Jan 25, 2022 8:14:23 PM

Luminant Corp., a subsidiary of Vistra Corp., has filed the 149-page document with the Texas Railroad Commission to stop Energy Transfer from halting natural gas service. Luminant claims that Energy Transfer illegally charged them $21.6 million for fuel during the winter storm. Luminants five plants that rely on ET’s pipelines provide 2,000 megawatts of electricity and serve about 400 000 homes in Texas including hospitals & schools."  Graham and Trinidad are served only by Energy Transfer’s pipelines and the three other pipeline companies that have access to Energy Transfer’s pipelines may not be able operate at full capacity if the Energy Transfer stops production. According to the filing, Luminant spent approximately $1.5 billion for natural gas during the February winter storm, twice its planned natural gas cost to fuel its entire Texas fleet for a full year.  They also went on to say that Luminant paid Energy Transfer more than $600 million for natural gas during the winter storm. The utility’s natural gas contract ended in November, and since then the company has been buying natural gas without a contract according to the filing. An Energy Transfer spokesperson said in a statement late Wednesday to WFAA, "We will continue to sell them gas pursuant to the same process, terms and conditions that have been in place since Dec. 1, 2021." Energy Transfer reported last year publicly that it had made $2.4 billion “from the storm for 2021.”

The US is getting ready for an intense year of power plant closures.  According to the Energy Information Administration (EIA), US electricity generator operators have scheduled 14.9 gigawatts (GW) of electric generating capacity to retire during 2022 whereas the majority of the scheduled retirements are coal-fired power plants (85%), natural gas (8%) and nuclear (5%). In 2021, there was a 17% increase in coal generation due to the rise in natural gas prices and reduction in production due to the pandemic. Coal demand worldwide is forecast to grow by 6% in 2021. If weather patterns cooperate, coal could reach new all-time highs as soon as 2022 with an estimated increase from last year's levels of 8%. Recently, the month-long ban on Jan. 1 on exports of coal by Indonesia has created a stir in the seaborne market for this fuel, with repercussions likely to be felt beyond its initial shortage. The coal supply crunch is being further exacerbated by the inability of some major exporters, such as Russia and South Africa to boost their shipments.

One of the largest shipping companies, A.P. Moller-Maersk has pledged to reach net zero greenhouse gas emissions by 2040 instead of 2050 which is a decade earlier than their previous goal!  The company said in December that the new vessel series is set to offer Maersk’s customers “carbon-neutral transportation at scale on ocean trades.” The design of the eight 16,000 twenty-foot equivalent units (TEU) container vessels powered by carbon neutral methanol will allow for a 20% improvement in energy efficiency per transported container when compared to industry standards. As a part of its commitment to reduce carbon emissions and create sustainable resources, this year's shipping giant Maersk has partnered with REintegrate in order for them both to produce green fuel that can be used on one of their vessels. The Danish renewable energy company European Energy will establish a new facility where it plans to produce 10,000 tons of carbon-neutral e-methanol. Henriette Hallberg Thygesen, CEO of Fleet & Strategic Brands, A.P. Moller-Maersk said, “Our updated targets and accelerated timelines reflect a very challenging, yet viable pathway to net zero which is driven by advances in technology and solutions. What is needed is a rapid scale-up which we will strive to achieve in close collaboration with customers and suppliers across the entire supply chain.”

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General Market Update

  • The February 2022 NYMEX Henry Hub traded to $4.031/MMBtu, down $0.83 (-17.0%) from the previous Wednesday. The price of the 12-month strip averaging February 2022 through January 2023 futures contract was down $0.31 (-7.2%) to $4.015/MMBtu.

  • Boston’s Algonquin Citygate price went up $3.73 (+19.7%) to $22.69/MMBtu last Wednesday. Transco Zone 6 NYC price increased $10.62 (+198.9%) to $15.96/MMBtu. 

  • Pennsylvania’s Eastern Gas South rose $0.05 (+1.2%) to $4.35/MMBtu. Tennessee Zone 4 Marcellus spot price decreased $0.04 (-0.9%) to $4.26/MMBtu.

  • SoCal Citygate price decreased $0.25 (-4.5%) to $5.30/MMBtu last Wednesday. The price at Northern California PG&E Citygate fell $0.27 (-5.1%) to $5.07/MMBtu week over week.

 

Utility Highlight

  • Potomac Edison the current price for Standard Offer Service (SOS) electricity is 6.814 cents/kWh, effective through May 31, 2022.

  • Met-Ed Price-To-Compare Residential (RS) 7.414 cents per kWh effective December 1, 2021

  • Penelec Price-To-Compare Residential (RS) 6.507 cents per kWh effective December 1, 2021

TRUELight Energy can help you locate savings in all of the deregulated markets!

Storage

  • For the week ending January 14th, 2022, the EIA reported net withdrawals from storage of 206 Bcf, which is more than last year’s net withdrawals of 179 Bcf this week last year and more than the 5-year (2017-2021) average net withdrawals of 167 Bcf.

  • Working natural gas in storage totaled 2,810 Bcf, which is 226 Bcf (-7.4%) lower than last year’s working gas totals of 3,036 Bcf at the same time and 33 Bcf (+1.2%) higher than the 5-year average of 2,777 Bcf.  Total working gas is within the five-year historical range


Supply/Demand

  • Average total supply of natural gas was flat 0.0% week/week.  Dry natural gas production decreased by 0.3%, while net imports with Canada increased by 5.1% compared with the previous week. 

  • Total US consumption of natural gas decreased by 6.0% since last week.  Natural gas consumption for power generation decreased 5.4%, industrial sector consumption decreased 2.2%, residential-commercial consumption decreased 8.2% week over week, and exports to Mexico decreased 2.2% compared to last week.

  • US LNG exports decreased week over week, with 20 vessels departing US ports for a combined 76 Bcf.


Weather

  • An above normal weather pattern for Texas is forecast for the 8-14 day period starting January 28th.  The end of January 2022 brings a below normal weather pattern for the Pacific Coast States, Rocky Mountain States, Southern States and Florida.  Texas and Oklahoma are forecast for above normal temperatures. 

  • The Midwestern States, Middle Atlantic States and New England States are now forecast for near normal temperatures and drove the sell off last week. Texas has the highest probability for much above normal temperatures.  Florida and the Pacific Coast States have the highest probability for much below normal temperatures.

  • In the 8-14 day window from January 28th through February 3rd, no portion of the United Sates is forecast for below normal precipitation.  The Pacific Coast States, Florida and Maine are forecast for near normal precipitation.  

  • The Rocky Mountain States, Southwestern States, Midwestern States, Middle Atlantic States and New England States are forecast for above normal precipitation probability.


 

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