The EnerKnol Pulse brings you up to speed on the most important energy news of the past week, through dozens of headlines sourced from the EnerKnol Platform. In today's edition, the industrial giant General Electric plans to sell a $1 billion energy portfolio as it scrambles for cash; Congress moves at great speed to confirm Trump's controversial nominee for the Federal Energy Regulatory Commission; Dominion and SCANA move closer to a successful merger following an agreement with North Carolina regulator.

October 15, 2018


Featured Topics

Climate and Green Energy

Rates and Power Markets

Energy Storage

Fuels and Pipelines


Featured Entities

Apollo

Deepwater Wind

Dominion Energy

Duke Energy

Enbridge

ERCOT

GE Capital

Global Energy and Power

Monarch Wind

NextDecade

NextEra Energy

Ørsted

PSC of North Carolina

Reliant Energy

Rio Bravo Pipeline

Rio Grande LNG

Royal Caribbean Cruises

SCANA

South Carolina E & G

Southern Company

Top News

GE Capital to Sell $1 Billion of Energy Investments to Apollo Global Management

GE Capital entered into an agreement to sell a $1 billion portfolio comprised primarily of equity investments in energy assets to funds managed by affiliates of Apollo Global Management LLC, according to the company’s Oct. 8 press release. The sale includes 20 investments in renewable energy, contracted gas-powered generation, and midstream energy infrastructure assets in the U.S. These were part of GE Capital’s Energy Financial Services unit, which invests and lends to the industrial giant’s energy customers.The deal comes at a time when GE is trying to narrow its focus, under the leadership of its new CEO Larry Culp, who is capitalizing on a growing interest by private-equity firms like Apollo in energy investments. GE Capital is the financial services division of General Electric Company.

Trump Nominates McNamee to FERC as Agency Examines Crucial Issues of Pipeline Policy, Resiliency

President Donald Trump nominated Bernard L. McNamee to the Federal Energy Regulatory Commission for the term ending June 30, 2020, to fill the vacancy resulting from Commissioner Robert Powelson’s resignation in August, according to an Oct. 9 release from the agency. McNamee currently serves as the Executive Director of the U.S. Energy Department’s Office of Policy and was instrumental in designing Energy Secretary Rick Perry’s controversial plan to prop up the country’s coal and nuclear plants. The nomination would restore the Republican majority among FERC Commissioners at a time when the commission is considering major dockets including a review of the 1999 gas pipeline policy, grid resiliency, and state policy priorities.The U.S. Senate Committee on Energy and Natural Resources will consider the nomination at the full committee hearing scheduled for Oct. 16.

Dominion, SCANA File Settlement With North Carolina Regulators to Advance $14.6 Billion Merger

Dominion Energy Inc. and SCANA Corporation on Oct. 4 submitted an agreement to the North Carolina Utilities Commission detailing customer protection measures to advance their merger deal. Under the settlement, SCANA-owned Public Service Company of North Carolina Inc., a gas distribution company, would refund $3.75 million of its 2017 revenues, raise its charitable contributions in 2019 over its 2017 level by $150,000, and agree to a rate moratorium until April 1, 2021. The companies would not include merger-related spending in regulated expenses for reporting and ratemaking purposes. The merger deal cleared the Federal Energy Regulatory Commission in July and Georgia regulators in March. The deal still needs approval from the U.S. Nuclear Regulatory Commission, and the South Carolina and North Carolina utility commissions. The companies announced the merger in January after SCANA subsidiary South Carolina Electric & Gas Co. decided last year to abandon a $9-billion expansion of the V.C. Summer nuclear plant in South Carolina. In June, South Carolina enacted a law to temporarily slash the utility’s electric rates by 15 percent to lower customer payments made toward the failed nuclear project.

Climate and Green Energy

Ørsted to Expand U.S. Offshore Wind Portfolio With $510 Million Acquisition of Deepwater Wind

Denmark-based Ørsted A/S will buy Deepwater Wind LLC, which owns the first U.S. offshore wind farm, the 30-megawatt Block Island farm off the Rhode Island coast, according to the company’s Oct. 10 press release. Ørsted entered into an agreement with U.S.-based D.E. Shaw Group to buy a 100 percent stake in Deepwater Wind, resulting in a combined portfolio of 8.8 gigawatts of offshore wind in the U.S. Deepwater Wind’s portfolio amounts to about 3.3 gigawatts, which comprises offshore wind projects in Rhode Island, Connecticut, Maryland and New York. Orsted’s wind portfolio in the U.S. amounts to around 5.5 gigawatts. The transaction, which must be cleared by U.S. competition authorities, would result in a new entity called Orsted U.S. Offshore Wind. The deal is expected to close by the end of 2018.

Southern Power Partners With Royal Caribbean in 200 Megawatt Wind Project to Offset Carbon Emissions

Royal Caribbean Cruises Ltd. signed an agreement with Southern Company’s subsidiary Southern Power for its 200 megawatt Reading wind facility in a bid to offset up to 12 percent of the cruise operator’s emissions, according to an October 11 press release. The project, located in eastern Kansas, was originally developed by Renewable Energy Systems Ltd. and will be Southern Power’s eleventh wind facility as well as its first project to be validated as a carbon offset under the Verified Carbon Standard, a voluntary program for the certification of greenhouse gas emission reduction projects. The wind farm is set to begin construction in the second quarter of 2019, to be completed by the second quarter of 2020.

North Dakota Mulls NextEra Subsidiary's 300 Megawatt Emmons-Logan Wind Energy Center Project, One of Largest in the State

The North Dakota Public Service Commission is reviewing an application by Emmons-Logan Wind LLC, an indirect subsidiary of NextEra Energy Resources, to build a 298.1 megawatt wind project in the southern part of the state, according to an Oct. 10 notice. An application was filled on July 19 for the 123 wind turbine generators and associated facilities and power lines, which the commission is set to discuss at a hearing scheduled for December 7. In 2017, North Dakota ranked fifth in the nation in the share of its electricity generated from wind energy and still has significant undeveloped wind energy potential, according to the Energy Information Administration.

NextEra Seeks Texas Approval to Sell Interests in 200-Megawatt Wind Farm

Monarch Wind Holdings LLC asked the Texas Public Utilities Commission to authorize the transfer of its Class B or non-controlling membership interests in Javelina Wind Energy II LLC to Global Energy and Power Infrastructure Fund II L.P., according to the agency’s Oct. 11 notice. Javelina owns a 200-megawatt wind generation facility in Webb County interconnected to the Electric Reliability Council of Texas. The post-transaction generation share held by Monarch Wind, Global Energy, and its affiliates in the Texas power market would remain under the 20 percent statutory limit. Monarch Wind is owned by NextEra Energy Resources LLC which will continue to control the managing interests after the transaction. NextEra Energy Resources is a subsidiary of NextEra Energy Inc.

U.S. Energy Department Invests $11.4 Million to Expand Geothermal Energy Development

The U.S. Energy Department selected seven projects to explore new and efficient technologies for drilling geothermal wells and discover methods to expedite the transfer of innovative technologies from the lab to the marketplace, according to an Oct. 9 press release. Currently, geothermal power generation occurs only in the western states, which provide about 3.8 gigawatts of electricity. By expanding through hydrothermal and improved geothermal systems, the department said there is a potential to develop an estimated 100 gigawatts of resources that are currently not accessible. The agency seeks to eliminate geographic barriers of conventional resources and underscored the need for technological innovation to economically develop them into cost-effective energy resources.

U.S. Lawmaker Proposes Bill to End Electric Vehicle Tax Credits, Impose Highway User Fees

Sen. John Barrasso, a Republican representing Wyoming, introduced legislation on Oct. 6 that would discontinue the tax credit for new electric vehicles and create a federal highway user charge for alternative fuel vehicles including plug-ins and fuel cell vehicles. Under current law, the credits apply for plug-in electric vehicles bought from 2010 and begin phasing out for each manufacturer after achieving the sale of 200,000 vehicles. (S.3559)

Rates and Power Markets

California Regulator Raises Fees for Community Choice Aggregation Customers to Avoid Cost Shifting

The California Public Utilities Commission on Oct. 11 approved a proposal that revises the Power Charge Indifference Adjustment, a fee intended to equalize cost sharing between customers who switch to community choice aggregation or CCA and those to continue to take service from electric utilities. The adjustment is an exit fee charged by the state’s investor-owned utilities to CCA and direct access customers. The commission found that the growing customer movement to CCA has widened the disparity between the level of resources in a utility’s portfolio and what is required to serve the lower demand. Advocates of CCA have raised concerns that the revision includes provisions such as including “pre-2002 legacy utility-owned generation” in the rate resulting in significant cost shifts to departing customers. The revised methodology will be used to calculate the fees that take effect as of Jan. 1, 2019.

West Virginia Regulator Orders Cost Adjustments Slashing Gas Bills For 95 Percent of Customers

The West Virginia Public Service Commission announced that customers will benefit from a decrease in the purchased gas portion of natural gas utilities’ rates, according to an Oct. 9 press release. The annual adjustment is an estimate of the prices utilities would pay for gas from November through October of the following year and a true-up of actual costs incurred in the prior year. Prices are determined by competitive markets and gas utilities are authorized to recover the costs of gas purchase. The commission does not regulate prices, but examines purchasing practices to ensure reliable supply at the lowest market price. Mountaineer Gas Company, Hope Gas/Dominion Energy, Peoples Gas, and Lumberport-Shinnston Gas will cut rates by 3.95 percent, 5.66 percent, 6.33 percent, and 5.84 percent, respectively. The lower interim rates go into effect Nov. 1, and final rates will be set early next year.

Texas Retail Electric Provider Fined $100,000 For Violating Billing Rules

Reliant Energy Retail Services LLC agreed to pay an administrative penalty to resolve violations concerning billing issuance, according to an Oct. 12 filing by the Texas Public Utility Commission staff. Retail electric providers are required to issue bills within 30 days of receiving usage data and related invoices from a transmission and distribution utility. The commission staff found that from August 2017 to May, 1,714 customers enrolled in the program for customer-sited generation, such as solar panels, experienced billing delays because of failures in the company’s billing database. Reliant also infringed rules by providing bills electronically instead of written mailings to 47,930 customers from January 1, 2017 to June 5, without first obtaining an agreement from customers to do so.

Energy Storage

Duke Energy Plans Microgrid in North Carolina, Envisions $500 Million in Battery Projects in Long-Term Resource Plan

Duke Energy Progress LLC asked the North Carolina Utilities Commission to approve its Hot Springs microgrid project consisting of a 2-megawatt solar facility and a 4-megawatt lithium-based battery storage facility in Madison County, according to an Oct. 8 filing with the agency. The company said the project provides an innovative grid solution without the need for costly upgrades and maintenance of an existing distribution power line in the remote town. The project is part of the company’s Western Carolinas Modernization Project aimed at advancing clean energy in the region and also includes a plan to replace a coal power plant in Asheville with a gas-powered plant next year. The company’s integrated resource plan includes an investment of $500 million in battery storage projects in the Carolinas over the next 15 years, resulting in a 20-fold increase in the region’s storage capacity.

New York to Jumpstart Energy Storage With $40 Million Funding For Solar-Paired Projects in Move Towards 1.5 Gigawatt Goal

Governor Andrew Cuomo, a Democrat, announced the funding to advance progress towards the state’s ambitious target of deploying of 1,500-megawatts of energy storage by 2025 and also support the Clean Energy Standard, which requires half of the state’s electricity to come from renewable energy by 2030. The NY-Sun program, a $1 billion initiative that strives to build a self-sustaining solar market, will make the funding available in November to speed up the deployment of at least 50 megawatts of solar-plus-storage. The technology will help lower consumer energy bills and enhance the value of renewable energy to the grid. Solar-paired-storage can also lower costs by utilizing federal tax incentives, combining permitting processes, and co-locating on the same site to save space. The storage component will facilitate shifting of renewable generation to times of highest usage in commercial and industrial applications and community solar projects. The funding marks the first storage incentive made available since the release of the state’s energy storage roadmap in June.

Fossil Fuels and Pipelines

Trump Moves to Remove Restrictions on Higher Ethanol Fuels, Boost for Corn Ethanol Industry

President Donald Trump directed the U.S. Environmental Protection Agency to begin the process of lifting restrictions on the sales of E15 gasoline, a fuel blend containing gasoline and 15 percent ethanol, during summer months, according to an Oct. 11 news release from the White House. Currently, the sale of E15 is restricted during summer months due to concerns of smog formation from evaporative emissions. The move directs the EPA to commence rulemaking to expand the waivers for “Reid vapor pressure” – a measure of gasoline volatility – for blends containing up to 15 percent ethanol. While corn growers hailed the measure which will expand the sale of corn ethanol, the American Petroleum Institute called it a “bad deal for consumers” saying that three out of four vehicles currently on road are not compatible with E15, and that higher ethanol levels can harm engines and fuel systems. Trump also asked the EPA to examine reforms to increase transparency in the market for biofuel credits called Renewable Identification Numbers used to demonstrate compliance with the renewable fuel standard.

FERC Schedules Environmental Review for Tallgrass Energy’s $213 Million Cheyenne Connector Gas Line

The Federal Energy Regulatory Commission set a Dec. 18 deadline to issue an environmental assessment for the Cheyenne Connector Pipeline and Cheyenne Hub Enhancement projects in Colorado, according to the agency’s Oct. 11 notice. The pipeline, proposed by Cheyenne Connector LLC, comprises a 70-mile interstate line to move about 600 million cubic feet per day of natural gas from supply connections in the Denver-Julesberg Basin in Weld County to Rockies Express Pipeline LLC’s Cheyenne Hub. The Cheyenne Hub Enhancement would improve the firm interconnectivity capability of pipelines and distribution systems in and around the hub. A final decision is due by March 18, 2019. Cheyenne Connector is a subsidiary of Tallgrass Energy LP.

Enbridge Agrees to Pay up to $500 Million for Tunnel Replacing Line 5 Oil Pipeline Under Michigan’s Mackinac Straits

The state of Michigan and Canadian company Enbridge Inc. signed an agreement under which the company would replace the Line 5 petroleum pipeline segment that crosses the Straits of Mackinac with a multi-utility tunnel beneath the Straits, according to an Oct. 3 press release from the Michigan Governor’s office. Enbridge agreed to bear the costs of construction – estimated to range from $350 million to $500 million – and operation of the tunnel for up to 99 years. The deal is subject to approval by the Mackinac Bridge Authority, which would own the infrastructure and lease space to Enbridge. Building on a November 2017 safety agreement, the new deal requires additional actions to expand safeguards along the segment. As part of the new measures, Enbridge must make at least $1.8 billion available to respond to potential oil spills. The 645-mile Line 5 transports up to 540,000 barrels a day of light crude oil and natural gas liquids underneath the Straits of Mackinac.

NextDecade Corporation’s Texas LNG Project Gets Favorable Draft Review From U.S. Energy Regulator

The Federal Energy Regulatory Commission staff issued a draft environmental assessment for NextDecade Corporation’s Rio Grande LNG Project finding that the project would result in some adverse environmental impacts, which would be reduced to less than significant levels, according to the agency’s Oct. 12 announcement. The staff said it has developed other site-specific mitigation measures that will further lower the environmental impact from the project construction. The project, proposed by Rio Grande LNG LLC and Rio Bravo Pipeline Company LLC, would consist of six liquefaction trains with a total nominal capacity of 27 million tons per annum for export and other associated facilities. The Rio Grande LNG Terminal would occupy about 750 acres of a 984-acre parcel of land in Cameroon County, Texas. The Rio Bravo Pipeline System would provide the terminal with about 4.5 billion cubic feet per day of firm natural gas capacity. The staff arrived at the conclusion based on input from cooperating federal agencies including the Army Corps of Engineers, Coast Guard, Energy Department, Transportation Department, Fish and Wildlife Service, National Park Service, Environmental Protection Agency, and National Oceanic and Atmospheric Administration. Rio Bravo Pipeline Company is a subsidiary of NextDecade Corporation. Comments on the draft are due by Dec. 3.

FERC Schedules Environmental Review For Northern Natural Gas Company’s $190 Million Pipeline Project in Minnesota

The Federal Energy Regulatory Commission set a Nov. 21 deadline to issue an environmental assessment for Northern Natural Gas Company’s Northern Lights 2019 Expansion Project and the Rochester Project in Minnesota, according to the agency’s Oct. 15 notice. The projects consist of new pipeline and compression facilities that would together increase natural gas transportation service by about 138,504 dekatherms per day in Minnesota. The Northern Lights 2019 Expansion is estimated to cost about $158 million and the Rochester project about $31.42 million. A final decision is due by Feb. 19, 2019.