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FERC rules on PJM capacity market, VA and MD pass clean energy bills

FERC orders PJM to expand MOPR to apply to new state-subsidized generation. Liberty Utilities NH releases new PTCs, headroom is available in PA, and VA and MD pass bills aiming for 100% clean generation.


Natural Gas

  • The January 2020 NYMEX Henry Hub forward contract increased to $2.286/MMBtu, a $0.04 (1.9%) increase from the previous Wednesday. The price of the 12-month strip averaging January 2020 through December 2020 futures contracts increased $0.02 (0.9%) to $2.294/MMBtu.

  • For the week ending December 13, the EIA reported net withdrawals from storage of 107 Bcf, which is lower than last year’s net withdrawals of 132 Bcf for this week and lower than the 5-year (2014–18) average net withdrawals of 112 Bcf.

  • Working natural gas in storage totaled 3,411 Bcf, which is 618 Bcf (22.1%) more than last year’s working gas totals of 2,793 Bcf at the same time and 9 Bcf (-0.2%) lower than the 5-year (2014-2018) average of 3,420 Bcf. Total working gas is within the five-year historical range.


Power

  • The ISO-NE Mass Hub On-Peak forward electricity strip for Winter 2019-2020 is down only 0.3% week over week, but is down 13.8% in the last month.

  • For those looking to hedge their ISO-NE Mass Hub On-Peak load, we see value in hedging the March through August 2020 periods. Contact TrueLight to stay on top of value in current forward curve pricing and learn more about our portfolio management execution expertise.


Utility Highlight

  • Our models indicate there is headroom starting January 1, 2020 for 6, 9 and 12 month contracts for Penn Power General Service Small (C1) customers.

  • Liberty Utilities (Granite State Electric) in New Hampshire released proposed price-to-compare rates effective February 1, 2020 through July 31, 2020. The Small Customer group, which includes residential customers under rate D and small commercial customers under rate G-3, will have a slightly lower rate of 7.127 cents/kWh, a 7.6% decrease from the current rate of 7.710 cents/kWh. Let TrueLight help you stay on top of current 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 rate changes.

Clean Energy

  • Both Virginia and Maryland passed 100% clean energy bills in their respective state legislatures last week. Virginia’s goal is to produce 100% of its electricity from clean sources by 2050, while Maryland is aiming for 100% clean electricity by 2040 and a 50% renewable portfolio standard by 2030. The Virginia Clean Economy Act would also enter the state into the Regional Greenhouse Gas Initiative, which is a carbon cap-and-trade program, as well as implement an energy efficiency standard. Maryland’s plan, the Clean and Renewable Energy Standard (CARES), provides for carbon capture incentives, making Maryland the first state to develop subsidies for carbon storage technology. Contact us for advice on renewable generation project development.

Market Intelligence

  • After months of delays, FERC finally ruled on PJM’s capacity market rules last Thursday night by ruling that PJM must expand its Minimum Offer Price Rule (MOPR) to apply to new state-subsidized resources. After FERC directed PJM to revise its capacity market rules, PJM proposed a Resource Carve-Out (RCO), which would have removed load associated with state-subsidized generation from the capacity market due to PJM’s claim that state subsidized resources were suppressing capacity market clearing prices. FERC is also directing no change to PJM’s Fixed Resource Requirement Alternative rule. States and clean energy proponents worry that the requirement of the MOPR for state-subsidized resources will inhibit new renewable generation from competing and thus hurt state clean energy goals while benefitting incumbent fossil fuel resources that are not supported by state subsidies. FERC ordered PJM to file a schedule for the 2022-2023 capacity auction within the next 90 days. Contact TrueLight Support for 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 price quotes.

Weather

  • In the 8-14 day window, above average temperatures are predicted for most of the continental U.S., with the Southwest experiencing average to slightly cooler than average temperatures. The East Coast will get wetter than usual conditions while most people west of the Rockies will see drier than normal weather.