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Jan. 29-Feb. 2: SC House delivers 1st SCANA blow; court approves Armstrong deal

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Jan. 29-Feb. 2: SC House delivers 1st SCANA blow; court approves Armstrong deal

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

Highs

ARMSTRONG — A federal bankruptcy court on Feb. 2 approved coal producer Armstrong Energy Inc.'s reorganization plan and the sale of assets to an affiliate of Murray Energy Corp. Armstrong filed for Chapter 11 bankruptcy protection on Nov. 1, 2017, citing an oversupply of coal and depressed prices as triggers. While initially planning to transfer substantially all of its assets to a new entity jointly owned by its secured noteholders and Knight Hawk Holdings LLC, Armstrong on Jan. 24 entered into an agreement with Murray Energy. Murray Energy agreed to acquire a 51% ownership interest in a new company that will own mines in the Illinois Basin formerly owned by Armstrong, while certain secured noteholders will hold a 49% ownership interest in the company.

ONCOR/SEMPRA — Sempra Energy's proposed acquisition of Energy Future Holdings Corp. and its 80% interest in Oncor Electric Delivery Co. LLC has received unanimous support from Texas stakeholders. Texas Legal Services Center on Feb. 1 signed a settlement among key intervenors that agreed to support the transaction before the Public Utility Commission of Texas. Under the deal, Sempra would acquire the 80% stake in EFH's prized utility for $9.45 billion in cash plus the assumption of about $7 billion in net debt.

Between

SAN ONOFRE — Southern California Edison Co. and San Diego Gas & Electric Co. on Jan. 30 reached a revised settlement agreement with numerous intervenors regarding cost recovery for the San Onofre Nuclear Generating Station, which was permanently shut down in 2013 because of faulty steam generators. Under the revised agreement, the utilities' customers will no longer have to pay for $775 million in San Onofre-related investments not yet recovered under a 2014 settlement. Plaintiffs with a federal court lawsuit challenging the 2014 settlement have agreed to dismiss the case once the commission approves the revised agreement. In addition, SoCalEd will reimburse SDG&E for the Sempra Energy subsidiary's $151 million contribution of the $775 million. SoCalEd, an Edison International subsidiary, and SDG&E have already returned more than $2 billion to customers under the 2014 settlement.

Lows

DOMINION/SCANA — South Carolina lawmakers appear willing to call SCANA Corp.'s "bluff" that it is heading for bankruptcy if they strip V.C. Summer cost recovery, while testing Dominion Energy Inc.'s threat to drop its bid for the troubled company. The South Carolina House of Representatives voted 119-1 on Jan. 31 to pass a bill that temporarily halts SCANA utility South Carolina Electric & Gas Co.'s ability to charge ratepayers for the abandoned nuclear reactors. Temporary rates, absent nuclear cost recovery, would be in place while the Public Service Commission of South Carolina evaluates proper rate relief and approval of SCANA's merger with Dominion. The merger agreement, filed Jan. 12 with the South Carolina PSC, states SCE&G must be allowed to include $3.3 billion tied to nuclear investment in retail rates during a 20-year amortization period.

NORTHERN PASS — Eversource Energy said it is "shocked and outraged" by a New Hampshire siting board's decision to reject its application for the 192-mile Northern Pass transmission line. The vote came one week after Massachusetts picked the $1.6 billion project as the winning proposal for the supply of emissions-free electricity in the state. The seven-member New Hampshire Site Evaluation Committee concluded Eversource had not met its burden in showing Northern Pass would not "unduly interfere with the orderly development of the region." The Northern Pass project would carry up to 1,090 MW of hydroelectric power from Hydro-Québec-owned plants in Canada into the U.S.