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In This Issue

EIA Forecast: Electricity Prices to Rise in 2017

Energy Department Announces $220M for Grid Modernization

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.


Market Overviews

EIA Forecast: Electricity Prices to Rise in 2017

Energy Co-Op Today | January 21, 2015

After two years of stability, the arrow on electricity prices is starting to point upward.

The price of electricity will climb in 2017 after holding stable for two years, the government says.

The Energy Information Administration said residential electricity prices will increase by about 3 percent in 2017 after holding steady in 2015 and 2016.

In its Short-Term Energy Outlook, released Jan.12, EIA put the average retail price of electricity in the residential sector at 13 cents per kilowatt-hour in 2017, up from the 2015 and 2016 price of 12.7 cents per kwh.

That would mark only the second time since 2008 that residential electricity prices jumped by more than 2.2 percent in a single year.

The rising prices reflect an increase of about 60 cents per thousand cubic feet in the cost of natural gas and more consumption of renewable energy, which tends to be higher in price than fossil fuel sources, according to EIA data.

“The projected generation shares for natural gas and coal generation fall in 2017 to 31.4% and 33.0%, respectively, as generation from renewable energy sources increases,” the agency said. Non-hydro renewables will stand at 9 percent of all generation in 2017.

The projected residential electricity price increases will vary widely from region to region, EIA said. Prices in New England will average 20.1 cents per kwh in 2017, by far the highest in the country.

Middle Atlantic residential prices will be 17.1 cents per kwh in 2017, up from 16.1 cents per kwh in 2015. By contrast, most states in the South and the Plains will average less than 12 cents per kwh, EIA said.

Nationally, the commercial and industrial sectors also are in for average price hikes to 11.1 cents per kwh and 7 cents per kwh respectively, after two years of little or no price growth.

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Energy Department Announces $220M for Grid Modernization

RTO Insider | January 21, 2015

RTOs and ISOs will take part in 15 research and development projects awarded almost $38 million in funding by the Energy Department last week.

U.S. Energy Secretary Ernest Moniz last week announced $220 million in funding as part of the Energy Department’s Grid Modernization Initiative, an effort by the Obama administration to integrate new technology into the country’s energy infrastructure.

The department awarded the funds over three years, subject to congressional appropriations, to its national laboratories. The labs will partner with grid operators, energy companies, universities and local government agencies on 88 projects, ranging from advanced storage systems to improving transformer resiliency, to accommodate increased transmission from renewable sources.

“Modernizing the U.S. electrical grid is essential to reducing carbon emissions, creating safeguards against attacks on our infrastructure and keeping the lights on,” Moniz said. “This public-private partnership … will help us further strengthen our ongoing efforts to improve our electrical infrastructure so that it is prepared to respond to the nation’s energy needs for decades to come.”

The projects are based in part on recommendations from last year’s Quadrennial Energy Review. (See Federal Energy Review Calls for Billions of Dollars in Spending on Infrastructure.)

“A modernized grid will enable two-way communication and data flows, allowing operators to better understand the grid’s immediate operating status,” said Franklin Orr, DOE undersecretary for science and energy. “By having this information, operators can run the grid closer to its full potential and capabilities, resulting in greater efficiencies and reliability.”

PJM in 8 Projects

PJM will take part in eight projects, followed by ERCOT with six, MISO with five and ISO-NE, NYISO and SPP with three each, according to the department. CAISO is participating in one project.

The eight projects in which PJM is participating were awarded about $25 million. One involves enhanced grid modeling; the others address transmission reliability, said Emanuel Bernabeu, manager of applied solutions.

Bernabeu called the modeling project “critical.”

“Our load changes rapidly. The composition is changing, and the way the customer behaves is also changing,” he said. “Our model needs to be able to capture that. Otherwise, when I run a [model], it may not match reality.”

The project, which will cost $2.7 million, will be developed at Argonne National Laboratory in partnership with Iowa State University, ERCOT, Commonwealth Edison and Alliant Energy, among others.

The other projects span a wide range of grid reliability. One aims to improve situational awareness in the control room. Another project, a $3 million effort across eight of the labs, aims to enhance the modeling of extreme events, including cold weather, hurricanes and geomagnetic disturbances. “Extreme weather is becoming more prevalent now,” Bernabeu said.

SPP, MISO Team on Seams Project

SPP and MISO will be the key players in an effort to evaluate the HVDC and AC transmission seams between the U.S. interconnections, according to SPP. The $1.2 million Midwest Interconnection Seams Study “will explore timely questions about aging infrastructure and enhance existing regional and interregional planning processes,” said Lanny Nickell, SPP vice president of engineering.

“It’s a long overdue study. SPP has been recommending such a study to investigate the interconnections between the eastern and western grids,” said Jay Caspary, director of research, development and special studies for SPP. The project will also involve the Energy Department’s Western Area Power Administration, the Solar Energy Industries Association, Minnesota Power and Xcel Energy. “No individual regional planner can do this on their own,” Caspary said.

“This important work will play a key role as MISO continues to ensure reliability now and in the future,” said Jennifer Curran, MISO vice president of system planning and seams coordination.

Some RTOs’ Roles Unclear

It is unclear to what degree each RTO and ISO will play in the projects.

ISO-NE said it is only acting as an adviser to the labs for certain projects. NYISO said that, though it is listed on the department’s website, it declined to partner with it on WindView, a $1.8 million visualization program that would display wind forecast information along with system power flows in order to better monitor how wind power affects the grid as the resource becomes more prevalent throughout the U.S.

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Natural Gas and Oil Market Update


Natural Gas Prices Turn Lower as U.S. Supplies Decline Less than Expectedted

Market Watch | January 21, 2015

Natural gas futures turned lower on Thursday after the U.S. Energy Information Administration reported that supplies of the commodity declined by 178 billion cubic feet for the week ended Jan. 15. That was less than the fall of between 183 billion cubic feet and 187 billion cubic feet expected by analysts polled by Platts. Total stocks now stand at 3.297 trillion cubic feet, up 629 billion cubic feet from a year ago and 473 billion cubic feet above the five-year average, the government said. February natural gas was at $2.108 per million British thermal units, down a penny, or 0.4%. Prices traded at $2.174 before the supply data.


Oil Prices Rise 3% After EIA Stockpile Data

CNBC | January 21, 2015

Oil prices extended gains after government data showed U.S. crude stockpiles rose less than an earlier industry report indicated, and as demand for distillate fuels rose.

Analysts expected crude stocks to rise by 2.8 million barrels, according to a poll of eight analysts. But data from the American Petroleum Institute, a U.S. industry group, showed crude inventories rose by 4.6 million barrels on Wednesday.

International benchmark Brent was up $1 at $28.88 a barrel. Brent has lost 26 percent so far in January, on track for its biggest monthly fall since 2008.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Working gas in storage was 3,297 Bcf as of Friday, January 15, 2016, according to EIA estimates. This represents a net decline of 178 Bcf from the previous week. Stocks were 629 Bcf higher than last year at this time and 473 Bcf above the five-year average of 2,824 Bcf. At 3,297 Bcf, total working gas is above the five-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 ($ per mmBtu)

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

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