Natural gas prices slid last week, and power prices were mostly flat. ISONE March Average real-time electricity price lowest in market history. Indian Point Unit 2 Nuclear Generator retires in NYISO. Coastal Virginia Offshore Wind project remains on schedule. The nation East of the Mississippi River is expected to see below normal temperatures, while West of the river is forecast to see above average temperatures.
The June 2020 NYMEX Henry Hub traded down to $1.869/MMBtu, a $0.18 (-8.8%) decrease from the previous Wednesday. The price of the 12-month strip averaging June 2020 through May 2021 futures contracts fell $0.07 (-2.7%) to $2.535/MMBtu.
For the week ending April 24th, 2020, the EIA reported net injection into storage of 70 Bcf, which is lower than last year’s net injection of 114 Bcf for this week and lower than the 5-year (2015–19) average net injection of 74 Bcf.
Working natural gas in storage totaled 2,210 Bcf, which is 783 Bcf (50%) higher than last year’s working gas totals of 1,427 Bcf at the same time and 360 Bcf (20%) higher than the 5-year (2015-2019) average of 1,850 Bcf. Total working gas is within the five-year historical range.
Power prices did move higher to start the week, in sympathy from a rally in short term natural gas pricing, but still ended up slightly down to flat compared to price levels last week. Pricing will continue to trade in a tight range with short term breakouts to manage and not panic when there is some bullish news in the market.
Prices for northeast summer hubs and load zones were flat week to slightly lower, around $0.25 - $0.40 lower, and you had even smaller moves higher for all your 12 and 24 month peak pricing strips in PJM, NYISO and ISONE. Summer pricing is still a great value as pricing is 40% - 50% lower year over year. ERCOT pricing had a quieter week and summer pricing moved up slightly with all other terms basically flat week over week. As the state starts to open back up will have to monitor energy demand pick-ups but most of the production related demand not to rebound as quickly.
Natural gas and power pricing will still be looking for any reason to rally over the next few weeks. Natural gas pushed higher early this week due to current pipeline disruptions and lower production but still won’t be able to balance out the falling energy demand and keep pricing in current trading range. We do have a cold blast coming to the major northeast markets this weekend and below normal temps in the 6-10 day forecast so expect power pricing to move higher with a few short term breakouts. Continue to come to market over time and hedge exposure in multiple tranches with small execution premium still expected or needed in your forward curves. Contact TrueLight to stay on top of value in current forward curve pricing with expert hedge strategy recommendations and learn more about our portfolio management execution expertise.
Headroom in the CLP – Rate 1 (Residential Electric Service) territory of Eversource in Connecticut is now available in the shorter periods for contracts with 3 and 6 month terms. Headroom of $0.00954/kWh and $0.00389/kWh is likely for these periods, respectively.
March 2020 average real time electricity prices were the lowest of any month since the launch of the ISNE current structure in March 2003. The average real time electricity price of $16.82 per MW-hour dropped 54% year over year and 17% from February 2020.The two main drivers of power prices, fuel price (Natural Gas), and consumer demand, were both impacted driving the record low price. In mid-March consumer demand declined by 3%-5% as responses to COVID-19 came into effect. The average ISNE natural gas price of $1.58 MMBTU dropped 60% year over year and 30% from February 2020. Let TrueLight help you stay on top of all utility and market 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 and market rate changes.
Dominion Energy reports that its 2,600 MW offshore wind project, Coastal Virginia Offshore Wind (CVOW), is scheduled to be built starting in 2024.The project will be in a 112,800 acre area 27 miles off the coast of Virginia Beach. Mark Mitchell, Dominion Energy vice president of generation construction, said; “Safety is our top priority, and while the coronavirus pandemic has created unique challenges, our teams have safely worked through them to keep the development of the commercial offshore wind project on track.” Contact TrueLight Energy for renewable asset management services.
On April 30th, Entergy’s Indian Point Unit 2 nuclear generator with 1,020 MW of capacity in NYISO shut down. The unit is located 24 miles from New York City in Buchanan New York. The 1,040MW unit 3 is still operating and planned to close April 2021. Unit 2 has been operating since 1974 and Unit 3 came online in 1976.Proposed decommissioning and demolishing of the facility by 2033 is planned to be done by Comprehensive Decommissioning International, a Camden, N.J.-based subsidiary of Holtec International. For strategic energy market support and 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 forward price assumptions.
Normal temperatures are forecast for Texas in the 8-14 day window starting May 8th. The highest probability for relatively cool anomalies is a very large area encompassing the portion of the nation East of the Mississippi river. On the West side of the Mississippi river above average temperatures are anticipated. The highest chance for warmth is in California while the North East, Great Lakes and Mid-Atlantic States have the highest chance for relatively cold temperatures.