Northeast power prices fall; EIA expects lower residential electricity consumption this summer

Updated: Jun 14, 2019

Northeast power prices fall; EIA expects lower residential electricity consumption this summer due to milder weather forecasts; Ohio utility files new PTC rates



General Update

  • The May 2019 NYMEX contract decreased $0.18 (-6.8%) to $2.517/MMBtu last Wednesday. The 12-month strip price averaging May 2019 through April 2020 futures contracts dropped $0.15/MMBtu (-5.2%) to $2.876/MMBtu.

  • Northeast prices fell with warmer temperatures. Boston’s Algonquin Citygate prices decreased $0.32 (-11.8%) to $2.40/MMBtu last Wednesday. Transco Zone 6 NYC prices decreased $0.20 (-7.8%) to $2.35/MMBtu.

  • Pennsylvania’s Dominion South fell $0.21 (-8.6%) to $2.23/MMBtu. Tennessee Zone 4 Marcellus spot prices fell $0.29 (-12.1%) to $2.10/MMBtu.

  • SoCal Citygate prices increased $0.16 (5.8%) from $2.74/MMBtu the previous Wednesday to a weekly high of $2.90/MMBtu. Prices at Northern California PG&E Citygate decreased $0.07 (-2.1%) from $3.31/MMBtu the previous Wednesday to $3.24/MMBtu last Wednesday.

Power

  • For the NEMASSBOST zone in ISONE, the 12 Month ATC strip dropped $0.65 (-1.4%) to $45.28. The 24 Month ATC strip decreased $0.38 (-0.8%) to $45.38, and the Cal 2020 ATC strip decreased $0.23 (-0.5%) to $45.31/MWh yesterday.

  • For the NYC zone in NYISO, the 12 Month ATC strip decreased $0.26 (-0.6%) to $42.00. The 24 Month ATC strip decreased $0.36 (-0.8%) to $42.63 and the Cal 2020 ATC strip decreased $0.28 (-0.7%) to $42.26/MWh yesterday.

  • For the PEPCO zone in PJM, the 12 Month ATC strip was unchanged at $38.04. The 24 Month ATC strip decreased $0.01 (-0.01%) to $37.60 and the Cal 2020 ATC strip increased $0.01 (0.01%) to $37.60/MWh yesterday.

  • For the Houston zone in ERCOT, the 12 Month ATC strip decreased $1.02 (-2.5%) to $40.59. The 24 Month ATC strip dropped $0.84 (-2.1%) to $39.39, and the Cal 2020 ATC strip decreased $0.94 (-2.4%) to $38.17/MWh yesterday.

Utility Highlight

  • The Price to Compare (PTC) for Connecticut’s United Illuminating Company Residential Service rate class (R) for the January 1, 2019 to June 30, 2019 price period is $0.112263/kWh, which is 24.1% higher than the previous price period’s PTC of $0.090496/kWh.

  • TRUELight’s expert pricing models indicate that headroom is likely for all the 1, 3, 6, 9 and 12 month terms. Headroom of $0.01078/kWh and $0.00776/kWh is expected for the 9 and 12 month terms, respectively. Please contact TRUELight should you need more detailed information about current default rates and headroom, or would like to receive our forecast for future default rates and headroom by market.

  • Over the last week, the Connecticut ATC 12-Month Strip traded $1.35/MWh lower, a loss of 3.0%, to finish the week at $44.49/MWh.

  • Since the beginning of the year, the strip has traded between $41.47/MWh and $47.88/MWh. This time last year, the strip traded at $43.83/MWh, which is 1.5% lower than this year.

Natural Gas

  • For the week ending April 12, the EIA reported net injections from storage of 92 Bcf, which is higher than last year’s net injections of 34 Bcf for this week and the 5-year (2014–18) average net injections of 21 Bcf.

  • Working natural gas in storage totaled 1,247 Bcf, which is 57 Bcf (-4.4%) lower than last year’s level and 414 Bcf (-24.9%) lower than the five-year average of 1,661 Bcf. Total working gas is within the five-year historical range.

Supply & Demand

  • Average total supply of natural gas rose by 1% compared with the previous report week, averaging 94.4 Bcf/day. Dry natural gas grew by 1% week over week while net imports from Canada increased by 2%.

  • Total US consumption of natural gas was unchanged from the previous week. Consumption for power generation declined by 3%, industrial sector consumption grew by 1%, residential-commercial consumption increased by 2%, and exports to Mexico decreased by 20%, mainly due to pipeline maintenance.

  • US LNG exports increased week/week, with eight vessels departing US ports for a combined 28.4 Bcf.

Market Intelligence

  • Dayton Power & Light has filed with the Public Utilities Commission of Ohio new Standard Offer Rates (SOR) for the period beginning June 1, 2019. The Residential SOR rate will drop 8% from the current rate of $0.0563604/kWh (0-750 kWh) to $0.0518603/kWh. The new Residential rate will apply to all kWh. Additional new rates are as follows: Residential Heating (All kWh, Summer) = $0.0518603/kWh, Residential Heating (All kWh, Winter) = $0.0441308/kWh, Secondary = $0.0518603/kWh, Primary = $0.0505626/kWh, Primary-Substation = $0.0500510/kWh, High Voltage = $0.0500510/kWh, Street Lighting = $0.0518603/kWh.

  • The EIA forecasts average Residential electricity consumption for this upcoming summer to be the lowest in five years. The estimate of 3,080 kilowatt-hours for summer 2019 is 5% lower than the average residential summer consumption in 2018. Milder weather forecasts and the continuing trend of lower residential consumption per household due to energy efficiency improvements are driving this lower expectation.

  • Nevada has passed a bill requiring the state to derive 50% of its electricity from renewables by 2030. This new bill is expanding upon the state’s current law, which only includes the state’s monopoly utility NV Energy and requires 25% by 2025 renewable portfolio standard (RPS). The new bill includes all electricity providers, and aspires to 100% carbon-free resources by 2050.

Weather

  • Compared to the past few weeks, a much less active weather pattern is expected to develop across most of the country over the next week. The same storm system that brought high winds and hail to Nebraska on Easter Sunday will hit the Midwest with severe thunderstorms on Monday afternoon and evening. An area spreading from eastern Iowa to northern Illinois will be at greatest risk for the most severe weather, with wind gusts up to 60 MPH. This storm system will dissipate, moving north into Canada. Only a few showers are expected along the east coast as a result heading into mid-week. Dry and pleasant conditions will follow for much of the eastern half of the country.

  • Widespread highs in the 80s are expected from Mississippi to South Carolina throughout the week, with sunshine and low humidity. The 80-degree-Fahrenheit temperatures will spread through the rest of the Carolinas, much of Virginia and into Washington, D.C., and Baltimore.

© 2019 by TRUELight Energy LLC

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