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ETE/Williams merger likely dead; Exelon floats rescue plan for at-risk nukes

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TheCalifornia ISO board ofgovernors on May 4 approved a plan aimed at improving gas and electriccoordination and heading off reliability risks due to the operation of the Aliso Canyonnatural gas storage facility.

Theexisting Energy Transfer EquityLP and Williams Cos.Inc. merger agreement will not be able to close, because law firmLatham & Watkins has concluded that it cannot deliver a tax opinionrequired as a condition to closing, ETE executives said May 5.

IncumbentSen. Rand Paul, R-Ky., placed the blame for Kentucky's coal collapse at thefeet of the Obama administration this week as the junior senator's re-electionbid comes into focus and he promises further pushback on federal authority.


*, andother stakeholders in Illinois have unveiled a new bill that seeks to secure thefuture of "at-risk nuclear plants" in the state. Other key elementsof the so-called "Next Generation Energy Plan"include a near doubling of energy efficiency programs in northern Illinois,$140 million in new funding for solar development, and a new solar rebate, the subsidiaries said in a news release.

*The U.S. SEC is conducting a formal investigation of and concerning theestimated costs andexpected in-service date of the Kemper integrated gasification combined-cycleproject, formally known as Plant Ratcliffe, according to a 10-Q .

* AlGore has been fighting for climate change action for 38 years, but only now ishe seeing the tablesturn toward public acknowledgment of the threat facing the globe.Speaking at the Climate Action 2016 conference in Washington, D.C., on May 5,the former second-in-command to President Bill Clinton said climate change isimpacting the world now in extremely visible ways.

*Morgan Stanley Research North America said FirstEnergy Corp.'s revised rate mechanism in Ohio will have a "lowprobability" of success at FERC. The brokerage also sees "a real risk"of rejection or modification of the revised plan at the state level.

*NV Energy Inc. is"unlikely" to build any new fossil fuel power resources in the next10 years, including the development of new $1 billion natural gas-fired projectin North Las Vegas, LasVegas Sun reported, citing a company executive. The news comes on theheels of the Berkshire HathawayEnergy subsidiary's recent move to purchase a gas-fired facility in Arizona from

*Exxon Mobil Corp. andFuelCell Energy Inc.are joining forces to advance a new application of carbonate fuel cells tocapture CO2 from power plants. The technology could "substantially reducecosts and lead to a more economical pathway toward large-scale applicationglobally," the companies said in a newsrelease.

Natural gas/midstream

*Southern Co. expectsto raise about $900 million in gross proceeds from the sale 18.3 millioncommon shares in a public offering, according to company release. The companyplans to use the proceeds to fund a portion of the purchase price of itspending acquisitionof AGL ResourcesInc., among others.

*LNG buyers are likely to renegotiate their long-term purchase contracts — someof which are locked in until 2040 — to take advantage of the drop in pricessaturated by new supply from Australia and the U.S., BloombergNews writes.

*NextDecade LLC filedits formal application withFERC for its proposed LNG liquefaction and export terminal inBrownsville, Texas. Rio Grande LNG would include six liquefaction trains, eachwith a nominal capacity of about 4.5 million tonnes per annum.

*Anadarko PetroleumCorp. is said to be seeking buyers for its assets in Wyoming, EastTexas and Louisiana. Each batch of the assets could fetch $300 million to $600million apiece, sources told BloombergNews.

* is facinga class-action lawsuit in connection with its terminated merger agreement with WilliamsCos. The lawsuit was filed by Khang & Khang LLP on behalf of investors whopurchased the partnership's shares between May 13, 2015, and June 19, 2015.


*The Office of the U.S. Trustee has warned that could faceobstacles in connection with its restructuring plan as consulting firm McKinseyRecovery & Transformation Services failed to fully disclose connectionswith potential buyers of the company's assets, Reutersreports.

* PeabodyEnergy Corp. could lose a significant long-term coal as one of its customers seeksto wriggle out of the deal after the coal miner's filing.

* Presumptive Republican nominee Donald Trump has garneredsupport from the West Virginia Coal Association to be elected president in the2016 election. "Trump has said he will reverse the Democratic regulatoryassault that has cost the coal industry more than 40 percent of our productionand jobs since 2008," Bill Raney, WVCA president, said in a statement.

* China's National Development and Reform Commission hasordered the immediate closure of 38 coal mining projects on account ofbreaching industry policies, Reutersreports.


*The latest indicationon drilling activity from oilfield service companies shows that morecontraction in activity will take place in the second quarter, but executivesare sticking to theirexpectations for a recovery in the second half of this year. Anytightening supply/demand balances that result could eventually be bullish foroil and gas prices.

*After ending the prior session 6.5 cents lower at $2.076/MMBtu, June naturalgas futures clawed upovernight ahead of the Friday, May 6, open, in short-covering leading up to theweekend. But amid an overriding fundamental weakness, as building inventoriesand weather forecasts that spell limited demand continue to plague the market,the contract moved back to near unchanged, trading last down 0.2 cent at$2.074/MMBtu.

*The price of power at the daily markets could Friday, May 6, amidforecasts for increased demand in much of the country coming off the weekend.

New from RRA

*Despite mid-month turbulence, both the Dow and S&P 500 maintained their holdon positive territory for the month of April, while the Nasdaq stumbled ondisappointing first-quarter earnings from some big names, including Microsoftand Apple. After surging in March, the RRA Index slipped 2.6% in April oninterest rate concerns, but is still up nearly 12% thus far in 2016, significantlyoutperforming the broad market indexes we track.

*On May 3, CommissionerLisa Edgar, an independent, of the Florida Public Service Commission that she will not seekreappointment to the PSC for a new term commencing in January 2017.


"Letme be clear, we're not gas agnostic and don't want to be gas agnostic as webelieve current prices are not sustainable," President and CEOMauricio Gutierrez said of expectations that higher gas prices will benefitits power plant fleet.

"HillaryClinton recently bragged to the American people that she's going to put a lotof coal companies and miners out of business. Kentucky needs leaders who willstand up to the Obama-Clinton War on Coal and fight back against theirjob-killing agenda," said Sen. Rand Paul, R-Ky.

The day ahead

*Hallador Energy scheduled to report first quarter 2016 earnings after the market close.

*Early morning futures indicators pointed to a lower opening for the U.S. equitymarkets. To view more SNL equity market indexes, click here.To view more SNL Energy commodities prices, click here.