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FERC holds upper hand on gas pipelines; FirstEnergy's Ohio plants to participate in PJM auction

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 holds upper hand on gas pipelines; FirstEnergy's Ohio plants to participate in PJM auction

Top news

Withthe extension of taxcredits for renewable energy development, and confident that regulations oncarbon emissions will only tighten, NextEra Energy Inc. management on April 28 said thecompany continues to outpace previous guidance it has set on the scale of itsrenewable development pipeline.

Ashowdown over gas pipeline approvals looms between FERC authority granted bythe Natural Gas Act and the state permitting requirements of the Clean WaterAct, an energy industry lawyer warned. "I think FERC should and will havethe upper hand," Steptoe & Johnson PLLC's Kurt Krieger said in anemail, but the fight will not be easy.

Theprolonged decline in global coal prices has sent a number of major producersinto bankruptcy, costing equity investors, lenders and suppliers billions. But for thosefirms overseeing producers' reorganization efforts, the fallout has provenlucrative.

Power

* FirstEnergyCorp.'s Ohio-based W. H. Sammis and Davis-Besse power facilitieswill participate in PJMInterconnection LLC's capacity auction for May following FERC'sdecision to revokeincome guarantee proposals for the plants. In an SEC filing,the company said it was considering both short-term and long-term legislativeand regulatory solutions in light of the FERC decision.

* Morgan Stanley Research North America expects FirstEnergyand American Electric Power Co.Inc. to pursue re-regulation in Ohio now that their income guaranteeproposals for certain "vital" power plants have been defeated. Whilesuccess of such a move is possible, the costs may be prohibitive and timinguncertain, the brokerage warned.

*An attorney forEnergy Future HoldingsCorp. reportedly told a bankruptcy judge April 28 that the sale ofOncor Electric Delivery Co.LLC to a group of investors led by will not close,and EFH will soonpresent a new plan to resolve the long-running bankruptcy, Reutersreported.

*Fitch Ratings has upgraded ExelonCorp. subsidiary CommonwealthEdison Co.'s long-term issuer default rating to BBB+ from BBB andrevised the ratings outlook to stable from positive.

*The U.S. EPA is facing a lawsuitfor allegedly failing to update emissions standards for sulfur and nitrogenoxides produced from the manufacture and burning of fossil fuels. The lawsuitwas filed by conservation and public-health groups, including the Center forBiological Diversity.

*Arizona Public ServiceCo. said it is "well prepared" to meet a summer peak ofdemand of 6,986 MW. In a statement, the PinnacleWest Capital Corp. subsidiary said it has nearly 8,500 MW of poweravailable to meet its customer's energy demands during the hottest days of theyear.

* Law Offices ofHoward G. Smith, LawOffices of Vincent Wong and HagensBerman Sobol Shapiro LLP have filed class-action lawsuits againstTerraForm Power Inc.on behalf of investors who purchased the company's stock between May 7, 2015,and March 15, 2016. The complaints allege that TerraForm made false andmisleading statements and failed to disclose the ineffectiveness of itsinternal controls, among others.

*Apex Clean Energy isplanning to build a 200-MW wind power project in Orleans County, N.Y., TheBuffalo (N.Y.) News reports.

Natural gas/midstream

*The California Assembly has approved a bill that seeks to extend the closure of's AlisoCanyon natural gas storage facility, TheAssociated Press reports. The bill now goes to the state Senate forconsideration.

*Proponents of the proposed $5 billion Atlantic Coast Pipeline project areexpecting a delay in the start of construction work of the project "until the summerof 2017," TheRoanoke (Va.) Times reports. The approximately 564-milepipeline is a joint venture of Dominion Resources Inc., , andAGL Resources Inc.

*MPLX LP executivesare confident that the partnership will be able to continue to grow distributions as it focuses onorganic growth projects and taking advantage of its position in the prolificMarcellus and Utica shale plays. During an April 28 earnings call, executivesreaffirmed MPLX's distribution growth guidance of 12% to 15% for 2016 anddouble digits for 2017, but declined to offer specifics beyond next year.

* Anew study suggests that oil and gas production in North Dakota's Bakken shaleaccounted for up to 3% of the total global ethane emissions in 2014. "Theidea that the US shale-gas contribution is responsible for the recent globalincrease in ethane is plausible given the rapid increase in US oil and gasproduction in the past decade," the study said.

*While Piedmont Natural Gas Co.Inc. is evaluating the impact of New York's of a key permit for theConstitution pipeline, it is not rethinking its $210 million investment inthe project, the Charlotte(N.C.) Business Journal reports.Also, worker unions who would have otherwise benefited from the construction ofthe pipeline are criticizing New York Gov. Andrew Cuomo's attempt to block it,the Albany(N.Y.) Business Review reports.

Coal

*Czech coal miner New WorldResources Plc warned that its main unit, OKD, was at the risk ofrunning out of cash within two weeks, BloombergNews reported. Chairman Gareth Penny is seeking government help torestructure about €300 million in debt to avoid a bankruptcy filing which couldhappen as early as today.

*Following in the footsteps of coal producers in Wyoming, moved toreduce its workforcein the state to match recent reductions in production amid a sustainedindustry downturn. According to the company, which filed for bankruptcy inAugust of last year, the layoffs occurred April 28 at its Eagle Butte Mine andBelle Ayr Mine, amounting to a reduction of 37 employees between the twofacilities.

*Creditors have so far lent $2.1 billion in debtor-in-possession financing thisyear to help bankrupt companies, including Peabody Energy Corp., during the restructuring process.The figure tops the $930 million committed last year and is likely to increaseas more troubled energy companies file for bankruptcy protection, Reuterswrites.

Commodities

*The California AirResources Board held a public workshop April 28 to discuss the of the state'scarbon cap-and-trade market with a similar program proposed for Ontario. InFebruary, officials in Ontario proposed legislation that would introduce acap-and-trade program in Canada's most-populous province in 2017. The provincesaid it plans to reduce greenhouse gas pollution to 15% below 1990 levels by2020 and to 37% below 1990 levels by 2030.

*After a 7.5-cent decline in its debut session in the lead slot April 28 to asettle at $2.078/MMBtu, the fresh front-month June natural gas futuresmeandered overnightahead of the Friday, April 29, open, as the market continued to digest thelarger-than-expected build to stocks in the latest storage report andmoderating weather in forecasts that should trim demand and allow for additionallarge inventory injections in the coming weeks. Spanning $2.056/MMBtu to$2.088/MMBtu, the contract was last eyed 0.3 cent lower at $2.075/MMBtu.

*The price of power for next-day delivery could be mixed to lower Friday, April 29, as tradersconsider varied demand forecasts for the onset of the next workweek alongsideongoing weakness at the natural gas futures arena.

New from RRA

*According to RegulatoryResearch Associates, which is part of S&P Global Market Intelligence, theutility regulatory climate in Maine is relatively balanced from an investor viewpoint.

Quoted

"Wehave no interest in getting involved in a protracted FERC-state jurisdictionaldebate," AEP Chairman, President and CEO Nicholas Akins on the company's first-quarter 2016earnings call.

The day ahead

* At10 a.m. ET, CalpineCorp. will holdits first-quarter 2016 earnings call.

* At11 a.m. ET, PNM ResourcesInc. will holdits first-quarter 2016 earnings call.

* At11 a.m. ET, Portland GeneralElectric Co. will hold itsfirst-quarter 2016 earnings call.

* At11 a.m. ET, Public ServiceEnterprise Group Inc. will holdits first-quarter 2016 earnings call.

* Atnoon ET, Pinnacle West CapitalCorp. will holdits first-quarter 2016 earnings call.

* At1 p.m. ET, Empire DistrictElectric Co. will holdits first-quarter 2016 earnings call.

* At3 p.m. ET, TransCanadaCorp. will hold itsfirst-quarter 2016 earnings call.

*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.