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In This Issue

Record Nuclear Shutdowns Seen Boosting `Pummeled' Natural Gas

PJM Can't Consider Power Line's Cost to Del., Exec Says

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

Record Nuclear Shutdowns Seen Boosting `Pummeled' Natural Gas

Bloomberg Markets | March 23, 2017

More U.S. nuclear reactors will close for refueling this spring than at any time in nearly two decades creating a power shortage that may lift beaten-down natural gas.

Operators plan to shut 34 reactors, or more than a third of nuclear generating capacity, to replace fuel rods from March through May, according to Michael Rennhack, president and chief executive officer of, a website that advertises jobs in the sector. That would be the most for the time of year in data going back to 2000, according to the U.S. Nuclear Regulatory Commission and projections from Rennhack.

The closures may be good news for gas, the worst performer in the Bloomberg Commodity Index as generators that burn the fossil fuel run harder to make up for the nuclear shortfall, according to Kyle Cooper, director of research with IAF Advisors in Houston. The power plant and heating fuel has tumbled about 28 percent this year as weak demand amid unseasonably warm weather has allowed a glut in supplies to persist.

"Natural gas has been pummeled by bad-weather forecast after bad-weather forecast, so this is the first glimmer of hope in a while," Cooper said. "This could provide some enthusiasm for the market."

Scheduled closures this season include Exelon Corp.’s Nine Mile Point unit 1 north of Syracuse, New York, and FirstEnergy Corp.’s Beaver Valley unit 2 outside of Pittsburgh, the data show. Nuclear reactors provide about 20 percent of the nation’s electricity.

All told, reactors with capacity to provide about 36,000 megawatts of power may shut this spring. That’s up from the same time a year ago when 20 units with about 22,300 megawatts were projected to shut. Operators typically schedule refueling outages during the spring and fall when demand wanes to minimize lost power sales. Companies generally withhold market-sensitive information such as the estimated duration of the closures.

In a region that extends from Virginia to Florida, nine reactors with about 9,800 megawatts of generating capacity are scheduled to close to replace spent fuel rods, Rennhack’s data show. From Washington to Maine, 10 reactors with about 9,600 megawatts of capacity will shut.

Exelon spokeswoman Jill Lyon confirmed by e-mail that Nine Mile Point unit 1 will close for refueling this spring without providing an estimated restart date. FirstEnergy spokeswoman Jennifer Young declined to confirm the timing of the Beaver Valley reactor outage, according to an e-mail Friday.

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PJM Can't Consider Power Line's Cost to Del., Exec Says

Delaware Online | March 23, 2017

The cost to Delawareans cannot be considered under federal guidelines, an executive with a power company seeking to restart a controversial project that will result in higher resident utility bills, told skeptical state legislators.

PJM Interconnection LLC, an operator of power grids across the Mid-Atlantic and elsewhere, has revived a plan to build a power line from the Artificial Island nuclear facility to a substation in Red Lion. Delawareans  will be forced to pay for the majority of the project's cost, but will only receive about 10 percent of the benefit. The power line will largely improve power output in New Jersey.

State officials claimed Delawareans could pay for about 85 to 90 percent of the project's $165 million price tag, but PJM has said the number is closer to 60 percent. Under the project's previous $272 million cost, it was estimated that Delawareans' utility bills would increase by as much as $13 per month.

Steve Herling, vice president of planning for PJM Interconnection, an operator of power grids in the Mid-Atlantic and elsewhere, said the cost-benefit allocation to Delawareans cannot be part of the selection process, according to federal rules. Testifying before Delaware Senate committee, Herling said the Federal Energy Regulatory Commission, a government agency that monitors electricity transmission, requires PJM to weigh a number of factors, but not cost allocation.

"We are not empowered to consider cost to individual groups of customers when selecting a project," Herling said. "As a result, you could have two alternatives that have markedly different cost allocation, but that cannot be considered."

Sen. Harris McDowell III (D-SD1) asked Herling if that meant it didn't matter who was paying the project's cost.

"I'm not suggesting it doesn't matter who is paying for the cost, but we cannot use that element in the determination of a project," Herling responded. "It clearly presents a potential for the kind of imbalance we are seeing now."

PJM revived the project earlier this month after abandoning the plan last summer. The Audubon, Pennsylvania company, said the new version will cost around $165 million, about $100 million less than initially thought.

The price decrease has not changed any minds among Delaware officials. Gov. John Carney said "it was not a good deal," echoing remarks by his predecessor Jack Markell, who vigorously fought against the project.

Legislators at the Thursday morning hearing said they are still looking for ways to prevent Delawareans' utility bills from soaring. Rep. Trey Paradee, (D-RD 29) asked Herling if PJM would advocate for Delaware. Herling said PJM has provided information to the Delaware and Maryland public service commissions to request a FERC hearing.

But when McDowell asked Herling if PJM would submit a filing to FERC on behalf of Delaware, the executive would not make a commitment.

"I'm not sure I can answer that question today," he told McDowell. "It would depend on what arguments would be made with FERC."

Herling said the transmission line is necessary because Artificial Island's connection lines have become outdated. Upgrading the connection would reduce the potential for power outages and limit the number of people impacted if one does occur, Herling said.

"We have been experiencing in recent years more and more challenges to our operations," he said.

But legislators argued an upgrading transmission line will largely benefit New Jersey and Southeastern Pennsylvania residents.

"This is a PSEG and Exelon problem," Paradee said, referring to Artificial Island's owners. "This is not a a Delaware problem. For those of us who live in this state, our rights are being trampled on and we are looking for a solution to this."

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Natural Gas and Oil Market Update


Natural Gas Holds After Stockpile Data

Wall Street Journal | March 23, 2017

Natural gas prices are holding close to unchanged Thursday after the federal government reported storage levels fell largely in line with expectations.

The U.S. Energy Information Administration’s weekly update on storage levels showed a fall of 150 billion cubic feet in the week ended March 17. Analysts and traders surveyed by The Wall Street Journal expected the agency to report that stockpiles fell by 151 billion cubic feet.


Oil Drops To Lowest Since November as U.S. Inventories Swell

Reuters | March 22, 2017

Oil prices slipped on Wednesday to their lowest since late November, with Brent testing the $50 per barrel support, after data showed record high U.S. crude inventories rising faster than expected, raising doubts over the viability of OPEC-led output cuts.

The Energy Information Administration (EIA) said U.S. inventories climbed almost 5 million barrels to 533.1 million last week, far outpacing forecasts of a 2.8 million-barrel build.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Working gas in storage was 2,092 Bcf as of Friday, March 17, 2017, according to EIA estimates. This represents a net decrease of 150 Bcf from the previous week. Stocks were 399 Bcf less than last year at this time and 266 Bcf above the five-year average of 1,826 Bcf. At 2,092 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

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