taking huge Q3 charge

Oilfield services major Schlumberger Ltd. is taking a hard look at its North American land market operations, which dragged down its earnings in the third quarter. CEO Olivier Le Peuch warned in September that the company overinvested in some segments because it expected higher producer activity.

Other energy headlines

* A government-mandated transition to renewable energy that eliminates the use of natural gas for home heating and power generation would cost up to C$1.4 trillion over the next three decades, the Canadian Gas Association said in a report. The report also said an electricity-only energy market would carry higher costs to reduce greenhouse gas emissions.

* Regulators in New York approved what would be the state's largest battery storage project. The New York Public Service Commission approved LS Power Group subsidiary Helix Generation LLC's request to develop a 316-MW battery storage facility.

* The Mississippi Public Service Commission on Oct. 24 will consider Mississippi Power Co.'s request to recover costs for upgrades at the Victor J. Daniel Jr. coal plant. The Sierra Club had questioned the utility's strategy to spend $62.5 million on upgrades at the 1,146-MW coal-fired plant.

* Kentucky Power Co. wants regulators to extend a program that gives the company flexibility with certain tariffs to offer special contracts with coal companies and coal processing businesses.

ChartWatch

SNL Image

M&A activity in the U.S. electric utility, multi-utility and independent power producers sectors was moderate year over year in the third quarter. Of the 29 asset deals announced in the third quarter, the largest deal in terms of value was the city of San Francisco's offer to acquire PG&E Corp. subsidiary Pacific Gas and Electric Co.'s electric transmission and distribution assets. PG&E rejected the offer.

Research and Data

* Financial Focus: PPL, Avangrid merger rumored in sleepy M&A space; utilities again underperform

* Data Dispatch: US utilities raise $13.8B of capital from 33 offerings in September

* RRA Regulatory Focus: Conn. Regulators outline vision for electric grid transformation

Pick of the day

Analyst sees strategic benefits for PPL and Avangrid in potential merger

The Daily Dose, PM edition has an editorial deadline of 1:30 p.m. ET. Links are current as of publication time, and we are not responsible if those links are unavailable later.