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US power companies up lobbying expenditure; ETE may be better off without Williams

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


US power companies up lobbying expenditure; ETE may be better off without Williams

Topnews

U.S. power companies and industry trade groups spentmore on federal-level lobbying in the first quarter of 2016 than a year earlieras lawmakers worked to pass major energy legislation and smaller reforms movedthrough Congress. Major U.S. electric utilities also spent more onfederal lobbying in the first quarter than the prior-year period. spent $3.4 million,up more than 14% from the same time in 2015 and the most of the 15 biggest U.S.power companies by market capitalization tracked by SNL Energy, an offering ofS&P Global Market Intelligence.

EnergyTransfer Equity LP may have spent more than two years trying to buyWilliams Cos. Inc.,but the Dallas-based Energy Transfer family will be more stable if its bid forthe natural gas midstream giant does not come to fruition, analysts said.ETE would be less levered as a stand-alone entity even as it relies onits partnership Energy TransferPartners LP as a principal source of cash flow, according to AndyBrooks, a midstream analyst at Moody's.

Coal production at mines in the Uinta Basincontinued to slide in the first quarter of the year, down nearly 900,000 tonsfrom the previous period and 34.7% below the same period in 2015. For the 12months ending with the first quarter of the year, basin output was 29.3 milliontons, down about 26.5% from the same period last year. Likerecent quarters, the basin's mines have been hardest hit by declining demandfrom domestic U.S. electricity generators and low cost natural gas, which hasspurred an increased number of utilities to shift to the lower cost option.

Power

* The discovery of damaged baffle bolts inside areactor at Public ServiceEnterprise Group Inc.'s Salemnuclear plant in New Jersey will extend the refueling outage of the plant's unit 1. PSEGExecutive Vice President and CFO Daniel Cregg announced that visual inspection ofSalem 1 during a refueling outage that began April 14 revealed a"series" of damaged bolts inside the reactor at unit 1 of the Salemnuclear plant in Salem County, N.J.

* DukeEnergy Corp. reported a drop in its first-quarter 2016 adjusted earningsto $777 million, or $1.13 per share, from $881 million, or $1.24 per share, inthe opening months of 2015. The result, releasedMay 3, is also 1 cent per share below the S&P Global MarketIntelligence normalized EPS consensus estimate of $1.14.

* The U.S. EPA has denied five petitions thatsought review ofcarbon emissions guidelines for new, modified and reconstructed fossil fuelpower plants, noting that a troubled Canadian power plant using carbon captureand sequestration is operating just fine. The new source rule, published inthe Federal Register in October 2015, requires newly constructed steam powerplants to adhere to standards of performance equivalent to a highly efficient,supercritical pulverized coal-fired boiler using partial carbon capture andsequestration technology.

* Asexpected, Andre Porter tendered his resignation as chairman of thePublic Utilities Commission of Ohio, TheColumbus Dispatch reports. Porter will step down on May 20 to take ajob in the private sector almost a year after he was appointed to thecommission by Gov. John Kasich.

* NextEra Energy Inc.'s proposed ofHawaiian Electric IndustriesInc. has garnered the support of more than 100 diverse Hawaii-basedorganizations. Those supporting the proposed merger comprise a diversestatewide coalition, including multiple chambers of commerce, labor unions,small and large businesses, Native Hawaiian and non-profit organizations, thecompanies said in a statement.

* Janet Brewer has been namedsenior vice president and chief communications and marketing officer at theTennessee ValleyAuthority, having served as vice president of communications since2012.

* Otter Tail Corp. reported a slight year-over-year increasein consolidated net income from continuing operations during the 2016 firstquarter: $14.5 million, or 38 cents per share, versus $13.8 million, or 37cents per share, for the first quarter of 2015.

* The California ISO reported$18.9 million in first-quarter 2016 benefits from the western energy imbalancemarket — higher than the previous quarter's total of $12.3 million givenNV Energy Inc.'sparticipation.

Naturalgas/midstream

* Just days after executives told analysts they werekicking the tires on a few bolt-on packages that could be serviced by theEQT Midstream PartnersLP affiliate, EQTCorp. announced that it is buying 62,500 net Marcellus andUtica shale acres in West Virginia for $407 million from Norway's .

* Separately, EQT upsized apreviously announced offering of shares to fund the purchase of 62,500 netMarcellus and Utica shale acres in West Virginia. The company will now offer10.5 million shares, with an additional 1,575,000 shares available tounderwriters; the company originally planned to issue 9.5 million shares, withan additional 1,425,000 shares available to the underwriters.

* Sources tell Reutersthat Energy Transfer EquityLP and Williams Cos.Inc. may renegotiate the terms of their agreement amid a persistentdrop in oil and gas prices, which challenges the deal's economics.

* Despite a resounding "no" from the ObamaAdministration, US$2.4 billion in written-off costs, and a pending NAFTA appealand court challenge, TransCanadaCorp.'s C$8 billion Keystone XL oil pipeline remains in thecompany's long-termplans. Shipping contracts remain in place, most of the landowneragreements that are needed have been obtained and miles of pipe awaiting burialsits in fields in Montana, CEO Russell Girling said at the company's annualmeeting in Calgary, Alberta.

* Husky Energy Inc. is selling its royalty interests incertain Western Canada assets to Freehold Royalties Ltd. for C$163million in cash and other considerations, including the transfer to Huskyof royalty and working interests in select heavy oil properties in theLloydminster area. The assets represent approximately 1,700 barrels of oilequivalent per day of expected production this year.

* The U.S. oil and gas sector saw its loansrestructured and borrowing standards tightened as lenders repositionedthemselves to account for slumping natural resource prices, TheWall Street Journal reports, citing a Federal Reserve survey of seniorloan officers.

* UGICorp. lowered itsper-share fiscal 2016 earnings guidance to $1.95 to $2.05 as adjusted netincome for the fiscal quarter ended March 31 dropped to $216.2 million, or$1.24 per share, from $220.8 million, or $1.26 per share, for the fiscalquarter ended March 31, 2015. The company was originally targetingEPS of $2.15 to $2.30.

* A number of energy companies, includingLightstream Resources Ltd., Twin Butte Energy Ltd. and , are edgingtoward a default even as oil prices hold above US$40 a barrel, TheGlobe and Mail writes.

Coal

* A quarterly report released by Kentucky's Energy& Environment Cabinet shows job losses in the state during the recentperiod were the highest since the report began publishing in late 2012.According to the report, Kentucky coal mines employ 6,900 miners, the lowestnumber of miners in the state since 1898 when there were an average of 6,399 Kentuckyworkers in the industry. Statewide coal production in the quarter was at 11.3million tons, the lowest level since 1939.

* Peabody Energy Australia could accelerate therumored sale and potential break-up of nine mines in Australia's New SouthWales and Queensland states if lenders of its now-bankrupt U.S. parentPeabody Energy Corp.exercise rights related to the insolvency, TheAustralian writes.

* India's power sector is expected to import 48million tonnes of coal during the ongoing fiscal year to meet its requirements,the PressTrust of India reports.

* ArchCoal Inc.'s Chairman and CEO John Eaves, and Peabody Energy'sPresident and CEO Glenn Kellow received $4.9 million and $4.8 million in totalcompensation in 2015, respectively. Eaves' total compensation in 2015was 33.3% lower than the prior year's roughly $7.3 million, while Kellow'stotal compensation was a 13.76% decrease compared to the previous year's $5.6million.

* Cloud Peak Energy Inc.'s board approved and adoptedcertain amendments to the proxy access bylaws that reduce the number ofrestrictions and conditions on shareholders on the use of proxy access,according to company filing.

Commodities

* Analysts from Morgan Stanley are acrossall zones in the upcoming PJMInterconnection LLC 2019/2020 Base Residual Auction, or BRA.Results of the auction will be released at the close of business May 24. Thisyear's BRA will procure capacity three years out for the delivery period June1, 2019, to May 31, 2020.

* Gross natural gas production in the U.S.accelerated its pushhigher in February, supported by rising output from Pennsylvania and Ohio, aswell as Texas and New Mexico, according to a monthly report from the U.S.Energy Information Administration. Meanwhile, total crude oil productioncontinued to slip.

* After sinking 13.6 cents to a settle at$2.042/MMBtu in the week's opening session, June natural gas futures overnight ahead ofthe Tuesday, May 3, open, as the market contemplates the implications of aproduction slowdown against a backdrop of mild weather and storage building.

* Forward power deals for May delivery spent theweek ended April 29 favoring the negative side of the ledger as most term markets ignoredhigher fueling costs implied by gains in natural gas futures and found littlesupport from slack demand provided by moderating weather forecasts.

* Next-day power prices could chop around in the Tuesday, May 3, session, astraders look to mixed demand outlooks and recent weakness in natural gasfutures.

SNL Image

Newfrom RRA

* In a new company report, SNL Energy affiliate Regulatory ResearchAssociates analyzes Southwest GasCorp.'s operations, regulatory environment and financialperformance.

* Significant rate case activity in May is expectedto dominate the regulatory landscape, as noted by Regulatory ResearchAssociates in a new report, "RRA's Regulatory Preview for May 2016."

Quoted

"Wecurtail a lot of the renewable energy in this country that could be used tohelp meet the Clean Power Plan. With storage we could eliminate a lot of thatcurtailment," IndianapolisPower & Light Co. Director of Project Development RichardBenedict said at theEnergy Storage Association's annual conference. Indianapolis Power & Lightis owned by AES Corp.

Theday ahead

* Fortis Inc., NiSource Inc., UGI Corp. and Crestwood Equity Partners LP will hold theirfirst-quarter earnings call at 9 a.m. ET today followed by the which willhold its fiscal second-quarter earnings call at 9:30 a.m. ET.

* ALLETE Inc. and Duke Energy will hold theirfirst-quarter 2016 earnings call at 10 a.m. ET today followed by , and which will hold theirfirst-quarter 2016 earnings call at 11 a.m. ET.

*WEC Energy Group Inc.will hold its first-quarter 2016 earnings call at 2 p.m. ET today.

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