Power markets trend downward, potential for cooler weather ahead

Power prices trend downward amidst mild weather and strong gas fundamentals. National Grid MA releases new PTCs, headroom is available in CT, and forecasts call for cooler weather for large parts of the country.


Natural Gas

  • The January 2020 NYMEX Henry Hub forward contract expired at $2.158/MMBtu, a $0.13 (-5.6%) decrease from the previous Wednesday. The 12-month strip averaging January 2020 through December 2020 futures contracts expired at $2.286/MMBtu, a -0.3% decrease from the previous week.

  • 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 NYISO Zone J On-Peak forward electricity 12 month strip is down 4.2% week over week and 10.5% in the last month.

  • For those looking to hedge their NYISO Zone J On-Peak load, we see value in hedging February 2020 through March 2021. 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 small commercial customers under rate GS in Connecticut’s United Illuminating (UI) service territory .

  • National Grid in Massachusetts released proposed price-to-compare rates for industrial customers under rates G-2 and G-3 effective February 1, 2020 through April 31, 2020. Using currently effective administrative and smart grid cost adjustment factors, the rate for NEMA customers is 11.269 cents/kWh, the rate for SEMA customers is 11.394 cents/kWh, and the rate for WCMA customers is 11.247 cents/kWh. Relative to current PTC rates the NEMA rate is 7.4% lower, the SEMA rate is 6.6% lower, and the WCMA rate is 5.1% lower. 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

  • The North American Electric Reliability Corporation (NERC) noted that one of the greatest challenges facing the North American grid will be adapting transmission systems to incorporate up to 330 GW of renewables by 2029 in its Long-Term Reliability Assessment. In just the next five years NERC anticipates an addition of 8 GW of energy storage and 35 GW of distributed solar, and this growing penetration of distributed energy resources will necessitate transmission infrastructure changes. Part of the issue is that grid operators and planners will not be able to see all of the distributed resources online. The report also asserted that in the next ten years the grid is expected to be reliable across the continent, despite thin reserve margins in some places like Texas. Contact us for advice on renewable generation project development.

Market Intelligence

  • Retail electricity supplier Starion Energy and the Attorney General of Massachusetts, Maura Healey, entered into a settlement to resolve a civil suit brought against Starion concerning the supplier’s marketing and pricing tactics. The settlement stipulates that Starion pay up to $10 million, which would largely fund restitution payments to residential customers in Massachusetts impacted by Starion’s practices. Additionally, Starion will agree to stop claiming rate reductions using variable or fixed rate products unless there is a guarantee of rate reductions throughout the duration of the contract. 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, below average temperatures are predicted for most of the most of the West and New England, with the Mid-Atlantic seeing average temperatures and the South seeing warmer than average temperatures. Almost the entire continental U.S. is predicted to experience wetter than normal conditions, while Florida will be drier than usual and the Atlantic coast will see about average precipitation.

© 2019 by TRUELight Energy LLC

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