2024-05-09 20:51

SAN JOSE, May 9 (Reuters) - Struck by the worst drought in five decades, Costa Rica announced an electricity rationing plan on Thursday, blaming a severe lack of rainfall that has hobbled hydroelectric plants. The Central American nation famed for its beaches and lush landscapes that power ecotourism normally gets about 70% of its electricity supply from the plants. State-run electricity company ICE has blamed the drought conditions partly on the weather phenomenon known as El Nino. Roberto Quiros, ICE's electricity director, described water levels at main reservoirs as "critical," adding the current El Nino is the most severe on record. He also pointed to delays in contracted deliveries from private power plants. The country last saw electricity rationing in 2007. The power cuts, to be implemented next Monday, are scheduled to last up to three hours daily but will not affect hospitals, industry or other high-voltage customers. ICE is also asking residential users to reduce consumption as much as possible. President Rodrigo Chaves has said he prays every day for rain as his requests to purchase energy from Costa Rica's neighbors have proved difficult since power shortages have also hit the broader region. Widespread power cuts blamed on a heat wave also hit Mexico earlier this week, in addition to similar problems in Colombia and Ecuador. The lack of rains has accompanied unusually unpredictable wind patterns, ICE officials noted, which has hit supplies from wind farms. This week, the company announced an alert signaling the possibility of rationing along with a so far unrealized forecast for imminent rainfall. Costa Rica's rainy season usually kicks off at the end of April. An uptick in demand has further complicated ICE's ability to meet it. Official data for January showed a 9% rise in electricity consumption compared to the same month last year. Sign up here. https://www.reuters.com/world/americas/suffering-worst-drought-decades-costa-rica-orders-electricity-rationing-2024-05-09/

2024-05-09 20:37

May 9 (Reuters) - The investment firms that took U.S. power plant operator Calpine Corp private six years ago are exploring options that include a company sale, an initial public offering or a stake divestment at a valuation of about $30 billion, including debt, according to people familiar with the matter. The deal deliberations come as data centers powering artificial intelligence and extreme weather, such as heat waves driven by climate change, spur electricity demand in some of Calpine's key markets, including Texas, where it operates 12 power plants. Energy Capital Partners, Access Industries and CPP Investments, which acquired Calpine for $17 billion in 2018, are having early-stage talks with investment banks about their exit options, the sources said. A transaction would likely happen late in 2024 or early in 2025, added the sources, who spoke on condition of anonymity to discuss confidential deliberations. Calpine did not respond to a comment request. ECP, CPP and Access all declined comment. An acquisition of Calpine would be the biggest in the U.S. power industry since TXU Corp's $45 billion leveraged buyout in 2007. An IPO would likely be one of the largest ever of a U.S. power company. Calpine owns 76 power plants generating almost 26,000 megawatts of power across 22 U.S. states, as well as Canada and Mexico, according to its website. Calpine is an independent power producer and, unlike regulated utilities, it can sell power at market prices, allowing it to profit more when demand is up. The arrangement also exposes it to more power-market risk, however, because Calpine does not have a dedicated customer base as regulated utilities do. Its customers include businesses, industrial sites, as well as residential homes. Having been stagnant for much of this century, aggregate U.S. power demand is expected to skyrocket further from the record 4,099 terawatts forecast for 2024 by the U.S. Energy Information Administration. While precise forecasts vary, Goldman Sachs said last month that U.S. power demand could reach 5,036 terawatts by 2030. Investors are scrambling to place bets in the sector, due to this outlook. So far this year, Vistra Corp's (VST.N) New Tab, opens new tab stock has jumped 139%, while shares of competitors Constellation Energy (CEG.O) New Tab, opens new tab and NRG Energy (NRG.N) New Tab, opens new tab have surged 81% and 58% respectively. This compares with the 12% gain in the S&P utilities index (.SPLRCU) New Tab, opens new tab, and a 9% increase by the S&P 500 (.SPX) New Tab, opens new tab. Sign up here. https://www.reuters.com/markets/deals/power-producer-calpine-explores-options-including-30-bln-sale-sources-say-2024-05-09/

2024-05-09 19:34

Canadian dollar gains 0.3% against the greenback Price of U.S. oil settles 0.3% higher 10-year yield eases about half a basis point TORONTO, May 9 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Thursday as the greenback posted broad-based declines and ahead of domestic jobs data that could offer clues on the timing of Bank of Canada interest rate cuts. The loonie was trading 0.3% higher at 1.3677 per U.S. dollar, or 73.12 U.S. cents. "A big part of that (move) has been because of the broad U.S. dollar selling we saw after the worse-than-expected initial claims report," said Erik Bregar, director of FX & precious metals risk management at Silver Gold Bull. "Bad news is a good thing for the markets broadly speaking." Wall Street rose and the U.S. dollar (.DXY) New Tab, opens new tab lost ground against a basket of major currencies after economic data showed the number of Americans filing new claims for unemployment benefits increased more than expected last week. Ebbing labor market momentum has put two interest rate cuts from the Federal Reserve this year back on the table. Canada's employment report for April, due on Friday, is expected to show the economy adding 18,000 jobs and the unemployment rate increasing to 6.2%. Disappointing data would solidify the chance of a Bank of Canada interest rate cut, Bregar said. Money markets see a roughly 60% chance the Canadian central bank would begin a rate cutting campaign next month. The Canadian financial system remains resilient, but the continuing adjustment to higher rates and possible shocks present key risks to stability, BoC Governor Tiff Macklem said. The price of oil , one of Canada's major exports, settled 0.3% higher at $79.26 a barrel as data from China and the U.S. signaled that demand in the world's two biggest crude-consuming nations could climb. The Canadian 10-year yield was down about half a basis point at 3.625%, as U.S. Treasury yields declined. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-advances-ahead-key-domestic-jobs-report-2024-05-09/

2024-05-09 19:25

WASHINGTON, May 9 (Reuters) - The U.S. House Transportation and Infrastructure Committee will hold a May 15 hearing on the federal government's response to the collapse of a Baltimore bridge. The Dali cargo ship crashed into the Francis Scott Key Bridge on March 26, killing six people. The hearing will include Federal Highway Administrator Shailen Bhatt, National Transportation Safety Board Chair Jennifer Homendy and senior officials with the U.S. Coast Guard and Army Corps of Engineers. The NTSB is expected to announce preliminary findings from the investigation next week. Last month, Homendy said investigators had conducted interviews with key cargo ship personnel in the investigation including the pilots, the second officer - who was the man on watch at the time of the crash - and other key personnel, as well as U.S. Coast Guard personnel. The NTSB has downloaded the voyage data recorder and brought in the manufacturer of equipment in the engine room to closely examine the electrical power system work. The NTSB is also looking at the circuit breakers and has tested the fuel onboard the ship. Maryland said last week it estimated it will cost $1.7 billion to $1.9 billion to rebuild the bridge and expects it will be completed by fall 2028. Lawmakers in Congress are working on legislation that would waive the current requirement that the state pay 10% of the rebuilding costs and ensure there is enough money in a federal rebuilding fund. The U.S. Department of Transportation previously provided an initial $60 million in emergency funds to clear debris and start the process of rebuilding the bridge. The collision has also raised concerns about whether there are adequate structural safeguards around other key U.S. bridges. Sign up here. https://www.reuters.com/world/us/us-house-panel-hold-hearing-maryland-bridge-collapse-2024-05-09/

2024-05-09 18:07

May 9 (Reuters) - Shares of Arm Holdings (O9Ty.F) New Tab, opens new tab fell on Thursday as the chip designer's softer-than-expected annual revenue forecast cooled some of the enthusiasm around the stock following its AI-powered jump in recent months. The stock fell as much as 8.5% before paring some of its losses to trade 1.5% lower at $104.50 in the afternoon. Bets that Arm will benefit from a surge in AI computing have doubled the chipmaker's share price since its initial public offer last September, giving it a market value of more than $100 billion. "This is a typical case of ARM not being able to live up to heightened expectations," said CFRA Research analyst Angelo Zino, adding that Arm's business is overtly reliant on the smartphone market, which has recently shown slower growth. UK-based Arm, which earns by licensing its chip designs and through royalties, has been expanding into the data center market where operators are looking to build their own chips to power new AI models and reduce their reliance on dominant supplier Nvidia. "AI demand (for Arm's technology) will take some time to grow into the revenue mix to absorb that weakness (from the smartphone market)," said Tejas Dessai, a research analyst at Global X ETFs. The UK chip designer said it was expecting full-year revenue to be between $3.8 billion and $4.1 billion, the midpoint for which is slightly below the consensus estimate of $3.99 billion, according to LSEG data. Its revenue in the March quarter and the forecast for the current quarter, however, came in above expectations. At least two analysts cut their price target on Arm, whose chip designs power nearly every smartphone in the world. Arm shares trade at 64.68 times its 12-month forward earnings estimates, significantly higher than the industry median of 19.95, according to LSEG data. Shares of Nvidia (NVDA.O) New Tab, opens new tab and Advanced Micro Devices (AMD.O) New Tab, opens new tab were down 1.6% and 1%, respectively, on Thursday. Sign up here. https://www.reuters.com/technology/arm-shares-fall-tepid-forecast-takes-shine-off-ai-optimism-2024-05-09/

2024-05-09 18:07

May 9 (Reuters) - Two major U.S. grid operators, PJM Interconnection and Midcontinent Independent System Operator, announced on Thursday that they are teaming up to assess how much electricity can be transferred between their regions in a study set to be performed in the second half of 2024. Based on input from the Organization of PJM States, the Organization of MISO States and the Midwestern Governors Association, the study aims to pinpoint opportunities for immediate improvements in transmission along the PJM and MISO boundary, the organizations said in a statement. Upon completion of the study in early 2025, both grid operators will present their discoveries to the Interregional Planning Stakeholder Advisory Committee. This committee was established by PJM and MISO to assess coordinated system planning endeavors involving all stakeholder factions. Enhancing the ability to transfer power between regions could boost grid resilience, especially after severe weather events and the rise of renewable energy sources with fluctuating output, the statement added. Sign up here. https://www.reuters.com/business/energy/us-grid-operators-pjm-miso-team-up-study-power-transfer-capability-2024-05-09/