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April 4-8


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Essential IR Insights Newsletter Fall - 2023


Cleantech Edge: Five is the new zero for energy transition debt

April 4-8

A brief look backat successes and setbacks in the energy industry.


WESTAR For small-to-mid-cap utilities, it remains a sellers'market. Deal rumors brokearound Kansas utility Westar EnergyInc. on April 8, with rumored buyers including Ameren Corp. and a Canadian investor consortium composedof Borealis Infrastructure Managementand Canada Pension Plan InvestmentBoard. Bloomberg reported that Westar is working with GuggenheimPartners LLC to field interest for the utility, with initial bids due the week ofApril 11. Westar's market value is believed to be approximately $7 billion.Westar has been reportedly reviewingstrategic alternatives since earlier this year.

DUKE A North Carolina judge on April 4 closed a lawsuit filed against a subsidiary related tocoal ash management at three power plants, because of the utility's commitment to clean up the sites. The order grantsDuke Energy Progress LLC'smotion for partial summary judgment in the case. In July 2015, Duke Energy filedmotions for summary judgments and proposed orders asking the court to dismiss civilenforcement actions brought by state regulators and environmental groups relatedto coal ash cleanup, arguing state law already required the remediation at the specifiedsites within a certain time frame. The Southern Environmental Law Center said itexpects the court to issue a separate order dealing with four additional sites involvedin the settlement with Duke Energy.

SOUTHERN The acquisition of AGL Resources Inc. by Southern Co. took a stepforward April 4 when the two companies announced they had reached asettlement agreement with most intervenors and regulatory staff of the Georgia PublicService Commission. The settlement extends Georgia Power Co.'s alternative rate plan for 2014 to 2016through the end of 2019, and sets up a number of prohibitions on cross-marketingbetween Georgia Power and SouthstarEnergy Services LLC, which does business as Georgia Natural Gas. Georgiaregulators are currently scheduled to vote on the $11.5 billion merger May 24.

JON WELLINGHOFF SolarCity Corp has hiredJon Wellinghoff as its chief policy officer, putting the former FERCchairman on the front lines to advocate for the company in the face of pushbackaround the U.S. over net metering policies. "With Jon leading our policy efforts, SolarCity will seek opportunitiesto collaborate and partner with utilities while ensuring that rooftop solar's fullbenefits to ratepayers and to the grid are considered and factored into all ratecases and resource discussions," SolarCity CEO Lyndon Rive said in a news release.


WILLIAMS-ETE WilliamsCos. Inc. announced alawsuit April 6 against EnergyTransfer Equity LP and its leader, Kelcy Warren, over a March privateoffering by ETE that Williams said threatens the merger between the two pipelinecompanies. In what is clearly a setback for the acrimonious merger's prospects,Williams filed a suit against ETE in Delaware seeking to unwind the offering, andin Texas against Warren. The suits claim the offering is a breach of themerger agreement, providing "select ETE investors with preferential treatmenton ETE distributions." Williams said it remains committed to mailing the proxystatement and holding the stockholder vote to close the deal as soon as possible,but the lawsuits are intended to protect the interests of its stockholders. Analysts are, to saythe least, uncertain as to how thedeal progresses from here, if at all. "This is the Cuban missilecrisis of mergers," Ethan Bellamy, analyst for Robert W. Baird & Co said."Both of these parties are better off alone. They are going to keep hammeringaway at each other until one blinks and walks away, or until the merger is completed.This could go anywhere from here."


SUNEDISON Another week, another hazardous headline for : On April 3 SunEdison'syieldco, TerraForm Global Inc.,filed a lawsuit againstSunEdison alleging it had manipulated the yieldco into providing a $231 million"pre-payment" for solar projects that it was developing in India and thendiverted those funds to prop up its "flagging liquidity position."According to the lawsuit, SunEdison management, "falsely represented"that TerraForm Global needed to make the payments in order to retain the portfolioof solar projects in India. Instead, the funds went to pay off a margin loan, thelawsuit states. SunEdison also diverted funds earmarked for projects in Uruguay,resulting in a failure to drop down those projects into the yieldco by the promiseddate. SunEdison shares closed at 21 cents April 4 and the company is widely expectedto declare bankruptcy.

DON BLANKENSHIP Former Massey Energy CEO Don Blankenship receivedthe maximum sentence April 6,a one-year penalty and $250,000 fine for his conviction on a misdemeanor chargeof conspiring to violate mine safety laws. Blankenship was investigated followingthe explosion in the Upper Big Branch coal mine that killed 29 miners in West Virginia.U.S. Secretary of Labor Thomas Perez said the situation was a "clear case ofthe punishment not fitting the crime." He urged Congress to strengthen minesafety penalties. One day later, Blankenship's attorneys submitted a notice of appeal of the sentence to the U.S.District Court for the Southern District of West Virginia Beckley Division.

KEYSTONE TransCanadaCorp. on April 8 upped its estimate of how much oil had spilled from a leak in the Keystone pipelinein South Dakota to 400 barrels of oil sands crude, up from an initial estimate ofabout 187 gallons, or 4.5 barrels. The incident, which started with a landowner reportApril 2, is being controlled and no significant environmental impact has been observed,a TransCanada spokesman said. The company originally expected the line, which iscapable of carrying 590,000 bbl/d of oil sands crude from Canada to the U.S. Midwest,would be returned to service by April 8. On April 10, TransCanada reported it had begun a controlled restart ofthe Keystone pipeline. Followingrestart approval by the U.S. Pipeline and Hazardous Materials Safety Administration,Keystone is operating at a reduced pressure, TransCanada said.

HALLIBURTON The U.S. Departmentof Justice on April 6 filed an antitrustlawsuit seeking to stop the merger of oilfield services giants and , saying it "threatens to eliminate competition,raise prices and reduce innovation in the oilfield services industry."The merger was valued at more than $34 billion when announced in November 2014.Halliburton and Baker Hughes respondedthat the federal government has, "underestimated the highly competitivenature of the oilfield services industry," and vowed to fight the suit. Analystssee Baker Hughes as poised to benefitno matter how the lawsuit plays out, due largely to a $3.5 billion breakup fee.