Natural gas prices slid slightly last week and up slightly to start the week, while power prices were flat to up depending on the region. New York's Independent System Operator (NYISO) electric grid is prepared to meet summer 2020 demand. Renewable energy consumption surpasses coal for the first time in over 130 years in the USA. The Pennsylvania PUC reminds customers of changes in default service electric rates which take effect June 1st. The Great Lakes and Midwest are forecast to see above average temperatures in the June 6th through June 12th window.
The July 2020 NYMEX Henry Hub traded down to $1.886/MMBtu, a $0.02 (-1.00%) decrease from the previous Wednesday. The price of the 12-month strip averaging July 2020 through June 2021 futures contracts fell $0.01 (-0.04%) to $2.451/MMBtu.
For the week ending May 22nd, 2020, the EIA reported net injection into storage of 109 Bcf, which is lower than last year’s net injection of 110 Bcf for this week and higher than the 5-year (2015–19) average net injection of 93 Bcf.
Working natural gas in storage totaled 2,612 Bcf, which is 778 Bcf (42%) higher than last year’s working gas totals of 1,834 Bcf at the same time and 423 Bcf (19%) higher than the 5-year (2015-2019) average of 2,189 Bcf.Total working gas is within the five-year historical range.
Headroom in the Dayton – RS01 (Residential Electric Service) territory of Dayton Power and Light in Ohio is now available in the shorter periods for contracts with 3 and 6 month terms. Headroom of $0.00245/kWh and $0.00141/kWh is likely for these periods, respectively.
The Pennsylvania Public Utilities Commission is reminding consumers that there are new electricity rates starting June 1, and to be aware of usage and the ability to competitively shop for the best electric rates. PUC Chairman Gladys Brown Dutrieuillesi quoted; “During these difficult times, consumers may be looking for ways to lower monthly bills by reducing energy usage and supply costs“; “We encourage consumers to carefully review their electric bills, understand the rates they will be paying”.
Penn Power will increase to 6.684 cents per kWh from 6.257. PPL will decrease to 7.284 cents per kWh from 7.632. Duquesne Light will increase to 7.11 cents per kWh from 7.10. 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 pricing moved slightly higher week over week as winter gas pricing wants to test and really break through the $3 price level. Natural gas pricing is having a tough time getting back to that level. Summer forecasts are starting to show stronger chance for above normal temperatures in your main eastern US demand centers so that is helping the cause to move pricing higher this week. PJM had some active congestion and clearing pricing coming out of the long holiday weekend last week but other ISOs remain very quiet.
New England MassHub 12 Month peak strip is up around about $0.25 to $35.27 and 24 Month peak up in sympathy with a $0.10 gain. NYISO NYC Zone (J) 12 Month peak strip is basically flat but did see summer 2020 move off lows to gain around $0.65 cents week over week. In PJM, even with the strong clearing pricing activity last week, forward marks are still flat week over week and if I look real hard can see pricing up less than $0.25 cents in most zonal locations.
Market continues to look for any reason to move higher and since we are in the summer demand and generation season will have more chances to move higher. Pricing should start to trend higher from these levels so you need to continue to layering in your hedges and look at the longer dated terms. I would also like to think we start seeing some clearing price volatility with the ISOs as they should start to get more comfortable with their demand forecasts and ease off on the over forecasting. We have a few more weeks to see if that changes and until it does volatility will be low this demand season and keep a lid on pricing.
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.
On May 28th, the EIA reported that renewable energy consumption surpassed coal consumption for the first time in 130 years. This trend is the result of growth in renewable energy (primarily wind and solar), combined with the simultaneous decline in the quantity of coal burned for power generation. This probably would have happened sooner if not for some of the coal assets still in regulated rate base locations as coal consumption for electricity has significantly declined over the past decade, being displaced primarily by natural gas consumption. Renewable energy production, from mostly wind and solar, grew to record highs after increasing for the past four years. Contact TrueLight Energy for renewable asset management services and project risk analysis.
On May 28th the New York Independent System Operator (NYISO) announced in the ‘Summer 2020 Capacity Assessment’ report that the electric grid is well positioned to meet the summer peak demand. Wes Yeomans, Vice President of Operations for the NYISO is quoted: “The NYISO operates the grid to meet reliability rules that are among the strictest in the nation and are designed to ensure adequate supply.”; “The state’s grid is well-equipped to handle forecasted summer demand,”. The NYISO is forecasting a summer peak load of 32,296 MW this summer. Generating resources available are 41,319 MW. 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.
Below normal temperatures are forecast for the Rockies and Pacific Northwest in the 8-14 day window starting June 6th. The Midwest, Great Lakes, Texas and Southern United States are expected to see above normal temperatures. The Midwest and Great looks are most likely to see above normal temperatures.