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Trump team seeks help for nuclear; FERC again denies Jordan Cove LNG developers

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European Energy Insights - May 2021

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Trump team seeks help for nuclear; FERC again denies Jordan Cove LNG developers

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Trump team asks DOE to name climate change researchers, seeks help for nuclear

President-elect Donald Trump's transition team has asked the U.S. Department of Energy to draw up a list of employees who worked on President Barack Obama's climate policies, which programs seek to achieve the outgoing administration's climate policies. The transition team also asked how the federal agency can help keep nuclear power plants operating.

FERC again denies Jordan Cove LNG developers

FERC again rejected the developers of the Jordan Cove LNG project and associated gas pipeline, finding that their denial in March was properly ruled and there was no reason yet to reopen the proceedings on the Veresen Inc.-backed venture. In response, Veresen expressed disappointment over the decision and said it will review all of its options, including an appeal or the submission of a new application.

Investor wants chance to prove coal rebound restored value of Peabody shares

An investor with a large stake in Peabody Energy Corp. believes that recent coal market recoveries means shareholders still stand to extract value from the company despite its earlier financial woes. Mangrove Partners Fund LP recently acquired a 5.2% stake in Peabody despite Peabody's warning that its equity securities would likely be canceled and extinguished for no value upon reorganization. Mangrove paid about $7.1 million for 971,058 shares.

Power

* For independent power producers, prolonged weakness in stock prices and power prices has put management on the spot to lower leverage using available means, including asset sales, barring any recovery in power prices led by positive volatility in the coming months.

* Former Texas Gov. Rick Perry has emerged as the top contender for the secretary of energy post, an official with President-elect Donald Trump's transition team told Reuters. Perry, who once proposed to eliminate the U.S. Department of Energy, served as governor of Texas from December 2000 to January 2015. Sens. Heidi Heitkamp, D-N.D., and Joe Manchin, D-W.Va., also are in the race to head the Energy Department.

* Canadian Prime Minister Justin Trudeau reached an agreement with provincial leaders, excluding Saskatchewan Premier Brad Wall, to implement a national carbon pricing plan under the Pan-Canadian Framework on Clean Growth and Climate Change. An interim report on the plan is expected in 2020, and the full review on carbon pricing will be completed by early 2022, according to a joint communiqué of Canada's first ministers.

* A U.S. Bankruptcy Court in Wilmington, Del., approved Noble Environmental Power LLC's restructuring plan that will allow key lender MSD Capital, the investment operation of Dell Inc. Chairman and CEO Michael Dell, to acquire a 100% stake in the company, The Wall Street Journal reported. Noble Environmental Power owns a 726-MW wind power portfolio, according to its website.

* Dynegy Inc.'s affiliate Illinois Power Generating Co. on Dec. 9 filed a prepackaged plan of reorganization under Chapter 11 of the federal bankruptcy code. Illinois Power Generating filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas after receiving enough votes from bondholders in favor of the plan.

* ITC Holdings Corp. appointed five additional members to the new board of directors it formed upon the closing of its acquisition by Fortis Inc. and GIC Private Ltd., effective Jan. 1, 2017. The new board members are ITC President and CEO Linda Blair; Albert Ernst, former director of Energy Industry Group; Sandra Pierce, senior executive vice president, private client group and regional banking director and chairman of Michigan, Huntington National Bank; Kevin Prust, former CFO and executive vice president of Weitz Co. LLC; and Thomas Stephens, former vice chairman and global chief technology officer of General Motors Co.

* Pacific Gas and Electric Co. will soon reach the California-mandated limit of installing 2,409 MW of private rooftop solar capacity under its current rooftop solar program this month, according to a news release. As it nears this milestone, the PG&E Corp. subsidiary introduced a new net energy metering program that includes a one-time fee of $145 for new customers to connect the system to the grid, a small charge for state-mandated costs contributing to public purpose programs and a time-of-use rate plan.

* IDACORP Inc. subsidiary Idaho Power Co. is asking FERC to exempt its Hells Canyon Complex from an Oregon law that requires fish passage for relicensing of the facility, The Associated Press reported.

* SunPower Corp. sold a substantial majority stake in two solar projects totaling 134.8 MW in Kern County, Calif., to investment fund New Energy Solar for an undisclosed sum. The projects, namely Stanford Solar and TID Solar, are expected to go online this month, according to a news release. The projects hold separate long-term power purchase agreements with Stanford University and Turlock Irrigation District.

* The Utah Public Service Commission gave Rocky Mountain Power more time to negotiate with solar energy advocates regarding its proposed fees and demand charges for new rooftop solar customers, The Salt Lake Tribune reported. The suspension of the Berkshire Hathaway Energy subsidiary's new rate schedule will remain in place until it reaches an agreement with solar advocates or it fails to reach a resolution. The new rate schedule was set to take effect Dec. 9.

Natural gas/midstream

* EQT Corp. announced its 2017 CapEx forecast of $1.5 billion that includes $1.3 billion for well development. The forecast excludes business development and land acquisitions. The company forecasts 2017 production sales volume of 810 Bcfe to 830 Bcfe, which includes volume growth of 70 Bcfe, the majority of which stems from the previous year's drilling program.

* Thanks to lower temperatures that aid the industrial process that cools natural gas to its liquid form, LNG export terminals will likely be able to produce more in the winter than in the summer, sometimes by a margin of about 1 million tonnes per annum, according to a Wood Mackenzie report.

* The National Assembly of Quebec passed Bill 106, which will establish a new system for licensing and authorizing oil and natural gas exploration and will create an energy transition fund for the payment of petroleum royalties, Bloomberg News reported. In addition, the bill will create a new agency to promote the province's transition to cleaner energy.

* A federal judge could decide by early February 2017 whether the U.S. Army Corps of Engineers must approve an easement for Energy Transfer Partners LP's controversial Dakota Access oil pipeline if the Trump administration does not first intervene, ClearView Energy Partners analysts said after a court hearing.

* LNG Canada launched a new competitive process to find a new lead construction contractor for the four-train facility in Kitimat, British Columbia. The consortium, formed by affiliates of Royal Dutch Shell plc, Korea Gas Corp., Mitsubishi Corp. and PetroChina, had delayed the final investment decision for the project in July due to global industry market challenges. The project is licensed to export up to 3.7 Bcf/d of natural gas for 40 years.

* Cheniere Energy Inc. ended talks to buy out the holding company that holds the majority stake in its master limited partnership after the companies were unable to agree to the terms of the acquisition.

* If President-elect Donald Trump picks Rex Tillerson as the next U.S. secretary of state, the Exxon Mobil Corp. chief could face bipartisan resistance in getting confirmed by the Senate due to his ties with Russian President Vladimir Putin, according The Wall Street Journal. Trump recently said he is getting very close to announcing his choice for secretary of state.

* The City Council of Broomfield, Colo., approved another moratorium on oil and natural gas drilling that will take effect Jan. 10, 2017, and will last until June 13, 2017, Broomfield Enterprise reported. A previous moratorium was invalidated by the Colorado Supreme Court early in 2016, according to the publication.

* WGL Holdings Inc. filed an automatic shelf registration statement for the potential sale of up to 2,571,037 of its common stock at a proposed maximum price of $72.50 apiece, totaling $186.4 million. The company plans to sell the shares under its dividend reinvestment and common stock purchase plan. It intends to add the sale proceeds to its funds for general corporate purposes.

Coal

* A Kentucky Energy and Environment Cabinet spokesperson said the agency is committed to protecting the environment and health of Kentucky citizens following recent criticism over a proposed state rule that would loosen regulations on coal ash cleanup.

* In its latest forecast, the International Energy Agency said it expects global coal demand growth to stall over the next five years, with the share of coal in the power generation mix dropping to 36% by 2021, from 41% in 2014.

* China is suspending coal imports from North Korea until Dec. 31 in accordance with the latest United Nations sanctions against North Korea for its September nuclear test, The Japan Times reported.

Commodities

* Amid natural gas prices that are seen as too weak to sustain production growth, a favorable outlook for natural gas export growth and continued strong power-sector natural gas burn, some are bullish on the natural gas market heading into 2017 and beyond. "I honestly think [an average of] $4[/MMBtu] next year isn't out of the question," S&P Global Platts analyst Bob Yu told the audience at the 15th annual Coal Trading Conference in New York on Dec. 6.

* After a settle 5.1 cents higher at $3.746/MMBtu ahead of the weekend, January 2017 gas tumbled overnight leading up to the Monday, Dec. 12, open as moderating weather in outlooks looked to sap demand and limit the amount of natural gas drawn from stocks. The contract was last seen 19.9 cents lower at $3.547/MMBtu.

* Next-day power markets could shift in mixed directions in the Monday, Dec. 12, session, as traders look to varied demand projections for the early part of the week and a big slump in natural gas futures. Tacking on 5.1 cents in the prior session, January natural gas futures were down sharply overnight ahead of the opening bell Monday.

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New from RRA

* On Dec. 9, the Michigan Public Service Commission authorized DTE Energy Co. subsidiary DTE Gas Co. a $122.3 million permanent gas rate increase premised upon a 10.1% return on equity and a 5.76% return for a test year ending Oct. 31, 2017.

* On Dec. 8, the Pennsylvania Public Utility Commission approved a default service procurement plan for Exelon Corp. subsidiary PECO Energy Co. covering the period June 1, 2017, through May 31, 2021. The plan is known as DSP IV.

* WGL Holdings Inc., up 6.1%, was the top performer in the RRA Index for the second consecutive week through midday Friday, likely on continued anticipation of WGL's acquisition by Iberdrola SA.

Quoted

"I think he will be drinking from a fire hose with respect to lots and lots of other aspects of environmental regulation," energy attorney Brendan Collins said about Oklahoma Attorney General Scott Pruitt, President-elect Donald Trump's nominee for U.S. EPA administrator.

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.

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