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Powelson vows to safeguard energy markets; TransCanada nixes Energy East project

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


Powelson vows to safeguard energy markets; TransCanada nixes Energy East project

Top News

FERC's Powelson pledges 'not to destroy' energy markets despite DOE directive

Federal Energy Regulatory Commission member Robert Powelson has promised the agency will safeguard competitive wholesale electricity markets on the heels of a U.S. Department of Energy proposal to ensure full cost recovery for certain coal and nuclear power plants.

LNG export developers optimistic as analysts talk possible shortage

U.S. LNG export developers are sounding optimistic as analysts and other market watchers start to look beyond the current global LNG glut to a possible shortage in the early 2020s.

Energy industry hopes to use new Interior committee to simplify royalty process

Energy industry representatives hope to use a new federal policy committee on resource royalties to simplify federal payment processes, meeting for the first time Oct. 4 in Washington, D.C.

TransCanada shelves Energy East, Eastern Mainline projects

TransCanada Corp. canceled its plans to build the Energy East and Eastern Mainline mega-projects, making its decision "after careful review of changed circumstances."

Power

* A bill working its way through Congress meant to ensure that stakeholders have a way to challenge rate changes that go into effect automatically due to the Federal Energy Regulatory Commission's failure to act may not produce the intended results, according to the agency's general counsel, James Danly.

* Two Exelon Corp. utilities are seeking proposals for wholesale power supplies of 737 MW to meet their standard offer service obligations in the District of Columbia and Delaware. Potomac Electric Power Co. is soliciting proposals to supply approximately 327 MW of electricity, while Delmarva Power & Light Co. is seeking proposals to supply approximately 410 MW of power.

* The governors of Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming signed a memorandum of understanding to plan a regional electric vehicle corridor for the West.

* Sempra Energy sweetened its offer for Oncor Electric Delivery Co. LLC by saying it will acquire all interests in indirect parent company Energy Future Holdings Corp. for $9.45 billion, all an in effort to further satisfy Texas utility regulators and consumer advocates.

* The Office of the Ohio Consumers' Counsel wants the state Supreme Court to intervene and push utility regulators to rule on a case concerning shut-offs by Duke Energy Corp., The Columbus (Ohio) Dispatch reported. The delay in resolving the case "is undue given the importance of this case for Ohio consumers who can suffer dire consequences from unlawful disconnection of electric service," the counsel reportedly said in a filing.

* The U.S. House Committee on Natural Resources voted to advance a bill that seeks to reduce federal regulations related to energy development on Indian lands.

* Michigan's Ann Arbor City Council agreed to extend a temporary ban on ground-mounted solar arrays in front yards and parking areas for up to 180 days, according to MLive.

* RGS Energy signed an exclusive and international license agreement to commercialize the Dow Chemical Co.-developed solar shingles system, according to a news release.

Natural gas/midstream

* U.S. Magistrate Judge Elizabeth Laporte of the Northern District of California has ordered the Department of the Interior to immediately reinstate a rule limiting methane emissions from oil and gas production on federal lands, The Associated Press reported. On the same day, the U.S. Bureau of Land Management detailed plans for suspending key parts of the methane rule until 2019.

* In addition to the pressure U.S. oil and gas producers face to stop spending for growth and return some cash to shareholders, S&P Global Ratings worries that lenders may tighten company credit lines in the next two years, taking away the lifeline that saved many exploration and production companies during the 2015-2016 downturn on crude oil prices.

* Petroliam Nasional Bhd. subsidiary Progress Energy Canada Ltd. has hired BMO Capital Markets to assist in the potential sale of its energy assets in Alberta, including gas processing plants and pipelines, The Canadian Press reported.

* Cameron County, Texas, agreed to provide Chapter 312 tax incentives for NextDecade Corp.'s planned Rio Grande LNG export project at the Port of Brownsville. The company expects to receive all necessary approvals by mid-2018, allowing for a final investment decision later that year and first LNG in 2022.

* The Federal Energy Regulatory Commission gave Millennium Pipeline Co. LLC another year to put in service the 127,200-Dth/d Valley Lateral natural gas transportation project serving a CPV Valley power plant after significant delay in the New York State permitting process.

* GAIL India Ltd. is working to renegotiate two more long-term LNG contracts, after it successfully bargained for lower prices with Exxon Mobil Corp. and Qatar's RasGas Co., Bloomberg News reported. In the U.S., the Indian company has LNG deals with Cheniere Energy Inc. and Dominion Energy Inc.

* Matador Resources Co. is selling 8 million common shares for estimated gross proceeds of approximately $210.8 million to fund its acquisition of about 9,800 gross acres in the Delaware Basin, to finance CapEx for midstream initiatives and for general corporate purposes, according to a company release.

Coal

* A former coal executive expected to take the reins of the agency in charge of his fellow coal miners said consistent enforcement and technology will be at the forefront of his agenda at a U.S. Senate confirmation hearing Oct. 4.

* Murray Energy Corp. petitioned the U.S. Supreme Court to review a lower court decision overturning an order for the U.S. Environmental Protection Agency to produce a jobs impact study showing how its regulations affect the coal industry.

Commodities

* California's power market bucked the prevailing trend of weak demand and low prices that loomed over most of the rest of the country in September.

* The weekly natural gas inventory report to be released by the U.S. Energy Information Administration at 10:30 a.m. ET on Thursday, Oct. 5, is expected to show another step down in the rate of storage building with an injection below historical averages.

* After climbing by 4.5 cents in the prior session to settle at $2.940/MMBtu, NYMEX November natural gas futures were in shallow positive territory overnight ahead of the Thursday, Oct. 5, open and the midmorning release of the weekly storage data that is poised to show another modest build to stocks.

* Day-ahead power prices could be weighed down Thursday, Oct. 5, by predominantly slack demand forecasts for the close of the workweek, as natural gas futures attempt to extend recent gains.

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New from RRA

* In testimony filed with the Kentucky Public Service Commission on Oct. 3, in Case No. 2017-00179, the Kentucky attorney general recommended American Electric Power Co. Inc. subsidiary Kentucky Power Co. be authorized a $39.9 million, or 7.2%, electric base rate increase premised upon an 8.6% return on equity (41.68% of capital) and a 6.03% return on a year-end rate base valued at $1.192 billion for a test year that ended Feb. 28, 2017.

Quoted

"FERC does not do politics. We don't do energy politics … I did not sign up to go blow up the markets," Federal Energy Regulatory Commission member Robert Powelson said at the annual meeting of the Organization of PJM States in Arlington, Va., in response to U.S. Energy Secretary Rick Perry’s proposal to ensure full cost recovery for certain coal and nuclear power plants.

The day ahead

* Early morning futures indicators pointed to a higher 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. S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.