FERC approves most of ISONE’s storage participation filing. NY and National Grid reach deal to keep gas supply license and end moratorium, headroom is available for UI customers in CT, and weather to turn warmer and wetter for most.
Gas futures continue to trend downward. Weather models favoring above average temperatures for much of the country this winter have tempered demand expectations and exerted bearish pressure on natural gas futures. Regional differences persist and there is still potential for spikes, but in general this winter is shaping up to be quiet for gas markets.
The December 2019 NYMEX Henry Hub forward contract expired at $2.470/MMBtu, a -$0.09 (-3.5%) decrease from the previous Wednesday. The price of the 12-month strip averaging December 2019 through November 2020 futures contracts decreased -$0.02 (-1.0%) to $2.402/MMBtu.
Hub-level data is unavailable due to the Thanksgiving holiday.
For the NYC zone (J) in NYISO, the 12 Month ATC strip decreased -$1.38 (-3.8%) to $35.20. The 24 Month ATC strip decreased -$0.93 (-2.5%) to $36.48 and the Cal 2020 ATC strip decreased -$1.01 (-2.7%) to $36.10.
For the NEMASSBOST zone in ISONE, the 12 Month ATC strip decreased -$1.62 (-4.0%) to $38.73. The 24 Month ATC strip decreased -$1.16 (-2.8%) to $39.86 and the Cal 2020 ATC strip decreased -$1.21 (-3.0%) to $39.86.
For the PEPCO zone in PJM, the 12 Month ATC strip decreased -$1.33 (-3.8%) to $33.81. The 24 Month ATC strip decreased -$0.94 (-2.7%) to $33.38 and the Cal 2020 ATC strip decreased -$0.58 (-1.7%) to $34.05.
For the Houston zone in ERCOT, the 12 Month ATC strip increased $0.21 (0.5%) to $43.18. The 24 Month ATC strip decreased -$0.19 (-0.5%) to $40.47 and the Cal 2020 ATC strip increased $0.28 (0.7%) to $43.31.
The upcoming Price to Compare for Connecticut’s United Illuminating Company (UI) Residential rate class (R) is $0.105607/kWh, in effect from January 1, 2020 to June 30, 2020. This rate is a 26.4% increase from the current rate of $0.083532/kWh for the July 1, 2019 to December 31, 2019 price period.
Headroom in the UI territory is now available in the 9 and 12 month terms. Headroom of $0.00683/kWh and $0.00622/kWh is likely for the 9 and 12 month terms, respectively.
Over the last week, the CONNECTICUT ATC 12-month strip decreased, slipping -4.1% to finish at $38.23/MWh yesterday. This time last year, the strip was trading at $52.00/MWh, which is 36.0% higher than this year.
Since the beginning of the year, the ATC strip has reached a high of $47.88/MWh on January 17, 2019 and a low of $38.08/MWh on July 5, 2019.
For the week ending November 22, the EIA reported net withdrawals from storage of 28 Bcf, which is lower than last year’s net withdrawals of 70 Bcf for this week and lower than the 5-year (2014–18) average net injections of 57 Bcf.
Working natural gas in storage totaled 3,610 Bcf, which is 548 Bcf (17.9%) higher than last year’s working gas totals of 3,062 Bcf at the same time and 31 Bcf (-0.9%) lower than the 5-year (2014-2018) average of 3,641 Bcf. Total working gas is within the five-year historical range.
FERC responded to ISO New England’s (ISO-NE) compliance filing related to electric storage participation, declaring that the ISO’s proposal generally complies with FERC Order 841 but urging further compliance filings regarding specific details. FERC agreed that ISO-NE’s rules appropriately allow storage to provide retail services on distribution systems in addition to wholesale services, however, it directed ISO-NE to clarify its dual participation rules to ensure that storage does not double pay for charging energy at the retail and wholesale prices. Additionally, FERC disagreed that all storage should be exempt from transmission charges when charging for later resale to the wholesale market and directed ISO-NE to adjust its language on applicability of transmission charges.
New York’s threat to revoke National Grid’s gas supply license to downstate customers has been resolved after the utility reached an agreement with the state. Under the agreement a state appointed monitor will supervise National Grid’s gas supply operations and report its findings to the Public Service Commission while National Grid will pay a total of $35 million to fund various initiatives and keep its supply license. The new customer connection moratorium will end and National Grid will begin supplying gas to new customers in New York City and Long Island effective immediately. National Grid will spend $7 million to compensate customers for hardships due to the moratorium, $8 million on energy efficiency measures, and $20 million on clean energy project investments.
Warmer than average temperatures are predicted for almost the entire country in the 8-14 day window. The warmest anomalies are expected for the entire East Coast from New England south to Florida. The one exception is a cooler than typical forecast for parts of Nevada and Utah, with about average temperatures expected for nearby areas in the Rockies and Southwest.
The precipitation outlook is the same for almost the entire continental US, with above average precipitation covering the majority of the continental US. The wettest forecasts are for the Pacific Northwest and the eastern portion of the country from the Mississippi River east to the Atlantic coast. The Southwest will see about average precipitation levels, with southern California experiencing drier than average conditions.