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Oct. 9-13: PG&E may face liability in Calif. wildfires; FERC approves pipelines

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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


Oct. 9-13: PG&E may face liability in Calif. wildfires; FERC approves pipelines

A look back at successes and setbacks in the energy industry.

Highs

PIPELINES — A divided Federal Energy Regulatory Commission late Oct. 13 approved the Atlantic Coast and Mountain Valley pipelines, which would move natural gas from the Appalachian Basin to mid-Atlantic and Southeast markets. FERC Chairman Neil Chatterjee and Commissioner Robert Powelson found that the Dominion Energy Inc.-led 1.5-Bcf/d Atlantic Coast pipeline and related projects will provide benefits to the market that outweigh any harmful effects to existing shippers, other pipelines and surrounding communities. The FERC majority agreed that mitigation measures would reduce the environmental impacts to acceptable levels. FERC also found the EQT Midstream Partners LP-led Mountain Valley project and a related Equitrans LP system expansion to be in the public interest. Commissioner Cheryl LaFleur dissented from both approval orders in a rare clash on pipeline application decisions.

EVERSOURCE — Eversource Energy on Oct. 12 agreed to sell its 1,200-MW portfolio of hydroelectric and fossil-fueled power plants, primarily located in New Hampshire, to a joint venture and private equity firm in separate transactions. Eversource reached an agreement to sell its 1,130.1-MW portfolio of fossil assets to Granite Shore Power LLC, a 50/50 joint venture formed between Atlas Holdings and Castleton Commodities International, for $175 million. The company's nine hydroelectric facilities will be acquired by private equity firm Hull Street Energy LLC and its affiliates for $83 million. The sale is part of a mandate that completes electric deregulation in New Hampshire.

Between

CLEAN POWER PLAN — The U.S. Environmental Protection Agency contends its proposed repeal of the Clean Power Plan will save $33 billion in avoided costs in 2030. Power industry insiders, however, said the planned repeal of the carbon reduction regulations will have little or no impact on the nation's generation fleet. "Our focus is on building a smarter energy future for our customers, and we remain committed to the investments we've planned," Duke Energy Corp. spokeswoman Dawn Santoianni said. In addition, the gas industry appears unfazed by the Trump administration's efforts to roll back regulations. "While it's unclear what the future holds for environmental regulations, the [Clean Power Plan] has been in limbo for some time, during which we've watched the grid move ahead by choosing natural gas because of its cost-competitiveness and its reliable, flexible nature," Natural Gas Supply Association spokeswoman Daphne Magnuson said Oct. 10.

LUMINANT — Vistra Energy Corp. subsidiary Luminant Generation Co. LLC announced Oct. 13 it will close the coal-fired Sandow and Big Brown plants in Texas, which total about 2,400 MW of capacity, in early 2018. The announcement came a week after Dallas-headquartered Luminant announced the retirement of its 1,800-MW Monticello coal plant in Titus County, Texas, in January 2018. Should the Electric Reliability Council of Texas determine that Sandow and Big Brown are not needed for reliability, Luminant expects to close Sandow unit 4 and Sandow (Unit 5) by Jan. 11, 2018, and either close or sell the Big Brown station by Feb. 12, 2018.

Lows

WILDFIRES — As deadly wildfires in Northern California continue to burn out of control, a spokeswoman for the California Department of Forestry and Fire Protection, or Cal Fire, said investigators are "absolutely looking into power lines" as a potential spark. The comment is confirmation that Cal Fire is taking a hard look at power lines and other electrical equipment owned by PG&E Corp. subsidiary Pacific Gas and Electric Co. More than 30 deaths have been reported in the ongoing wildfires, raising the potential for PG&E to face significant liability. The California Public Utilities Commission in April fined PG&E $8.3 million for its part in the Butte Fire in Amador and Calaveras counties.

PIPE CONSTRAINTS — Researchers backed by the Environmental Defense Fund issued a report that concluded Eversource Energy and Avangrid Inc. were responsible for making New England gas pipeline constraints worse in recent years by blocking access to capacity and thereby causing a large inflation of gas and electricity prices at peak periods. "We estimate that capacity withholding increased average gas and electricity prices by 38% and 20%, respectively, over the three-year period we study," the report's authors wrote. Eversource spokesman Michael Durand blasted the report. "It appears to be fabricated by anti-pipeline proponents who are trying to make the case that pipeline shortages in New England are due to capacity withholding," Durand said. "To the contrary, it is well documented that New England pipeline demand greatly exceeds the supply on cold days."