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NextEra pays premium for expansion; coal sector optimistic on policy changes

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NextEra pays premium for expansion; coal sector optimistic on policy changes

Top News

NextEra pays premium for Florida expansion in deal for Southern assets

NextEra Energy Inc.'s $6.48 billion acquisition of Southern Co.'s Florida businesses and two gas plants allows Southern to address a multibillion-dollar equity need and NextEra to grow regulated earnings, their CEOs said May 21.

2nd investor questions timing of Loews' warning of possible Boardwalk MLP buyout

A second large investor joined the call for Boardwalk Pipeline Partners LP sponsor Loews Corp. to make a decision soon to exercise its right to buy out Boardwalk's limited partners, accusing Loews of stalling after announcing a possible buyout to get unit holders to bail out and keep any buyout price low.

Trump policy changes give coal industry alliance 'reason to be optimistic'

The U.S. coal sector is still mapping out a future under a presidential administration it hopes can help deliver further relief from federal regulations and foster new technology to bolster the fuel's long-term prospects.

Power

* Electric vehicles are expected to grab significant market share from gasoline-powered automobiles over the next decade, accounting for an estimated 34% of light-duty sales in the U.S. and 28% worldwide by 2030, Bloomberg New Energy Finance said May 21. Raw material shortages and a lack of charging stations, however, could slow that progress.

* While U.S. electricity generators rush to build gas-fired power plants to deliver grid reliability service, Rocky Mountain Institute argues that advances in renewable energy and distributed energy resources can offer the same with lower rates.

* Exelon Corp. subsidiary Constellation Mystic Power LLC on May 16 asked the Federal Energy Regulatory Commission to accept a cost-of-service compensation agreement with the ISO New England that would allow the company to continue operating the two natural gas-fired units of its Mystic generating station beyond their intended retirement date of May 31, 2022, for an additional two years.

* The National Park Service released a report that links the rising sea levels to human activities, The Hill in Washington, D.C., reported. The Trump administration has been accused of censoring the climate report.

* BP Ventures is investing $20 million in ultra-fast charging battery developer StoreDot. According to BP Ventures, ultra-fast charging will be key in accelerating electric vehicle adoption worldwide.

* Ohio lawmakers revised a bill that would lower the state's renewable and energy efficiency mandates, The Blade of Toledo, Ohio, reported.

Natural gas/Oil

* Stung by the recent oil and gas price collapse and feeling pressure from investors to stick to their budgets, formerly profligate U.S. drillers are doubling down on their new belief in fiscal discipline even as oil prices have sprinted to $70 per barrel.

* Billionaire investor Carl Icahn and Keith Meister's Corvex Management LP may be looking to acquire oil and gas producer Energen Corp. Icahn recently agreed to purchase 2 million shares of Energen at $64.84 per shares from Corvex and has an option to purchase an additional 2 million shares at $67.37 per share, according to a regulatory filing.

* The trade truce between China and U.S. could provide a $30 billion boost to U.S. liquefied natural gas, according to Bloomberg News.

* Utilities looking for growth may still turn to acquisitions to get there, but after so many deals in recent years, finding a good match may require more analysis and a willingness to take on larger acquisition targets.

* We Energies is seeking approval from the Wisconsin Public Service Commission to build a 49-mile natural gas pipeline in the state, the Milwaukee Journal Sentinel reported. The project is estimated to cost $187 million to $196 million.

* XTO Energy Inc. will move up to 1,200 jobs to its new headquarters in the Houston area from Fort Worth in Texas between June 1 to July 1, according to the Houston Chronicle.

Coal

* One of the few U.S. coal companies actively continuing to build new coal mines turned its first profit in the first quarter and sees an even brighter future ahead.

* Dominion Energy Inc. is seeking coal for its Virginia City Hybrid Energy Center, according to a company official.

Commodities

* After moving mostly higher in the week prior, term power markets across the U.S. were pointed in different directions during the week ended May 18 with gains in natural gas futures providing some support.

* After shedding 3.7 cents to settle at $2.810/MMBtu in the week's opening session, NYMEX June natural gas futures ticked higher overnight ahead of the Tuesday, May 22, open, on the back of renewed weather support.

* Price action for next-day power could be jumbled Tuesday, May 22, in tandem with varied demand expectations for midweek. Traders will also watch choppy natural gas markets for direction Tuesday.

* While the overall outlook for the PJM Interconnection's 2021/2022 base residual auction is stronger than the prior year, an S&P Global Market Intelligence analysis using proprietary Power Forecast data shows that 32,190 MW of capacity is at risk not to clear the auction.

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New from RRA

* Avista Corp. filed a settlement with the Montana Public Service Commission regarding the proposed acquisition of Avista by Hydro One Ltd. The settlement, which became public on May 15, was filed by the joint applicants and the city of Colstrip, Mont.

Quoted

"I think it's safe to say the foundation has now been laid to rebuild and sustain the nation's coal industry," said Warrior Met Coal Inc. COO Jack Richardson, at a conference hosted by the Virginia Coal & Energy Alliance, lauding the Trump administration's support for fossil fuels.

The day ahead

* The U.S. Senate Committee on Appropriations' subcommittee on energy and water development will hold a business meeting at 2:30 p.m. ET for the markup of the fiscal year 2019 energy and water development appropriations bill.

* 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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