Dec 21, 2021 4:05:44 PM

The Stanford University and the Massachusetts Institute of Technology states that keeping the last remaining nuclear power plant in California open can help the state achieve its climate goals and save money, according to a 114-page assessment.  The report analyzed various scenarios and concluded that keeping Diablo Canyon running would “significantly reduce California’s use of natural gas for electricity” and save $2.6 billion in costs to the state’s power system from 2025 to 2035. The 2,240 megawatts of electricity generated by the plant can also help grid operators avoid blackouts, such as the statewide outages experienced in August 2020. However, the operator of the Diablo Canyon Power Plant, Pacific Gas & Electric still plans on closing the facility in three years. Senior manager of communications Suzanne Hosn said in a statement, “PG&E is committed to California’s clean energy future, and as a regulated utility, we are required to follow the energy policies of the state." The plant has been producing power since the mid 1980s and is the last remaining power plant in California. 

PSC Commissioner Eric Skrmetta, R-Metairie, recommended Entergy Louisiana and Cleco Power begin the process of withdrawing from MISO last month. Skrmetta’s comments launched widespread efforts by environmentalists and renewable energy advocates to stop that termination. He also added, “They’ve gotten free windmill assets. Now they want the ratepayers to pay for the transmission for these stranded wind assets that are going to cost $130 billion to bring into the marketplace.” Craig Greene, the PUC chair of R-Baton Rouge announced the five elected commissioners would put off the vote, adding that only one regulator seemed to support the idea of leaving the Midcontinent Independent System Operator. MISO (Midcontinent Independent System Operator) is an independent, not-for-profit, member-based organization responsible for operating the power grid across 15 U.S. states and the Canadian province of Manitoba serves over 42 million people. MISO recommends 335 projects estimated at $3 billion for upgrading infrastructure and closing generating plants. Louisiana argues that the improvements would benefit the state. 

According to the Renewable Energy Transition Study, PJM synthesized the diverse set of state policies within its footprint into three scenarios in which an increasing amount of energy is served by renewable generation on an annual basis (10%, 22% and 50%), up to 70% carbon-free generation when combined with nuclear generation. Currently, renewables represent approximately 6% of the annual energy, a total of over 40% carbon-free when combined with nuclear’s contribution to the energy mix in 2020. The study suggests five key focus areas for PJM stakeholders - complete list can be found here

  • Correctly calculating the capacity contribution of generators is essential.
  • Flexibility becomes increasingly important with growing uncertainty.
  • Thermal generators provide essential reliability services today and an adequate supply will be needed until a substitute is deployed at scale.
  • Regional markets facilitate a reliable and cost-effective energy transition.
  • Reliability standards must evolve.

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General Market Update

  • The January 2022 NYMEX Henry Hub traded to $3.802/MMBtu, down $0.01 (-0.3%) from the previous Wednesday. The price of the 12-month strip averaging January 2022 through December 2022 futures contract was up $0.02 (+0.5%) to $3.738/MMBtu.

  • Pennsylvania’s Eastern Gas South fell $0.39 (-12.3%) to $2.77/MMBtu. Tennessee Zone 4 Marcellus spot price decreased $0.30 (-9.7%) to $2.78/MMBtu.

  • SoCal Citygate price decreased $0.68 (-9.3%) to $6.63/MMBtu last Wednesday. The price at Northern California PG&E Citygate rose $0.06 (+1.1%) to $5.29/MMBtu week over week.

 

Utility Highlight

  • The upcoming Price to Compare for First Energy Potomac Edison in Maryland, Residential No Electric Heat rate class (RSNH) is $0.06531/kWh, in effect from January 1, 2022 to January 31, 2022.

  • The current Price to Compare data for First Energy Potomac Edison in Maryland (POTED), General Service Commercial Small (GSCS) is $0.06096/kWh, in effect from January 1, 2022 to January 31, 2022.

  • Positive Headroom in ISO New England Market for 3 - 36 month terms. Contact Us for your complimentary consultation and find out which utilities have savings.

 

Storage

  • For the week ending December 10th, 2021, the EIA reported net withdrawals from storage of 88 Bcf, which is less than last year’s net withdrawals of 118 Bcf this week last year and less than the 5-year (2016-2020) average net withdrawals of 114 Bcf.

  • Working natural gas in storage totaled 3,417 Bcf, which is 326 Bcf (-8.7%) lower than last year’s working gas totals of 3,743 Bcf at the same time and 64 Bcf (-1.8%) lower than the 5-year average of 3,481 Bcf.  Total working gas is within the five-year historical range. 


 

Supply/Demand

  • Average total supply of natural gas rose 0.4% week/week.  Dry natural gas production increased by 0.5%, while net imports with Canada decreased by 2.0% compared with the previous week. 

  • Total US consumption of natural gas fell by 1.4% since last week.  Natural gas consumption for power generation increased 1.0%, industrial sector consumption decreased 1.2%, residential-commercial consumption decreased 2.8% week over week, and exports to Mexico decreased 0.2% compared to last week.

  • US LNG exports decreased week over week, with 21 vessels departing US ports for a combined 80 Bcf.

 

Weather

  • A cold weather pattern for the Northern portions of the United States is forecast for the 8-14 day period starting December 23rd.  The end December 2021 brings a below normal weather pattern for The Pacific Coast States, Northern Rocky Mountain States, Northern Midwestern States and Maine.  Southern California and the New England States are forecast for near normal temperatures. 

  • The Southwestern States, Texas, Southern States, Florida and Middle Atlantic States are forecast for above normal temperatures.  Texas has the highest probability for much above normal temperatures while Montanan has the highest probability for much below normal temperatures.

  • In the 8-14 day window from December 23rd through December 29th, Texas, Florida and the Southern States are forecast for below normal precipitation. 

  • The Pacific Coast States, Rocky Mountain States and Great Lake States are forecast for above normal precipitation.  The New England States and Middle Atlantic States are forecast for near normal precipitation probability.

 

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