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Power and gas stay low, cooler weather to come in the West

Power and natural gas prices remained low through the holidays. Cooler weather is forecasted for the West, headroom is available in IL, and VA proposes retail choice legislation.


Natural Gas

  • The February 2020 NYMEX Henry Hub forward contract decreased to $2.135/MMBtu, a $0.02 (-1.1%) decrease from the previous Wednesday. The price of the 12-month strip averaging February 2020 through January 2021 futures contracts settled at $2.318/MMBtu on Monday.

  • For the week ending December 27, the EIA reported net withdrawals from storage of 58 Bcf, which is higher than last year’s net withdrawals of 20 Bcf for this week and lower than the 5-year (2014–18) average net withdrawals of 190 Bcf.

  • Working natural gas in storage totaled 3,192 Bcf, which is 484 Bcf (17.9%) higher than last year’s working gas totals of 2,708 Bcf at the same time and 38 Bcf (-1.2%) lower than the 5-year (2014-2018) average of 3,230 Bcf. Total working gas is within the five-year historical range.


Power

  • The PJM West Hub On-Peak forward electricity 12 month strip is down 2.3% week over week and 8.6% in the last month.

  • For those looking to hedge their PJM West Hub On-Peak load, we see value in hedging February 2020 through July 2020. Contact TrueLight to stay on top of value in current forward curve pricing and learn more about our portfolio management execution expertise.


Utility Highlight

  • Our models indicate there is headroom starting January 1, 2020 for 9 and 12 month contracts for small commercial customers under rate C28 in Illinois’s Commonwealth Edison (COMED) service territory. Let TrueLight help you stay on top of current rates and subscribe to our PTC tracking and headroom reporting or use our price verification service to ensure you stay on top of all utility rate changes.

Clean Energy

  • The Bureau of Land Management (BLM) gave siting approval to the largest solar farm in the country for Nevada Energy’s Gemini project. The project consists of 690 MW of solar and a 380 MW and four hour duration battery storage installation and will be constructed outside Las Vegas. The project is slated to come online by the beginning of 2024. Contact us for advice on renewable generation project development.

Market Intelligence

  • Lawmakers in Virginia are expected to roll out a proposal to deregulate electricity markets in the state today. Delegates Mark Keam and Lee Ware will introduce the Virginia Energy Reform Act, which would create a competitive market for retail electric customers and impose energy efficiency measures. Although the proposals details have not yet been released, the Virginia Energy Reform Coalition (VERC) that formed in May 2019 to address electricity market reforms announced goals to create a competitive retail electricity market, create an independent grid operator, and phase out capacity markets among other aims. Contact TrueLight Support for analysis of the most up-to-date energy market news or use our price verification service to ensure the most recent market shifts are reflected in your price quotes.

Weather

  • In the 8-14 day window, below average temperatures are predicted for the West, with above average temperatures forecast for the South and the East Coast. Almost the entire continental U.S. is predicted to experience wetter than normal conditions, while west Texas will be drier than usual and Florida will see about average precipitation.