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SPP looks to modernize power market rules; fossil fuel foes cheer Zinke's exit

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COVID-19 Impact & Recovery: Energy Outlook for H2 2021

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US utility commissioners: Who they are and how they impact regulation

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Climate Credit Analytics: Linking climate scenarios to financial impacts

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Essential Energy Insights, April 2021


SPP looks to modernize power market rules; fossil fuel foes cheer Zinke's exit

Top News

After a decade of changes, SPP looks to modernize power market rules

The Southwest Power Pool is undertaking a year-long review of its governance, transmission cost allocation and planning philosophies to accommodate dramatic changes in the wholesale power market and electric utility industry over the past decade.

Allegations of falsified pipeline records come at perilous time for PG&E utility

Allegations that Pacific Gas and Electric Co. systematically broke gas safety rules and falsified records for years could compound a set of recent problems at the utility company, including an ongoing probation violation inquiry and the parent company's suffering stock price.

Analysts urge pipeline companies to avoid excessive distribution growth in 2019

As energy pipeline companies lay out their 2019 financial guidance, analysts are cautioning midstream management teams against emphasizing investor payouts over other uses for excess cash flow like debt reduction and share buyback programs.

Crude oil price pressure to resume after brief tightness gives way to oversupply

OPEC production cuts aside, Jefferies analysts expect the crude oil market to become oversupplied and see downside pressure for prices into 2020.

Fossil fuel foes cheer Zinke's exit from Interior but worry about successor

The departure of U.S. Department of Interior Secretary Ryan Zinke at the end of the year will clear the way for Deputy Secretary David Bernhardt, a former oil and gas lobbyist, to at least temporarily lead the agency that oversees the use of public lands.

Quoted

"I had the question from states, I mentioned one, but there were others. I had Congress ask that question. I had the administration ask me that question. I've never been asked those kinds of questions before," said PJM Interconnection President and CEO Andy Ott, in an interview with S&P Global Market Intelligence, on the questions that led to the grid operator's extreme generation retirements and fuel security scenario study.

Power

* Citing New York's total Democratic rule coming out of the 2018 midterm elections, with control of both houses of the state legislature plus the governorship, Gov. Andrew Cuomo outlined an aggressive 20-point policy agenda and urged lawmakers to act on it in the first 100 days of the 2019 legislative session.

* Hydro One Ltd. and Avista Corp. formally filed a petition with Washington state utility regulators to reconsider their Dec. 5 decision that rejected the proposed $5.3 billion merger between the companies. The state Utilities and Transportation Commission has 20 days to act on the request for reconsideration.

* Xcel Energy Inc. is seeking approval from Minnesota regulators for a 151.2-MW power purchase agreement with Dakota Range III LLC, according to Midwest Energy News. The agreement is a "first step in procuring the incremental renewable energy" for an unspecified commercial and industrial customer.

* With South Carolina regulators set to release their written order approving Dominion Energy Inc.'s acquisition of SCANA Corp. within a matter of days, Wall Street maintains that the controversial transaction will close by year-end.

* TransAlta Corp. plans to spend about C$275 million to build the 207-MW Windrise wind project, which holds a 20-year renewable electricity support agreement with the Alberta Electric System Operator. The project is expected to enter operation during the second quarter of 2021.

* About 81% of the registered voters support the "Green New Deal," a proposal that calls for generating 100% of the nation's electricity from renewable sources within the next 10 years, according to a survey carried out by the Yale Program on Climate Change Communication. The proposal is being pushed by Democratic lawmakers.

* The European Union reached a compromise to reduce carbon dioxide emissions from cars by 37.5% and vans by 31% by 2030, European energy chief Miguel Arias Cañete tweeted. The EU leaders previously proposed to cut emissions by 30% by 2030, compared to 2021 levels, according to Reuters reported.

* BAE Systems Inc. won a contract to build a natural gas-fired steam facility at Holston Army ammunition plant in Kingsport, Tenn. The gas plant will replace an existing coal-fired power supply at the Army-owned plant.

Natural gas

* Holders of Enbridge Energy Partners LP and Enbridge Energy Management LLC voted to approve the entities' $3.5 billion merger into sponsor Enbridge Inc. Separately, Enbridge closed the acquisition of all outstanding common units of Spectra Energy Partners LP valued at $3.3 billion, bringing Enbridge one step closer to its corporate simplification goal.

* TransAlta Corp. said it exercised its option to acquire a 50% ownership stake in the 120-kilometer Tidewater gas pipeline, which will have an initial throughput of 130 MMcf/d with the potential to expand to approximately 440 MMcf/d. The pipeline will allow the company to increase the amount of gas it co-fires at its Sundance and Keephills coal-fired units.

* Kinder Morgan Inc. announced the completion of the open season for refined petroleum products transportation capacity for its Roanoke expansion on the Plantation Pipe Line Co. Inc. system.

* The Canadian federal government is expected to announce a C$1.6 billion support package for oil and gas companies amid low oil prices, The Canadian Press reported.

* A trio of investors committed to invest $150 million in San Antonio-based Cavalcade Midstream LLC, a newly formed, full-service midstream company, the San Antonio Business Journal reported.

Oil

* Royal Dutch Shell PLC is said to be in talks to purchase Texas-based oil producer Endeavor Energy Resources LP in a deal that could be valued at approximately $8 billion, sources told Bloomberg News. Endeavor, which holds more than 300,000 acres in the prolific Permian Basin, was initially hoping to fetch up to $15 billion in a sale.

* Production in the Permian Basin continues to exceed predictions and will push beyond 3.8 million barrels of oil per day in January, the U.S. Energy Information Administration said in its monthly Drilling Productivity Report.

* ConocoPhillips committed to provide $2 million to the advocacy group Americans for Carbon Dividends that is pushing for a tax on carbon emissions, The Hill in Washington, D.C., reported. The oil and gas major also is joining the Climate Leadership Council, whose members include Exxon Mobil Corp., BP PLC and Shell.

* Exxon Mobil has become the "most active driller" in the Permian Basin, overtaking rivals such as Concho Resources Inc. and Chevron Corp., according to Bloomberg News.

* Conservation groups sued the Trump administration for allegedly violating federal laws and ignoring climate change when it approved Hilcorp Alaska LLC's Liberty Project oil and gas development and production plan in the federal waters offshore Alaska.

* The sovereign wealth fund of Kuwait is set to divest 40% of its stake in the North Sea Midstream Partners Ltd. business, which it acquired from ArcLight Capital Partners LLC in July, to JPMorgan Asset Management Ltd., the Financial Times reported.

* Mike Zimmer resigned as a member of the newly formed Mackinac Straits Corridor Authority to oversee construction and operation of a tunnel that would house a replacement segment for Enbridge Inc.'s Line 5 oil pipeline, the AP reported. Last week, Geno Alessandrini stepped down from the authority shortly after his appointment.

Coal

* Global coal demand is forecast to remain stable over the next five years, with coal’s contribution to the global energy mix declining to 25% by 2023 from 27% in 2017, according to the International Energy Agency’s latest coal market report.

* A bankruptcy court should deny Westmoreland Coal Co.'s request to employ management consulting firm McKinsey Recovery & Transformation Services U.S., LLC during its Chapter 11 proceedings because McKinsey "patently lacks disinterestedness," a U.S. trustee recommended.

* Community and environmental groups filed a friend of the court brief in support of the city of Oakland's ban on coal storage and handling. The city is facing a lawsuit for terminating its lease with the developers of a proposed coal and commodity export terminal.

* U.S. coal producer Alliance Resource Partners LP agreed to acquire oil and gas mineral interests in the Anadarko, Permian, Willison and Appalachian shale basins for $176 million.

ChartWatch

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The California Air Resources Board passed a rule requiring public transit agencies in the state to transition their public bus fleets to run solely on electricity or fuel cells by 2040.

New from RRA

* Forward curves in the Electric Reliability Council of Texas have shifted up in recent weeks as continued capacity constraints for summer 2019 have become clear.

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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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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