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In This Issue

Electric Bills in R.I. to Go Up Sixteen to Twenty-One Percent

NatGas, Power Grids Coast-to-Coast Perform As Expected in Midst of Solar Eclipse

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

Electric Bills in R.I. to Go Up Sixteen to Twenty-One Percent

Providence Journal | August 18, 2017

Despite opposition, state regulators approve National Grid rate increases from 16 to 21 percent, reflecting rising energy costs.

Despite the objections of elected officials and community activists, state regulators on Tuesday unanimously approved an electric rate hike proposed by National Grid that will increase the monthly electric bill for the majority of Rhode Islanders by anywhere from 16 percent to 21 percent.

The three members of the Rhode Island Public Utilities Commission voted in favor after a five-hour public hearing, saying that because National Grid complied with regulated procurement practices, they had little choice but to approve the proposal from the state’s dominant electric utility, which supplies power to 486,000 customers.

The increase that will go into effect from Oct. 1 to March 31 is driven entirely by the cost of energy, which makes up about half of a customer’s bill. The other half, the cost of delivering that energy, was not affected under the proposal that won passage.

National Grid is forbidden by state law to profit from the sale of energy, only from its delivery. The retail energy rate the company charges its customers is identical to the cumulative rate it pays power generators.

The increase, from 6.3 cents a kilowatt hour to 9.2 cents for residential customers, is high for two main reasons. One, current rates are unusually low and have come at the end of two years of steady declines. And two, a projected shortage of generating capacity pushed energy prices higher across New England during the auction that tied up supply across the region for 2017-2018.

“I think it was a very impressive presentation from all of the people who spoke. I think I speak for all the commissioners when I say it was very moving in very many respects,” commission chair Margaret Curran said. “Just to reiterate, it is true that the decision before us today does not involve any profit for the utility National Grid.”

After the vote, Governor Gina Raimondo expressed disappointment that energy bills are set to go up.

“This rate increase will create uncertainty for many Rhode Island families and seniors who live on fixed incomes,” she said in a statement. “In the months ahead, I will direct our regulators to complete a comprehensive review of the utility companies’ rates and ensure that Rhode Island consumers are paying a fair rate and not a penny more.”

She echoed the sentiments of many of the more than 70 people that packed the hearing room at the PUC’s offices in Warwick who argued against raising rates in a state where residents already pay among the highest prices for electricity in the nation.

Cranston Mayor Allan Fung said the increase “shocks the conscience.”

“The fact is an overwhelming number of residents, not just low-income families, are barely getting by and the proposed massive rate increase will be a hard blow to absorb,” he said.

State Rep. Aaron Regunberg presented the commission with a petition that he said was signed by 600 people opposed to the proposal.

“Shame on us if we allow corporate profits to go ahead of working people,” the Providence Democrat said. “We should be better than that.”

More than 18,000 electric ratepayers had their power shut off last year because they failed to pay their bills, according to the George Wiley Center, a Pawtucket advocacy group. They are people like Cranston resident Pauline Belal, who had her service terminated in June after, she said, her family went through medical emergencies.

“If you guys continue to do this, you’re going to put me on the street,” she told the commission. “I’m not asking for free. I’m asking for fair.”

According to an analysis from the state Division of Public Utilities and Carriers, National Grid’s current standard offer rate in Rhode Island is the lowest among the seven utilities in Rhode Island, Connecticut and Massachusetts. Its rates were the second-lowest in that group last winter and the lowest the winter before that.

None of the other utilities has released rates for the coming winter yet, but the division expects them to ask for substantial increases because they all buy power from the same New England marketplace.

The market is managed by Independent System Operator New England, which pays power plants to ensure that there is sufficient generating capacity to meet future demand. It holds auctions to secure supply three years before it’s needed. The auction for 2017-2018 was held in 2014.

Before that auction, a host of old power plants announced plans to shut down, but only a small amount of new generation was set to come online to compensate for the shortfall — leading to a spike in capacity prices.

“The proposed rates reflect the wholesale costs of today’s marketplace,” National Grid attorney Jennifer Brooks Hutchinson said. “National Grid does not take that lightly and shares customers’ concerns about increases in electric costs.”

Capacity prices went up again in the 2015 auction, but they have dropped since then, as new generating projects in New England have been put forward and efforts to reduce demand have stepped up.

But ratepayers will have to wait before seeing large benefits. In a recent filing to the commission, National Grid projects the energy rate to drop to 8.2 cents a kilowatt hour in April but then climb sharply in October 2018 to 11.4 cents a kilowatt hour.

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NatGas, Power Grids Coast-to-Coast Perform As Expected in Midst of Solar Eclipse

Natural Gas Intel | August 22, 2017

In California where the grid operator manages more solar power than anywhere in the country, supplies from the sun plummeted by more than 3,000 MW when the total eclipse first hit the West Coast and then just as quickly spiked upward an hour later, according to the California Independent System Operator's (CAISO) real-time data. CAISO’s website tracks renewables 24/7.

With millions of Americans viewing the celestial show in a 70-mile swatch spanning from Oregon to South Carolina, scientists and grid operators who prepared for months in advance for the event now will be calculating and analyzing what it foreshadows for energy planners and astrophysicists alike. CAISO engineers began Tuesday to deconstruct the eclipse and expect to have some observations and numbers in a few days, a spokesperson told NGI.

CAISO had forecast a drop of 4,200 MW worth of utility-scale solar on its grid, but the actual drop was closer to 3,500 MW, the spokesperson said. Why it was less is one of the questions being analyzed, he said. "It is going to take a few days to actually crunch numbers; for now, we just have a few observations."

One fact is clear: natural gas-fired generators and hydroelectric power filled the gap in California. Gas-fired capacity makes up more than half of the 70,000 MW available to CAISO.

Generally, operations on Monday "went very smooth; more smooth than what was expected," the CAISO spokesperson said. "We had no major issues and no minor issues, it was extraordinarily smooth and we attribute that to the advance outreach, conference calls and coordination that we had for the past several months with market participants."

CAISO officials were satisfied there was no impact from the eclipse to the state’s bulk electric system, and that was the story that unfolded for the most part throughout the nation. CAISO expects that a definitive list of "lessons learned" may take some time.

"Exactly what we come up with and how we disseminate it is not determined at this time," the CAISO spokesperson said.

In Idaho, Idaho Power Co. reporting "smoother-than-normal" grid operations where up to 280 MW of solar on its grid dropped to zero or near-zero during the eclipse, but the loss was made up by other sources, mostly hydro.

"Our grid operators said it was actually easier during the eclipse than normal days because the pattern of solar energy was more certain; with the eclipse we knew exactly when it was going to start and how long it was going to last," a utility spokesperson said.

On the East Coast, Charlotte, NC-based Duke Energy Corp. said it lost about 1,700 MW of solar capacity during the eclipse's peak.

"Given the weather conditions, we should have expected 1,808 MW of solar output during the afternoon. But at the height of the eclipse, we were getting only about 109 MW," Duke management said. Duke has about 2,500 MW of installed solar capacity in North Carolina, the nation's second largest solar state behind California.

"We were able to balance the Duke Energy system to compensate for the loss of solar power over the eclipse period," said Director of System Operations Sammy Roberts. "Our system reacted as planned, and we were able to reliably and efficiently meet the energy demands of our customers in the Carolinas."

The Tennessee Valley Authority (TVA) service area was in the path of totality, and the Southeast utility saw about 30% less generation from its renewable sources Monday than it was expecting the day after the eclipse, according to spokesman Jim Hopson. He said TVA has close to 500 MW of solar capacity between utility-scale and distributed sources.

"It was a significant decline over the course of the day," Hopson said. "You were reducing solar intake for the better part of three hours both going into the eclipse and coming out of the eclipse. It was a significant loss of solar power for what is traditionally one of the peak periods for solar in our area."

TVA made up for the declines in solar through a combination of natural gas, nuclear, coal and hydroelectric generation, according to Hopson.

As a result of the eclipse, PJM Interconnection saw a decline of around 520 MW in wholesale solar generation across its large footprint in the Mid-Atlantic and parts of the Midwest. The grid operator estimated that behind-the-meter solar generation decreased by about 1,700 MW. Solar makes up less than 1% of PJM's 185,000 MW of generation capacity.

"PJM had expected a reduction in power demand from rooftop panels to result in an increase in electric demand on the grid," the operator said. "However, because of a variety of potential factors, including reduced air conditioning, increased cloud cover and changes in human behavior related to the event, PJM saw a net decrease in demand for electricity of about 5,000 MW throughout the eclipse.

"The PJM footprint experienced an average temperature decrease of about 2 degrees Fahrenheit through the duration of the eclipse. The Chicago area also experienced storms after the eclipse's onset."

Richmond, VA-based Dominion Energy spokesman Rayhan Daudani said the utility saw minimal impact from the eclipse. During the eclipse’s peak over Virginia, solar output briefly dropped by around 90%, he said.

“While the Aug. 21 eclipse caused our solar output to drop briefly, Dominion Energy customers did not feel any impact,” Daudani said. “We had analyzed several scenarios and consulted with other industry experts to ensure we were prepared for any effects. Our diversified energy mix ensured there was no impact to our customers and we were able to continue to offer the same reliable energy as we do on any day.”

The North American Electric Reliability Corp. (NERC) earlier this year published a white paper on the eclipse, drawing on an assessment of the 2015 solar eclipse in Europe and concluding that the more diversity of power sources on the grid, the more impact an eclipse can have. The overall amount of solar on the North American grid had grown in 2016 to 42,619 MW from 5 MW in 2000 with a large portion of it centered in California.

Read More:

Natural Gas and Oil Market Update


Natural-Gas Prices Hold On To Earlier Gains As Rise In U.S. Supply Comes In A Bit Smaller

MarketWatch | August 24, 2017

Data from the U.S. Energy Information Administration on Thursday showed that domestic supplies of natural gas rose by 43 billion cubic feet for the week ended Aug. 18. On average, analysts were looking for a build of 46 billion cubic feet, according to a survey of analysts conducted by S&P Global Platts.

Total stocks now stand at 3.125 trillion cubic feet, down 223 billion cubic feet from a year ago, but 45 billion cubic feet above the five-year average, the government said. Prices for natural gas also got a boost from forecasts that Tropical Storm Harvey in the Gulf of Mexico may become a hurricane by Friday, which could significantly disrupt energy operations in the region.


Oil Rises On Fears Hurricane Harvey Will Hit U.S. Production

Rueters | August 24, 2017

Oil prices rose on Friday as the U.S. petroleum industry prepared for the arrival on the coast of Texas of Hurricane Harvey, which threatens to disrupt onshore and offshore production.

The tropical storm has rapidly intensified since Thursday, spinning into potentially the biggest hurricane to hit the mainland United States in 12 years and taking aim at the heart of the nation’s oil refining industry between Houston and Corpus Christi.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Working gas in storage was 3,125 Bcf as of Friday, August 18, 2017, according to EIA estimates. This represents a net increase of 43 Bcf from the previous week. Stocks were 223 Bcf less than last year at this time and 45 Bcf above the five-year average of 3,080 Bcf. At 3,125 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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