Power prices trend downwards, lowest summer natural gas prices in 20 years

Power and gas prices trend downwards. Headroom is available in Potomac Edison, summer natural gas prices projected to stay low, and NY advances offshore wind development by securing substantial procurement.

General Update

  • Financial gas markets trended downward week over week. The August 2019 NYMEX Henry Hub forward contract decreased -$0.14 (-5.7%) from the previous Wednesday, reaching $2.304/MMBtu. The price of the 12-month strip averaging August 2019 through July 2020 futures contracts decreased, falling -$0.11 (-4.4%) to $2.463/MMBtu.

  • Northeast natural gas price movement was mixed in demand markets. Boston’s Algonquin Citygate prices decreased -$0.09 (-3.7%) to $2.35/MMBtu last Wednesday. Transco Zone 6 NYC prices rose slightly, increasing $0.03 (1.3%) from $2.38/MMBtu to $2.41/MMBtu.

  • Pennsylvania’s Dominion South decreased -$0.06 (-2.7%) to $2.14/MMBtu. Tennessee Zone 4 Marcellus spot prices decreased -$0.11 (-5.0%) to $2.10/MMBtu.

  • California prices were mixed. SoCal Citygate prices increased $0.16 (6.3%) to $2.69/MMBtu last Wednesday. Prices at Northern California PG&E Citygate decreased, falling $0.23 (-7.9%) to $2.69/MMBtu.


  • For the NEMASS BOST zone in ISO-NE, the 12-Month ATC strip decreased -$0.68 (-1.7%) to $38.75. The 24-Month ATC strip decreased -$0.57 (-1.4%) to $39.27 and the Cal '20 ATC strip decreased -$0.54 (-1.3%) to $39.53.

  • For the NYC (J) zone in NYISO, the 12-Month ATC strip decreased -$0.57 (-1.6%) to $35.64. The 24-Month ATC strip increased $1.99 (5.8%) to $36.32 and the Cal '20 ATC strip increased $2.07 (6.0%) to $36.41.

  • For the PEPCO zone in PJM, the 12-Month ATC strip increased $0.06 (0.2%) to $31.96. The 24-Month ATC strip decreased -$0.04 (-0.1%) to $31.42 and the Cal '20 ATC strip decreased -$0.15 (-0.5%) to $31.28.

  • For the HOUSTON zone in ERCOT, the 12-Month ATC strip decreased -$2.08 (-6.3%) to $30.85. The 24-Month ATC strip decreased -$1.37 (-4.2%) to $31.14 and the Cal '20 ATC strip decreased -$0.91 (-2.8%) to $32.12.

Utility Highlight

  • The upcoming Price to Compare for Southern Massachusetts Eversource (CECO) Residential rate class (R1) is approximately $0.10836/kWh, in effect from July 1, 2019 to December 31, 2019. This rate is a -20.3% decrease from the previous rate of $0.13588/kWh for the January 1, 2019 to June 30, 2019 price period.

  • TRUELight’s expert analytics and proprietary models indicate that headroom in CECO has decreased since last reported over a month ago. Headroom is now available in only the 1 and 3 month terms. Headroom of $0.00881/kWh and $0.00478/kWh is likely for the 1 and 3 month terms, respectively.

  • Over the last week, the SEMASS ATC 12-month strip decreased, slipping -2.7% to finish at $40.26/MWh yesterday. This time last year, the strip was trading at $43.89/MWh, which is approximately 9.0% higher than this year.

  • Since the beginning of the year, the ATC strip has reached a high of $48.24/MWh on January 17, 2019 and a low of $38.41/MWh on Friday, July 5, 2019.

Natural Gas

  • For the week ending July 12, the EIA reported net injections from storage of 62 Bcf, which is higher than last year’s net injections of 46 Bcf for this week and lower than the 5-year (2014–18) average net injections of 63 Bcf.

  • Working natural gas in storage totaled 2,533 Bcf, which is 291 Bcf (13.0%) more than last year’s working gas totals of 2,242 Bcf at the same time and 143 Bcf (-5.3%) lower than the 5-year (2014-2018) average of 2,676 Bcf. Total working gas is within the five-year historical range.

Supply and Demand

  • Average total supply of natural gas decreased 2% week/week. Dry natural gas production decreased 2% with a portion of production in the Gulf of Mexico shut-in due to Hurricane Barry, while net imports with Canada remained the same.

  • Total US consumption of natural gas increased 2%. Consumption for power generation was up 6% week/week, industrial sector consumption decreased 4%, residential-commercial consumption increased 3%, and exports to Mexico increased 3%.

  • US LNG exports decreased week/week, with nine vessels departing US ports for a combined 32.9 Bcf.

Market Intelligence

  • The EIA projects average summer 2019 natural gas prices to be the lowest they have been since 1998. Its Short-Term Energy Outlook predicts the average Henry Hub price during June, July and August 2019 to be $2.37/million British thermal units (MMBtu), $0.55/MMBtu lower than the average price during the summer of 2018. Mild weather to begin the summer depressed natural gas-fired generation and allowed net injections and storage inventories to increase, driving natural gas prices down. However, a warmer than projected finish to the summer could increase electricity consumption, natural gas-fired generation, and natural gas prices.

  • New York completed contracts for approximately 1,700 megawatts of offshore wind, as Governor Andrew Cuomo announced last week. Two projects comprise the procurement: the 816 MW Empire Wind project, estimated to begin operation in December 2024, and the 880 MW Sunrise wind project, which will begin operation in May 2024. The projects will generate Offshore Wind Renewable Energy Certificates (OREC) through contracts with the New York State Energy and Research and Development Authority (NYSERDA).


  • Our glimpse into late July and early August shows heat for a significant portion of the northeast – New England, New York, and the Mid-Atlantic are expected to see above normal temperatures which are likely to drive up energy demand. Precipitation joins heat risks in most of the interior eastern US with coastal regions remaining more on the neutral side for rain risk.

  • Looking down into Texas, the coastal half of the state is slated to see a mixture of cooler temps (in the eastern half) and warmer temps further south. Rain risk in these regions will work to keep peak energy demand at bay. In western portions of the state, both drier and warmer conditions.

© 2019 by TRUELight Energy LLC

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