Top News

Start of operations for 1st US offshore wind farm marks new era

America's first commercial offshore wind farm has begun producing electricity, three miles off of the coast of Rhode Island. Project developer Deepwater Wind announced on Dec. 12 that its $300 million, 30-MW Block Island Offshore Wind project started supplying electricity to the grid after completing its commissioning and testing.

For rebuffed Jordan Cove LNG, pipeline was the stumbling block at FERC

For developers of the stalled Jordan Cove LNG export project, convincing federal regulators of a need for the associated gas pipeline has been a hurdle too high. FERC on Dec. 9 said it would not reconsider its initial rejection of the Jordan Cove Energy Project LP and Pacific Connector Gas Pipeline projects because developers had failed to present "extraordinary circumstances" that would have justified a rehearing.

Coking coal market faces headwinds following $285/tonne benchmark settlement

Metallurgical coal market observers say the first-quarter 2017 metallurgical coal benchmark settlement of $285/tonne could represent the top of the largely supply-driven market. "I suspect that the peak has been reached," Doyle Trading Consultants CEO Hans Daniels told S&P Global Market Intelligence on Dec. 12. "With little demand growth and relatively weak global economic growth, this rally has originated solely from a supply deficit. With Chinese mining controls easing, new and expanded coking coal projects on the horizon, and mine outages resuming [production], rising coal prices will face a headwind barring an unforeseen event such as weather, strike, regulation, [or a] mine shutdown."

Power

* Bill Gates, Jeff Bezos and 20 other leading juggernauts of industry have committed more than $1 billion to a new clean energy technology fund aimed at combating climate change. Philanthropist and Microsoft Corp. co-founder Gates on Dec. 12 launched the Breakthrough Energy Ventures fund that will focus on investing in early-stage and growth clean tech companies that have the potential to significantly reduce greenhouse gas emissions.

* An Ares EIF Group-managed fund has agreed to sell the recently commissioned Pio Pico Energy Center in Otay Mesa, Calif., to institutional investors advised by J.P. Morgan Asset Management for an undisclosed sum. The 322-MW, simple-cycle, natural gas-fired power facility sells its output to Sempra Energy subsidiary San Diego Gas & Electric Co. under a 25-year power purchase and tolling agreement. Ares EIF Group, formerly known as Energy Investors Funds, was acquired by Ares Management LP in January 2015.

* The U.S. EPA is proposing a new rule to address inadequacies in Texas' regional haze plan state implementation plan. The rule proposes SO2 limits on 29 electric generating units at 14 Texas facilities to fulfill requirements for the installation and operation of best available retrofit technology, or BART, for SO2.

* Electric utility industry trade groups welcomed measures in the water resources bill passed by Congress that would give states more control over ash regulation and ensure more timely reviews for hydropower projects.

* Ameren Missouri, legally known as Union Electric Co., plans to install two more air monitors near its Labadie coal-fired plant in Franklin County, Mo., in January 2017 to gather additional data to determine if the facility complies with the EPA's SO2 emissions rules, according to The Associated Press.

* Solar photovoltaic installations totaled 4,143 MW, or 1 MW every 32 minutes, in the third quarter of 2016, according to GTM Research and Solar Energy Industries Association's Q4 2016 U.S. Solar Market Insight report. "Coming off our largest quarter ever and with an extremely impressive pipeline ahead, it's safe to say the state of the solar industry here in America is strong," SEIA interim President Tom Kimbis said in a statement.

* Michigan Rep. Aric Nesbitt, R-Lawton, has reached out to Consumers Energy Co., Entergy Corp. and the Midcontinent Independent System Operator Inc. to keep the Palisades nuclear plant open. Nesbitt, who chairs the House Committee on Energy Policy, said the plant's closure would put the state's energy future and the local economy at risk.

* The U.S. Nuclear Regulatory Commission has started a special inspection at Energy Northwest's Columbia nuclear power facility in Benton County, Wash., in response to a discrepancy related to the shipment of some low-level waste to a disposal facility. The event, which occurred Nov. 9, "revealed weaknesses in the licensee's process for packaging and preparing radioactive waste shipments," the NRC said in a statement.

* The U.S. Bureau of Ocean Energy Management will move forward with its planned Dec. 15 auction for offshore wind leases after reaching an agreement with fishing groups. The groups, however, may still seek to block the final sale during a court hearing in February 2017, The Associated Press reported.

* In support of its goal of achieving 100% renewable energy, Hawaiian Electric Cos. issued a request for information for land available for utility-scale renewable energy projects or for growing biofuel feedstock, according to a news release. The request was issued by Hawaiian Electric Co. Inc., Maui Electric Co. Ltd. and Hawaii Electric Light Co. Inc. Interested parties can submit responses by Jan. 27, 2017.

Natural gas/midstream

* President-elect Donald Trump has picked Rex Tillerson to be the next U.S. secretary of state, saying in a Dec. 13 tweet that the chairman and CEO of oil and gas giant Exxon Mobil Corp. is "one of the truly great business leaders of the world."

* Rig operator Patterson-UTI Energy Inc. agreed to acquire competitor Seventy Seven Energy Inc. in an all-stock transaction valued at about $1.76 billion. Upon closing, Patterson-UTI "will have one of the largest and most modern pressure pumping fleets in the industry, with more than 1.5 million hydraulic fracturing horsepower both available and strategically-located in some of the most prolific oil and gas regions in the U.S.," the company said in a statement.

* Williams Cos. Inc. completed its previously announced board refreshment plan with the addition of Michael Creel and Charles Cogut as independent directors. Creel was CEO and a director of the general partner of Enterprise Products Partners LP until his retirement in 2015, and Cogut was a partner at Simpson Thacher & Bartlett LLP from 1980 through 2012. The Williams board now comprises 11 directors — 10 are independent and seven were appointed this year, according to a company statement.

* The Marcellus Shale pipeline operator EQT Midstream Partners LP expects to grow income and distributions on the back of new gathering projects and a 9% growth in shale gas production from its producer sponsor, EQT Corp. The midstream master limited partnership said 2017 net income should be between $555 million and $595 million, 32% more at the midpoint than analysts' expectations reported to S&P Global Market Intelligence before the Dec. 12 announcement.

* Enerplus Corp. subsidiary Enerplus Resources (USA) Corp. reached a deal to sell its nonoperated assets in North Dakota for $292 million in cash, subject to estimated $12 million cash tax and customary closing adjustments. The assets include about 5,800 net acres primarily located on the Fort Berthold Indian Reservation that produced an average of 5,000 barrels of oil equivalent per day during the third quarter of 2016.

* Credit Suisse analysts lowered their target for Cheniere Energy Inc. after the termination of the company's attempted takeover of its master limited partnership, saying the MLP and its holding company are where investors can find short-term upside in the Cheniere complex, the only major U.S. exporter of LNG.

Coal

* An S&P Global Market Intelligence analysis of U.S. Mine Safety and Health Administration data shows that third-quarter coal production rebounded 21.5% compared to the prior quarter. Employment, which has declined precipitously since 2011, settled, with just a 1.2% employment loss in the third quarter.

* A new analysis from Arabella Advisors found that 688 institutions and 58,399 individuals across 76 countries have committed divestment from fossil fuels over the past 15 months. The total value of those pledged divestments from fossil fuel companies has reached about $5.20 trillion, according to the report.

* CNX Coal Resources LP initiated full-year 2017 guidance of 6.25 million tons to 6.75 million tons for coal sales and $90 million to $110 million for adjusted EBITDA. The partnership also affirmed its 2016 guidance of 5.90 million tons to 6.10 million tons for coal sales and $74 million to $82 million for adjusted EBITDA.

* Teck Resources Ltd. settled with major customers for a first-quarter 2017 benchmark price for its highest-quality coals at $285 per tonne, according to a news release. The company also announced that unionized employees at its Fording River and Elkview steelmaking coal mines in British Columbia have ratified new five-year collective agreements expiring April 30, 2021, and Oct. 31, 2020, respectively, replacing agreements that expired April 30, 2016, and Oct. 31, 2015.

Commodities

* Heavy rainfall in October kept Pacific Northwest rivers swollen to drive the region's hydropower production well above historical averages in November, sending spot power prices to a new low for the month. During the prior 10 years, spot on-peak power prices at Mid-Columbia averaged $40.12/MWh, with the lowest monthly average during that period coming in at $20.58/MWh in November 2015. November 2016 spot on-peak power prices averaged $19.15/MWh.

New from RRA

* On Dec. 9, parties intervening in Delmarva Power & Light Co.'s pending gas base rate case filed testimony with the Delaware Public Service Commission.

* In two rate cases decided in September and November, the Railroad Commission of Texas authorized Texas Gas Service Co. to consolidate certain service territories.

Quoted

"New York can permissibly favor zero-emission nuclear plants, with all the environmental benefits they bring, without running afoul of the dormant Commerce Clause," Exelon said in support of a New York PSC motion countering a suit by independent generators over a new state plan that, among other things, assists Exelon's upstate nuclear plants.

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.

The Daily Dose is updated as of 7:30 a.m. ET. Some links may require registration or a subscription.