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In This Issue

PJM Panel Advances Capacity, Day-ahead Power Market Proposals

Large Hydropower Joins the Renewable Energy Club

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

PJM Panel Advances Capacity, Day-ahead Power Market Proposals

Platts | March 10, 2016

The PJM Interconnection's Market Implementation Committee on Wednesday approved manual changes affecting the capacity market and the day-ahead market time line, but rejected proposals to mask the identity of financial transmission rights auction winners.

On the capacity performance market, the committee agreed to add three parameters -- maximum run time, start-up time and notification time -- to the list of parameters by which a resource's schedule might be limited.

Previously, the parameters were the turn-down ratio, the minimum down time, the minimum run time, the maximum daily starts and the maximum weekly starts.

The additional parameters would be applicable for 2016-2017 and later capacity performance resources, and for 2018-2019 and 2019-2020 for base capacity resources. The shorter list of parameters applies for 2014-2015 through 2017-2018 for the base capacity resources.

The manual revisions also addressed issues such as a February 28 deadline for submitting unit-specific parameters before the first delivery year, with PJM responding by April 15 on whether such parameters are approved.

Regarding the day-ahead market time line, the committee approved a change moving the deadline for day-ahead bids or offers from noon to 10:30 am ET on the day before the operating day, shortening the clearing window to three hours, so that the results are posted by 1:30 Eastern time or as soon as practical thereafter.

The re-bidding period would be between the publication of day-ahead market results until 2:15 pm, under the proposal approved Wednesday.

In the next step, both proposals go to the PJM Markets and Reliability Committee, which next meets on March 101.

An issue on which the Market Implementation Committee decided to take no action was a proposal to mask the identity of winners of financial transmission rights auctions for a period after the results are posted. The committee considered and rejected two proposals.

One of these would have masked annual and monthly FTR ownership data for three months after the auction and masked long-term FTR ownership data for six months after the results were posted. This measure failed by a vote of 22 in favor to 203 against with 11 abstentions.

A separate proposal, to mask ownership data for all three categories for four months after the auction, failed by a vote of 42 in favor, 158 against with 13 abstentions.\

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Large Hydropower Joins the Renewable Energy Club

RTO Insider | March 10, 2016

Large hydropower projects shunned by New England’s renewable portfolio standards are elbowing their way into the clean energy conversation, speakers at the 13th Northeast Energy and Commerce Association Conference on Renewable Energy said Thursday.

Hydropower projects larger than 30 MW have not qualified for financial incentives under most New England states’ standards.

But with coal and nuclear fleets shrinking, large-scale Canadian hydropower is needed to avoid an overreliance on natural gas and meet aggressive carbon reduction goals, several speakers said. Wind and solar can’t develop at scale fast enough to replace thousands of megawatts of legacy generation, they said.

“If we’re going to achieve our climate and clean energy goals under the [Massachusetts] Global Warming Solutions Act and the various states’ renewable energy targets, we’re going to need a course correction,” said Leslie Malone, a senior analyst at the energy and environmental organization The Acadia Center.

The Massachusetts law and similar legislation in Connecticut mandate a 25% cut in greenhouse gas emissions from 1990 levels by 2020 and an 80% reduction by 2050.

One potential solution, Malone said, is a “bundling” of firm hydro resources with intermittent wind energy to create a steady supply of clean power into the region.

Natural gas accounts for about half of the region’s power mix, with that percentage expected to grow. ISO-NE estimates 4,200 MW of older generation will retire in the next few years, including the 1,517-MW coal-fired Brayton Point station and the 680-MW Pilgrim nuclear plant, both in Massachusetts.

Most of the new plants that have cleared in ISO-NE’s recent Forward Capacity Auctions are natural gas generators.

David Wilby, senior vice president for state policy at SunEdison, noted that the pace of plant retirements has been faster than added capacity in recent years. SunEdison began as a solar energy developer, but in 2014 it acquired Boston-based First Wind, a developer of wind projects from Maine to Hawaii.

“As much as my company and others have added renewable megawatts as quickly as we can, we’re basically treading water … so we need big, large long-term investments to grow and to help the [power source] diversity,” he said.

The proposed Northern Pass transmission project in New Hampshire would bring 1,090 MW of Canadian hydropower into the market. Transmission Developers Inc.’s Clean Power Link, which would run under Lake Champlain and into Vermont, would transmit 1,000 MW.

But those projects aren’t enough to replace the retiring generation, said David O’Connor of ML Strategies, a government relations and consulting firm.

Massachusetts Gov. Charlie Baker’s proposed legislation to authorize utilities to purchase 2,400 MW of large-scale imports also is insufficient, he said. “That would be … about one-third of Massachusetts’ needs, or only 10% for the entire region,” he said.

The region’s clean energy needs are sufficiently large that Canadian projects are no longer seen as crowding out local resources, Wilby said. “It’s not hydro, or wind, or renewables; it’s ‘and’ to get us where we need to go,” he said. “It’s not one thing that’s going to get us there.”

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Natural Gas and Oil Market Update


Oil Extends Losses on Report Moscow Meeting is Off

CNBC | March 10, 2016

Oil prices extended losses on Thursday following a report a meeting between oil producers to discuss a global pact on freezing production is unlikely to take place in Russia on March 20.

Brent crude futures were at $40.43 per barrel at 9:34 a.m. ET (1434 GMT), down $1.04 from their last close, having earlier this week peaked at $41.48, the highest level since Dec. 9. U.S. crude was down 72 cents at $37.57 per barrel, having hit $38.51 on Tuesday, also its highest since Dec. 9.


Natural Gas Prices Turn Lower as U.S. Supplies Decline by 57 Billion Cubic Feet

Market Watch | March 10, 2016

Natural-gas futures turned lower on Thursday after the U.S. Energy Information Administration reported that supplies of the commodity declined by 57 billion cubic feet for the week ended March 4. That was in line with the fall of between 55 billion and 59 billion cubic feet expected by analysts polled by Platts, but less than the 118 billion cubic foot five-year average decline, according to Citi Futures. Total stocks now stand at 2.479 trillion cubic feet, up 911 billion cubic feet from a year ago and 727 billion cubic feet above the five-year average, the government said. April natural gas was down a penny at $1.752 per million British thermal units. Prices traded $1.786 before the supply data.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Working gas in storage was 2,479 Bcf as of Friday, March 4, 2016, according to EIA estimates. This represents a net decline of 57 Bcf from the previous week. Stocks were 911 Bcf higher than last year at this time and 727 Bcf above the five-year average of 1,752 Bcf. At 2,479 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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