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FERC chair prioritizes LNG; hedge fund urges PG&E to shelve bankruptcy plans

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


FERC chair prioritizes LNG; hedge fund urges PG&E to shelve bankruptcy plans

Top News

FERC chair's priorities include grid resilience, LNG, but agency could be split

Advancing LNG projects was at the forefront of Federal Energy Regulatory Commission Chairman Neil Chatterjee mind as he rattled off his near-term priorities for reporters after the agency's first open meeting of 2019 held Jan. 17.

US grid expected to add a net 40,800 MW of generating capacity in 2019

More than 49,000 MW of new power generation capacity is expected to be added to the U.S. grid in 2019, according to S&P Global Market Intelligence data. Accounting for capacity set to be retired, the U.S. should see a net gain of 40,823 MW.

Hedge fund urges 'valuable' PG&E to abandon bankruptcy plans

The activist hedge fund BlueMountain Capital Management LLC urged PG&E Corp. and its utility subsidiary Pacific Gas and Electric Co. to shelve plans for Chapter 11 bankruptcy, saying the plan is "damaging, avoidable, and unnecessary" because the companies are solvent.

OPEC sees demand for its oil declining in 2019

Demand for OPEC crude oil will continue to fall in 2019, according to data from the cartel's latest Monthly Oil Market Report released Jan. 17.

US coal production surges 14% YOY in 1st full week of 2019

Total U.S. coal production for the week ended Jan. 12 rose 13.9% year over year to 15.1 million tons from 13.2 million tons, according to data from the U.S. Energy Information Administration.

Quoted

"There is overwhelming evidence that [PG&E Corp.] is solvent. We simply cannot recall a situation where such a valuable company filed for bankruptcy with such blatant questions about the necessity of doing so," said hedge fund BlueMountain Management LLC, in a letter urging the boards of PG&E Corp. and Pacific Gas and Electric to abandon their plan to seek bankruptcy protection.

Power

* As PG&E Corp.'s march toward bankruptcy continues, California's government, local governments and publicly owned utilities should not see negative credit impacts, Fitch Ratings said.

* PG&E's potential bankruptcy filing may allow the utility to revoke or renegotiate the terms of its renewable power purchase agreements to current market prices, which could save the company up to $2.2 billion annually, The New York Times reported, citing Credit Suisse analysts.

* An unexpected plunge in the stock market on Dec. 24, 2018, and subsequent volatile sessions leading to year-end deprived the equity prices for many U.S. electric and diversified utilities of most of their gains in 2018.

* The U.S. Court of Appeals for the 6th Circuit denied a request by environmental groups to review a divided three-judge panel's ruling that the Tennessee Valley Authority is not liable under the Clean Water Act for toxic chemicals seeping from coal ash settling ponds at the Gallatin coal-fired power plant into the adjacent Cumberland River, according to The Associated Press.

* Gas pipeline and transmission outages are among the potential risks Georgia Power Co. will explore in a new resilience section being added to its next integrated resource plan, parent company Southern Co.'s Chairman and CEO Tom Fanning said.

* Tri-State Generation and Transmission Association Inc. has asked a Colorado district court to reject Delta Montrose Electric Association's assertion that Tri-State is attempting to keep it from quitting its quit its membership by setting a "punitive exit charge that is unjust, unreasonable and discriminatory," The Denver Post reported.

* Entergy Louisiana LLC will refund approximately $58 million to its 1 million electric customers in the first three months of 2018, as part of a plan approved by the state Public Service Commission, The Advocate in Baton Rouge, La., reported.

* Rep. Jared Huffman, D-Calif., plans to introduce a resolution that would reproach the U.S. President Donald Trump's decision to exit the 2015 Paris climate agreement, The Hill in Washington D.C., reported.

* Quinbrook Infrastructure Partners Ltd.'s portfolio company Scout Clean Energy LLC closed financing and tax equity commitments for the 300-MW Ranchero wind facility in Crockett County, Texas. The project is expected to enter operations by the end of this year.

Natural gas

* FERC Chairman Neil Chatterjee hinted that the agency will have to tackle different opinions on whether to expand consideration of the potential impacts of greenhouse gas emissions in reviews of LNG terminals and gas pipelines before making final decisions on those kinds of projects.

* Canada's National Energy Board rejected a request by British Columbia's city of Burnaby to rescind two orders that allow Trans Mountain Pipeline ULC to undertake pipeline relocations and decommissioning works at its Burnaby terminal.

* Without acknowledging pressure from an activist shareholder, Gulfport Energy Corp. said that it will buy back $400 million of its shares over the next two years using funds from operations and asset sales.

* Independent oil and natural gas firm Riviera Resources Inc. has completed the sale of its Arkoma Basin properties in Oklahoma for $68 million to an anonymous buyer. The company received net cash proceeds of approximately $65 million after customary closing adjustments and transaction costs.

* FERC launched investigations and ordered hearings into the transportation or storage rates of three interstate natural gas companies to determine if the companies have been charging unreasonable rates.

* Sunoco LP closed the acquisition of Schmitt Sales Inc.'s wholesale fuel distribution business and signed a deal to purchase certain convenience stores from Speedway LLC for a combined value of approximately $50 million, plus working capital adjustments.

Oil

* Oilfield services behemoth Schlumberger Ltd. reported Jan. 18, full-year 2018 normalized earnings of $1.62 per share, up 8% on the year and below the S&P Global Market Intelligence outlook for $1.64 per share, while earnings per share of 36 cents for the fourth-quarter 2018 were down 22% sequentially and below the S&P Global Market Intelligence outlook for 37 cents per share.

* Husky Energy Inc.'s shares jumped 16% after it decided to bow out of its hostile takeover bid for MEG Energy Corp. due to a lack of approval from two-thirds of shareholders, Bloomberg News reported.

* The U.S. Energy Information Administration reported in its "Weekly Petroleum Status Report" that gasoline production climbed in the week ended Jan. 11 despite falling crude oil inputs into the nation's refineries.

Coal

* A federal judge lifted a court stay Jan. 16 that would have allowed the U.S. EPA to delay the production of 20,000 emails sought by the Sierra Club until after the partial federal government shutdown ends.

* Green investors Green Century Funds and Calvert Funds plan to review their investments in Arthur J. Gallagher & Co. after a Reuters investigation found that the global insurance brokerage and risk management services firm had invested in 34 refined-coal producing facilities.

* Total U.S. coal rail traffic for the week ended Jan. 12 grew 14.8% year over year to 87,228 carloads, according to data from the Association of American Railroads.

ChartWatch

SNL Image

After a stable third quarter with only two losses reported, six out of eight SNL Energy sub-sector indexes were negative in the fourth quarter of 2018, according to S&P Global Market Intelligence data.

New from RRA

* Following a weak finish to 2018, yieldco stock performance is mixed thus far in 2019, with negative investor sentiment for some yieldcos likely tied to fears over associated exposure to Pacific Gas and Electric Co. and its parent, PG&E Corp.

* The water utility sector experienced greater visibility from investors in 2018 than has been seen in recent years.

The day ahead

* The Baker-Hughes Rig Count report is due out today.

* 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.

SNL Image

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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