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Future of nuclear playing out on California's coast; Armstrong posts Q4 loss

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Future of nuclear playing out on California's coast; Armstrong posts Q4 loss

Top news

Future of nuclear power playing out on California's coast

In January, when Entergy Corp. announced it had reached a decision with New York to close the Indian Point 2 and Indian Point 3 nuclear power units, it marked the latest in a string of announced nuclear shutdowns. According to the U.S. Energy Information Administration, five nuclear plants have closed in the last five years, and another six retirements have been announced, including Indian Point. None of these are more significant, or more controversial, than the 2,300-MW Diablo Canyon plant near San Luis Obispo, Calif.

Pair of IPOs signal friendlier capital market for driller-backed midstream MLPs

Initial public offerings by Hess Midstream Partners LP and Antero Midstream Partners LP's general partner indicate a further thaw of capital markets for midstream master limited partnerships sponsored by oil and gas drillers after the sustained industry downturn of 2014-2016.

Armstrong posts loss in Q4'16 as bankruptcy threat looms

Though many of the coal giants taken down by a wave of sector bankruptcies have emerged or are near emergence in the wake of an improved market, at least one more producer may face a court restructuring. Armstrong Energy Inc. reported in a securities filing March 31 that there is "substantial doubt" about the company's ability to continue as a going concern.

Power

* U.S. utilities should not expect the Japanese government to provide assistance to settle issues between them and newly bankrupt nuclear contractor Westinghouse Electric Co. LLC, according to comments made by a Japanese government official.

* Responding to Texas utility regulators' move to block NextEra Energy Inc.'s acquisition of Oncor Electric Delivery Co. LLC, analysts suggested they are still confident NextEra can satisfy its growth targets without the Texas wires business.

* While recognizing human contributions to climate change, EPA Administrator Scott Pruitt said the "real issue is how much we contribute to it and measuring that with precision," according to Fox News Sunday. Separately, Reuters reports that the agency's scientific integrity office is reviewing Pruitt's recent comments on climate change for potential violations of the agency's policies.

* Another federal district judge has landed the latest in a long string of blows to FERC's attempt to limit the scope of court reviews of the agency's market manipulation findings.

* The California Public Employees' Retirement System intends to vote in favor of a shareholder proposal that would require Duke Energy Corp. to disclose the impact of Paris climate accord-related targets on its operations, the Charlotte Business Journal reports. Duke Energy's board is against the proposal. According to S&P Global Market Intelligence data, CalPERS own 1,970,489 shares of Duke Energy as of Dec. 31, 2016.

* Contrary to expectations, demand for electricity in some parts of the states that legalized marijuana has fallen as farmers look to use greenhouses and the sun instead of expensive indoor systems, Bloomberg News reports, citing utilities and analysts. "We were thrilled to get that much load growth from one new industry," a spokesman for Public Service Co. of Colorado was quoted as saying. "That just doesn't happen to utilities."

* The EPA released more details tied to President Donald Trump's proposed 31% budget cut for the agency, The Washington Post reports. Among the biggest programs and grants that will be defunded include the Great Lakes restoration and the climate protection program, the report said.

* The Vermont Public Service Board approved Ranger Solar's proposed 20-MW Coolidge solar project in Windsor County, The Associated Press reports. A report commissioned earlier by Ranger Solar found that renewable energy credits associated with the facility will most likely be sold out-of-state due to a large regional discrepancy in prices.

Natural gas/midstream

* Ares Management LP formed a new oil and natural gas company that will provide development capital to North American E&P operators. The company, dubbed Development Capital Resources, will be led by Ronnie Scott and Matt Loreman, according to a news release. Development Capital Resources also entered a $300 million drilling partnership with Midland, Texas-based Endeavor Energy Resources and $150 million partnership with a non-Permian operator.

* FERC staff determined Millenium Pipeline Co. LP's upgrade of its natural gas system in New York would not create significant environmental issues while providing an additional 223,000 Dth/d of transportation capacity.

* Baker Hughes Inc. Chairman and CEO Martin Craighead is set to receive a $41 million golden parachute in connection with the company's pending merger with General Electric Co.'s oil and gas business, the Houston Chronicle's FuelFix reports. The amount is more than 40% higher than what Craighead would have received if Baker Hughes' deal with Halliburton Co. did not fall through. Craighead will serve as vice chairman of the new company.

* The developer of the Magnolia LNG export project told investors that a "perceived" delay in receiving approval to start construction will not keep the Louisiana venture from receiving a final funding decision.

* Chugach Electric Association Inc. reached an agreement to purchase 1.8 Bcf of natural gas from Furie Operating Alaska from April 2023 to March 2033, according to the Alaska Journal of Commerce.

* BP Products North America Inc. paid $30 million in cash and delivered a promissory note of $123.5 million to acquire certain assets of Clean Energy Renewable Fuels LLC's renewable natural gas business, according to a Form 8-K filing. BP also agreed to pay up to an additional $25 million in cash over a five-year period. These assets include two production facilities, a 50% stake in joint ventures formed to develop two new production facilities and third-party renewable natural gas supply contracts.

* Crestone Peak Resources is seeking approval from the Colorado Oil and Gas Conservation Commission to drill on a land in Boulder County, Colo., The Daily Camera in Boulder reports. The application is the company's first in five years in the Boulder County, which has a moratorium on accepting and processing applications for new oil and gas development until May 1.

Coal

* Alliance Resource Operating Partners LP and its Alliance Resource Finance Corp. subsidiary intend to offer $500 million of senior unsecured notes due 2025 in a private placement to eligible purchasers. Alliance Resource Operating, a subsidiary of Alliance Resource Partners LP, plans to use net proceeds to meet certain outstanding debt obligations and for general corporate purposes.

* A bipartisan group of lawmakers is urging President Donald Trump to increase funding for black lung health clinics in rural areas. Eight members of the U.S. House of Representatives signed a March 29 letter requesting that Trump allocate $10 million in his proposed 2018 budget toward the clinics, which provide coal miners with health screenings, medical care and assistance in obtaining black lung benefits.

* The Trump administration's new order for the federal government to dismantle or review its climate rules will have "no material positive credit implications" for major coal-fired generators, Moody's said in a March 31 report. Low natural gas prices and declining renewable energy costs will plague coal markets in the next three to five years regardless of the climate order, providing immaterial credit benefits for coal-heavy generators, Moody's said.

* Federal District Judge Irene Keeley ruled against families of 78 miners killed in a 1968 coal mine explosion in Farmington, W.Va., the Pittsburgh Post-Gazette reports. The victims' families filed the case in 2014, after new information surfaced. While Keeley acknowledged the new information, she said laws during that time placed a two-year limit from the time of explosion for filing a lawsuit. The mine was owned by Consolidation Coal Co., which changed its name to CONSOL Energy Inc. after the incident.

* A new bill from Democrats in the U.S. House and Senate aims to reform federal laws that allow the coal sector to self-bond its environmental liabilities. "As coal companies emerge from bankruptcy, we should act now to avoid the mistakes of the past," said Sen. Maria Cantwell, D-Wash.

Commodities

* Near-term supply and demand fundamentals continued to steer the U.S. thermal coal market the week ended March 30 as prices hardly budged after the Trump administration began repealing the Clean Power Plan.

* Price action for day-ahead power could be mixed to higher in the week's opening session Monday, April 3, as varied demand outlooks for Tuesday combine with a renewed uptick at the natural gas futures complex. Ending the prior session near unchanged, May natural gas futures were moving higher early Monday ahead of the opening bell.

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New from RRA

* The Texas PUC's March 30 finding that the proposed NextEra Energy/Oncor tie-up is not in the public interest could portend high hurdles for potential future buyers of the Texas-based transmission and distribution company.

Quoted

"As we sit here today, to be a solar company making solar modules — terrible business, absolutely brutal," said SunPower Corp. Chairman, President and CEO Thomas Werner.

The day ahead

* 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.

The Daily Dose is updated as of 7:30 a.m. ET. Some links may require registration or a subscription.