Jun 29, 2021 3:43:51 PM

PJM, which makes up about 63% of wholesale power costs, has finalized nine proposals to modify the Minimum Offer Price Rule (MOPR) that was issued by the Federal Energy Regulatory Commission (FERC) in  2019. The goal is to propose the MOPR changes with FERC for the 2023/2024 Delivery Year Base Residual Auction scheduled in December 2021. If you recall, MOPR raises the price of all fuel types, no matter the size, that receive or are entitled to receive state subsidies, such as renewables. According to PJM, “repricing proposals and those that heavily rely on the MOPR create inconsistencies between prices and actual conditions... believes this leads to unclear market signals.”  Clean energy advocates support PJM’s proposals because MOPR raises costs and could derail clean energy initiatives. However, MOPR supporters state that renewable resources that receive credits or other state subsidies suppress capacity market prices and make it more difficult for other resources such as new gas plants to compete in the market.

More drama in ERCOT, Texas set an all-time record for power usage due to a heatwave in the month of June with more than 12,000 megawatts of power generation being out of service during the demand spike. This is the second time the state of Texas has endured power shortages due to extreme weather conditions, the first back in February from an extreme winter storm. According to ERCOT, of the approximately 12,000 megawatts of generation offline last Monday, about 9,600 megawatts, or nearly 80% of the outages, were from thermal power sources. The Texas power outage tracker still shows that there are currently 2,724 customers without power in Texas. That represents less than 1% of 12 million customers tracked (June 23, 2021). Leslie Sopko, a spokesperson for ERCOT stated, “Based on preliminary information received from generation owners, the vast majority of forced outages that occurred last week are due to equipment issues.”

New technology and policy changes helped to make the price of renewable energy cheaper than fossil fuel and coal. Prices of solar are falling by 3% compared to last year to a global average of 6.8 US cents per kilowatt-hour, while onshore and offshore wind costs both fell by about 9% to 5.3 cents per kWh and 11.5 cents per kWh respectively. 62% of new renewable energy projects built globally last year are expected to undercut coal plants of up to 800 gigawatts (GW). Francesco La Camera, International Renewable Energy Agency (Irena) director-general said, “ Today renewables are the cheapest source of power. Renewables present countries tied to coal with an economically attractive phase-out agenda that ensures they meet growing energy demand while saving costs, adding jobs, boosting growth, and meeting climate ambition.”


General Market Update

  • The July 2021 NYMEX Henry Hub traded to $3.333/MMBtu, up to $0.08 (+2.5%) from the previous Wednesday. The price of the 12-month strip averaging July 2021 through June 2022 futures contract was up $0.05 (+1.6%) to $3.259/MMBtu.

  • Boston’s Algonquin Citygate price went up to $0.26 (+11.0%) to $2.62/MMBtu last Wednesday. Transco Zone 6 NYC price increased $0.15 (+6.5%) to $2.45/MMBtu. 

  • Pennsylvania’s Eastern Gas South (formerly known as Dominion South) rose $0.35 (+16.6%) to $2.46/MMBtu. Tennessee Zone 4 Marcellus spot price increased $0.47 (+24.5%) to $2.39/MMBtu.

  • SoCal Citygate's price decreased from $1.57 (-27.7%) to $4.09/MMBtu last Wednesday. The price at Northern California PG&E Citygate rose $0.18 (+3.8%) to $4.87/MMBtu week over week.

Utility Highlight

  • The upcoming Price to Compare for Atlantic City Electric Company in New Jersey, Residential rate class (AECO - RS) is $0.10334/kWh, in effect from July 1, 2021, to July 31, 2021.

  • Headroom in the AECO – RS territory is now available in the shorter period for a contract with a 3-month term.  Headroom of $0.00061/kWh is likely for the 3 month period; respectively.

  • The current Price to Compare data for Atlantic City Electric Company in New Jersey, Monthly General Service Primary rate class (AECO - MGSP) is $0.09191/kWh, in effect from July 1, 2021, to July 31, 2021.

  • Headroom is available in the AECO – MGSP market for the shorter period for contracts with 3 and 6-month terms.  Headroom of $0.01120/kWh is likely for the 3 month period and headroom of $0.00579/kWh is likely for the 6 month period; respectively.


  • For the week ending June 18th, 2021, the EIA reported net injections into the storage of 55 Bcf, which is less than last year’s net injection of 115 Bcf this week last year and less than the 5-year (2016-2020) average net injections of 83 Bcf.

  • Working natural gas in storage totaled 2,482 Bcf, which is 513 Bcf (-17.1%) lower than last year’s working gas totals of 2,995 Bcf at the same time and 154 Bcf (-5.8%) lower than the 5-year average of 2,636 Bcf.  The total working gas is within the five-year historical range.


  • The average total supply of natural gas fell 0.1% week/week.  Dry natural gas production was higher by 0.2%, while net imports with Canada decreased by 6.6% compared with the previous week. 

  • Total US consumption of natural gas fell by 1.8% since last week.  Natural gas consumption for power generation decreased 4.3%, industrial sector consumption increased 0.6%, residential-commercial consumption increased 3.4%, and exports to Mexico increased 3.0% compared to last week.

  • US LNG exports fell week over week, with 17 vessels departing US ports for a combined 62 Bcf.


  • A very hot weather pattern for most of the Western United States is forecast to continue through the start of July 2021 in the 8-14 window starting July 2nd. 

  • The Western United States consisting of the Pacific Coast States and the Rocky Mountain States, as well as, Florida and the New England States are forecast for above-normal temperatures. 

  • The Southwestern States, Texas, Midwestern States, and the Southern States are forecast for a below-normal temperature pattern. 

  • The Rocky Mountain States along with Northern Pacific Coast States have the highest probability for much above normal temperatures, while the non-Coastal Southern States have the highest probability of below normal temperatures.

  • In the 8-14 day window from July 2nd through July 8th, the Northern Pacific Coast States, Rocky Mountain States, Northern Midwestern States, and Florida are forecast for below-normal precipitation. 

  • The Southern Pacific Coast States, Southwestern States, Texas, Southern States, Middle Atlantic States, and the New England States are forecast for above-normal precipitation.  


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