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May 2-6

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


May 2-6

A brief lookback at successes and setbacks in the energy industry.

Highs

TRUMP  Donald Trump won the IndianaRepublican primary May 3, and after rival candidates Ted Cruz and John Kasichsuspended their campaigns, the real estate mogul became the GOP's .While the GOP will decide on a policy platform this July during itsconvention, it remains uncertain whether Trump will adhere to the party'sstance on energy or other issues. On May 5, Trump . Speakingat a rally surrounded by supporters holding signsreading, "Trump Digs Coal," he echoed local criticism of federalregulations so often cited for the industry downturn, telling the crowd that "theseridiculous rules and regulations that make it impossible for you to compete, sowe're going to take that all off the table folks." Trump added, "Youwatch what happens – if I win, we're going to bring those miners back." Theleading candidate for the Democrats, Hillary Clinton, also campaigned inKentucky and West Virginia, but faced a much chillier reception to her calls for a "MarshallPlan," to help economically rebuild coal country communities.

ORMAT  OrmatTechnologies Inc. posted first-quarter results that surged pastconsensus estimates. The company on May 5 reported first-quarter adjusted EBITDA of $80.2 million, a 22.8%year-over-year increase due to top-line growth and margin expansion. Ormatbooked $65.3 million in adjusted EBITDA for the year-ago period.S&P Global Market Intelligence's consensus adjusted EBITDA estimate forOrmat in the first quarter was $65.6 million. Ormat's operating incomeincreased 69.3% year over year to $50.5 million, from $29.9 million in thecorresponding quarter of 2015. And net income attributable to thecompany's shareholders almost tripled to $29.3 million, or 59 cents per share,compared to the S&P Global Market Intelligence consensus EPS estimate of 35cents. Ormat shares of $45.13 the nextday.

PLAINS ALL AMERICAN  on May 4 reported first-quarteradjusted net income attributable to the partnership of $355million, or 45 cents per unit. That was down from $369 million, or 57 cents perunit, Plains All American posted during the corresponding period in 2015.But those results handily topped the S&P Capital IQ normalized EPSconsensus estimate for the quarter of 38 cents. While Plains AllAmerican's adjusted EBITDA for the first quarter was flat at $621 million,management noted that result topped the partnership's guidance by 9%. Despitethe solid quarterly results, Plains reducedits midpoint guidance for adjusted EBITDA by about 4% to $2.175billion. "Unfortunately onshore crude oil drilling activity is laggingmeaningfully below our 2016 forecast assumptions and we anticipate thatcompletions and production volumes will fall off in the latter half of 2016,"CEO Greg Armstrong said.

WEC  WECEnergy Group Inc. reported first-quarterresults that beat the S&P Global Market Intelligencenormalized EPS consensus estimate of $1.01 by 8 cents. WEC posted ayear-over-year increase in its first-quarter 2016 adjusted net income of $346.2million, or $1.09 per share, versus $204.1 million, or 90 cents per share, forthe first quarter of 2015. WEC plans to for 2016 and 2017 as a result of the bonus depreciation tax break, companyexecutives said.

Between

DYNEGY  Citing flaws in thewholesale market structure of the MidcontinentIndependent System Operator Inc., announced May 3 threecoal-fired coal plants in Southern Illinois. Dynegy President and CEO RobertFlexon said the company is "self-correcting the cash-flowdeficiency by shutting down that capacity in excess of our retail andwholesale sales volume to substantially eliminate our reliance on the annualMISO capacity auction." Dynegyis also contemplatingshuttering an additional 500 MW, and intends to restructure the portfolio ofIllinois assets acquired from AmerenCorp. in 2013. Though Flexon expressed frustration with MISO andIllinois state lawmakers over the state of power markets in Illinois, marketsresponded favorably. Dynegy shares rose 7.83% to $17.90 in active trading May 4 off news ofthe decision.

Lows

ETE  The long and rocky merger negotiationsbetween Energy Transfer Equity LPand Williams Cos. Inc.suffered a significant setback after attorneyson May 5 said they cannot deliver a required tax opinion key toclosing the deal. "We can't close this transaction," KelcyWarren, head of the Energy Transfer family, said during the partnership'sfirst-quarter earnings call. "Absent a substantial restructuring of thistransaction — which Energy Transfer has been very willing, and actuallydesiring, to do — absent that, we don't have a deal." Williams, however, shows no signs of giving up on theagreement. "With respect to the pending merger I will mention that theWilliams Board is unanimously committed to enforcing its rights under themerger agreement … and to delivering the benefits of the merger agreement toWilliams stockholders," Williams Director of Investor Relations JohnPorter said. On June 28, either party canwalk away from the agreement. ETE executives said they are not focused on thatdate, and are still moving forward to find some way to get to closing.

SOUTHERN  Southern Co. disclosed May 5 the SEC is conductinga formal investigationinto estimated costs and the expected in-service date of 's integratedgasification combined-cycle generation project in Kemper County. "SouthernCompany and Mississippi Power believe the investigation is focused primarily onperiods subsequent to 2010 and on accounting matters, disclosure controls andprocedures, and internal controls over financial reporting associated with theKemper IGCC," the company said. As of March 31, Mississippi Power estimated a total costfor the Kemper project of $6.72 billion, with the plant estimated to be fullyoperational during the third quarter.

HUNT  Hunt Consolidated Inc. is trying to salvage its deal tolead an investor consortium to acquire OncorElectric Delivery Co. LLC and convert it into a Real EstateInvestment Trust after a group of creditors backed out the bankruptcyrestructuring plan for EnergyFuture Holdings Corp., which owns a majority stake in Oncor. Acreditor group backed out after an April 30 deadline passed, . EFHfiled an alternative Chapter 11 exit plan May 1. Attorneys for Hunt and theother investors on May 4 continuedto pursue their request with Texas regulators to grant a rehearingon their prior approval of the Oncor acquisition, saying the new EFH bankruptcyplan holds the door open for a REIT conversion of Oncor like what the Huntinvestors contemplate. The Public Utility Commission plans to decide on arehearing May 19.

ULTRA PETROLEUM — Oil and gas exploration company succumbedto difficult market conditions and filedfor Chapter 11. In its bankruptcy filing, the Houston-basedUltra said it has assets of $1.28 billion and debts of $3.92 billion. Ultra has holdings in Wyoming naturalgas fields and acreage in Pennsylvania and Utah. The company's sharesare being traded on the pink sheets.