Natural gas prices were up week over week. While power prices were slightly down to flat. PJM is prepared to meet summer demand, as well as, maintain reliability with ongoing coordination and ample reserves. ComEd files June 1 price to compare which is 10% lower for residential customers. Amazon announces new utility scale solar projects in Ohio and Virginia. The Western States are forecast to see above normal temperatures while Texas is forecast to experience below normal temperatures.
The June 2020 NYMEX Henry Hub traded up to $1.771/MMBtu, a $0.16 (+9.6%) increase from the previous Wednesday. The price of the 12-month strip averaging June 2020 through May 2021 futures contract climbed $0.04 (+1.7%) to $2.399/MMBtu.
For the week ending May 15, 2020, the EIA reported net injection into storage of 81 Bcf, which is less than last year’s net injection of 101 Bcf for this week and lower than the 5-year (2015–19) average net injection of 87 Bcf.
Working natural gas in storage totaled 2,503 Bcf, which is 779 Bcf (45.2%) higher than last year’s working gas totals of 1,724 Bcf at the same time and 407 Bcf (19.4%) higher than the 5-year (2015-2019) average of 2,096 Bcf. Total working gas is within the five-year historical range.
Headroom in the PEPCO - RMNS territory is now available in the shorter periods for contracts with 3 and 6 month terms. Headroom of $0.00209/kWh and $0.00221/kWh is likely for these periods, respectively.
Commonwealth Edison (COMED) new residential price to compare rate starting June 1st 2020 ($0.06473 per kWh) will decrease 10% versus the current price to compare rate ($0.07175 per kWh). The new, updated residential price to compare electricity rate is good through at least September 30th, and could change October 1st based on a fall procurement auction. The new rate takes into account the results of PJM’s Financial Transmission Rights (FTR) auction which posted results May 4th 2020. Let TrueLight help you stay on top of all utility and market rates and utilize our PTC tracking and headroom reporting or use our price verification service.
Power markets continue to show weakness in all terms as not much movement heading into and coming out of the long holiday weekend. Forward pricing is down slightly week over week again and will continue to trade in this range and move slightly lower as summer forecasts and demand continue to firm up. The ISO hourly clearing prices continue to clear at record low levels and no summer heat in the forecast
Up in New England the MassHub 12 Month peak strip moved down to end at $34.91 and 24 Month peak strip moved in sympathy to end at $36.79. In the NYISO market the NYC Zone (J) 12 Month peak strip decreased at similar levels and finished at $33.89 with summer 2020 peak pricing still well below the $30 level at $25.21, historically great value. PJM didn’t want to break from the pack and West Hub 12 Month peak strip was down to $30.67 and 24 Month peak at $31.21. Continue to see low clearing pricing and even some negative overnight and early morning clearing prices.
ERCOT day-ahead forecasts continue to show volatility and majority of day well above realized demand. Pricing is at good value levels for the summer given the adjustment higher of summer reserve margins. Guidance should be to remain disciplined and hedge over time with strong attention to realized load forecasts to adjust hedge levels and even forward pricing assumptions. Still have the need for slight risk premiums on forward curves to account for work from home environment but execution with counterparties has been smooth with only a few having to drop out if numbers of trades are too high. 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.
Amazon has a company climate pledge program to reach net zero carbon by 2040. Amazon currently has 91 renewable energy projects that can generate 2,900 MW globally. Amazons renewable generation projects supply green energy to their Amazon Web Services (AWS) data centers and fulfillment centers. Amazon announced a new 130 MW solar project in Virginia, as well as two new projects in Ohio. The Ohio projects are a 200 MW solar project and a 80 MW solar project. Virginia Senator Jennifer L. McClellan is quoted : “The announcement of this new Amazon solar project helps the Commonwealth meet our climate goals and contributes to our economic growth. The Virginia Clean Economy Act will help to drive more clean energy investments like this, to make Virginia a national hub for clean energy jobs.” Contact TrueLight Energy for renewable asset management services and project risk analysis.
PJM interconnection, which includes 13 states and the District of Columbia, is the nation’s largest electricity grid operator. PJM stated last week, that is has the resources to meet the summer demand. The forecasted summer peak demand for this summer 2020 is 148,000 MW. This would be lower than last year’s July 19th 2019 peak load of 151,000 MW and lower then the all-time peak load of 165,563 MW in the summer of 2006. The 148,000 MW peak load forecast for this summer 2020 is conservative and does not reflect the current decrease in demand being experienced as a result of COVID-19. PJM has 187,000 MW of generating capacity available to meet that peak demand. This leaves enough resources in reserve to make up for any unplanned generation unit outages. 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.
Above average temperatures are forecast for the Western portion of the United States in the 8-14 day window starting May 29th. The highest probability for cool anomalies is Texas.