Jun 9, 2021 1:14:58 PM

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."

 

 General Market Update

  • The July 2021 NYMEX Henry Hub traded to $3.075/MMBtu, up to $0.05 (+1.6%) 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 $3.049/MMBtu.
  • Boston’s Algonquin Citygate price went down $0.07 (-3.0%) to $2.23/MMBtu last Wednesday. Transco Zone 6 NYC price decreased $0.23 (-9.5%) to $2.18/MMBtu.
  • Pennsylvania’s Eastern Gas South (formerly known as Dominion South) fell $0.22 (-9.9%) to $2.01/MMBtu. Tennessee Zone 4 Marcellus spot price decreased $0.56 (-27.3%) to $1.49/MMBtu.
  • SoCal Citygate price increased $0.38 (+9.3%) to $4.48/MMBtu last Wednesday. The price at Northern California PG&E Citygate rose $0.30 (+8.0%) to $4.05/MMBtu week over week.

 Natural Gas

  • The July 2021 NYMEX Henry Hub traded to $3.075/MMBtu, up to $0.05 (+1.6%) 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 $3.049/MMBtu.
  • For the week ending May 28th, 2021, the EIA reported net injections into the storage of 98 Bcf, which is less than last year’s net injection of 103 Bcf for this week and more than the 5-year (2016-2020) average net injections of 96 Bcf.
  • Working natural gas in storage totaled 2,313 Bcf, which is 386 Bcf (-14.3%) lower than last year’s working gas totals of 2,699 Bcf at the same time and 61 Bcf (-2.6%) lower than the 5-year average of 2,374 Bcf.  The total working gas is within the five-year historical range. 

 Supply/Demand

  • The average total supply of natural gas fell 0.4% week/week.  Dry natural gas production was higher by 0.2%, while net imports with Canada decreased by 13.5% compared with the previous week. 
  • Total US consumption of natural gas rose by 0.7% since last week.  Natural gas consumption for power generation decreased 8.0%, industrial sector consumption increased 2.7%, residential-commercial consumption increased 24.0%, and exports to Mexico increased 3.8% compared to last week.
  • US LNG exports rose week over week, with 21 vessels departing US ports for a combined 76 Bcf.

 Weather

  • A warm weather pattern for most of the United States, besides Texas and Florida, is forecast through the middle of June 2021 in the 8-14 window starting June 11th. 
  • The entire United States, excluding Texas and Florida along with their surrounding states, is forecast for above-normal temperatures. 
  • Texas and the immediate States surrounding, are forecast for a below-normal temperature pattern.  Florida and the immediate States surrounding are forecast for normal temperature outlook. 
  • The Rocky Mountain States and the upper Midwestern States have the highest probability for much above normal temperatures, while Texas has the highest probability of below normal temperatures.

 

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