SC studying electricity market reforms, gas and power forwards hold low marks

South Carolina legislature proposes studying changes to electricity market. Bearish gas and power markets don’t budge with strong storage numbers, new POTED SOS rates filed, and MA governor announces zero emissions goal by 2050.


Natural Gas

  • The February 2020 NYMEX Henry Hub forward contract decreased to $1.905/MMBtu, a $0.22 (-10.1%) decrease from the previous Wednesday. The price of the 12-month strip averaging February 2020 through January 2021 futures contracts decreased $0.13 (-5.9%) to $2.156/MMBtu.

  • For the week ending January 17, the EIA reported net withdrawals from storage of 92 Bcf, which is lower than last year’s net withdrawals of 152 Bcf for this week and lower than the 5-year (2014–18) average net withdrawals of 194 Bcf.

  • Working natural gas in storage totaled 2,947 Bcf, which is 554 Bcf (23.2%) higher than last year’s working gas totals of 2,393 Bcf at the same time and 251 Bcf (9.3%) higher than the 5-year (2014-2018) average of 2,696 Bcf. Total working gas is within the five-year historical range.


Power

  • The ISONE Mass Hub On-Peak Summer 2020 forward electricity strip is up 2.2% week over week, but is down 26.3% in the last year.

  • For those looking to hedge their ISONE Mass Hub On-Peak load, we see value in hedging the March 2020 through November 2021 periods. 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 forward headroom models indicate there is headroom starting February 1, 2020 for 3, 6, 12, 24 and 36 month contracts for Massachusetts' WMECO Small General Service (G0) customers.

  • Maryland’s Potomac Edison (POTED) released proposed SOS rates for residential customers effective June 1, 2020 through May 31, 2021 and new Type II rates effective March 1, 2020 through May 31, 2020. The residential Electric Supply Charge, which is the primary component of the price-to-compare, will be 12% lower than the current rate and 5% lower than last year’s summer rate. 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

  • Governor Charlie Baker of Massachusetts announced his intention to set a statewide goal of net-zero carbon emissions by 2050 in his State of the Commonwealth address last week. This target improves upon the existing targets of 25% emissions reductions by 2020 and 80% emissions reductions by 2050 relative to 1990 levels, both of which were set by the 2008 Global Warming Solutions Act. Baker reaffirmed the state’s commitment to the Transportation Climate Initiative (TCI), which is a proposed cap and trade program for gasoline and diesel emissions. A bill to implement the net zero emissions target was introduced in the Massachusetts House of Representatives last Thursday as well. Contact us for advice on renewable generation project development.

Market Intelligence

  • Legislators in South Carolina introduced a bill in the state Senate that would establish a committee to study electricity market reforms. The Electricity Market Reform Measures Study Committee would be tasked with examining the possibility of creating or joining a regional transmission organization (RTO), divesting generation and transmission assets within its monopolistic utilities, developing retail electricity choice, and allowing community choice aggregations among other proposals. Although the bill has yet to be passed in both of the state’s legislative houses, the bill demonstrates an interest in reassessing South Carolina’s current vertically integrated electricity market model. 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

  • The 8-14 day forecast beginning February 4th includes above average temperatures for the East coast and average to below-average temperatures for the Midwest and West. Most of the country is expected to see wetter than average conditions, with the exception of the West Coast experiencing lower than average precipitation.

© 2019 by TRUELight Energy LLC

  • LinkedIn Social Icon
  • Twitter Social Icon