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TCEH emerges from bankruptcy; Oil, gas lead S&P 'weakest links' list

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


TCEH emerges from bankruptcy; Oil, gas lead S&P 'weakest links' list

Top News

Energy Future's generation, retail business emerges from bankruptcy

The parentcompany of Energy Future HoldingsCorp.'s generation and retail businesses consummated its reorganizationplan Oct. 3 and emerged from Chapter 11, according to a federal filing.The emergence of TCEH from bankruptcy is a separate transaction from the regulatedside of EFH, where the company is working toward completion of an to be acquired,along with its 80% ownership share in OncorElectric Delivery Co. LLC, by NextEraEnergy Inc.

Moeller reflects on time at FERC, work still to be done

Only one FERC commissioner served longer than Philip Moeller,who since leaving the agency has buckled down in his new job working for the EdisonElectric Institute. Still, he has plenty to say about his time at the commissionand the challenges facing the industry.

Oil, gas lead S&P 'weakest links' list for high default risk

Despitethe mild upswing in commodity gas prices, oil and gas companies are still drivingthe overall increase in potential corporate defaults, S&P Global Ratings found.The oil and gas sector had the most firms on S&P's global list of 249 "weakestlinks," S&P said. "Weakest links" are companies rated near thebottom of speculative grade, B-, with negative outlooks. S&P blamed low commodityprices for putting 58 oil and gas firms, 23% of the total, on the list.

Liberal think tank wants to overhaul federal coal leasing to considerclimate

The federalcoal program should be overhauled with market-based changes that include lease capsset to guide the country toward its climate goals, according to the liberal thinktank Center for American Progress. In anOct. 4 issue brief, the Center for American Progress, or CAP, put forth its visionfor a new federal coal leasing program that would consider U.S. climate goals, supporteconomic transition in coal-dependent communities and be more likely to survivelegal and political challenges.

Power

* TheU.S. EPA's Clean Power Plan's legalsaga has had "more plot twists than Game of Thrones," accordingto attorney David Doniger of the Natural Resources Defense Council.A week after the U.S. Court of Appeals for the District of Columbia Circuit heardoral arguments, attorneysand energy policy experts on both sides met at the Bipartisan Policy Center in Washington,D.C., to discuss the legal case that has seen unprecedented action from both thefederal appeals court and the U.S. Supreme Court.

* Anindependent audit of the Canadian Nuclear Safety Commission found flaws in its nuclearsafety practices, particularly in managing the inspections of the country's nuclearpower plants, TheWall Street Journal reports. The agency welcomed the findings and notedthat it is working to address the issues.

* is selling $500 millionworth of senior notes due 2025 to help fund its buyout of EnergyCapital Partners III LLC's stakein a joint venture formedto acquire 's fossil fuel-fired power plantsin the U.S., according to a company release.

* is in South Carolina with the launchof its residential solar service in the state. The expansion follows the company'sintroduction of a new solar loan earlier this summer. SolarCity, which is in themiddle of a $2.6 billion acquisitionby Tesla Motors Inc.,is offering residents the option to choose 10-year or 20-year loan options or purchasetheir systems outright.

* has raised morethan $200 million of capital to fund distributed generation commercial and industrialsolar projects. The commitments came from the Alternative Energy Investing groupat Goldman Sachs, Global Atlantic Financial Group and FS Investments, accordingto a company release.

Natural gas/midstream

* Thecombination of slightly higher commodity prices and ongoing cost reduction willhelp the upstream segments of major integrated oil and gas companies over the next 12 months,Moody's analysts said. EBITDA for the globalintegrated oil and gas sector is stabilizing and is expected to "modestly improve"over the next year, the analysts wrote in a report.

* Ina bid to improve its access to long-term natural gas supply, Nucor Corp. has purchased 49% of Encana Corp.'s leasehold interest covering 54,000-acre landin the South Piceance Basin, according to news release. Nucor alsoterminated Carry and Earning drilling agreements with Encana and sold its 50% equityinterest in Hunter Ridge Energy Services LLC, a gas gathering and water serviceprovider, to Encana.

* TheU.S. Pipeline and Hazardous Materials Safety Administration announced its interim final rule to put in place that allowsit to take industrywide action on immediate safety concerns without going throughthe full rulemaking process.

* sees a significantupside for its shale assets in the U.S. should oil and gas prices recover, saidBHP's President of petroleum operations Steve Pastor. "While currently wellsupplied, underlying fundamentals suggest both oil and gas markets are improvingmore quickly than our minerals commodities," Pastor said.

* has agreedto acquire certain oil and gas properties in Reeves County, Texas, from FirewheelEnergy LLC for $135 million, according to a news release.The properties consists of 3,293 net acres in Firewheel's Delaware Basin operatingarea and includes 13 horizontal and 15 vertical wells that produce about 1,200 netbarrel of oil equivalent per day.

* TheJordan Cove LNG export project in Oregon didnot get a full chance to prove its economic viability before FERC deniedits application, preventing the market from deciding who the "winners"are, the project's leader said.

* EnerplusCorp. is said to be seeking buyers for its natural gas assets in the Marcellus Shaleregion, sources told Reuters.The assets, which could be valued at about $500 million, have reportedly attractedbuyers from the U.S. and Asia.

* Republicanpresidential nominee Donald Trump met with oil and gas executives in Colorado to"assuage" their concerns over his stance on fracking. Trump recently saidhe supports local residents voting for fracking bans, BloombergNews reports.

Coal

* Republicanvice presidential candidate Mike Pence promisedthat he and running mate Donald Trump will free the coal industry from its regulatoryburdens if they reach the White House, a much-visited theme in the 2016 electionsthat has divided the GOP and Democrats on energy.

* A newreport from Moody's says Wyoming counties that are dependent on coal are record declinesbetter than peers in West Virginia and Kentucky. According to the report, Wyoming'scoal-producing counties demonstrate healthier income and poverty levels and localgovernments are less dependent on state distributions of coal severance tax revenues.

* TheParis climate pact is one step closer to going into force after the European Unionvoted to ratify the agreement, TheAssociated Press reports. For the climate deal to become effective, at least55 countries accounting for at least 55% of global emissions must have adopted it.

Commodities

* Afterstalling in the prior month, spot natural gas prices resumed their march higher in September in all parts of theU.S. but the Northeast. Average spot prices in the Northeast declined 9.5% versusthe prior month and 7.5% versus the prior year, while the Gulf Coast saw pricesjump 11.4% year over year to $2.847/MMBtu.

* Electricitydemand and natural gas prices were the majordrivers of power prices in September, as U.S. power prices were mixedand generation margins were in line with year-ago levels.

* Inventoriesof natural gas liquids surpasseda 10-month high in July with help from a record level of ethane stocks. NGL inventorieswere also boosted by weakness in demand for propane and butane compared to a yearago.

Quoted

FERC"is a higher-profile agency now for a variety of reasons, and so the appointmentprocess is going to reflect that and people are more engaged in these issues ifthey're members of Congress or the U.S. Senate. They've had to think about themmore. It's not a calm time," saidformer FERC Commissioner Philip Moeller, referring to the need for Congress to approvetwo new FERC members.

The day ahead

* is scheduledto hold an analyst/investor day meeting today.

* 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.