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Oct. 1-5: Investors give LNG Canada green light; GE ousts chief executive


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Oct. 1-5: Investors give LNG Canada green light; GE ousts chief executive

A look back at successes and setbacks in the energy industry.


LNG CANADA — A group led by Royal Dutch Shell PLC on Oct. 2 officially decided to commercially sanction the US$31 billion, or C$40 billion, LNG Canada natural gas liquefaction and export facility in British Columbia. The final investment decision is expected to pave the way for one of Canada's biggest energy infrastructure ventures. Sanford C. Bernstein & Co. LLC analysts said the announcement "is the start of a major LNG investment wave, and Shell will be at the winning end with 25% LNG market share."

DOMINION/SCANA — Dominion Energy Inc. and SCANA Corp. on Oct. 4 filed a settlement agreement with North Carolina regulators tied to their proposed merger. The agreement reached with the North Carolina Utilities Commission public staff and an intervenor is intended to ensure "rate stability and service reliability" for customers of SCANA gas utility Public Service Co. of North Carolina Inc., or PSNC Energy, the companies said in a joint statement. Under the agreement, PSNC Energy will create a regulatory liability of nearly $3.8 million representing a refund to customers of 2017 revenues. The refund will be provided to customers as three annual bill credits of $1.25 million. PSNC Energy also will implement a rate moratorium, prohibiting the utility from filing a general rate case before April 1, 2021. The deal still faces significant regulatory and legal hurdles in South Carolina.


NEXTERA — NextEra Energy Inc. is continuing to weigh regulated M&A after it recently closed part of a $6.48 billion expansion in its home state of Florida, Chairman, President and CEO Jim Robo said Oct. 3 at the Wolfe Research Utilities & Energy Conference in New York. NextEra completed the acquisition of Florida City Gas from Southern Co. in late July. "When we closed on the [Florida City Gas] transaction, I had the team in the room, and I said, 'Congratulations, you just completed the first-ever regulated acquisition that NextEra Energy has ever actually been able to bring to the finish line,'" Robo said, referencing the company's failed deals in Hawaii and Texas. NextEra's agreement with Southern includes the acquisition of Gulf Power Co. and ownership stakes in the Oleander and Stanton natural gas plants.

AEP — American Electric Power Co. Inc. said Oct. 5 that it plans to shut down the 1,530-MW Conesville coal plant in Coshocton County, Ohio, by May 31, 2020. AEP spokeswoman Melissa McHenry said "there are market conditions" that could lead the company to shut down units 5 and 6 at the plant in May 2019. AEP subsidiary AEP Generation Resources owns about 92% of the plant, while AES Corp. subsidiary AES Ohio Generation LLC owns the remaining stake. AEP in September confirmed plans to retire the 650-MW coal-fired Oklaunion plant by Sept. 30, 2020, due to unfavorable market conditions.


MOUNTAIN VALLEY — The U.S. Army Corps of Engineers on Oct. 5 halted construction on the 2-Bcf/d Mountain Valley Pipeline LLC at hundreds of stream and wetland crossings in southwestern Virginia. The Corps in its decision to suspend a key permit for the project noted that the U.S. Court of Appeals for the 4th Circuit vacated in its entirety a similar permit that affected four river crossings in West Virginia. "Because of that order, it is uncertain whether [the permit] will ultimately be available to authorize work for [Mountain Valley] in West Virginia," the Corps said in a letter to Mountain Valley developers. The suspension will stand until the Corps decides whether to reinstate, modify or revoke the permit. The 300-mile project in Virginia and West Virginia is backed by EQT Corp.'s EQT Midstream Partners LP, NextEra Energy, WGL Midstream Inc., Con Edison Transmission Inc. and RGC Midstream LLC.

GENERAL ELECTRIC — General Electric Co. on Oct. 1 removed John Flannery as chairman and CEO while warning that its earnings and free cash flow for full year 2018 will fall short of its previous guidance due to weaker performance in the power business. GE also revealed that it will take a $23 billion noncash goodwill impairment charge related to the struggling power segment. S&P Global Ratings on Oct. 2 downgraded the industrial conglomerate and GE Capital Global Holdings LLC by two notches. Moody's placed GE and GE Capital on review for a potential downgrade, and Fitch Ratings placed the companies on rating watch negative.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.