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Court upholds Calif. cap-and-trade program; Trump urged to support Paris deal

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Court upholds Calif. cap-and-trade program; Trump urged to support Paris deal

Top News

Chamber of Commerce loses appeal of Calif. carbon cap and trade challenge

The California 3rd District Court of Appeal on April 6 ruled against the California Chamber of Commerce's appeal of the state Air Resources Board's carbon cap-and-trade program. The court affirmed a lower court ruling in a lawsuit challenging the program, brought by the Chamber and Morning Star Packing Co., a food processor.

Appalachian drillers expect 2016's NGL revenue spike to be just the beginning

Big independent Appalachian shale producers posted substantial increases in their natural gas liquids revenue in 2016 and are looking at further gains in 2017 and 2018 as oil-linked NGL prices continue to improve and new midstream projects knit the Utica and Marcellus shales into U.S. and international markets.

Coal firms call for Trump to support Paris agreement to shape climate debate

A handful of coal producers have joined a growing number of energy companies urging the Trump administration to stay in the Paris climate agreement in hopes of shaping the climate change debate. Cloud Peak Energy Inc., Arch Coal Inc. and Peabody Energy Corp. have all expressed their support for the climate change agreement in recent weeks as Trump has called for input from energy companies likely to be affected by the effort.

Power

* Following similar efforts in Illinois and New York, two Ohio senators have sponsored legislation that would provide subsidies for the state's at-risk nuclear generation. S.B. 128, officially introduced April 6 in the Ohio General Assembly by Sens. John Eklund and Frank LaRose, implements zero-emissions nuclear credits for in-state nuclear capacity within the PJM Interconnection LLC market.

* Midland Cogeneration Venture LP plans to expand its 1,633-MW combined-cycle power plant in Michigan to an approximately 2,300-MW facility, The Associated Press reports. The $500 million expansion project calls for the addition of two new gas-fired turbines and a steam turbine. Midland Cogeneration expects to begin construction after securing a power purchase agreement.

* A coalition of states and municipalities and a group of environmental and public health organizations have asked the U.S. Court of Appeals for the District of Columbia Circuit to rule on a challenge to the U.S. EPA's Clean Power Plan even though the agency has begun a process that ultimately is expected to roll back that regulation.

* U.S. Interior Secretary Ryan Zinke appointed Aurelia Skipwith as deputy assistant secretary for fish, wildlife and parks, and Katharine MacGregor as deputy assistant secretary for land and minerals management, according to a news release. Skipwith has "years of national and international experience" in both the public and private sectors and nonprofits. MacGregor most recently served as a senior staff member of the Subcommittee on Energy and Mineral Resources of the House Natural Resources Committee.

* TerraForm Power Inc. subsidiary TerraForm Power Operating LLC has again amended its credit and guaranty agreement with Barclays Bank PLC to extend the filing deadline for its financial statements and accompanying audit report for full year 2016 and its financial plan for 2017. TerraForm Power LLC now has until April 28 to file the said material to the administrative agent and other lenders, according to a Form 8-K filing.

* Dennis DeChamplain will replace Brian Bale as senior vice president and CFO of Canadian Utilities. Bale, who will be retiring after more than 35 years with the company, will continue in his role until June 1 to ensure a smooth and seamless transition.

Natural gas/midstream

* President Donald Trump plans to issue an executive order "soon" that would reverse the Obama-era restrictions on offshore oil and natural drilling in U.S. Atlantic and Arctic waters, Bloomberg News reported, citing Interior Secretary Ryan Zinke.

* U.S. Sens. Edward Markey, D-Mass., and Michael Bennet, D-Colo., reintroduced legislation that would designate the Coastal Plain of the Arctic National Wildlife Refuge as wilderness and protect the land from future oil and gas drilling. The Coastal Plain represents roughly 1.5 million acres of the 19.6 million-acre wildlife refuge.

* As Cameron LNG's joint venture partners bear the brunt of the more than $10 billion Louisiana export project's risk, analysts were happy to hear that Sempra Energy shareholders stand to gain from what an executive said will be a "mountain of cash."

* Sunoco LP executives said selling the majority of its convenience stores to 7-Eleven Inc. is a step toward decreasing debt and defining its relationship to Energy Transfer Equity LP and Energy Transfer Partners LP.

* The California Public Employees' Retirement System has come out in support of a shareholder proposal that would require Kinder Morgan Inc. to disclose the impact of the global climate change-related policies on its operations, according to company filing. CalPERS own approximately 4.73 million shares of Kinder Morgan.

* The Interior Board of Indian Appeals upheld a decision by the Bureau of Indian Affairs not to declare certain oil and natural leases on the Fort Peck Indian Reservation as invalid. Alda Bighorn and Ernest Bighorn Jr., the owners of undivided interests in trust allotments on the Fort Peck Indian Reservation, had sought to overturn the BIA's decision, saying the BIA had not complied with its regulations governing oil and gas leases and assignments.

Coal

* The ups and downs of weather — warm U.S. winters and destructive storms on the other side of the planet — are affecting the steady coal shipments that railways depend on as the market continues to look for a path to recovery.

* Peabody Energy Corp. is touting the findings of a third-party study suggesting that the Navajo power plant can continue to be competitive with natural gas and other coal plants through 2040. The Salt River Project, the operator of the plant, has said the Navajo coal plant could shut down in 2017.

* Warrior Met Coal LLC, which launched its IPO April 4, reported preliminary first-quarter 2017 metallurgical coal production results for its two underground mines in Alabama. Production at Mine No. 4 is expected to be 453.7 short tons and 1,159.6 short tons at Mine No. 7, according to results filed with the Mine Health and Safety Administration.

Commodities

* After climbing 6.5 cents in the prior session to finish at $3.331/MMBtu, NYMEX May natural gas futures recoiled overnight ahead of the Friday, April 7, open, as the market succumbed anew to fundamental pressure signaled by predominantly lackluster weather-related demand expectations that should allow for a ramp up in the pace of storage-building in the weeks ahead. At 7:15 a.m. ET (1115 GMT), the contract was 3.2 cents lower at $3.300/MMBtu, while trading a range from $3.296/MMBtu to $3.340/MMBtu.

* Power dailies could retreat in the week's closing session Friday, April 7, as expectations for generally diminished demand coming off the weekend conspire with a renewed downdraft at the natural gas futures complex. Rising 6.5 cents the day prior, front-month May natural gas futures at the NYMEX were trending lower early Friday ahead of the opening bell on preweekend profit-taking. At last look at 6:40 a.m. ET, the May contract was down 3.1 cents to $3.300/MMBtu, as market fundamentals remain overwhelmingly bearish.

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New from RRA

* Consumers Energy Co. has filed a request with the Michigan Public Service Commission for a $172.8 million (4.2%) permanent electric rate increase premised upon a 10.5% return on equity (41.14% of a regulatory capital structure) and a 6.16% return on an average rate base valued at $10.289 billion for a test year ending Sept. 30, 2018 (Case No. U-18322).

* On April 5, CenterPoint Energy Resources Corp. filed with the Arkansas Public Service Commission for a $9.1 million, or 5.2%, gas base rate increase in the context of the company's initial formula rate plan proceeding (Docket No. 17-010-FR).

Quoted

"A decision from this court will resolve critical live disputes over the scope of the Clean Air Act that will not only determine the enforcement of the Clean Power Plan, but also affect any reconsideration or revision of the rule that EPA may undertake." – From a court filing from a coalition of states and municipalities asking the U.S. Court of Appeals for the District of Columbia Circuit to rule on a challenge to the Clean Power Plan, despite the Trump administration's motion to hold the appeal in abeyance.

The day ahead

* Early morning futures indicators pointed to a lower 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.

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