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Emera, TECO reach merger settlement in New Mexico; CP ends efforts to merge with NS

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Essential Energy Insights - February 2021

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Message in a (Word)Cloud

Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021


Emera, TECO reach merger settlement in New Mexico; CP ends efforts to merge with NS

Top news

Clean Power Plan litigation product of unresolved legal questions

Whenthe parties litigating the Clean Power Plan appear before the U.S. Court of Appealsfor the District of Columbia Circuit on June 2, their arguments will reflect theambiguity left by more than a decade of legal wrangling over the regulation of greenhousegases.

Chesapeake stock spikes as borrowing base affirmed, redetermination delayed

Analystsand shareholders warmly greeted news that ChesapeakeEnergy Corp.'s borrowing base was reaffirmed at $4 billion and the nextredetermination of its credit facility would be postponed until June 2017.

Oral arguments begin in long-running Spruce coal mine permit veto case

Oralarguments in a case to decide whether the federal government acted inappropriatelywhen it canceled a mining permit for what could have been one of the country's largestmountaintop removal projects began April 11 in the U.S. Court of Appeals for theDistrict of Columbia Circuit.

Power

* and TECO Energy Inc. have reached a settlementagreement with intervening parties in New Mexico in connection with their pendingmerger . The settlement laysout a number of Emera's commitments, including investing in the expansion of thenatural gas system to underserved communities and the Mexican border. The stipulationis subject to review and approval by the New Mexico regulators.

* MassachusettsGov. Charlie Baker has signedinto law solar legislationthat raises public net metering caps to 8% from 5% of utilities' peak load, andprivate net metering caps to 7% from 4%. The bill allows the Department of EnergyResources and the Department of Public Utilities to gradually transition the solarindustry to a more self-sustaining model.

* Themarket share of renewable generation in the United States rose to 13.4% in 2015 from 13.1% the year prior. While theoverall increase in renewable generation was small on a percentage basis, shiftsin the fuel type breakout were noteworthy. The 0.3 percentage point increase inrenewable generation was derived from percentage point increases of 0.3 in windgeneration and a 0.2 increase in solar generation. It was offset by a 0.2 percentagepoint decrease in hydro generation.

* Dhiaa Jamil as executive vice presidentand COO, effective May 1, and William Currens Jr. as senior vice president, chiefaccounting officer and controller, effective May 16.

* MorganStanley Research Global pegged potential sale prices for Duke Energy's Latin Americangeneration assets at approximately$2 billion, with a midpoint of about $1.2 billion for the Brazilian assets and $900million for the non-Brazil generation.

* is workingto secure power purchase contracts for its recently acquired Hale Wind Energy LLC project in Texas, the Plainview(Texas) Daily Herald reports. The company expects to finalize PPAs for 200MW to 250 MW of capacity in the next two to three months, Daryl Hart, NextEra directorof wind development, reportedly said. "Construction will start in the firstquarter of 2017 and it will be fully operational nine months later, in Q4 of 2017,"Hart was quoted as saying.

Natural gas/midstream

*Marathon Oil Corp. said it has agreed to sellcertain noncore assets for $950 million. Under the largest deal, the company willdivest all of its Wyoming upstream and midstream assets for $870 million. In separatedeals, Marathon Oil will sell 10% working interest in the outside-operated Shenandoahdiscovery in the Gulf of Mexico, operated natural gas assets in the Piceance basinin Colorado and certain undeveloped acreage in West Texas for about $80 million.

* Notlong ago mired in investigations and in-fighting, Gas Natural Inc. has transformeditself into a "very attractive" small-market-capitalizationutility, according to an April 8 analyst note. Wunderlich Securities Inc. gave GasNatural a "buy" rating with a fair value of $9.50, compared with the company'sshare price of $7.58 as of the market close April 8.

* TheU.S. Bureau of Land Management approved 4,228 drilling permits in fiscal year 2015— a 10% increase over the prior fiscal year. As a result, the number of approveddrilling permits that have not yet been put to use by industry is at a record highof 7,500, comprising roughly 6,100 federal lands and 1,400 tribal. These approveddrilling permits are ready for immediate use without further review or approvalby the agency, BLM said in a statement.Meanwhile, production from federal and tribal onshore leases accounted for 11% ofthe natural gas and 7% of the oil produced in the U.S. in the most recent fiscalyear, the agency said.

Coal

*??????? said it hasterminatedefforts to merge withNorfolk Southern Corp.,including the withdrawal of a resolution asking NS shareholders to vote in favorof good-faith negotiations between the two companies. In a statement, CP said ithas no further financial offers or overtures to meet with the NS board at this time.

* TheSouth Carolina Public Service Authorityis seeking to terminatethe remainder of a 1 million-ton coal contract with Alpha Natural Resources Inc., citing a bankruptcy provisionof their supply agreement.

Commodities

* Prompt-monthnatural gas futures were weighed downthroughout the duration of the 2015/16 titular withdrawal season amid a persistentsupply/demand imbalance, as a sluggish pace of storage erosion driven by subduedweather-related demand combined with ongoing strong production.

* Aftertumbling by 7.8 cents in the week's opening session to a settle at $1.912/MMBtu,May natural gas futures ticked higherovernight ahead of the Tuesday, April 12, open in bargain hunting following prior-daylosses, albeit with little in the way of fundamental support, as imminent springwarming in outlooks that should keep demand lackluster continues to feature alongsidehefty supplies.

* Next-daypower markets around the United States could see choppy moves Tuesday, April 12, as traders look to mixeddemand forecasts on regional grids and recent weakness in natural gas.

*The crude oil market postedits second consecutive drop in the week ended April 5 as smart money traders their net longposition. Natural gas prices fell marginally as data suggest that short coveringwas prevalent.

New from RRA

*Despite the minutes releasedon April 6 from the March Fed meeting indicating that an April rate hike is unlikely,investor unrest forced U.S. broad markets down more than 1% last week. Even oilprice gains failed to cheer investors, as West Texas Intermediate up 8% to $39.72/bbl, whilenatural gas moved up to end the week at $1.99/MMBtu.

Quoted

"Thestudy shows that an affordable investment in renewable and zero-emissions powerwill provide benefits for communities across the state, and net benefits of nearly$2 billion including the impact of reduced carbon emissions," New York StateDepartment of Public Service spokesman Jon Sorensen said, explaining a white paper on the costs and benefitsof the state's proposed clean energy standard.

The day ahead

* TheINGAA Foundation will release a report detailing their midstream infrastructureprojections through 2035 at 9:30 a.m. ET.

* Earlymorning futures indicators pointed to a lower 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.