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In This Issue

Spectra Delays Access Northeast Natural Gas Pipeline

FERC Wants More Detail on PJM’s Seasonal Capacity Plan

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

Tables

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

 

Market Overviews

Spectra Delays Access Northeast Natural Gas Pipeline

Utility Dive | January 5, 2016

New England still needs natural gas, but Spectra last month told the Federal Energy Regulatory Commission (FERC) that it must rethink how to pay for new capacity into the region.

"Algonquin believes it is prudent to take additional time to solidify the commercial foundation for critically needed infrastructure and to complete its analysis of the Access Northeast facilities," the company told FERC in a December filing. The company said it anticipates filing draft resource reports in the middle of this year, followed by a full application.

Eversource Energy and National Grid both pulled support for the proposed expansion in the aftermath of the Massachusetts high court's decision. And four other utilities—NSTAR, Western Massachusetts Electric, Massachusetts Electric and Nantucket Electric—dropped petitions to acquire capacity on the line.

According to a report from the Boston Herald, the delay likely pushes back the expansion inservice to 2019, and means Spectra will have to approach state lawmakers for a possible funding fix.

Not everyone is convinced that the region requires additional gas supply, however. Massachusetts Attorney General Maura Healey argued that requiring electric ratepayers to pay for new natural gas pipeline capacity "effectively shifts the risks associated with building these projects," following the court ruling. Healey has said in the past she believes the region's energy needs should be met with efficiency and demand response instead.

Key Points:

  • Spectra Energy informed federal regulators it is delaying the proposed $3 billion Northeast Access pipeline, reiterating the demand for new gas capacity while also indicating it would need to "solidify the commercial foundation" of the project.

  • In August, the Massachusetts Supreme Judicial Court blocked regulators from approving contracts that would fund the line through a charge on electric bills.

  • The project, an expansion of the existing Algonquin Gas Transmission system, would help boost gas capacity in the region by up to 925,000 dekatherms per day. The company may now look to changes in Massachusetts law to push the project ahead, according to a report in the New Hampshire Union Leader.

 

Read More:
http://www.utilitydive.com/news/spectra-delays-access-northeast-natural-gas-pipeline/433128/

FERC Wants More Detail on PJM’s Seasonal Capacity Plan

RTO Insider | January 5, 2016

FERC has issued a deficiency notice requesting more information from PJM on its proposal to incorporate more seasonal resources under Capacity Performance .

PJM has until Jan. 22 to respond to the Dec. 23 notice, which asks for more detail and specific examples about its plan to integrate seasonal resources into capacity auctions and incorporate them into operational protocols. The proposal would relax the current prohibition on seasonal resources aggregating across locational deliverability areas. In October, the RTO angered some stakeholders when staff announced at the annual meeting of the Organization of PJM States Inc. that it was filing its proposal despite a lack of stakeholder consensus.

“The proposed [Open Access Transmission Tariff] revisions appear unclear as to how PJM will determine which Seasonal Capacity Performance Resource offers clear an auction and which do not, and how PJM will ensure least-cost capacity procurement,” the commission wrote.

It asked if offers will be put in auctions individually or paired with a resource from the opposite season with an aggregated offer price. FERC also asked how PJM’s optimization algorithm will compare seasonal and annual resources, at what price the algorithm would stop clearing seasonal resources and how it will break ties if multiple seasonal resources submit identical offer prices.

The RTO’s proposal would allow resources to aggregate beyond LDA borders, with unmatched resources moving up to the next LDA level until a match is found.

FERC wanted more detail on how PJM’s cross-LDA aggregation concept would affect operational procedures, noting that the current proposal allows a seasonal resource to clear an auction, be counted toward the reliability requirement of an LDA other than the lowest level one in which it’s located and receive a clearing price less than that of the lowest-level LDA.

The commission also asked how a resource could be subject to a performance assessment hour in the LDA where it’s located, but receive the clearing price and help with the reliability requirement for the LDA in which it cleared the auction. It wanted to know how PJM plans to apply performance-related charges and credits and what rates will apply.

FERC also asked if the RTO intends for fixed resource requirement capacity plans that include seasonal resources to have equal quantity of summer and winter resources.

The commission wondered why PJM created a way for summer demand response to offer into auctions, but not for winter resources. “Why does PJM propose to exclude a winter-period demand resource from participating as a seasonal Capacity Performance resource?” it asked.

FERC also showed interest the differences between seasonal resources, asking PJM to opine on whether resources from one season or the other make a bigger difference on system reliability. It asked about any documentation PJM has on the topic.

Read More:
https://www.rtoinsider.com/ferc-pjm-capacity-performance-36138/

Natural Gas and Oil Market Update

Arrow

Natural Gas Edges Higher Ahead of Inventories Report

The Wall Street Journal | January 5, 2017

Natural gas prices edged higher Thursday, easing off a four-day losing streak as traders awaited data on the amount of inventory in storage.

Futures for February delivery rose 2.3 cents, or 0.7%, to $3.290 a million British thermal units on the New York Mercantile Exchange.

A bleak outlook on winter demand has hit the market this week, with natural gas prices down more than 11% year to date. Weather reports show above-normal temperatures spreading across the U.S. over the next two weeks. These forecasts are a sharp turnaround from expectations in December for colder-than-normal temperatures in the new year.

  Arrow

Oil Rises 2 Percent Amid Expected Draw In U.S. Crude Inventories

Reuters | January 5, 2017

Oil prices rose nearly 2 percent on Wednesday on expectations U.S. crude inventories have dropped and on signs that the world’s top oil exporters will stick to agreed output cuts that took effect this week.

Global benchmark Brent crude futures LCOc1 rose 99 cents, or 1.8 percent, to settle at $56.46 a barrel. U.S. West Texas Intermediate crude futures CLc1 gained 93 cents to end at $53.26 a barrel, also a 1.8 percent gain.

In post-settlement trade, crude rose slightly after industry group the American Petroleum Institute reported that crude stockpiles fell 7.4 million barrels in the week ended Dec. 30.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Summary
Working gas in storage was 3,311 Bcf as of Friday, December 30, 2016, according to EIA estimates. This represents a net decline of 49 Bcf from the previous week. Stocks were 364 Bcf less than last year at this time and 21 Bcf below the five-year average of 3,332 Bcf. At 3,311 Bcf, total working gas is within 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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