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Fate of FitzPatrick nuke hinges on Exelon purchase; market for US coal to peak mid-2020s

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is in talks withExelon Corp. to sellits James A. FitzPatricknuclear plant in Scriba, N.Y., if state regulators pass and implement a subsidythat would help three upstate plants. New York Gov. Andrew Cuomo welcomed theannouncement and said he has directed various state agencies to continueworking with Exelon and Entergy to reach an agreement for sale.

It'stime for federal authority to override state regulators when it becomesapparent a state is holding up permits to block FERC-authorized pipelineprojects from moving forward, the CEO of the United States' largest pipelineoperator says. "Ifit becomes apparent that states are acting to frustrate [development], that'snot the place any project developer wants to be in," CEO Steve Kean saidin an interview. "It's essential that the federal authority overrides. It'sessential to the functioning of energy markets."

Asianmarkets for U.S. coal will improve slightly in the next few years, but willpeak around the mid-2020s, according to experts speaking at an energyconference hosted by the U.S. Energy Information Administration. "We donot believe that the national coal consumption in China has peaked yet,"said Xizhou Zhou at the conference. The senior director of IHS Energy says thatthis peak in demand, including the need for metallurgical coal used insteelmaking, likely will not be reached until 2025 or 2026.


*The Missouri Public Service Commission has againrejected Clean Line EnergyPartners' applicationfor the Grain Belt Express Clean Line, citing a filing technicality. Accordingto The Associated Press, Clean Line will refileits application with the state regulator.

* AGovernment Accountability Office draft report obtained by McClatchyindicates the U.S. Department of Energy's nuclear program lacks effective regulationsaddressing so-called "chilled work environments" at U.S. nuclearfacilities. Democratic Sens. Claire McCaskill, Ron Wyden and Edward Markey areexpected to hold a news conference July 14 to discuss the report.

*Substations across the U.S. remain vulnerable to sabotage attacks despitefederal orders to secure the power grid. Only last year dozens of break-instook place at substations that are weakly defended but host sensitive andhard-to-replace equipment that deliver power to customers, TheWall Street Journal reports.

*Presenters at a smart meter technology meeting had on the benefits and risksfrom increased deployment of advanced metering infrastructure. There are 65million smart meters installed to date in the U.S. and integration of all thesedevices on the local distribution system will create integration challenges,Allen Mosher, vice president of policy analysis at the American Public PowerAssociation, said.

*SunEdison Inc.'sretirement savings plan incurred a loss of $10.3million for the year ended Dec. 31, 2015, mostly as a result of investmentsin the company's stock. The savings plan had investments of $16.8 million inSunEdison stocks at the beginning of 2015, though their value dropped toapproximately $5 million at the end of the year.

*Sen. Martin Heinrich, D-N.M., recently introduceda bipartisan bill to incentivize business and home energy storage byestablishing and offering investment tax credits, similar to those offered forsolar energy development. The Energy Storage Tax Incentive and Deployment Acthas the backing of the Energy Storage Association, the National ElectricalContractors Association, and the National Electrical Manufacturers Association.

*NV Energy Inc. hascalled foul on Switch that theBerkshire Hathaway Energysubsidiary unlawfully tried to prevent the data company from ending itsrelationship with the utility and purchase renewable power from the openmarket, the LasVegas Sun reports.

Natural gas/midstream

*Evidence filed in PG&E Corp.'scriminal trial of the fatal 2010 San Bruno, Calif., pipeline explosionindicates that company lobbied regulators to use cheaper, external pipeinspection methods rather than more expensive hydrotesting, TheMercury News of San Jose, Calif., reports.

*Congress has paved wayfor the oil and gas industry to use unmanned aircraft systems, also known asdrones, to inspect production and pipeline systems. In passing the FederalAviation Administration Reauthorization Act, the House and Senate approved aprovision that allows anyone to apply with the Federal Aviation Administrationto operate drones for particular purposes.

*The U.S. Pipeline andHazardous Materials Safety Administration proposedregulations to improve oil spill response readiness and mitigateeffects of rail incidents.The regulations call for railroads to share information in an attempt toimprove community preparedness of potential accidents and incorporate a testmethod for initial boiling point for flammable liquids into the hazardousmaterials regulations.

* Chairman Lamar Smith, R-Texas, of the House Committee onScience, Space, and Technology has subpoenaed New York Attorney General EricSchneiderman, Massachusetts Attorney General Maura Healey and eightenvironmental organizations to hand over documents relatedto their investigation into whether misledinvestors on climate-related investment.

*Lightstream Resources Ltd. has secured interimcourt approval to pursue a plan that would shed C$1.18billion in debt all the while reducing annual interest cash payments byC$112 million.


*Greenpeace is urgingthe Chinese government to urgently extend its ban on new coal-fired projectsand cancel projects on a selective basis in a bid to avoid spending 1 trillionrenminbi on excessive capacity by 2020. "Despite a new overcapacitypolicy, China still has enough coal-fired projects in the pipeline to keepadding one coal-fired power plant per week until 2020, potentially resulting in400,000 MW of excess capacity. The overcapacity crisis will slow down China'senergy transition, making it harder for renewables to be fully utilized andhave a large environmental impact," Greenpeace said.

* Acoalition of environmental advocacy groups issued a final plea to the , asking theutility to reverse what it says is a coal ash disposal "cover up plan"at several of its coal-fired power plants. The Southern Environmental LawCenter, the Southern Alliance for Clean Energy, the Environmental IntegrityProject, Earthjustice and several other groups submitted comments together inopposition to the TVA's recommendation of closure-in-place as its preferredmethod for disposing of coal ash byproducts at the sites of the plants.

* In an op-ed published in TheHill, Paul Bledsoe, president of energy, tax and climate policyconsultancy Bledsoe & Associates LLC, urged presidential hopeful DonaldTrump and other Republicans to recognize coal's drawbacks and support effortssuch as carbon capture to help the industry survive.


*The natural gas marketseems to be questioningwhether a new up leg is underway after August futures failed several times tobreach key resistance near $3.00/MMBtu. The short-term trend remains negativebut the market is trading with a bullish slant that could shift higher with abreak above resistance around $2.80/MMBtu.

*The weekly natural gas inventory report to be released by the U.S. EnergyInformation Administration at 10:30 a.m. ET on Thursday is natural gas inventoriesclimbing at a rate improved from the most recent modest injections but stillwell below historical averages.

* Next-day power prices could see moves around the countryThursday, July 14, as generally waning demand outlooks ahead of the weekend aremet by gains for natural gas. Ending the prior session just 0.3-cent higher,front-month August natural gas futures were extending to the upside earlyThursday ahead of the opening bell, adding another 1.7 cents to trade near$2.754/MMBtu in front of the midmorning release of weekly natural gas storagedata. Market sources are calling for an average 58-Bcf injection into storagefor the week ended July 8. The figure will compare to the five-year averageaddition of 77 Bcf and the 95-Bcf injection reported for the same week in 2015.

* Following a finish a modest 0.3 cent higher at$2.737/MMBtu, August natural gas futures continued to search for direction in overnight tradeahead of the Thursday, July 14, open, and the next slate of inventory data fromthe U.S. Energy Information Administration. The contract was last 1.0 centshigher at $2.747/MMBtu.

New from RRA

*The Indiana UtilityRegulatory Commission adopted asettlement thereby approving Northern Indiana Public Service Co.'s request toestablish a framework for rate recognition of certain electric infrastructureinvestments the company is to make from 2016 through 2022. NIPSCO is asubsidiary of NiSource Inc.


"Absentthe upstate nuclear plants, power prices would be significantly higher, ashigher-cost resources would be called upon to make up the lost powerproduction," the Brattle Group saidin a report assessing a New York Public Service Commission staff proposal tosubsidize the continued operation of three nuclear plants in the state.

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.