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FERC to revamp interconnection procedures; LNG industry likes sound of Perry

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FERC to revamp interconnection procedures; LNG industry likes sound of Perry

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For 1st time in 13 years, FERC looks to revamp interconnection procedures

FERC on Dec. 15 proposed to make major changes to its large generator interconnection procedures and pro forma interconnection agreement, citing the significant changes that have occurred within the industry since the commission's existing policies were established in 2003.

Seeking fast track to export, LNG industry likes sound of Energy Secretary Perry

President-elect Donald Trump's pick to head the U.S. Department of Energy could be in a position to help U.S. LNG exports, including streamlining the agency's approval process, a number of industry advocates said. Trump on Dec. 14 formally announced his selection of former Texas Gov. Rick Perry, who would bring to the office a history of supporting domestic oil and natural gas growth.

Energy producers with eye on public land find ally in Trump's Interior pick

Rep. Ryan Zinke, President-elect Donald Trump's choice to head the U.S. Department of the Interior, would provide energy producers with an ally and leaves environmental advocates wary about the future of production on federal land. Zinke, R-Mont., is likely to try to reverse Obama administration Interior policies often cited as limiting to energy production.

Power

* Opponents of President Barack Obama's climate policies have offered plenty of analysis of ways for the Trump administration to go about reversing the Clean Power Plan. And now a coalition of attorneys general who have been fighting for several years to quash the rule have added their own program: In a letter to Vice president-elect Mike Pence, the group asked Pence to ensure an executive order to withdraw the rule is issued "on day one."

* Michigan lawmakers on Dec. 15 passed major energy bills that require electric providers to produce 15% of their power from renewable sources by the end of 2021, and set a nonbinding goal of meeting 35% of state's power needs by 2025 through a combination of renewable energy and energy conservation, The Associated Press reports. The legislation now heads to the desk of Michigan Gov. Rick Snyder, who is expected to sign it.

* The U.S. Department of the Interior has finalized the framework to manage the 1,312-MW Glen Canyon Dam in Arizona over the next 20 years. According to the federal agency, the framework is intended for "certainty and predictability for water and power users while protecting environmental and cultural resources."

* A Mexican subsidiary of Sempra Energy has completed the acquisition of the Ventika I and Ventika II wind farms in Mexico for about $900 million, including the assumption of outstanding debt. With an installed capacity of 252 MW, the facilities are touted as the largest operating wind farm in Mexico, according to a news release.

* Noting weak utility growth and debt at the parent level, Citi Research on Dec. 15 initiated coverage of Southern Co. with a "sell" rating and $44 price target. To reach its $44 per share price target for Southern, Citi deducted $7 for the estimated $13 billion in parent company net debt as of June 30, 2017.

* Boralex Inc. and Alberta Wind Energy Corp. have formed Alberta Renewable Power LP to develop wind and solar projects in Alberta. Boralex will hold a 52% stake in Alberta Renewable Power, while Alberta Wind will own the remaining 48% stake, according to a news release.

* A U.S. bankruptcy judge has approved a Chapter 11 plan for the U.S. unit of Abengoa SA, overruling objections from Portland General Electric Co., which is suing an Abengoa subsidiary for allegedly botching the construction of a $500 million power plant, according to The Wall Street Journal.

* The Washington Utilities and Transportation Commission has rejected Avista Utilities' request to raise electric rates by 7.6% and natural gas rates by 2.8%. The Avista Corp.'s operating division has failed to present "adequate evidentiary support to demonstrate that its current rates are insufficient or that the pace of its capital investments is outside of the company's control," the commission said in its order.

* The New York Power Authority board of trustees approved a 2017 fiscal year budget that includes $475.2 million for operations and maintenance, $258.9 million in capital investment and $208.5 million in energy services program. The budget, which takes effect Jan. 1, 2017, is intended to continue investments in modernizing New York's electric grid and further accelerate use of renewables as part of the state's energy mix.

* Emera Inc. subsidiary Emera US Finance LP has launched an exchange offer for US$3.25 billion of four series of its outstanding senior unsecured notes for a like amount of new notes, according to a company release. The exchange offer is expected to expire at 11:59 p.m. ET on Jan. 13, 2017.

* The California Energy Commission has set the first mandatory energy efficiency standards for computers and monitors that could save consumers about $373 million annually. "Improved efficiency unlocks millions in utility bill savings for consumers and lightens the load on our electricity system," Commissioner Andrew McAllister said in a statement.

Natural gas/midstream

* With its $1.85 billion takeout of one of the top shale producers in Oklahoma, the Utica Shale driller Gulfport Energy Corp. joins the list of gas drillers diversifying out of Appalachia to shales closer to gas and liquids demand on the Gulf Coast.

* In a Facebook video, North Dakota Gov. Doug Burgum said he "supports the legal completion" of the Energy Transfer Partners LP's controversial Dakota Access pipeline, "Make no mistake, this infrastructure is good for our economy and it's the safest way to transport our North Dakota products," Burgum added.

* Anadarko Petroleum Corp., on Dec. 15, completed its $2 billion cash acquisition of Freeport-McMoRan Inc. deepwater Gulf of Mexico assets. Pursuant to the transaction, Freeport-McMoRan settled a $582 million preferred stock obligation with its subsidiary, Plains Offshore Operations Inc.

* Cascade Natural Gas Corp. has agreed to pay a $2.5 million fine for pipeline safety violations under a settlement with the Washington Utilities and Transportation Commission's pipeline safety staff. The settlement is still subject to a review by the commission.

* The developers of the Jordan Cove LNG export project plan to refile their FERC application after they design a more efficient facility, following a decision in which the commission denied a second chance for the original project.

* A subsidiary of Enbridge Energy Partners LP commenced a binding open season for its proposed expansion of the Enbridge Ozark Pipeline, which runs from Cushing, Okla., to Wood River, Ill., according to a news release. The in-service date of the expansion is expected to be during the second quarter of 2018.

Coal

* Total U.S. coal rail traffic for the week ended Dec. 10 went down 5.4% year over year to 87,929 carloads, according to data from the Association of American Railroads. Year-to-date coal rail traffic tumbled 21.4% through the week, a continued downtrend leading to the largest annual decline since record keeping began in 1949.

* Peabody Energy Corp. disclosed it paid its debtor-in-possession financing package early as the company nears emergence from bankruptcy. Peabody received approval for early payment from the U.S. Bankruptcy Court for the Eastern District of Missouri on Dec. 14. The company paid its bankruptcy financing package in full the next day.

* In a bid to reduce greenhouse gas emissions, Oregon's Portland City Council voted to ban new fuel fossil fuel storage facilities in the city as part of a zoning change, according to the Oregon Public Broadcasting.

* The China Banking Regulatory Commission is calling on banks to stop providing funding to coal and steel "zombie" firms and those companies, which violate the government's capacity reduction plans, Reuters reports.

* Morgan Stanley thinks coal's post-election optimism is "overdone." In a Dec. 15 post-election research note, Morgan Stanley warned that several headwinds will limit the coal sector's response to recent price surges.

Commodities

* Despite big gains in the Northeast, power markets across the U.S. moved in different directions Thursday, Dec. 15, as traders took into account mostly lower Friday demand forecasts and mixed spot natural gas prices. Running counter to reports of a 147-Bcf net withdrawal during the week ended Dec. 9, which was above consensus estimates and historical averages, the front-month January 2017 natural gas futures contract closed the day down 10.6 cents at $3.434/MMBtu.

* After finishing the previous session 10.6 cents lower at $3.434/MMBtu, January 2017 natural gas futures were extending the downside overnight ahead of the Friday, Dec. 16, open. The contract was last seen 6.4 cents lower at $3.370/MMBtu. The market once again failed to hold the upside and took a decided turn lower in the previous session despite the report of the first triple-digit withdrawal from natural gas inventories of the season.

* Day-ahead power markets could shift in varied directions in the week's closing session Friday, Dec. 16, as traders look to mixed demand outlooks for the start of the fresh workweek and extended losses in natural gas. Declining 10.6 cents in the prior session, front-month January 2017 natural gas futures were extending those losses ahead of the Friday open on pre-weekend profit taking.

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New from RRA

* The Illinois Commerce Commission's recent formula rate plan decision for Ameren Illinois Co. gave rise to a revenue requirement change approximating that sought by the company.

Quoted

"Making prices better reflect the marginal cost of what it takes to keep the lights on will help reduce uplift payments that are otherwise necessary when the marginal costs don't reflect all of the resources that are needed," FERC Commissioner Cheryl LaFleur said as the commission launched an effort to reform pricing policies for fast-start generating resources.

The day ahead

* 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.

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