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In This Issue

Grid Strain in New England Too Close for Comfort

Northern Pass Line Clears Regulatory Hurdle

Natural Gas and Oil Market Update

EIA - Weekly Natural Gas Storage Report

NYMEX Natural Gas Week-to-Week Price Change

Natural Gas Futures - Five Year Price


NOAA 6 to 10 Day Outlook
Color indicates the probability of forecasted temperatures being above or below a historical average for the period.


Grid Strain in New England Too Close for Comfort

Energy Collective | January 2, 2014

A nasty winter storm ripped through the northeast December 14, causing a surge in power demand that severely challenged grid reliability for the region.

The surge caused electricity demand to peak at 20,182 megawatts (MW), according to the system operator’s reports. While the total available capacity and reserve requirement were enough to effectively cover electric demands, the storm certainly appeared to test the system operator’s abilities. Utilities providing power to businesses come under significant strain during grid events — but that doesn’t have to mean losing power during peak hours. Demand response programs can help utilities provide a reliable source of electricity to their customers, and protect their region’s power supply.

In regards to the grid event Dec. 14, Forbes contributor William Pentland states, "The actual load was significantly above the forecast load [on the 14th] for several hours and filling that gap on the fly pushed the system near the edge of its operating capabilities."

Around 5 p.m., New England’s electric demand jumped quickly, rising more than 20 megawatts per minute for over an hour. As a result, emergency plans were implemented for only the third time this year. In addition, energy prices began to soar rapidly to offset the demand. Whereas the average price in 2012 for one megawatt-hour of electricity in New England’s real-time power market was $36, on Dec. 14 it rose to over $1,000 per megawatt-hour during peak demand.

Officials were asked earlier in December about New England’s grid reliability by the New Haven Register. The system operator was confident there are enough resources needed to meet demand, but also warned how certain factors related to producing power could create problems during the harshest days. ISO-NE spokeswoman Lacey Ryan explains:

"More than half of the region’s electricity is produced by power plants that run on natural gas. At the same time, some power plant operators procure fuel using a ‘just-in-time’ delivery system that taps into the release of unneeded capacity from the pipelines used by local gas distribution companies. Use of that kind of delivery system becomes problematic during periods of really cold weather in which the demand for both electricity and natural gas for heating homes increases."

As a result, Ryan told the newspaper that ISO-NE is taking steps before the end of the winter season to procure almost two million megawatt-hours of energy through oil-fired generation facilities, which are the most reliable at times of grid strain. The additional capacity will certainly help contend against similar circumstances in the future, which is a great relief for the region.

The threat of a blackout was fairly minimal due to the operating reserve requirement, but to have only 274 megawatts of reserve capacity on hand at any given time is a cause for concern. Fortunately, energy efficiency measures like demand response can be implemented when system operators need assistance to eliminate the threat of blackouts, brownouts, and voltage fluctuations.


Northern Pass Line Clears Regulatory Hurdle

Concord Monitor | January 2, 2014

The group that manages the power grid in New England said yesterday it’s confident the proposed Northern Pass transmission line through New Hampshire can reliably connect to the existing system.

ISO New England said in a letter dated yesterday it has approved the interconnection application made by Northeast Utilities. It means Northeast Utilities can continue pursuing the project and is just one of many regulatory steps the company must clear on the way to final approval.

Northern Pass said it was "pleased with ISO New England’s findings on this issue as it’s the culmination of years of hard work by our project team."

The approval came after the New England Power Pool Reliability Committee on Dec. 19 declined to support the application. The committee, which offers nonbinding recommendations to ISO New England, was worried about the effect the proposed line would have on existing power generators.

The $1.4 billion project would transmit 1,200 megawatts of Canadian hydroelectric power, enough to serve 1.2 million homes, from Hydro-Quebec into New England.

Opponents say the transmission towers would damage the environment, lower property values and hurt tourism. Supporters say the power would reduce carbon emissions.

The project has been in the works since 2010, and backers hope to have it online by 2017.

The ISO determination was contingent on Northeast Utilities meeting a number of technical requirements, including that it be limited to 1,200 megawatts of power imported from Canada and that further impact studies be completed.

Northeast Utilities will have to submit more detailed plans and information for the ISO to review before the project can interconnect with the grid.


Natural Gas and Oil Market Update

arrow upNatural Gas Prices Rally as Major Winter Storm Heads for Northeast

MarketWatch | January 2, 2014

Natural gas futures rallied sharply in the first trading session of 2014 on Thursday, as a late-season winter storm was headed to the U.S. Northeast, prompting expectations for increased demand for heating.

On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD4.311 per million British thermal units during U.S. morning trade, up 1.9%. Nymex February gas futures rose by as much as 2.3% earlier to hit a daily high of USD4.331.


arrow downWTI Crude Falls as Improving Economy Boosts Dollar

Bloomberg | January 2, 2014

West Texas Intermediate crude decreased to the lowest level in more than two weeks as the dollar strengthened on signs the U.S. economy is improving.

Futures declined as much as 2.2 percent, slipping for a third day from a two-month high, as U.S. jobless claims fell and manufacturing expanded. The Federal Reserve is watching those areas as it decides how quickly to curb bond purchases meant to stimulate economic growth. The dollar gained against the euro and equities slipped from record highs.

WTI for February delivery fell $1.99, or 2 percent, to $96.43 a barrel at 10:51 a.m. on the New York Mercantile Exchange. The contract touched $96.30, the lowest level since Dec. 16. The volume of all contracts traded was 8.1 percent higher than the 100-day average for the time of day. The U.S. benchmark crude climbed 7.2 percent in 2013.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report


Working gas in storage was 3,071 Bcf as of Friday, December 20, 2013, according to EIA estimates. This represents a net decline of 177 Bcf from the previous week. Stocks were 591 Bcf less than last year at this time and 313 Bcf below the 5-year average of 3,384 Bcf. In the East Region, stocks were 242 Bcf below the 5-year average following net withdrawals of 115 Bcf. Stocks in the Producing Region were 37 Bcf below the 5-year average of 1,111 Bcf after a net withdrawal of 41 Bcf. Stocks in the West Region were 33 Bcf below the 5-year average after a net drawdown of 21 Bcf. At 3,071 Bcf, total working gas is within the 5-year historical range.

NYMEX Natural Gas Week-to-Week Price Change NYMEX Natural Gas Week-to-Week Price Change

Natural Gas Futures - Five Year Price

NYMEX Natural Gas Week-to-Week Price Change - Five Yearly Snapshot
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