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US Termination of Ukraine Energy Grid Support signals a policy shift: USAID halts aid for grid restoration amid Russia attacks, impacting energy security, infrastructure resilience, winter readiness, and negotiations leverage with Moscow and allies.

Key Points

A US policy reversal ending USAID support for Ukraine's grid, impacting energy security, resilience, and leverage.

✅ USAID halt reduces funds for grid restoration and winter prep

✅ Policy shift may weaken Kyiv's leverage in talks with Russia

✅ Ukraine seeks EU, IFIs, private capital for energy resilience

The U.S. government has recently decided to terminate its support for Ukraine's energy grid restoration, a critical initiative managed by the U.S. Agency for International Development (USAID). This decision, reported by NBC News, comes at a time when Ukraine is grappling with significant challenges to its energy infrastructure due to ongoing Russian attacks. The termination of support was reportedly finalized before Ukrainian President Volodymyr Zelensky's scheduled visit to Washington, marking a significant shift in U.S. policy and raising concerns about the broader implications for Ukraine's energy resilience and its negotiations with Russia.

The Critical Role of U.S. Support

Since Russia's invasion of Ukraine, the country’s energy infrastructure has been one of the primary targets of military strikes. Russia has launched numerous attacks on Ukraine's power generation facilities, substations, and power lines, causing power outages across multiple regions. These attacks have led to significant material losses, with damage reaching billions of dollars. As part of its commitment to Ukraine, the U.S. government, through USAID, had been instrumental in funding restoration efforts aimed at rebuilding and reinforcing Ukraine’s energy grid.

USAID's support was crucial in helping Ukraine withstand the damage inflicted by Russian missile strikes. This aid was not just about restoring basic services but also about fortifying the energy grid to ensure that Ukraine could continue functioning amidst the war and keep the lights on this winter as temperatures drop. The U.S. contribution to Ukraine's energy sector, alongside international support, helped reduce the immediate vulnerabilities faced by Ukraine's civilians and industries.

The Abrupt Change in U.S. Policy

The decision to cut support for energy grid restoration is seen as a sharp reversal in U.S. policy, particularly as the Biden administration has previously shown strong backing for Ukraine in the aftermath of the invasion. This shift in policy was reportedly made by the U.S. State Department, which directed USAID to halt its involvement in the energy sector.

According to NBC News, USAID officials expressed concern about the timing of this decision. One official noted that terminating support for Ukraine’s energy grid restoration would severely undermine the U.S. government's ability to negotiate on issues like ceasefires and peace talks with Russia. The official argued that such a move would signal to Russia that the U.S. is backing away from its long-term investments in Ukraine, potentially weakening Ukraine's position in the ongoing war.

The abrupt end to this support is also seen as a blow to the morale of Ukraine’s government and people. Ukraine had been heavily reliant on the U.S. for resources to repair its critical infrastructure, and the decision to cut this support without warning has created uncertainty about the future of such recovery efforts.

Ukraine’s Response and Search for Alternatives

In response to the termination of U.S. support, Ukrainian officials have been seeking alternative sources of funding to continue the restoration of their energy grid. Deputy Prime Minister Olha Stefanishyna reported that Ukraine has already reached preliminary agreements with other international partners to secure financial support for energy resilience, cyber defense, and recovery programs including new energy solutions for winter blackouts.

These efforts come at a time when Ukraine is working to rebuild its war-torn economy and safeguard critical sectors like energy and infrastructure. The termination of U.S. support for energy restoration projects underscores the growing pressure on Ukraine to diversify its sources of aid and not become overly dependent on any one nation. Ukrainian leaders are in ongoing talks with European governments, international financial institutions, and private investors to ensure that essential programs do not stall due to the lack of funding from the U.S., as energy cooperation grows and Ukraine helps Spain amid blackouts in solidarity.

Implications for Ukraine’s Energy Security

Ukraine's energy security remains a critical issue in the context of the ongoing conflict with Russia. The war has made the country’s energy infrastructure vulnerable to repeated attacks, and the restoration of this infrastructure is essential for ensuring that Ukraine can keep the lights on and recover in the long term. The U.S. has been one of the largest contributors to Ukraine's energy security efforts, and its withdrawal could force Ukraine to look for other partners who may not have the same level of financial or technological resources.

This development also raises questions about the future of U.S. involvement in Ukraine's recovery efforts more broadly. As the war continues and winter looms over the battlefront for frontline communities, the need for reliable and sustained support from international partners will only increase. If the U.S. significantly scales back its aid, Ukraine may face even greater challenges in maintaining its energy infrastructure and achieving long-term recovery.

Moving Forward

The termination of U.S. support for Ukraine’s energy grid restoration serves as a reminder of the complexities involved in international aid and geopolitics during wartime. As Ukraine faces the ongoing realities of the war, it must adapt to a shifting international landscape where traditional allies may not always be reliable sources of support. Ukraine’s leadership will need to be strategic in its search for alternative sources of aid, while also focusing on strengthening its energy grid, managing electricity reserves to stabilize supply, and reducing its vulnerabilities to Russian attacks.

While the end of U.S. support for Ukraine's energy restoration is a significant setback, it also underscores the urgent need for Ukraine to diversify its international partnerships. The future of Ukraine’s energy resilience may depend on how effectively it can navigate these changing dynamics while maintaining the support of the international community in the fight against Russian aggression.

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Hydro-Que9bec COVID-19 M&A Pause signals a halt to international expansion as falling electricity demand, weaker exports, and revenue pressure shift capital to the Quebec economy, prioritizing domestic investment, strategic plan revisions, and risk management.

Key Points

Hydro-Que9bec COVID-19 M&A Pause halts overseas deals, shifting investment to Quebec as demand, exports and revenue fall.

✅ International M&A on hold; capital reallocated to Quebec projects

✅ Lower electricity demand reduces exports and spot prices

✅ Strategic plan and 2020 guidance revised downward

COVID-19 is forcing Hydro-Québec to pull the plug on its global ambitions — for now, even as its electricity ambitions have reopened old wounds in Newfoundland and Labrador in recent years.

Quebec’s state-owned power generator and distributor has put international mergers and acquisitions on hold for the foreseeable future because of the COVID-19 crisis, chief financial officer Jean-Hugues Lafleur said Friday.

Former chief executive officer Éric Martel, who left last month, had made foreign expansion a key tenet of his growth strategy.

“We’re in revision mode” as pertains to acquisitions, Lafleur told reporters on a conference call, as the company pursues a long-term strategy to wean the province off fossil fuels at home as well. “I don’t see how Hydro-Québec could take $5 billion now and invest it in Chile because we have an investment opportunity there. Instead, the $5 billion will be invested here to support the Quebec economy. We’re going to make sure the Quebec economy recovers the right way before we go abroad.”

Lafleur spoke after Hydro-Québec reported a 14-per-cent drop in first-quarter profit and warned full-year results will fall short of expectations as COVID-19 weighs on power demand.

Net income in the three-month period ended March 31 was $1.53 billion, down from $1.77 billion a year ago, Hydro-Québec said in a statement. Revenue fell about six per cent to $4.37 billion.

“Due to the economic downturn resulting from the current crisis, we’re anticipating lower electricity sales in all of our markets,” Lafleur said. “Consequently, the financial outlook for 2020 set out in the strategic plan 2020–2024, which also reflects the province’s no-nuclear stance, will be revised downward.”

It’s still too early to determine the scope of the revision, the company said in its quarterly report. Hydro-Québec was targeting net income of between $2.8 billion and $3 billion in 2020, according to its strategic plan.

The first quarter was the utility’s last under Martel, who quit to take over at jetmaker Bombardier Inc. Quebec appointed former Énergir CEO Sophie Brochu to replace him, effective April 6.

First-quarter results “weren’t significantly affected” by the pandemic, Lafleur said on a conference call with reporters. Electricity sales generated $294 million less than a year ago due primarily to milder temperatures, he said.

Results will start to reflect COVID-19’s impact in the second quarter, though NB Power has signed three deals to bring more Quebec electricity into the province that could cushion some exports.

Electricity consumption in Quebec has fallen five per cent in the past two months, paced by an 11-per-cent plunge for commercial and institutional clients, and cities such as Ottawa saw a demand plunge during closures.

Industrial customers such as pulp and paper producers have also curbed power use, and it’s hard to see demand rebounding this year, Lafleur said.

“What we’ve lost since the start of the pandemic is not coming back,” he said.

Demand on export markets, meanwhile, has shrunk between six per cent and nine per cent since mid-March. The drop has been particularly steep in Ontario, reaching as much as 12 per cent, after the province chose not to renew its electricity deal with Quebec earlier this year, compared with declines of up to five per cent in New England and eight per cent in New York.

Spot prices in the U.S. have retreated in tandem, falling this week to as low as 1.5 U.S. cents per kilowatt-hour, Lafleur said. Hydro-Québec’s hedging strategy — which involves entering into fixed-price sales contracts about a year ahead of time — allowed the company to export power for an average of 4.9 U.S. cents per kilowatt-hour in the first quarter, compared with the 2.2 cents it would have otherwise made.

Investments will decline this year as construction activity proceeds at reduced speed, Lafleur said. Hydro-Québec was initially planning to invest about $4 billion in the province, he said, as it works to increase hydropower capacity to more than 37,000 MW across its fleet.

Physical distancing measures “are having an impact on productivity,” Lafleur said. “We can’t work the way we wanted, and project costs are going to be affected. Anytime we send workers north on a plane, we need to leave an empty seat beside them.”

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New York Utility Disconnection Ban protects residents during state emergencies, covering electric, gas, water, telecommunications, cable, and internet services, with penalties for noncompliance and options like deferred payment agreements and consumer protections.

Key Points

A proposed law barring shutoffs in state emergencies across electric, gas, water, telecom, cable, and internet.

✅ Applies during declared state and local emergencies statewide.

✅ Covers electric, gas, water, telecom, cable, and internet services.

✅ Noncompliance triggers penalties; payment plans required for arrears.

Governor Andrew M. Cuomo has announced a proposal to prohibit utility disconnections in regions that are under a state of emergency, addressing the energy insecurity many households face, as part of the 2021 State of the State. The Governor will propose legislation that will apply to electric, gas, water, telecommunications, cable and internet services. Utilities that fail to comply will be subject to penalties.

“In a year in which we dealt with an unprecedented pandemic, ferocious storms added insult to injury by knocking out power for hundreds of thousands of New Yorkers,” Governor Cuomo said. “Utility companies provide essential services, and we need to make sure they continue to provide them, rain or shine. That’s why we’re proposing legislation to make sure that New Yorkers, especially those living in regions under states of emergency, have access to these critical services to provide for themselves and their families.”

Governor Cuomo has taken a series of actions to protect New Yorkers’ access to utilities during the COVID-19 pandemic, including a suspension of shut-offs in New York and New Jersey, among other measures. Last year, the Governor signed legislation extending a moratorium that prevents utility companies from disconnecting utilities to residential households that are struggling with their bills due to the COVID-19 pandemic, a move mirrored by reconnection efforts in Ontario by Hydro One. Utility companies must instead offer these individuals a deferred payment agreement on any past-due balance. 

On November 19, Governor Cuomo announced that Con Edison now faces $25 million in penalties and possible license revocation from the New York State Public Service Commission, amid a broader review of retail energy markets by state regulators, following an investigation into the utility’s failed response during large-scale power outages in Manhattan and Brooklyn in July 2019. On November 2, Governor Cuomo announced that more than $328 million in home heating aid is now available, similar to Ontario bill support during the pandemic, for low- and middle-income New Yorkers who need assistance keeping their homes warm during the coming winter season.

The Governor has previously enacted some of the strongest and most progressive consumer protection and assistance programs in the country, including smart streetlights in Syracuse that reduce energy costs, and other initiatives. Governor Cuomo established New York’s energy affordability policy in 2016, as states pursue renewable energy ambitions that can affect rates, underscoring the need for affordability. The policy extended energy bill support to more than 152,000 additional New York families, ensuring that more than 920,000 New York families spend no more than 6 percent of their income on energy bills. Through this program, New York commits more than $238 million annually helping to keep the lights and heat on for our most vulnerable New Yorkers, while actively striving to expand coverage to additional families.

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Georgia Cities Clean Energy IRP Coalition unites Savannah, Atlanta, Decatur, and Athens-Clarke to shape Georgia Power's Integrated Resource Plan, accelerating renewables, energy efficiency, community solar, and coal retirements through Georgia Public Service Commission hearings.

Key Points

Georgia cities working to steer Georgia Power's IRP toward renewables, energy efficiency, and community solar.

✅ Targets coal retirements and doubling renewables by 2035

✅ Advocates data access, transparency, and energy efficiency

✅ Seeks affordable community solar options for low-income customers

Savannah is among several Georgia cities that have led the charge forward in recent years to push for clean energy. Now, several of the state's largest municipalities are banding together to demand action from Georgia's largest energy provider.

Hearings regarding Georgia Power's Integrated Resource Plan (IRP) happen every three years, but this year for the first time the cities of Savannah, Decatur, Atlanta and Athens-Clarke and DeKalb counties were at the table.

"It's pretty unprecedented. It's such an important opportunity to get to represent ourselves and our citizens," said City of Savannah Energy Analyst Alicia Brown, the Savannah representative for the Georgia Coalition for Local Governments.

The IRP, which essentially maps out how the company will use its various forms of energy over the next 20 years was filed with the Georgia Public Service Commission (GPSC) in January, the 200-page IRP outlines Georgia Power's plans to shutter nearly all Georgia Power-controlled coal units, similar to Tucson Electric Power's coal exit timelines elsewhere, which could begin later this year.

The company is also planning to double its renewable energy generation by 2035. The IRP also outlines plans for several programs, including an Income-Qualified Community Solar Pilot, reflecting momentum for community energy programs in other states as well.

During the hearings the coalition, alongside the other groups, had the ability to question Georgia Power officials about the plan to include the proposed increase per kilowatt for the company's Simple Solar program, Behind-the-Meter Solar program study and various other components, amid debates over solar strategy in the South that could impact lower income customers.

"The established and open IRP process is central to effective, long-term energy planning in Georgia and is part of our commitment to 2.7 million customers to deliver clean, safe, reliable and affordable energy. In continuing our longstanding relationship with the City of Savannah, we welcome their interest and participation in the IRP process," John Kraft, Georgia Power spokesman said in an email.

Brown said the coalition's areas of interest fall into three categories: energy efficiency and demand response, data access and transparency and renewable energy for citizens as well as the governments in the coalition.

"We have these renewable goals and just the way the current regulations are set, the way the current laws are on the books, and developments like consumer choice in California show how policy shifts can reshape utility markets, it's very challenging for us to meet those renewable energy goals without Georgia Power setting up programs that are workable for us," she said.

The city of Savannah is already taking action locally to reduce carbon emissions and move toward clean and renewable energy through the 100% Savannah Clean Energy Plan, which was adopted by Savannah City Council in December.

The plan aims to achieve 100% renewable electricity community-wide by 2035 and 100% renewable energy for all energy needs by 2050.

Council previously approved the 100% Clean Energy Resolution needed to develop the plan in March 2020, making Savannah the fifth city in the state to pledge to pursue a lower carbon future to fight climate change.

The final plan includes 45 strategies that fall into five categories: energy efficiency; renewable energy; transportation and mobility; community and economic development; and education and engagement.

Brown said the education and engagement component is central to the plan, but the pandemic has hindered community education and awareness efforts, and utilities have warned customers about pandemic-related scams that complicate outreach, something the city hopes to catapult in the coming weeks.

"With the 100% Savannah resolution passing right before the pandemic, we haven't had as many opportunities to raise awareness about the initiative and to educate the public about clean energy as we would like. This transition will present a lot of opportunities for our communities, but only if people know that they are there to be taken," she said.

"... We also want to engage the community so that they feel like they are developing this vision for a healthy, prosperous, clean community alongside us. It's not just us telling them, 'we're going to have a clean energy future and it's going to look like this,' but really helping them to develop and realize a collective vision for what 100% Savannah should be."

The final round of IRP hearings are scheduled for next month. Those hearings will allow the coalition and other groups to put witnesses on the stand who will make the case for why Georgia Power's IRP should be different, Brown said.

In June, Georgia Power, following a June bill reduction for customers, will have a chance to offer rebuttal testimony and will again be subject to cross examination. Shortly after those hearings, the parties will join together for the settlement process, a sort of compromise on the plan that the commission will vote on toward the beginning of July.

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Meaford Pumped Storage Project aims to balance the grid with hydro-electric generation, a hilltop reservoir, and transmission lines near Georgian Bay, pending environmental assessment, permitting, and federal review of impacts on fish and drinking water.

Key Points

TC Energy proposal to pump water uphill off-peak and generate 1,000 MW at peak, pending studies and approvals.

✅ Balances grid by storing off-peak energy and generating at peak.

✅ Requires reservoir, break wall, transmission lines, generating station.

✅ Environmental studies and federal review underway before approvals.

Plans for a $3.3 billion hydro-electric project in Meaford are still in the early study stages, but some residents have concerns about what it might mean for the environment, as past Site C stability issues have illustrated for large hydro projects.

A one-year permit was granted for TC Energy Corporation (TC Energy) to begin studies on the proposed location back in May, and cross-border projects like the New England Clean Power Link require federal permits as well to proceed. Local municipalities were informed of the project in June.

TC Energy is proposing to have a pumped storage project at the 4th Canadian Division Training (4CDTC) Meaford property, which is on federal lands.

A letter sent to local municipalities explains that the plan is to balance supply and demand on the electrical grid by pumping water uphill during off-peak hours. It would then release the water back into Georgian Bay during peak periods, generating up to 1,000 megawatts of electricity.

The project is expected to create 800 jobs over four years of construction, in addition to long-term operational positions.

According to the company's website, the proposed pump station would require a large reservoir on the military base, a generating station, transmission lines infrastructure, and a break wall 850 metres from shore.

Some residents fear the project will threaten the bay and the fish, echoing Site C dam concerns shared with northerners, and the region's drinking water.

Meaford's mayor says the town has no jurisdiction on federal lands, but that a list of concerns has been forwarded to the company, while Ontario First Nations have urged government action on urgent transmission needs elsewhere.

TC Energy will tackle preliminary engineering and environmental studies to determine the feasibility of the proposed location, which could take up to two years.

Once the assessments are done, they need to be presented to the government for further review and approval, as seen when Ottawa's Site C stance left work paused pending a treaty rights challenge.

TC Energy's website states that the company anticipates construction to begin in 2022 if it gets all the go-ahead, with the plant to begin operations four years later.

Input from residents is being collected until April 2020, similar to when the National Energy Board heard oral traditional evidence on the Manitoba-Minnesota transmission line.

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European Gas Prices hit pre-invasion lows as LNG inflows, EU storage gains, and softer oil markets ease the energy crisis, while recession risks, windfall taxes, and ExxonMobil's challenge shape demand and policy.

Key Points

European gas prices reflect supply, LNG inflows, storage, and policy, shaping energy costs for households and industry.

✅ Month-ahead hit €76.78/MWh, rebounding to €85.50/MWh.

✅ EU storage 83.2% filled; autumn peak exceeded 95%.

✅ Demand tempered by recession risks; LNG inflows offset Russian cuts.

European gas prices have dipped to a level last seen before Russia launched its invasion of Ukraine in February, after warmer weather across the continent eased concerns over shortages and as coal demand dropped across Europe during winter.

The month-ahead European gas future contract dropped as low as €76.78 per megawatt hour on Wednesday, the lowest level in 10 months, amid EU talks on gas price cap strategies that could shape markets, before closing higher at €83.70, according to Refinitiv, a data company.

The invasion roiled global energy markets, serving as a wake-up call to ditch fossil fuels for policymakers, and forced European countries, including industrial powerhouse Germany, to look for alternative suppliers to those funding the Kremlin. Europe had continued to rely on Russian gas even after its 2014 annexation of Crimea and support for separatists in eastern Ukraine.

On Tuesday 83.2% of EU gas storage was filled, data from industry body Gas Infrastructure Europe showed. The EU in May set a target of filling 80% of its gas storage capacity by the start of November to prepare for winter, and weighed emergency electricity measures to curb prices as needed. It hit that target in August, and by mid-November it had peaked at more than 95%.

Gas prices bounced further off the 10-month low on Thursday to reach €85.50 per megawatt hour.

Europe has several months of domestic heating demand ahead, and some industry bosses believe energy shortages could also be a problem next winter, with a worst energy nightmare still possible if supplies tighten. However, traders have also had to weigh the effects of recessions expected in several big European economies, which could dent energy demand.

UK gas prices have also dropped back from their highs earlier this year, and forecasts suggest UK energy bills to drop in April. The day-ahead gas price closed at 155p per therm on Wednesday, compared with 200p/therm at the start of 2022, and more than 500p/therm in August.

Europe’s response to the prospect of gas shortages also included campaigns to reduce energy use – a strategy belatedly adopted by the UK – and windfall taxes on energy companies to help raise revenues for governments, many of which have started expensive subsidies to cushion the impact of high energy prices for households and consumers. Energy companies have enjoyed huge profits at the expense of businesses and households this year, as EU inflation accelerated, but costs remained much the same.

However, the US oil company ExxonMobil on Wednesday launched a legal challenge against EU plans for a windfall tax on oil companies, according to filings by its German and Dutch subsidiaries at the European general court in Luxembourg. ExxonMobil argued that the windfall tax would be “counter-productive” because it said it would result in lower investment in fossil fuel extraction, and that the EU did not have the legal jurisdiction to impose it.

ExxonMobil’s move has prompted anger among European politicians. A message posted on the Twitter account of Paolo Gentiloni, the EU’s commissioner for the economy, on Thursday stated: “Fairness and solidarity, even for corporate giants. #Exxon.”

Oil prices are significantly lower than they were before the start of Russia’s invasion, and only marginally above where they were at the start of 2022. Brent crude oil futures traded at $100 a barrel on 28 February, but were at $81.84 on Thursday.

Oil prices dropped by 1.7% on Thursday. Prices had risen from 12-month lows in early December as traders hoped for increased demand from China after it relaxed its coronavirus restrictions. However, Covid-19 infection numbers are thought to have surged in the country, prompting the US to require travellers from China to show a negative test for the disease and tempering expectations for a rapid increase in oil demand.

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