Energy Market Intelligence


PG&E fined by CPUC, ERCOT pushing new legislation, Wind Energy Project gains in CA and Market Updates

Market Intelligence

Pacific Gas and Electric Co. (PG&E) has been fined $106 million by the California Public Utilities Commission (CPUC) for allegedly violating guidelines in 2019 for executing planned power outages to lower wildfire risks. The violations according to the administrative law judge (ALJ) were stated as a “failure of PG&E’s website, which was unavailable or non-functional during the majority of the duration of a PSPS event, inaccuracy of its online outage maps, inaccessibility of its secure data transfer portals to its public safety partners, and PG&E’s failure to provide advanced notification of [PSPS] events to approximately 50,000 customers and 1,100 medical baseline customers during the three PSPS events in Fall 2019.” PG&E stated that they covered $86 million of the fine through customer bill credits, therefore, the decision orders a net payment of $20 million to be paid by shareholders through credits to customers and a contribution to a statewide backup portable battery program.

February 2021 winter storm in Texas has sparked legislation requiring only natural gas generation facilities that are deemed “critical” by regulators to weatherize along with power plants and transmission lines. Senate Bill (SB) 3 estimates $4.5 billion in ratepayer-backed bonds for natural gas utilities, $2 billion for electric cooperatives in crisis-related grid services, and $800 million loaned to pay off debts to the Electric Reliability Council of Texas (ERCOT). There would also be a requirement to implement an emergency alert system for blackouts similar to an Amber Alert which are emergency messages issued when a child has been abducted. Regulatory changes such as the number of seats on ERCOTS board to 11 from 16 and requiring members to live in Texas. A consulting firm would also be brought in to select eight out of the 11 members.

The Department of Interior (DOI), Bureau of Ocean Energy Management (BOEM), and the Department of Defense (DOD) have agreed to lease 399 square miles off the northern coast of California for Wind Energy Area (WEA) development. The agreement identifies two sites off central and Northern California with the potential to install massive floating wind turbines that could produce 4.6 gigawatts of electricity, enough to power 1.6 million homes. Interest in offshore wind on the West Coast has grown for years, especially with California's own ambitious goal to cut greenhouse gas emissions. "This is a major breakthrough — a major advancement that will allow California to start planning for its carbon-free electricity goals with offshore wind firmly in the picture," says Nancy Rader of the California Wind Energy Association, who also pointed to the challenges. "Offshore wind development off the coast at Morro Bay and Humboldt will require a major port facility in each area to construct the floating platforms and assemble the turbines that will require continued proactive planning by the state and federal governments."

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electricity captag iso

Understanding "Cap Tag" and Why it Matters

A cap tag is a measure of a customer’s electricity usage when the overall demand on the grid is high. More formally called a PLC (Peak Load Contribution), it is a kW value during the hour or hours, depending on the ISO when the grid is at its annual peak load. These peak hours occur during the summer and then drive a customer’s costs for the following June to May year. The grid operators need to ensure that there is enough generation capacity in the system to produce power at high load times so the load is charged based on their contribution to the system peak. Cap tags affect overall energy pricing and determine how much a customer pays for capacity during the year.

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pjm AUCTION BRA forwardpricing

PJM Posts the Results for the Current Base Residual Auction

PJM announced the annual capacity auction base residual results this afternoon and the RTO price almost touched one of the all-time low prices of $40/MW-day again, as the RTO region cleared at $50/MW-day in this auction.  The Base Residual Auction (BRA) was set up to clear lower due to the lower forward load forecasts expected during this planning year period from covid restrictions and the majority of the older and less efficient/higher cost units being previously retired.  Even with those bearish indicators prices were expected to clear higher given the uncertainty around the new auction rules.  The last time PJM ran the BRA in 2018 RTO prices hit $140/MW-day but cleared lower this time and there was not much separation between the eastern and western zones for this auction with only BGE cracking the $100/MW-day price level and the other zones progressively moving lower the further west you go in PJM.   PJM is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia for 65 million people.  Auctions are usually held three years in advance of the delivery year.  The 2022/2023 auction was originally scheduled to be held in May 2019 but was postponed due to pending approval from FERC of capacity market Minimum Offer Price Rules (MOPR).

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weather texas winter ercot

Texas Bill Bans Residential Wholesale Electricity Plans

House Bill 16 passed on May 12, 2021, which states that Texas would not allow residential or small-business electricity customers to sign up for electricity plans where wholesale prices for power are passed to customers. This is one of the first pieces of legislation to come forward after Texas was hit with an eight-day winter storm in February 2021 with cold air dropping temperatures into the 20s and 30s.  The storm left 4.5 million customers without power, killed at least 111 Texans, and sent a wave of high energy bills throughout the state.  Energy suppliers scrambled to purchase power that was available and allowed by regulators in Texas. This surged the market price cap to $9,000 a megawatt-hour (highest amount allowed) compared to $21 per megawatt-hour in 2020.  Natural gas prices also hit a record high of more than 700% during the storm.  

Some customers reported bills of over $15,000 from companies such as Griddy Energy that offers wholesale energy plans. Many of these suppliers have since filed for bankruptcy after racking up a large debt with the state.  However, companies like Austin Energy a city-owned utility made money earning $54 million as a result of the Texas freeze. Approximately 30,000 Texans will be affected by House Bill 16 who are on wholesale energy plans out of about 10 million residential customers in Texas. The criticism of the power outages has to lead many board members of ERCOT to resign and state lawmakers are trying to change how the ISO is governed.  Texas is a deregulated state which allows consumers to choose their energy provider, similar to selecting your cellphone provider or your airline company.  However, Texas is the only state on its own power grid and governed by the Electric Reliability Council of Texas (ERCOT),  a nonprofit council that regulates the state's electric power to more than 26 million customers, about 90 percent of the states' electric load and connects more than 46,500 miles of transmission lines and 710+ generation units.  Reports of limited regulation and poor weatherization of wind turbines, frozen gas wells, and power sources by ERCOT led to the power outages. ERCOT CEO Bill Magness states that "the high prices were necessary to incentivize generators to send power to the grid and to keep big customers from turning their power back on and increasing demand." Not all parts of Texas were affected by the power outage, such as the city of El Paso. After the 2011 winter storm,  El Paso sought additional measures and currently accesses the New Mexico power plant and Montana Power Station, which would allow power to be exchanged with other grids.  Many government officials pushed for repricing the market as a solution, but experts disagreed that it would not have any effect on indexed plans. 

TRUELight Energy has experience helping suppliers and developers with independent valuation analysis to meet development goals and to accurately capture future revenue streams and costs.  Contact us to learn more and schedule a discovery call. 

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renewableenergy PPA

Vineyard Wind Is the Nation's First Commercial-Scale Offshore Wind Project

President Biden’s effort to tackle climate change with the goal to set the US economy to net-zero by 2050 and cut emissions by half by 2030 has increased interest in renewable energy such as wind power.  Simply put wind energy, once called windmills is a form of solar energy,  where wind turbines turn wind into electricity using the force from the rotor blades and collected to power the grid.  Compared to its popular counterpart Solar panels, less CO2 is released into the atmosphere, less energy is consumed, and one wind turbine can generate the same amount of electricity per kWh as about 48,704 solar panels.  The $2.8 billion offshore wind project known as Vineyard Wind is the nation's first utility-scale offshore wind energy project and will be a big step to achieve Biden’s target.  According to the EIA, 42 states in 2020 with utility-scale wind power projects generated a total of about 338 billion kilowatt-hours (kWh). The five states with the most electricity generation from wind in 2020 were Texas, Iowa, Oklahoma, Kansas, and Illinois. These states combined produced about 58% of total U.S. wind electricity generation in 2020. However, compared to the share of total U.S. utility-scale electricity generation. wind turbines accounted for only 8.4%.

The Vineyard wind project will be over 15 miles off the coast of Massachusetts and is expected to power 400,000 homes and businesses and reduce carbon emissions by about 1.6 million tons per year.  The project will provide power to Massachusetts in 2023 and construction will begin this year.  Many political leaders such as U.S. Senator Elizabeth Warren, Congressman Bill Keating, and State Representative Patricia Haddad praised the project, and Governor Charlie Baker stated  "Massachusetts should be proud that this decision launches the nation’s first commercial-scale offshore wind project here on the Commonwealth’s shores. "  Although the project will create thousands of jobs in addition to the big push to clean energy and less reliance on fossil fuels, the New England fishing industry sees the project as being rushed and a disruption to their livelihood.  A major challenge to this renewable source is offshore cabling which can have an environmental impact on marine life and impact on the fishing industry. The Responsible Offshore Development Alliance (RODA), an organization that supports fishing interests feels silenced and is concerned with safe passages of fishing vessels and protection of the marine.  Annie Hawkins, executive director of the RODA, said "there hasn’t been enough opportunity for people in the fishing industry and the public to become informed and weigh in on the proposal."  There are advantages and disadvantages to even renewable energy resources and no matter which side you are on the renewable energy industry is growing and reliance on development on fossil fuels is scaling back.  The interest in PPA or power purchase agreement in renewables has also grown due to the decreased prices as a result of improved technology. 

If you are interested in learning more about how we have helped businesses with expert analysis of the current market for their PPA pricing strategy and projects, contact us to learn more. 

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EIA projects switching from natural gas electricity generation to coal electricity generation this summer

The US Energy Information Administration’s (EIA) April Short-Term Energy Outlook (STEO) is projecting natural gas electricity generation to coal electricity generation switching this summer.  The EIA is projecting overall US natural gas consumption to decline in 2021 and 2022 as it did in 2020.  The total natural gas consumption declined in 2020 mainly as a result of slowdowns from the COVID-19 pandemic, along with milder temperatures and lower heating demand.  The forecast is for less natural gas consumption in 2021 from electricity generation and the EIA is quoted: “Natural gas prices in 2019 and 2020 were historically low, making natural gas more competitive with coal for generating electric power.

However, because forecast natural gas prices will be higher and more renewable capacity will come online in 2021 and 2022, we expect more electricity generation will come from coal and renewables and less from natural gas.”  The EIA is forecasting Henry Hub spot natural gas prices to average $3.04/MMBtu in 2021, which would be higher than the 2020 average of $2.03/MMBtu.  So far in 2021, MISO has had the largest market share gain for coal electricity generation, as 40% of 2021 total generation is from coal compared to 30% in 2020.  In SPP, the total coal generation market share has jumped about 7%, while there is a 6% jump in PJM and a 4% increase in ERCOT.  The EIA projects that US-wide coal-fired electricity generation share will rise to 22% in 2021 and to 23% in 2022, which is up from 20% in 2020.  US-wide natural gas electricity production is down about 7% so far this year.  The EIA is forecasting the US-wide share of natural gas electricity generation to average 36% in 2021, 35% in 2022, which is down from 39% in 2020.

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SC studying electricity market reforms, gas and power forwards hold low marks

South Carolina legislature proposes studying changes to electricity market. Bearish gas and power markets don’t budge with strong storage numbers, new POTED SOS rates filed, and MA governor announces zero emissions goal by 2050.

Natural Gas

  • The February 2020 NYMEX Henry Hub forward contract decreased to $1.905/MMBtu, a $0.22 (-10.1%) decrease from the previous Wednesday. The price of the 12-month strip averaging February 2020 through January 2021 futures contracts decreased $0.13 (-5.9%) to $2.156/MMBtu.

  • For the week ending January 17, the EIA reported net withdrawals from storage of 92 Bcf, which is lower than last year’s net withdrawals of 152 Bcf for this week and lower than the 5-year (2014–18) average net withdrawals of 194 Bcf.

  • Working natural gas in storage totaled 2,947 Bcf, which is 554 Bcf (23.2%) higher than last year’s working gas totals of 2,393 Bcf at the same time and 251 Bcf (9.3%) higher than the 5-year (2014-2018) average of 2,696 Bcf. Total working gas is within the five-year historical range.


  • The ISONE Mass Hub On-Peak Summer 2020 forward electricity strip is up 2.2% week over week, but is down 26.3% in the last year.

  • For those looking to hedge their ISONE Mass Hub On-Peak load, we see value in hedging the March 2020 through November 2021 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 forward headroom models indicate there is headroom starting February 1, 2020 for 3, 6, 12, 24 and 36 month contracts for Massachusetts' WMECO Small General Service (G0) customers.

  • Maryland’s Potomac Edison (POTED) released proposed SOS rates for residential customers effective June 1, 2020 through May 31, 2021 and new Type II rates effective March 1, 2020 through May 31, 2020. The residential Electric Supply Charge, which is the primary component of the price-to-compare, will be 12% lower than the current rate and 5% lower than last year’s summer rate. 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

  • Governor Charlie Baker of Massachusetts announced his intention to set a statewide goal of net-zero carbon emissions by 2050 in his State of the Commonwealth address last week. This target improves upon the existing targets of 25% emissions reductions by 2020 and 80% emissions reductions by 2050 relative to 1990 levels, both of which were set by the 2008 Global Warming Solutions Act. Baker reaffirmed the state’s commitment to the Transportation Climate Initiative (TCI), which is a proposed cap and trade program for gasoline and diesel emissions. A bill to implement the net zero emissions target was introduced in the Massachusetts House of Representatives last Thursday as well. Contact us for advice on renewable generation project development.

Market Intelligence

  • Legislators in South Carolina introduced a bill in the state Senate that would establish a committee to study electricity market reforms. The Electricity Market Reform Measures Study Committee would be tasked with examining the possibility of creating or joining a regional transmission organization (RTO), divesting generation and transmission assets within its monopolistic utilities, developing retail electricity choice, and allowing community choice aggregations among other proposals. Although the bill has yet to be passed in both of the state’s legislative houses, the bill demonstrates an interest in reassessing South Carolina’s current vertically integrated electricity market model. 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.



  • The 8-14 day forecast beginning February 4th includes above average temperatures for the East coast and average to below-average temperatures for the Midwest and West. Most of the country is expected to see wetter than average conditions, with the exception of the West Coast experiencing lower than average precipitation.

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Power and gas stay low, cooler weather to come in the West

Power and natural gas prices remained low through the holidays. Cooler weather is forecasted for the West, headroom is available in IL, and VA proposes retail choice legislation.

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Forward gas and power continue to fall, suppliers ask for rehearing of NY PSC Reset Order

Forward gas and power prices tumble with strong gas storage numbers. NY PSC’s Reset Order for ESCO participation causes complaints from RESA and suppliers, headroom is available in OH, and NJ passes EV adoption bill.

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Power prices in ERCOT continue the upward trend with gains along the entirety of the forward curve, while ISONE, NYISO, and PJM trend downwards

TrueMarket Update

Providing you an analytical snapshot of weekly energy price movements, retail electricity headroom opportunities, and weather trends. 

General Update

  • Financial gas markets trade higher, with the contract for November 2018 rising $0.25 (8.4%) to $3.230/MMBtu. The 12-month strip averaging November 2018 through October 2019 futures contracts climbed $0.12 (4.3%) to finish the week at $2.931/MMBtu.
  • Physical gas spot prices were mixed. Boston’s Algonquin Citygate increased $0.37 (11.4%) to $3.60/MMBtu. Transco Zone 6 NYC increased $0.44 (15.4%) to $3.29/MMBtu.
  • Tennessee Zone 4 also increased, rising $0.22 (13%) to $1.92/MMBtu. Dominion South, serving southwest Pennsylvania, fell $0.07 (-3.2%) to $2.09/MMBtu. Chicago Citygate prices increased $0.29/MMBtu (10%) to $3.18/MMBtu, a weekly high.
  • SoCal Citygate prices increased $0.72 (19.4%) to finish at $4.42/MMBtu. Prices at Northern California PG&E Citygate increased $0.22 (6.7%) to $3.50/MMBtu.
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