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FERC staff field questions on resiliency rule; Contracts keep Utah mines afloat

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


FERC staff field questions on resiliency rule; Contracts keep Utah mines afloat

Top News

DOE's proposed resiliency rule prompts plenty of questions from FERC staff

With initial comments due Oct. 23 on the U.S. Department of Energy's demands that federal regulators adopt a new rule allowing certain struggling nuclear and coal-fired generators to fully recover their costs, Federal Energy Regulatory Commission staff has posed a long series of questions related to the proposal.

Permian gas megaproject expected to move forward after Targa joins pipe venture

The addition of Targa Resources Corp. to Kinder Morgan Inc. and DCP Midstream LP's plans to jointly develop a nearly 2 Bcf/d Permian-to-Gulf Coast pipeline project increases the odds of the potential megaproject reaching a final investment decision, analysts said Oct. 5.

Long-term contracts keep Utah coal mines afloat as Colo. production sinks

While production numbers have fallen across the Uinta Basin over the past five years, Utah's mines have shown a larger degree of resilience than Colorado's.

Power

* In its planned repeal of the Clean Power Plan, the Trump administration will raise the issue of how some of its air pollution-related regulations forced "generation shifting" and how that is inconsistent with the Environmental Protection Agency's authority under the Clean Air Act, Bloomberg News reported. According to documents obtained by the news outlet, the EPA will seek public input on how to cut greenhouse gas emissions instead of immediately releasing a replacement plan.

* Southwestern Public Service Co.'s request for New Mexico to approve its deals for three major wind projects has been bogged down for months over state regulators' refusal to grant confidential treatment for terms of the contracts.

* Brookfield Asset Management Inc. is said to be in "advanced talks" to acquire Abengoa SA's 41.5% interest in Atlantica Yield plc, Bloomberg News reported, citing "people familiar with the matter."

* The top policy issue that Fortis Inc. President and CEO Barry Perry would like to see the Federal Energy Regulatory Commission tackle is the regulatory process for settling disputes over the appropriate base rate of return on equity for transmission, he told reporters Oct. 4 following a speech to the Detroit Economic Club.

* An Exelon Corp. spokesperson said the company is committed to operate the Oyster Creek nuclear power facility in Ocean County, N.J., until its scheduled retirement date of December 2019, the Asbury (N.J.) Park Press reported. The statement came after New Jersey Gov. Chris Christie said the company may close the plant ahead of its scheduled retirement, according to WBGO.org.

* The Santee Cooper board of directors will consider a resolution on the appointment of an interim president and CEO during its special called telephonic meeting today at 10:30 a.m. Santee Cooper is known legally as South Carolina Public Service Authority.

* Elon Musk said in a tweet that Tesla Inc. can help rebuild Puerto Rico's electricity with independent solar and battery systems, noting that the company has done this for many smaller islands. However, the Tesla CEO added that "[s]uch a decision would be in the hands of the PR govt, PUC, any commercial stakeholders and, most importantly, the people of PR."

* The U.S. Environmental Protection Agency appointed Doug Benevento as administrator for Region 8, which covers Colorado, Utah, Wyoming, South Dakota, North Dakota and Montana. Benevento has been working on energy and environmental issues at Xcel Energy Inc.

* Westinghouse Electric Co. LLC is seeking approval from the U.S. Bankruptcy Court for the Southern District of New York to increase the salary of CEO Jose Gutierrez to $1 million from $627,000 in order to bolster restructuring efforts, Reuters reported.

* An employee for a Louisville Gas and Electric Co. and Kentucky Utilities Co. contractor died after slipping into a coal ash pond at the Ghent Generating Station in Carroll County, Ky., The Associated Press reported.

* Vionx Energy Corp. and National Grid USA commissioned a 3-MWh battery storage unit at Holy Name High School in Worcester, Mass. The system will be used to test and operate 13 specific use case applications, which will provide National Grid data to help optimize grid operations for renewable energy assets.

Natural gas/midstream

* The U.S. Court of Appeals for the D.C. Circuit will no longer hear oral arguments in the Sierra Club's challenges of three U.S. Department of Energy orders approving LNG exports, a sign that judges will likely echo their ruling upholding export authorization for the Freeport LNG terminal in Texas.

* The first shipment of U.S. crude oil to India arrived on Oct. 2, U.S. Energy Secretary Rick Perry said. The shipment was loaded at the Saint James, La., and Freeport, Texas, terminals. More shipments will follow in coming months.

* The Federal Energy Regulatory Commission granted Eastern Shore Natural Gas Co. a certificate for a proposed system expansion project that will provide additional gas transportation service to utility and industrial manufacturing companies in Delaware, Maryland and Pennsylvania.

* Ward Energy Partners LLC sold assets in Stephens and Grady counties, Okla., to an undisclosed buyer. The assets are prospective for the Woodford, Mississippian and Springer reservoirs in the SCOOP and Hoxbar oil trend.

* Corterra Energy LLC, an independent exploration and production company, completed the acquisition of 26,000 net acres and interest in more than 400 producing wells in the Arkoma Basin from Continental Resources Inc. for $68 million.

* UGI Corp. acquired Totalgaz Italia Srl, the LPG distribution business of TotalErg SpA. The acquisition is expected to be approximately 2 cents per share accretive to UGI in the first year.

Coal

* Managing the risk of climate change is going to become more important to get investors interested in coal plants in the future, according to an analyst.

* The Natural Resources Research Institute at the University of Minnesota Duluth is developing a coal substitute from roasted wood, the Duluth News Tribune reported. The Institute's Associate Director Don Fosnacht told the news outlet that the torrefied wood that Portland General Electric Co. ordered and burned "worked great" for the company.

* Armstrong Energy Inc. filed a Form 15 with the SEC on Oct. 5, immediately suspending the company's obligations to file periodic and current reports relating to its 11.75% senior secured notes due 2019 under Sections 13 and 15(d) of the Securities Exchange Act of 1934.

* Metallurgical coal exports through the Prince Rupert's Ridley terminals in British Columbia rose 1,341% to 2,379,698 tonnes in the first eight months of 2017, Business in Vancouver reported. This compares to exports of 165,141 tonnes in the same period of 2016.

Commodities

* A few offshore oil and gas operators in the Gulf of Mexico are evacuating platforms and rigs and shutting in supply in advance of Tropical Storm Nate, which is still strengthening and could reach hurricane status before making landfall on the U.S. Gulf Coast by Sunday, Oct. 8.

* The natural gas market's bias appears to be to the downside as oversold conditions leave the market susceptible to short-covering rallies but with any gains likely giving way to profit taking, technical analysts said.

* After ending the prior session down 1.7 cents at $2.923/MMBtu, NYMEX November natural gas futures worked lower overnight ahead of the Friday, Oct. 6, open, despite warmer weather outlooks that could spell lingering cooling demand and a continuation of the lackluster rate of weekly storage builds.

* Power dailies could end the workweek biased higher Friday, Oct. 6, amid predominantly stronger demand expected coming off the weekend. Participants will also watch natural gas market activity.

SNL Image

New from RRA

* Emera Maine filed for a $10 million, or 12%, electric distribution rate increase with the Maine Public Utilities Commission on Oct. 2. The rate increase is premised upon a 9.5% return on equity (49% of capital) and a 7.24% return on an average rate base valued at $292.1 million for a calendar-2016 test year, adjusted for certain known and measurable changes.

Quoted

"Based on what we saw last week, it would be foolish to imagine that FERC is not going to take this opportunity to essentially weaponize its jurisdiction to go after state policies when the California ISO comes to it with a whole series of changes," said Matt Freedman, staff attorney with consumer advocacy group The Utility Reform Network, during a panel discussion in San Francisco on U.S. Energy Secretary Rick Perry's proposal to ensure cost recovery for certain coal and nuclear plants.

The day ahead

* The U.S. Senate Committee on Energy and Natural Resources will hold a field hearing at 11 a.m. ET at the Robbins Lumber Mill in Searsmont, Maine to examine efficient approaches to reduce industrial energy costs.

* Early morning futures indicators pointed to a mixed 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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