Jan 10, 2022 1:50:55 PM

According to the North American Electric Reliability Corp. (NERC), there is "anecdotal evidence" of natural gas price gouging in Texas during February's winter storm Uri.  NERC Chief Technical Advisor Thomas Coleman's  presentation to the Electric Reliability Council of Texas (ERCOT) speculates that consumers may have been cheated by gas producers by producers not delivering on long-term supply contracts, and instead selling gas on the spot market for much higher prices. He goes on to state, "When we look at compressor stations that are electric, it's not a whole lot of critical mass in Texas.  So most of this big drop [in gas production] is a result of freezing and winter conditions and not a loss of power to these facilities." The 300-page analysis also highlights the following: 

    • 81 percent of freeze-related generating unit outages occurred at temperatures above the units’ stated ambient design temperature.

    • 87 percent of unplanned generation outages due to fuel issues were related to natural gas, predominantly related to production and processing issues, while 13 percent involved issues with other fuels such as coal or fuel oil.

    • Natural gas fuel supply issues were caused by natural gas production declines, with 43.3 percent of natural gas production declines caused by freezing temperatures and weather, and 21.5 percent caused by midstream, wellhead or gathering facility power losses, which could be attributed either to rolling blackouts or weather-related outages such as downed power lines.

According to the IEA’s Coal 2021 report, after falling in 2019 and 2020, global power generation from coal is expected to jump by 9% in 2021 to an all-time high of 10,350 terawatt-hours. The COP 26 climate summit in Glasgow last month weakened efforts to end coal power from countries like China, who also encountered power shortages and blackouts in Beijing. Dave Jones of Ember, a climate and energy think-tank states, “China has committed to phasing down coal from 2025, while India’s huge renewables target should remove the need for more coal. It will take time for the ship to turn, but time is not on our side to keep 1.5 degrees within reach.” IEA executive director Fatih Birol  states, “Coal is the single largest source of global carbon emissions, and this year’s historically high level of coal power generation is a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net zero.” The economic recovery from the pandemic , rise in natural gas prices and the increase in demand for electricity in countries like India and China has lead to the upward demand for coal.

 

Gov. Charlie Baker’s administration agreed to purchase an additional 1,600 megawatts as part of its third round of bidding for offshore wind power. Once the two projects already under development, the offshore wind will generate roughly 25 percent of Massachusetts and the total to be procured by the state from wind energy to 3,200 megawatts, or enough to power 1.6 million homes. The governor’s office said it will buy 1,200 megawatts of power from Vineyard Wind and the 400 megawatts from Mayflower Wind. Officials with parent company Avangrid said, "Vineyard Wind's 1,200 MW Commonwealth Wind project will create 11,000 full time equivalent jobs over the project's lifetime and generate enough energy to power 750,000 homes annually." Mayflower Wind said its 400 MW proposal is accompanied by an economic development package that includes "commitments to spend up to $42.3 million, including $27 million over 10 years to the SouthCoast Community Foundation." According to Energy and Environmental Affairs Secretary Kathleen Theoharides, "These projects will double the size of our current offshore wind procurements, they will deliver significant economic benefits to a number of coastal communities across the commonwealth, they include important provisions for diversity, equity and inclusion as well as benefits to environmental justice communities, and they invest significantly in the state while balancing protections with environmental resources including fisheries," According to Clean Power, the United States have established nearly 40,000 MW of offshore wind procurement targets to date.

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General Market Update

  • The February 2022 NYMEX Henry Hub traded to $3.882/MMBtu, down $0.14 (-3.5%) from the previous Wednesday. The price of the 12-month strip averaging February 2022 through January 2023 futures contract was up $0.03 (+0.8%) to $3.839/MMBtu.

  • Boston’s Algonquin Citygate price went up $7.78 (+205.8%) to $11.56/MMBtu last Wednesday. Transco Zone 6 NYC price increased $5.16 (+206.4%) to $7.66/MMBtu. 

  • Pennsylvania’s Eastern Gas South rose $1.06 (+45.7%) to $3.38/MMBtu. Tennessee Zone 4 Marcellus spot price increased $0.90 (+37.2%) to $3.32/MMBtu.

  • SoCal Citygate price decreased $1.45 (19.6%) to $5.95/MMBtu last Wednesday. The price at Northern California PG&E Citygate fell $1.47 (-21.5%) to $5.37/MMBtu week over week. 

Utility Highlight

  • ComEd Residential Price to Compare effective January 1, 2022 is 7.802 cents per kWh.
  • Ameren Residential Price to Compare effective January 1, 2022 through May 31, 2022 is 5.478 cents per kWh consumed below 800kW and 5.28 cents per kWh consumed above 800kW. 
  • PECO Residential Price to Compare effective January 1, 2022 – February 28, 2022 is $.07023. Next rate change on March 1, 2022. 
  • PECO Commercial Price to Compare effective January 1, 2022 – February 28, 2022 is $.06219. Next rate change on March 1, 2022.
  • United Illuminating Company Residential (Rate Class R) Price to Compare effective Effective January 1, 2022 - June 30, 2022 is 10.6731 cents per kWh
  • United Illuminating Company Commercial (Rate Class GS) Price to Compare effective Effective January 1, 2022 - June 30, 2022 is 9.9109 cents per kWh

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

Storage

  • For the week ending January 6, 2022, the EIA reported net withdrawals from storage of 31 Bcf, which is less than last year’s net withdrawals of 127 Bcf this week last year and less than the 5-year (2016-2020) average net withdrawals of 108 Bcf.

  • Working natural gas in storage totaled 3,195 Bcf, which is 154 Bcf (-4.6%) lower than last year’s working gas totals of 3,349 Bcf at the same time and 96 Bcf (+2.9%) higher than the 5-year average of 3,099 Bcf.  Total working gas is within the five-year historical range. 



 

Supply/Demand

  • Average total supply of natural gas fell 1.5% week/week.  Dry natural gas production decreased by 2.7%, while net imports with Canada increased by 28.5% compared with the previous week. 

  • Total US consumption of natural gas increased by 13.3% since last week.  Natural gas consumption for power generation increased 9.6%, industrial sector consumption increased 4.5%, residential-commercial consumption increased 21.8% week over week, and exports to Mexico increased 2.3% compared to last week.

  • US LNG exports increased week over week, with 24 vessels departing US ports for a combined 88 Bcf.

 

Weather

  • A above normal weather pattern for the western portion of the United States is forecast for the 8-14 day period starting January 14th.  The middle of January 2022 brings a below normal weather pattern for the Middle Atlantic States, New England States, and Northern Michigan. 

  • The Pacific Coast States, Rocky Mountain States, Southwestern States and Florida are forecast for above normal temperatures.  The Midwestern States and Southern States are forecast for near normal temperatures.  Coastal California and the Four Corners States have the highest probability for much above normal temperatures.  Northern New York and the Northern New England States have the highest probability for much below normal temperatures.

  • In the 8-14 day window from January 14th through January 20th, the Pacific Coast States, Idaho and Nevada are forecast for below normal precipitation. 

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

 

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