PJM submits 2nd MOPR compliance filling. Lowest ISONE April prices ever. ERCOT talks DG & DR.

Natural gas prices were slightly up week over week and pulled power prices up. ISONE real-time electricity pricing was lowest of any April, third-lowest month overall. New Distributed Generation (DG) and Demand Response (DR) resources growing in Texas. PJM has submitted a second compliance filing regarding capacity market price rules to the FERC. Texas is forecast to receive above average temperatures while the Great Lakes and Northeast are forecast for cool weather.

Natural Gas

  • The July 2020 NYMEX Henry Hub traded down to $1.821/MMBtu, a $0.06 (-3.2%) decrease from the previous Wednesday. The price of the 12-month strip averaging July 2020 through June 2021 futures contract fell $0.01 (-0.4%) to $2.438/MMBtu.

  • For the week ending May 29, 2020, the EIA reported net injection into storage of 102 Bcf, which is less than last year’s net injection of 118 Bcf for this week and lower than the 5-year (2015–19) average net injection of 103 Bcf.

  • Working natural gas in storage totaled 2,714 Bcf, which is 762 Bcf (39.0%) higher than last year’s working gas totals of 1,952 Bcf at the same time and 422 Bcf (18.4%) higher than the 5-year (2015-2019) average of 2,292 Bcf.Total working gas is within the five-year historical range.


Utility Highlight


  • Headroom in the PSNH - R territory is now available in the shorter periods for contracts with 3 and 6 month terms. Headroom of $0.001009/kWh and $0.00394/kWh is likely for these periods, respectively.

  • PJM submitted their second Minimum Offer Price Rule (MOPR) compliance filing regarding capacity market price rules to the Federal Energy Regulatory Commission (FERC). The filing used stakeholder input, specifically, state default service procurement rules. PJM intends to proceed with the 2022/2023 Base Residual Auction upon FERC approval of the pending compliance filings. The second filling, “Proposes that state auctions meeting strict, competitive criteria not be considered a state subsidy” and “Prohibits the replacement of a commitment on a non-subsidized resource with a subsidized resource that is procured via a bilateral transaction”. The comments and commission’s intent is an attempt to keep the existing MOPR applicable to natural gas units intact in its present form while adding the new MOPR addressing subsidized units.

  • 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

  • Power pricing moved slightly higher week over week as we entered the peak summer demand season. We did have winter natural gas move slightly higher and attempt to test the $3 price level but already started to pull back to start this week. The summer demand forecasts are showing stronger chance for above normal temperatures so should help to move prices higher in the short term.

  • In PJM, the only market with real time price action, we did see hourly clearing price volatility the past few weeks with higher congestion costs due to stronger than forecasted demand on a handful of days. Summer power pricing moved higher from this activity and we had West Hub summer peak up almost 5% to $27.47 and the 24 peak strip up to $31.57.

  • In other northeast power pricing markets similar small moves higher before pull back yesterday. The New England Mass Hub 12 Month peak strip up slightly at $35.67 and 24 Month peak strip up $0.30 to end at $37.37. NYISO NYC Zone (J) 12 Month peak strip increased to be around $34.97 with summer 2020 peak at $29.10.

  • We are in the summer demand and generation season so do feel power pricing will look to move higher from these very low value levels. Pricing should start to trend higher from these levels and next area to focus on will be winter gas pricing to time your longer term hedges and contracts. 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.


Clean Energy

  • ERCOT, the electricity operator for Texas, has published new tools and documents (including videos) on how Distributed Generation (DG) and Demand Response (DR) are used in the ERCOT footprint. As the ERCOT grid evolves, the use of DG and DR are growing. It is a priority of ERCOT’s to understand how these growing resources complement existing generation and support grid reliability. These two resources can reduce consumer demand at an exact location. These resources can be very important as they provide flexibility and can serve load at the distribution level. They can be particularly valuable during emergency conditions and when intermittent resources are not generating. Contact TrueLight Energy for renewable asset management services and project risk analysis.

Market Intelligence

  • 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.

Weather

  • Above average temperatures are forecast for Texas, Southern California and the 4 corners states in the 8-14 day window starting June12th. The highest probability for heat is in Texas.A cool snap forecast is projected for the Eastern United States and Pacific Northwest. The Great Lakes and Northeast have the highest likelihood of seeing cooler than normal weather.

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