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In This Issue

Baker Prioritizes New Energy Sources

Pennsylvania Lags in Solar Power Market

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

Baker Prioritizes New Energy Sources

Boston Globe | January 28, 2015

Governor Charlie Baker is making energy a top priority for his second year on the job. But he doesn’t want ratepayers to get stuck with too much of the tab. During his State of the Commonwealth speech Thursday, he telegraphed this goal: keeping electric bills under control while improving reliability and meeting the state’s greenhouse gas reduction targets. But this stuff can get complicated and we don’t blame you if you’re confused. Here’s a primer on how the governor wants to increase supplies while curbing the state’s carbon footprint.


Baker urged continued support for the solar industry but not at prices “two to three times more than every other option.” That’s a reference to the debate on Beacon Hill over net metering, the way solar panel owners get reimbursed for distributing excess power. Lawmakers left for home before Thanksgiving without a compromise on this.

There’s a divisive issue dragging down the talks. As more users install solar panels, those reimbursements pile up. State officials are debating how best to scale back the reimbursements once the amount of total solar power in the state reaches a set threshold of 1,600 megawatts (we are at 1,000 now). The governor’s proposal represents a middle ground between a state Senate bill that’s generous to the solar industry and a stingy House bill, but it still worries some in the solar business.


When it comes to energy, Baker’s biggest focus is getting what’s known as “the hydro bill” passed. This would prompt Eversource Energy and National Grid to seek long-term contracts with clean-energy providers for large amounts of electricity, most likely hydropower in Canada. These contracts could help finance at least one new power line to draw more juice into this region.

Governors in other New England states, Baker said, are waiting for Massachusetts. He urged lawmakers to “move on this now.” Good luck with that. Baker filed his hydro bill last summer, but the House and the Senate have yet to approve their own versions, with House leaders saying they want to tackle this as part of a broader energy bill. The complexity means this issue might not be resolved until the formal session ends in July.


A new power line to connect with Canada could also give wind farm developers a way to get electricity from rural places (namely in Maine) to populous areas. Baker’s bill encourages this piggyback concept, but some question whether the language leaves enough room to guarantee wind farms can participate.

Baker sounded a more cautious tone about offshore wind, saying it should be embraced only at competitive prices. This implies he may not support efforts in the House to prompt the two big utilities to buy at least some power from an offshore wind developer. Offshore wind proponents say the technology is still too new to the US but could become a cost competitive option after the industry is more established.


Baker deliberately didn’t mention natural gas. Don’t be fooled — it’s still important to him. The region’s pipeline system is so jammed right now, gas-fired power plants are often unable to access cheap gas from Pennsylvania on the coldest winter days. The state Department of Public Utilities took the unprecedented step of allowing Eversource and National Grid to propose charges for electric customers to help finance new pipelines. Both utilities filed such requests in recent weeks.

So why didn’t it deserve a mention? Of all these energy sources, natural gas is arguably the most controversial. Witness the protesters who showed up on Thursday, complaining about Baker’s support of this “secret pipeline tax.” Some critics worry about new pipelines coming through their backyards. Others simply don’t want New England to become more dependent on natural gas, which is already responsible for roughly half of the region’s electricity.

Read More:

Pennsylvania Lags in Solar Power Market

Tribune-Review | January 28, 2015

Tech companies that use large amounts of energy to run servers increasingly are looking at solar power — but they are doing more than following the sun.

They want to locate in states with policies that encourage solar use and development, said Jeff Benzak, spokesman for Environmental Entrepreneurs, an advocacy group in Washington. Pennsylvania is not on that list.

“It's a huge loss of opportunity when we see the rest of the nation growing with their solar market,” said Sharon Pillar, project director for Solarize Allegheny, a campaign funded by The Heinz Endowments to encourage adoption of solar energy.

Since 2010, the number of U.S. solar-related jobs increased 123 percent to 208,859, according to a report by The Solar Foundation in Washington. The federal extension of a 30 percent solar investment tax credit in December is expected to boost the number.

Pennsylvania's solar-related jobs fell 58 percent to 2,800 between 2010 and 2014, according to the foundation.

One reason for the decline is that Pennsylvania's Alternative Energy Portfolio Standard requires utilities to get only half of 1 percent of their electricity from solar sources by 2020, which is lower than other state targets, said Rob Altenburg, director of the PennFuture Energy Center.

It also allows utilities to buy renewable energy credits from generators outside the state. Other states limit or prohibit their utilities' out-of-state purchases, said Ron Celentano, president of the Pennsylvania Solar Energy Industries Association.

“We are subsidizing solar development in places like West Virginia, North Carolina, Illinois (and) Indiana,” said Joe Morinville, president of Energy Independent Solutions, a solar installation company in Westwood.

Gov. Tom Wolf's first budget proposal included a $225 million energy package that would have encouraged solar development through grants and rebates. After a six-month delay, lawmakers passed a partial budget without money to pay for solar development.

Wolf intends to revive the idea in his next budget proposal.

Read More:

Natural Gas and Oil Market Update


Natural Gas Prices Pare Some Losses as U.S. Supplies Decline More than Expected

Market Watch | January 28, 2015

Natural gas futures pared some of its earlier losses on Thursday after the U.S. Energy Information Administration reported that supplies of the commodity declined by 211 billion cubic feet for the week ended Jan. 22. That was more than the decline of between 204 billion cubic feet and 208 billion cubic feet expected by analysts polled by Platts. Total stocks now stand at 3.086 trillion cubic feet, up 530 billion cubic feet from a year ago and 432 billion cubic feet above the five-year average, the government said. March natural gas was at $2.134 per million British thermal units, down 2.3 cents, or 1.1%. Prices traded $2.113 before the supply data.


Oil Surges Above $35 on Growing Expectations of Production Cut

CNBC | January 28, 2015

Oil surged as much as 8 percent to above $35 per barrel on Thursday, hitting a three-week high and bouncing sharply away from a 12-year low set this month, as expectations built that major producers may cooperate to cut output.

Oil is up around 30 percent from its lowest since 2003 set earlier in January. Gains have gathered pace this week on speculation that Russia and OPEC may agree to reduce production.

Brent crude was up $1.28 at $34.28 a barrel by 11:23 a.m. ET, more than 3 percent higher after gaining 4.1 percent on Wednesday.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Working gas in storage was 3,086 Bcf as of Friday, January 22, 2016, according to EIA estimates. This represents a net decline of 211 Bcf from the previous week. Stocks were 530 Bcf higher than last year at this time and 432 Bcf above the five-year average of 2,654 Bcf. At 3,086 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

Disclaimer: The information contained in these reports is gathered from public and/or internal sources and is presented solely for the convenience of our customers and Newsletter Subscribers. Patriot Energy Group makes no representation or warranty, express or implied as to the accuracy or completeness of the information set forth in this newsletter, and Patriot Energy shall not have any liability to any person or entity resulting from use of this information in any way.
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