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Industry hails restoration of FERC quorum; New coal pricing allows volatility

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Industry hails restoration of FERC quorum; New coal pricing allows volatility

Top News

With lots on their plate, new FERC members will have to quickly get up to speed

After six months of lacking the three-member quorum needed to vote on major matters, the Federal Energy Regulatory Commission will soon regain that authority given that the U.S. Senate late on Aug. 3 voted to allow Neil Chatterjee and Robert Powelson to join Acting Chair Cheryl LaFleur on the five-member commission.

FERC quorum brings promise of activity to frozen pipeline industry

Desperate to advance an unprecedented backlog of infrastructure projects, the natural gas industry hailed the U.S. Senate's vote to confirm two commissioners for the Federal Energy Regulatory Commission and restore a voting quorum at the agency.

Warrior: New met coal pricing allows volatility, upside for flexible producers

Warrior Met Coal Inc. CEO Walter Scheller is expecting more volatility in metallurgical coal markets and is poised to take advantage of a shift to an index-based pricing formula. Scheller said a new index-based pricing formula replacing the former benchmark pricing tradition for metallurgical coal deals will "expose market participants to great volatility."

Power

* Dynegy Inc. and Vistra Energy Corp. management teams on Aug. 4 separately flagged an excess of generation assets available for sale, a trend seen as shifting bargaining power to the buy-side.

* Tesla Inc. intends to offer $1.5 billion of its senior notes due 2025 to further strengthen its balance sheet during "this period of rapid scaling with the launch of Model 3," and for general corporate purposes. The offering is subject to market and other conditions, according to a company statement.

* The U.S. District Court for the Middle District of Tennessee ruled against the Tennessee Valley Authority for coal ash leaks at its Gallatin Fossil Plant and ordered the utility to excavate and move its coal ash from a leaking, unlined pit to a safe dry lined location. The ruling came in favor of plaintiffs Tennessee Scenic Rivers Association, represented by the Southern Environmental Law Center and co-plaintiff Tennessee Clean Water Network.

* Dynegy Inc. launched a private placement of $600 million of its senior notes due 2026. The company plans to use the sale proceeds, together with approximately $480 million of cash received from the sale of its Armstrong and Troy plants and approximately $195 million of other cash-on-hand, to pay the consideration in connection with its $1.2 billion cash tender offer for its outstanding 6.75% senior notes due 2019 and/or a conditional notice of redemption to redeem the same principal amount of 2019 notes and for general corporate purposes.

* While the target of 100% renewable electricity is widely embraced by local governments, it is still fiercely debated in academic circles on the state, regional and national levels. Hawaiian Electric Industries Inc. is more than a quarter of the way there already and is eyeing the halfway mark in just a few years.

* Georgia Power Co. expects to complete its comprehensive schedule and cost-to-complete assessment, as well as cancellation cost assessment, for the Vogtle nuclear expansion by the end of the month. The Southern Co. subsidiary expects to file the final recommendation to the state Public Service Commission as part of the 17th Vogtle construction monitoring report, according to a news release.

* Juneau, Alaska, businessmen are seeking ways to keep Alaska Light and Power Co. in local control, the Juneau Empire reports. The electric utility is a subsidiary of Avista Corp., which is currently in the process of being acquired by Canadian energy company Hydro One Ltd.

* The National Trust for Historic Preservation and Preservation Virginia are challenging the U.S. Army Corps of Engineers' decision to grant the necessary federal permit that allows Dominion Energy Inc. to proceed with its Jamestown transmission line project across the James River near Jamestown, Va., the group said in a statement.

* Excelerate Energy LP has terminated contracts with the troubled Puerto Rico Electric Power Authority to build a $380 million offshore gas project amid the utility's bankruptcy, The Wall Street Journal reports.

* Stephen Bolze, former president and CEO of General Electric Co.'s power business, is joining Blackstone Group LP as a senior managing director and head of portfolio operations and asset management for its newly launched dedicated infrastructure business, according to a new release.

* The U.S. Bureau of Land Management Las Cruces District is seeking public input on its environmental assessment of 96 Ranch Energy LLC's proposed 345-kV Lordsburg transmission line in New Mexico, according to a news release. The agency will accept public comments until Sept. 6.

Natural gas/midstream

* The Cameron LNG export project on the coast of western Louisiana will not enter service until 2019, Sempra Energy announced Aug. 4, and the contractor building the multibillion-dollar facility wants to be paid beyond the amount defined in the lump-sum agreement.

* The Nebraska Public Service Commission ruled that opponents of TransCanada Corp.'s long-delayed Keystone XL pipeline may not use the argument that there is no need for the project based on current market conditions, Reuters reports. The PSC is scheduled to hold hearings on the project, starting today.

* Horizontal drilling can resume at 16 locations in Pennsylvania along Sunoco Pipeline LP's Mariner East 2 gas and liquids pipeline route to a terminal outside Philadelphia, a state environmental judge ruled Aug. 3, but a ban remains in place at 39 other locations.

* Vectren Energy Delivery of Indiana-North and Vectren Energy Delivery of Indiana-South are seeking approval from the Indiana Utility Regulatory Commission to implement their respective compliance program related to new natural gas storage field safety rule. The Vectren Corp. utilities seeks to enact enhanced safety measures needed for compliant operation of the four storage fields in its Vectren North territory in central Indiana. Each of the program is valued at $14 million.

* Asset manager Pantheon is offering the troubled Sheridan Production Partners fund $350 million in junior capital to help rescue the fund, which is "struggling" under approximately its $1 billion in debt, The Wall Street Journal reports.

* Houston-based deepwater driller Pacific Drilling SA said it is evaluating various options to address its liquidity and capital structure, which may include a private restructuring or a negotiated restructuring of its debt under the protection of Chapter 11 of the U.S. Bankruptcy Code, according to a company release. The company recently announced management changes, including the appointment of Paul Reese as CEO, replacing Christian Beckett.

* Storm Cat Energy Corp., a bankrupt coal bed methane company, secured court approval to sell its remaining producing wells to Summit Natural Gas, the Casper Star-Tribune reports.

Coal

* The U.S. Office of Natural Resources Revenue, or ONRR, is repealing the Obama-era federal energy valuation reform rule. ONRR said in the Federal Register to be published Aug. 7 that it was repealing the reform in its entirety.

* President Donald Trump touted a coal comeback to supporters packing a West Virginia arena Aug. 4. "I love the people of this state," Trump said. "I love your grit, your spirit and I love our coal miners and they're coming back strong ... As president, we are putting our coal miners back to work. We've ended the war on beautiful, clean coal. We've stopped the EPA intrusion."

* The U.S. Mine Safety and Health Administration has reported the 11th mining fatality of the year, which occurred in a Colorado mine. The death occurred Aug. 2 at Deseret Generation and Transmission Co-operative's Deserado mine in Rio Blanco County, Colo.

Commodities

* After closing 2.6 cents lower at $2.774/MMBtu ahead of the weekend, NYMEX September natural gas futures revisited the upside in overnight trading leading up to the Monday, Aug. 7, open in renewed buying amid oversold conditions absent any significant fundamental support. At 6:55 a.m. ET (1055 GMT), the contract was 1.2 cents higher at $2.786/MMBtu.

* The price of power at the daily markets could be biased higher in the week's opening session Monday, Aug. 7, amid predominantly stronger demand forecasts for Tuesday.

* Renewable energy credit prices continued to leak lower at some major markets around the country during the first week of August. In New Jersey, solar REC prices continued to tumble in value during the week ended Aug. 4.

Quoted

"[President Trump is] open to re-engaging in the Paris agreement if the United States can identify terms that are more favorable to it, its businesses, its workers, its people, and its taxpayers," said a U.S. State Department release on the Trump Administration formally notifying the U.N. of its intent to withdraw from the Paris Agreement on climate change.

The day ahead

* The following companies will hold their second-quarter 2017 earnings conference calls: CONE Midstream Partners LP and SemGroup Corp. at 11 a.m. ET; DCP Midstream LP at 2 p.m. ET; and Sunrun Inc. at 5 p.m. ET.

* Early morning futures indicators pointed to a higher 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.

The Daily Dose is updated as of 7:30 a.m. ET. Some links may require registration or a subscription.