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April 3-7: Sempra eyes cash windfall from Cameron LNG; Ohio unveils nuke subsidy

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April 3-7: Sempra eyes cash windfall from Cameron LNG; Ohio unveils nuke subsidy

A brief look back at successes and setbacks in the energy industry.

Highs

PEABODY — Peabody Energy Corp. announced April 3 that it has emerged from a yearlong Chapter 11 reorganization after shedding more than $5 billion in debt. The world's largest private-sector coal producer returned to the NYSE on April 4 and emerges into a market that is finally starting to see some stabilization.

SEMPRA — Sempra Energy is poised to unlock "a mountain of cash" as the Cameron LNG export project nears fruition, a company executive told investors and analysts. "Our stock valuation is missing this point: Cash is coming. It's coming soon," Joe Householder, corporate group president of infrastructure businesses, said during Sempra's April 5 analyst day. Sempra maintained its timeline for Cameron LNG, which is under construction in Louisiana, and expected to have the first three liquefaction trains in service by the end of 2019.

Between

NUKE SUBSIDY — Ohio lawmakers sponsored legislation that would provide subsidies for the state's at-risk nuclear generation. S.B. 128, officially introduced April 5 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 market. Ohio Rep. Anthony DeVitis is reportedly sponsoring the House's version of the legislation, which is designed to compensate FirstEnergy Corp.'s 908-MW Davis-Besse and 1,268-MW Perry nuclear plants "for the clean, reliable and secure power they generate." FirstEnergy spokeswoman Jennifer Young said initial estimates indicate that the credits will bring in approximately $300 million each year, but independent power producers worry that the subsidies will distort the market.

VIRGINIA LEGISLATION — Lawmakers in Virginia on April 5 failed to override Gov. Terry McAuliffe's veto of legislation that would reinstate tax credits to incentivize in-state coal employment and production. The General Assembly, however, adopted the governor's recommendations to halt permitting for coal ash pond closures until more analysis is performed. Dominion Resources Inc. said it is prepared to provide the analysis required by the bill.

Lows

NORTHERN ACCESS — New York, shortly before midnight on April 7, denied National Fuel Gas Co. the water permits needed to complete a key pipeline project that would transport National Fuel's shale gas production to markets in New England and Canada. "What is perhaps the most troubling aspect of this decision is that the [New York State Department of Environmental Conservation] waited literally until the 11th hour to issue this denial, even though we had detailed discussions with NYS DEC staff over a 34-month period and undertook detailed engineering and environmental studies at the agency's request, to support the stream-crossing techniques that now form the basis of their denial," National Fuel CEO Ronald Tanski said in a statement.

IPP CONCERN — S&P Global Ratings warned in an April 5 report that cost-cutting initiatives at independent power producers could ultimately hurt longer-term growth prospects. S&P analysts highlighted strategic moves by Calpine Corp., Dynegy Inc. and NRG Energy Inc. as immediate defensive responses to the downturn in wholesale prices chipping away at the sector's bottom line. "We think these initiatives result in a classic agency problem between management, which has a long-term view on business prospects, and the activist shareholders, who are looking for immediate gratification and are likely to exit their investment over a shorter time period," S&P said.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.