2024-10-11 20:39

Oct 11 (Reuters) - Duke Energy (DUK.N) , opens new tab expects to take at least four more days to restore electricity to many of its customers in Florida after Hurricane Milton caused power outages across the state, the U.S. utility firm said on Friday. Milton made landfall on Florida's west coast on Wednesday as a Category 3 hurricane before plowing into the Atlantic Ocean a day later, according to the U.S. National Hurricane Center (NHC). The hurricane caused widespread flooding and deadly tornadoes, killing at least 16 people in the state. Duke Energy estimated its customers in 12 counties would have their power restored by 1159 pm ET (0359 am GMT) on Oct. 13, while those in Pasco and Pinellas counties would have to wait till at least 1159 pm ET on Oct. 15. According to Duke Energy's power outage map, at least 750,391 customers were without power as of 15:56 pm ET. Meanwhile, data from PowerOutage.us suggests 2.2 million homes and businesses in Florida did not have access to electricity. Duke Energy was the utility with most customers hit, followed by Florida Power & Light Company, with 677,681 clients lacking electricity, the data showed. Sign up here. https://www.reuters.com/business/energy/duke-energy-take-four-days-restore-power-florida-after-hurricane-milton-2024-10-11/

2024-10-11 20:36

Oct 11 (Reuters) - PetroChina Canada will no longer be a committed shipper on the Trans Mountain oil pipeline after assigning its contracts to another party, the company said in a letter filed with the Canada Energy Regulator, dated Oct. 10. The recently expanded Trans Mountain pipeline has capacity to ship 890,000 barrels per day (bpd) of crude from Alberta's oil sands to the Port of Vancouver in British Columbia. The company is a subsidiary of China's top oil-producing firm PetroChina (601857.SS) , opens new tab and holds six assets in western Canada, including the MacKay River and Dover oil sands projects and a stake in the LNG Canada liquefied natural gas project, due to start operating next year. A spokesperson for PetroChina Canada did not immediately respond to a request for comment on why the company had given up its committed shipping agreements. PetroChina Canada wrote to regulators to say it was withdrawing as an intervenor in a long-running dispute between Trans Mountain and its committed shippers over pipeline tolls. "PCC has now assigned these agreements to another party and will not be a committed shipper going forward," the letter said. PetroChina did not name the other party. Sign up here. https://www.reuters.com/business/energy/petrochina-will-no-longer-be-committed-shipper-trans-mountain-oil-pipeline-2024-10-11/

2024-10-11 20:29

LONDON, Oct 11 (Reuters) - Catastrophe bonds issued by the U.S. National Flood Insurance Program (NFIP) fell sharply on Friday, according to a weekly broker's note, reflecting expectations that Hurricane Milton may trigger payouts for clean-up after the storm. Catastrophe bonds are a form of insurance-linked security (ILS), which offer a way for institutional investors to access the insurance market. Catastrophe bonds typically offer investors high returns, but issuers keep their principal if a specified event occurs, such as a hurricane or flood in a particular region. Hurricane Milton brought widespread flooding and touched off a spate of deadly tornadoes , opens new tab on Florida's east coast this week, killing at least 16 people and leaving millions without power. Seven NFIP-issued catastrophe bonds totalling $1.3 billion fell between 13% and 59% on Friday compared with a week ago, according to the note from broker Aon (AON.N) , opens new tab seen by Reuters. Aon and NFIP did not immediately respond to request for comment. "We are monitoring the NFIP bonds that cover hurricane-induced flooding, however it is too early to tell the exact impact," specialist investor Twelve Capital said in a note. The NFIP provides insurance to help reduce the social and economic impact of floods. Its catastrophe bonds provide protection against flood risk from named storms , opens new tab, according to data from specialist website Artemis. Several other catastrophe bonds issued by insurers also fell sharply, according to the Aon note. It could take weeks or months to determine whether the catastrophe bonds are triggered by the hurricane, during which time investors will be unable to redeem their bonds, industry sources say. The hurricane would likely lead to "private trapped ILS capital", UBS analysts said in a note. Sign up here. https://www.reuters.com/business/environment/us-flood-catastrophe-bonds-fall-sharply-after-hurricane-milton-2024-10-11/

2024-10-11 20:11

NEW YORK, Oct 11 (Reuters) - U.S. corporate credit spreads hit fresh multi-year lows in recent days in a sign of growing investor confidence, although some market participants worry corporate debt investors may be too optimistic given economic risks ahead. The spread on the ICE BofA U.S. Corporate Index (.MERC0A0) , opens new tab, a commonly used benchmark for high-grade debt, declined to 84 basis points this week, its lowest since 2005. Spreads were at 92 bps at the end of last month. Spreads in the ICE BofA U.S. High Yield Index (.MERH0A0) , opens new tab, which tracks so-called junk bonds, dipped to 289 basis points late last week, their lowest since March 2007. They were last at 299 bps as of Thursday, LSEG data on Friday showed. Spreads indicate the premium investors demand to hold corporate bonds rather than safer government securities and are a gauge of market confidence. Strong demand for bonds that are below investment grade, in particular, is seen as an optimistic signal, as investors see financial conditions as healthy and are less worried about corporate defaults. "The probability of any type of meaningful recession is quite low, and so that's very supportive of the credit asset class," said Steven Oh, global head of credit and fixed income and co-head of leveraged finance at PineBridge Investments. Still, he said there was a "level of complacency" in the market as prices did not account for the potential of a sharper economic slowdown than anticipated. "Spreads are trading tight to where fair value is in a very supportive fundamental economic environment but one that is slowing," he said. Treasury yields have surged this month as fears of an economic slowdown reversed after the Federal Reserve cut interest rates for the first time in over four years last month and data pointed to continued economic resilience. Higher yields could incentivize investors to add more credit, a dynamic that has boosted demand for corporate debt in recent years. Investment-grade bond issuance so far this year at $1.3 trillion is already 29% higher than the volumes in the year earlier period, according to Informa Global Markets data. At the same time, as the Fed is expected to lower rates further, that reduces risks around debt refinancing, improving the outlook for companies strained by high borrowing costs, said Dominic Pappalardo, chief multi-asset strategist at investment research firm Morningstar. "Investors may be more willing to move down in quality and allocate to credit sectors in place of government bonds to ensure they can still reach desired income bogeys," he said. One hiccup could be the U.S. election on Nov . 5, which could rattle markets. "There always exists the possibility of conditions becoming more difficult in November," said Richard Wolff, head of U.S. bond syndicate at Societe Generale CIB, who has been advising clients to move their funding plans forward, if possible. Still, given yields of around 7% for high-yield bonds, some believe there's plenty of cushion to absorb a potential widening of spreads. "Junk credit spreads still have room to tighten even though they are at their tightest levels in years," said Nick Burns, portfolio manager at Payden & Rygel. "Assuming flat rates, you’d need to see spreads widen materially and/or defaults increase substantially before realizing a negative return over a given twelve month period with starting yields at that level,” said Burns. Sign up here. https://www.reuters.com/markets/rates-bonds/us-credit-spreads-narrow-new-lows-economy-looks-up-2024-10-11/

2024-10-11 20:05

Oct 11 (Reuters) - PJM Interconnection plans to delay its next annual capacity auction by about six months while the largest U.S. grid operator addresses a complaint brought by environmental groups, the biggest U.S. grid operator said in a letter on Thursday. PJM's most recent auction, which resulted in payments to power plants in its system that were 833% higher than the previous year, set off concerns about spiking power bills. That prompted the Sierra Club, Earthjustice and other environmental groups to file a complaint last month with the Federal Energy Regulatory Commission, alleging that PJM drove up capacity prices partly by unjustifiably excluding certain power plants. The grid operator makes capacity payments to power generators to run during times of high demand and the payouts, which are determined each year, depend largely on PJM's estimate of available power supply and demand. The plants excluded from the auction have contracts, known as RMR agreements, to operate beyond their planned retirement dates. Including these plants would have reduced capacity costs by approximately $5 billion annually over the next three years, the complaint by environmental groups says. The complaint and another letter sent by the Organization of PJM States, called for RMR agreements to be included in the next auction. PJM said it plans to ask the FERC to postpone its upcoming auction when it answers the complaint. "PJM does not take auction delay lightly," the letter said. "However, this approach improves market certainty and provides a path for resolution." If FERC declines the request, the auction will proceed in December, PJM said. Potential changes to the market structure could negatively impact PJM-operating Independent Power Producers, analysts at Barclays and Jefferies said. IPPs Talen Energy , Constellation Energy , and Public Service Enterprise (PEG.N) , opens new tab were down between 0.5% and 5% on Friday. However, this could benefit transmission and distribution utilities and may reduce tightness in the upcoming auction, Barclays added. Sign up here. https://www.reuters.com/business/energy/pjm-wants-delay-capacity-auction-after-environmentalists-complaint-2024-10-11/

2024-10-11 19:40

Oct 11 (Reuters) - The Pickering Nuclear Generating Station in Ontario has received approval from the Canadian Nuclear Safety Commission for the safe operation of its "B" units until December 2026. "The data is clear, Ontario needs more power to meet growing energy demands. We have long believed that the Pickering Nuclear Generating Station is essential to Ontario's energy expansion plan," Stephen Lecce, Ontario's minister of energy and electrification, said in a statement. This decision will facilitate the production of "reliable, affordable and clean power," as well as life-saving medical isotopes to combat cancer, Lecce added. The Pickering Nuclear Generating Station's "B" units produced its second-highest output ever in 2023 as a six-unit station, and generates 2,000 MW of power, enough to power two million homes. The approval comes after Ontario Power Generation concluded that Pickering could safely generate electricity through 2026 and subsequently applied to amend the station's operating license. This move is in line with the government's announcement in January supporting OPG's plan to proceed with refurbishing the station's "B" units. Sign up here. https://www.reuters.com/business/energy/ontarios-pickering-nuclear-station-gets-green-light-continued-operation-2024-10-11/