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Staff questions AEP clean projects plan; PG&E could be forced to inspect lines

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


Staff questions AEP clean projects plan; PG&E could be forced to inspect lines

Top News

Ohio regulatory staff says AEP has not demonstrated need for renewables projects

Ohio Power Co. has not demonstrated a need to construct additional electricity generation resources to justify 900 MW of renewable energy projects the company has proposed, state regulatory staff said in recently filed public testimony.

Judge proposes to require PG&E to inspect lines for 2019 Calif. fire season

A U.S. district judge in California proposed to require Pacific Gas and Electric Co. to inspect its entire electric transmission network and cut off power in areas deemed to be unsafe under certain wind conditions, the San Francisco Chronicle reported.

Energy pipeline rally may signal turnaround for depressed sector, analysts say

A stock price rally sweeping North America's energy pipeline sector could indicate a material turnaround for some beleaguered equity values, some industry experts said.

Not just power: US coal consumption in smaller domestic markets also shrinking

Coal consumption by U.S. commercial and institutional customers and other industrial sectors has been sharply declining in recent years, echoing a drop in overall demand for thermal coal.

Quoted

"The facts we have presented make it clear that our state needs renewable generation resources to make Ohio even more attractive to companies looking to come here, address customer demand for renewable energy, and spark the development of a clean energy economy in Ohio," Ohio Power Co. said in a statement responding to testimony by Public Utilities Commission of Ohio staff stating that the utility has not demonstrated a need to construct additional electricity generation resources to justify building 900 MW of renewable energy projects the company has proposed.

Power

* A trade group of competitive wholesale electricity suppliers and an independent power supplier have asked the U.S. Supreme Court to hear their challenges against New York's and Illinois' "at-risk" nuclear energy subsidies.

* California Gov. Gavin Newsom indicated that he was working with all stakeholders, including the state utility regulators "to address the solvency" of PG&E Corp. without providing any specific details of his plans for the troubled company, Bloomberg News reported.

* The ISO New England will need to procure a net value of at least 33,750 MW during a forward capacity auction slated for February to meet the reliability requirements of the region for 2022-2023, according to a Federal Energy Regulatory Commission order accepting the grid operator's method for calculating installed capacity requirements.

* Georgia groups, represented by the Southern Environmental Law Center, challenged the Fulton County Superior Court's dismissal of their appeal of the state Public Service Commission's decision to approve forecast costs increases at the Vogtle nuclear expansion project.

* U.S. carbon dioxide emissions increased by 3.4% in 2018, marking the second largest annual gain in more than two decades, according to a preliminary estimate by research firm Rhodium Group. The estimate is based on preliminary power generation, natural gas and oil consumption data.

* Two Democratic U.S. congressman from California introduced legislation that sets a renewable energy target of 100% by 2035 and a greenhouse gases emissions reduction target of 80% below 1990 levels by 2050. The bill was introduced by Reps. Ted Lieu, Jimmy Gomez.

* Avista Corp. and Duke Energy Corp. announced a joint investment in Open Energy Solutions Inc. to develop open source software for utility smart grid platforms. Open Energy Solutions was founded by Japan's Itochu Corp.

* The Diablo Canyon Decommissioning Engagement Panel is recommending in its "strategic vision" for the Diablo Canyon nuclear power facility that the decommissioning process should begin immediately upon shutdown with a goal of 10 years for completion of radiological decommissioning and decontamination. The panel is set to submit the document to Pacific Gas & Electric and the California Public Utilities Commission.

* U.S. power companies are "accelerating" their transition away from coal-fired generation to wind, solar and natural gas-fired generation, as these alternative power generation technologies become more "cost-competitive," The Wall Street Journal reported. "We'll continue to see renewables and other technology become more cost competitive," NiSource Inc. CEO Joe Hamrock was quoted as saying. "There's recognition that the market is changing in a fundamental and permanent way."

Natural gas

* The Delaware Riverkeeper Network filed a petition to the U.S. Supreme Court appealing a court decision that denied the group's request for the Pennsylvania Environmental Hearing Board to review a water certification given to the Atlantic Sunrise pipeline project.

* U.S. LNG exports to China dropped by about 20% in 2018 amid the ongoing trade war between the two countries, Reuters reported. Before the trade dispute, China was "on track" to import 141.6 Bcf of natural gas from the U.S. in 2018, compared to 103.4 Bcf of U.S. gas the Asian country imported in 2017.

* Mountain Valley Pipeline LLC told federal regulators that it was not overbuilding as it defended its MVP Southgate natural gas pipeline expansion from protests by two North Carolina agencies and a coalition of environmental groups.

* New Mexico Land Commissioner Stephanie Garcia Richard is working to increase the state's royalty cap on future oil and natural gas leases to 25% from the current 20%, The Associated Press reported.

* S&P Global Ratings is considering a downgrade to its rating on Ruby Pipeline LLC after issuing a large credit rating cut to its largest anchor shipper, PG&E Corp.

* Enable Midstream Partners appointed Craig Harris to the newly created position of COO. As part of the new organization, the company named Tina Faraca as senior vice president of commercial.

Oil

* U.S. oil export boom has initiated a frenzy among oil companies to build offshore ports along the Gulf Coast to handle more than 3 million barrels per day, Reuters reported. The U.S. oil production is expected to reach 12 million barrels per day this year, up from 9.35 million bpd in 2017.

* Potential bidders, including Neptune Energy Ltd. and Apex International Energy Management LLC, may offer up to $2 billion for Electricité de France SA subsidiary's oil and gas assets in Egypt and Italy, Bloomberg News reported, citing people familiar with the matter.

* Investment company Arab Petroleum Investments Corp. is looking to invest approximately $1 billion in energy projects in Egypt, Iraq, Libya, Morocco and the U.S. in 2019, Bloomberg News reported.

* Mexico's federal government is expected to inject at least $1.25 billion of capital into state-owned oil company Petróleos Mexicanos SA de CV by the end of this year, Reuters reported, citing a company presentation.

* Italy has decided to halt the issuance of 36 pending oil and gas exploration permits, saying the "upstream oil and gas activity" was "not of strategic importance for the country," Reuters reported.

Coal

* Overall coal shipments along U.S. rail lines remained stable in 2018 compared to 2017 as some major factors influencing the sector carried over year to year. Carloads of coal through Dec. 29, 2018, were down 0.3% year over year to 4.4 million tons, according to the Association of American Railroads.

* A federal judge will reopen Alpha Natural Resources Inc.'s bankruptcy case after allegations that its management consulting firm McKinsey & Co. had a conflict of interest during the case, a McKinsey spokesperson confirmed Jan. 9.

ChartWatch

SNL Image

* The S&P 500 Electric Utilities Sub Industry index performed the best in 2018 with a total return of 4.2%, followed by the S&P 500 Utilities index at a 4.1% gain and the S&P 500 Multi-Utilities index with a 1.8% gain. The S&P 500 index had a negative return of 4.4%.

New from RRA

* With 2018 just wrapping up, preliminary calculations as of Jan. 8 revealed a continued downward trend in authorized returns on equity for both electric and gas utilities, according to Regulatory Research Associates, an offering of S&P Global Market Intelligence.

The day ahead

* California regulators are set to open proceedings today to develop a "stress test" for utilities' wildfire costs, according to Bloomberg News.

* The U.S. Energy Information Administration natural gas storage report is due out today.

* Early morning futures indicators pointed to a lower 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.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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