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Musk defends timing, rationale of SolarCity deal; oil, gas groups enter Constitution Pipeline case

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Insight Weekly: Global stock performance; hydrogen pilot projects; Powell's Fed future unsure

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Insight Weekly Labor market recovery hurdles power market integration nonbank MA hunt

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Q&A: Q2'21 Power Forecast: Overheated Power Markets are Here – Who Wins, Who Loses, and Why?

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ESG & Technology: Impacts and Implications


Musk defends timing, rationale of SolarCity deal; oil, gas groups enter Constitution Pipeline case

Top news

Inhis "Master Plan, Part Deux," Tesla Motors Inc. Chairman and CEO Elon Musk on July 20defended the rationale and timing of his company's proposed of rooftop solar companySolarCity Corp. whileat the same time pushing a vision for an expanded product line of electricvehicles with self-driving technology.

Maineregulators have unanimously endorsed a plan that authorizes electricdistribution companies to purchase capacity on natural gas pipelines servingthe increasingly gas-dependent ISO New England Inc. region. The Maine Public UtilitiesCommission in its July 19 decision ignored PUC staff advice and voted to allowratepayer-supported electric utilities to enter into contracts with a regionalpipeline operator if neighbors Connecticut, Massachusetts, New Hampshire andRhode Island move forward in supporting the regional plan as well.

Theoil and gas industry, supported by manufacturing and commercial groups, hasjumped into the court case between Constitution Pipeline Co. LLC and New Yorkin an effort to protect all natural gas infrastructure projects. The groupstold the U.S. Court of Appeals for the 2nd Circuit that New York's Aprildenial of a CleanWater Act permit for Constitution Pipeline, which had already received FERCapproval for its 124-mile gas pipeline project between Pennsylvania and NewYork, is dangerous from a regulatory and economic perspective.

Thecomment period over the practice allowing coal companies to self-bond ended onJuly 20 with a flurry of comments supporting and lambasting the controversialpractice. The U.S. Office of Surface Mining Reclamation and Enforcementannounced in May thatit was opening a comment period on a petition to change regulations that allowcoal companies to self-bond on reclamation obligations.

Power

*Donald Trump supporters are lobbying to have him soften his stance on climatechange, a notion that the Republican presidential candidate believes is a hoax,Reutersreports. Organizations such as the Young Evangelicals for Climate Action group,Greater Cleveland Young Republicans, RepublicEn and ClearPath argue thatembracing cleaner sources of electricity could secure votes for Trump, who hasvowed to reverse some of President Obama's climate change initiatives.

* tookthe unusual step of denyingspeculation that it was still open to merger offers from othercompanies in the wake of its failed effort to merge with NextEra Energy Inc.The rumors gained traction on July 18, when Hawaii Gov. David Ige indicatedseveral investor groups had approached him and expressed interest in acquiringthe state's utilities. One rumor had it that Hawaii's utilities wereentertaining an offer from Berkshire Hathaway Energy.

* Areport from Public Watchdogs allegesthat Southern California EdisonCo. intentionally operated unit 3 at the now-retired nuclear power plantat higher-than-allowable pressure and temperatures, which caused a radiationleak that shut down the facility for good in 2012. The report from theindependent watchdog challenges the Edison International subsidiary's that the shutdown was caused byfaulty steam generators built by Mitsubishi Heavy Industries Ltd.

* AnSEC filing by Great Plains EnergyInc. sheds light on the events leading up to the company's$12.2 billionbid for According tothe KansasCity Business Journal, Great Plains bumped its initial bid — helping itstand out against eight other suitors.

Naturalgas/midstream                                    

*Ravindra Chhatre, the National Transportation Safety Board's lead investigatorfor the fatal 2010 San Bruno, Calif., explosion, testified that misled federal investigators and provided "conflicting versions of itspipeline pressure policies," TheMercury News of San Jose, Calif., reports. A recent from an FBI agent alsoindicated that the PG&ECorp. subsidiary's pipeline system records were spotty.

*Kinder Morgan Inc. ison track to lower akey debt metric through asset sales and joint ventures, bringing the companycloser to being able to increase the dividend it slashed last year or buy backshares to boost value. The company is expected to have 5.3x debt-to-EBITDA bythe end of 2016, chairman and co-founder Richard Kinder said on a July 20conference call to discuss second-quarter 2016 earnings.

*  subsidiaryChevron USAInc. has agreed to supply up to 0.5 million metric tons perannum of LNG to Singapore Carbon Hydrogen Energy Pte. Ltd. for five years,beginning in 2018. Singapore Carbon Hydrogen is a subsidiary of China'senergy company, JOVO.

*Alaska Gov. Bill Walker has named former state senator Hollis French to the AlaskaOil and Gas Conservation Commission, effective July 25. The appointment issubject to the state legislative approval.

*Calgary, Alberta-based exploration and production company, , has launched the second phase of its sale andinvestment solicitation process. Final binding bids are due by Aug. 10.

Coal

*Production at one ofthe largest mines in the U.S. has dropped to the lowest quarterly level of the millennium.Data provided by the U.S. Mine Safety and Health Administration indicates thatArch Coal Inc.'sBlack Thunder mine in Wyoming produced only 13.7 million tons in the secondquarter 2016, the lowest amount since the last quarter of 1999 when the mineproduced around 13.2 million tons.

*Bankrupt coal miner PeabodyEnergy Corp. has secured court approval to pay nearly $30 million inproperty taxes in Colorado, Wyoming, New Mexico and Indiana, The AssociatedPress reports. An earlierreport by SNL Energy indicated that missed property tax paymentsfrom Peabody were leaving local communities in the states without vital funds.

*West Virginia Sen. Shelley Moore Capito brought at the RepublicanNational Convention, stressing the need to push back on the Obamaadministration's "war on coal" in her appeal for a Donald Trumppresidency. Toward the end of a night dedicated to the economy, titled"Make America Work Again," Capito took the Obama administration totask for what she saw as regulatory overreach and its impact on the coalindustry.

Commodities

*Following a week ofstifling heat, market observers expect the U.S. Energy InformationAdministration's weekly natural gas inventory report to reflect anotherbelow-average buildto the Lower 48's underground storage. Analysts and traderssurveyed ahead of Thursday's 10:30 a.m. ET release of the report anticipate a33-Bcf to 39-Bcf injection, with the consensus expectation being a storagebuild of 37 Bcf, below the previous week's injection of 64 Bcf, well below thefive-year average injection of 61 Bcf and sharply below the 70-Bcf injectionreported for the same week in 2015.

*After shedding 7 cents in the prior session at a settle at $2.658/MMBtu, Augustnatural gas futures remained tethered to the downside overnight ahead of theThursday, July 21, open, as the market looks beyond the possibility for additionalunderperforming storage builds when the next weekly inventory data is releasedat midmorning and further into the midrange amid warmer weather forecaststoward prospects for record-high end-of-season stocks. The contract was lasteyed down 0.8 cent at $2.650/MMBtu.

*Following a move higher in the previous session, power dailies Thursday, July21, driven by expectations for firm to elevated demand across the bulk of thecountry at the close of the workweek, but limited by ongoing losses at thenatural gas futures complex. Following a 7.0-cent loss in the prior session,August natural gas was last seen trading 1.5 cents lower at $2.643/MMBtu.

* Atthe over-the-counter market, prices for Regional Greenhouse Gas Initiative CO2allowances continued toplunge toward $4.00/ton following a recent failed attempt to crackthrough $6.00/ton. Broker data as of July 19 showed the RGGI spotallowance contract in a bid-and-offer range of $4.17/ton to $4.48/ton, slumping89 cents on the week. The spot contract has dropped a total of $1.55, or 26.4%,since hitting a June 23 peak of $5.88/ton.

New from RRA

*On July 20, the MissouriPublic Service Commission staff filed testimony in a proceeding in which the PSC isconsidering Algonquin Power &Utilities Corp.'s proposed acquisition of The staffrecommends that the PSC impose certain conditions if it ultimately allows thedeal to proceed.

* Ina Topical Special Report issued on July 19, RRA dating back to1985, including drivers, regulatory review proceedings and conditions.

Quoted

"Despitestatements reported in the media about other unnamed parties rumored to beinterested in acquiring HEI, the company is not currently in discussions withany other party regarding a business combination and does not intend toinitiate any such discussions," Hawaiian Electric Industries .

The day ahead

*The EIA natural gas storage report is due out today.

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