Utilities & Energy

NGL Frac’s 7/8 BPD cost is ~36% lower than NGL Frac #1’s ($2,233 vs. $3,500) even though construction wages increased ~18% ($56.1K vs.
$66.2K). Note: an optimized engineering design, lessons learned, shorter schedule, and/ or sharing of common utilities and offsite facilities are
possible explanations for this improvement.

Regulatory Background: Vogtle is regulated by the Georgia Public Service Commission (GPSC). GPSC’s primary role is to protect rate payers & determine if project costs can be justifiably passed-through via utility rates.

Mighty Mouse? Sempra’s (SRE) Costa Azul LNG (ECA, 2.4mtpa Phase-1) might be the only North American LNG project with a realistic chance at FID in 2020. As we saw last cycle, being small (and cheap) can be an advantage in difficult markets. As we note below, we’ve included our key takeaways around 1) Project viability in the current environment, 2) Site & Permitting Issues, 3) our independent project timeline & cost estimates, and 4) our Independent assessment of ECA’s project economics.

American Electric Power AEP has a market cap of 42 B), been in business for 114 years, and has 5 5 MM customers in 11 states, which includes Texas

ERCOT is a non profit governed by a board of directors and oversight by the Public Utility Commission of Texas (“PUCT”) and Texas legislature In 2019 ERCOT energized 1 3 B in transmission projects

Enterprise Products (EPD) is one of the largest publicly traded energy partnerships (~$28B Market Cap), with 21 consecutive years of distribution growth.