The NEI Morning Clip File

Here are some of the news clips we're reading at NEI this morning. Our talk of record-breaking oil prices is starting to sound like ... well ... a broken record. But that is the news this morning, as prices hit their highest-ever peak of $66.15 before dropping down to $66.05.

U.S. oil has risen 52 percent since the start of the year. And the stage is set for further gains, with no let-up seen in global demand growth and no signs that $60-plus oil is harming the economy of the world's largest consumer, the United States.

Michael Wittner, head of energy market research at Calyon, made a prediction:

"We're going to have a very strong price environment until the steam is taken out of demand or until investment catches up and restores a spare capacity cushion to production and refining."

Until that happens, keep checking NEI's clip file for daily record highs.

In other news, Morningstar Inc., which provides independent investment research, says the "Energy Policy Act has something for everyone," but especially for utilities:

On the regulatory front, the Energy Policy Act commits to a major utility regulation overhaul. First and foremost, it repeals the Public Utilities Holding Company Act (PUHCA) of 1935. That bill had forced utilities with service territories in multiple states to register with and be regulated by the SEC. Eliminating this requirement has the potential to reduce the filing and compliance costs of currently proposed mergers. ... The repeal of PUHCA has received lots of attention by Wall Street, as its elimination is seen as a catalyst for increased merger and acquisition activity in the sector.

... The Energy Policy Act also revises utility purchase requirements under the Public Utility Regulatory Policies Act of 1978 (PURPA). Under PURPA, utilities are required to make mandatory energy purchases from certain outside generators called qualifying facilities. These mandatory purchases limit the ability of regulated utilities to grow earnings by expanding regulated generation assets. The bill allows utilities to either restructure or eliminate these contracts under certain conditions, something that paves the way for additional regulated generation investments.

Morningstar also highlights how the energy legislation benefits nuclear, coal and hydroelectric power, as well as renewables.

Come back this afternoon for more news from the NEI Clip File.

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