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In This Issue

Budget Crisis Leads to Proposed Electric Bill Changes

PJM task force heads into the next stage of capacity market redesign

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

Budget Crisis Leads to Proposed Electric Bill Changes

NBC Connecticut | September 22, 2017

Part of what ratepayers spend on monthly electric bills could soon change because of Connecticut’s budget problem.
Both the Republican and Democratic bills want to take part of what ratepayers pay toward the Clean Energy Fund, listed as Combined Benefit Charges under Delivery Fees and divert it to the general fund.

“That is a specific fund, there for a specific use,” said Taren O’Connor, who works for the Office of Consumer Counsel and chairs the Energy Efficiency Board. “It’s to allow the Green Bank to offer programs and services in the renewable energy space, and the clean air space.”

O’Connor explains that the average ratepayer, who uses 750 kWh per month, spends about eight to 10 dollars per year towards the Green Bank. That money helps it finance projects and grants towards things like solar.

“That’s not fair for that money to then be spent on things like pensions,” O’Connor said.

The GOP bill proposes transferring a total of $26 million to the general fund over the next two years.

“You still have $13 million, that’s a lot of money,” said GOP President Pro Tempore Len Fasano. “You can still do a lot of things, but when it comes to cutting care for kids or cutting medical stuff, we are going to opt to say, ‘Look, let’s just put a hold on this for two years.’”

Democrats proposed charging ratepayers double, keeping some of it with the Clean Energy Fund and transferring more than $30 million.

“What we’re looking to do is to have a balanced revenue structure that will put the state in balance,” said Democratic President Pro Tempore Martin Looney. “Something that was necessary to do.”

If the measure is implemented in the state’s final spending plan, ratepayers might not know by looking at their bill how much of their money will go to the general fund instead of toward clean energy.

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PJM Task Force Heads Into the Next Stage of Capacity Market Redesign

Utility Dive | September 22, 2017

PJM’s market monitor, Monitoring Analytics, has called subsidies such as Illinois’ Zero Emission Credit (ZEC) program a “threat” to PJM’s market. The grid operator is taking the threat, particularly to its capacity market, seriously.

The RTO’s Capacity Construct Public Policy Senior Task Force has already gone through several rounds of discussions and proposals regarding how to integrate subsidized resources into its market construct.

The proposals are now grouped into one of two categories: re-pricing and non re-pricing. Repricing proposals include submissions from PJM, LS Power, NRG, Old Dominion Electric Cooperative and Exelon.

Non re-pricing proposals were filed by American Municipal Power, Capacity Choice, NRDC's Sustainable FERC Project, PJM's ndependent Market Monitor, and the Northern Virginia Electric Cooperative.

The majority of the re-pricing proposals take a two-stage approach. For instance, the first stage would clear resources as offered and in the second stage offers with “actionable subsidies” would be replaced with reference prices that would go through another auction process.

The non-re-pricing proposals include a variety of approaches, including proposals that would do more to accommodate certain resources, such as seasonal resources. Another proposal would revise PJM’s current minimum offer price rule.

PJM is also studying plans that would enhance the RTO’s short-term resilience and integrate a carbon price into its market auctions.

“Everything is on the table,” Ken Seiler, executive director of system operations at PJM said in a statement.

Critics say many existing proposals could extend the life of less efficient coal and natural gas plants while doing little to solve underlying issues of generation overcapacity. Officials expect work to continue on market reform proposals through 2020.

Power market reforms in regions like PJM are also the focus of federal regulatory discussions. The Federal Energy Regulatory Commission held a technical conference on state power subsidies in May and is set to evaluate whether to increase compensate baseload generators providing essential reliability services.

Read More:

Natural Gas and Oil Market Update


U.S. Oil Drillers Cut Rigs For Third Week In A Row: Baker Hughes

Reuters | September 22, 2017

U.S. energy firms cut the number of oil rigs operating for a third week in a row as a 14-month drilling recovery stalled as companies pared back on spending plans when crude prices were softer.

Drillers cut five oil rigs in the week to September 22, bringing the total count down to 744, the least since June, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday.


U.S. Natural Gas Rig Count Hit a 9-Week Low

Market Realist | September 15, 2017

On September 22, 2017, Baker Hughes (BHI) will release its US natural gas rig count report. In the previous week’s report, the US natural gas rig count fell by one to 186 on September 8–15, 2017. The US natural gas rig count is at the lowest level since July 21, 2017. Rigs fell due to lower crude oil (USO) (UWT) and natural gas (UNG) (DGAZ) prices in the past few months.

Volatility in crude oil and natural gas prices impacts drilling and production activity. It also impacts drillers and producers’ (XES) (IEZ) earnings like Rowan Companies (RDC), Atwood Oceanics (ATW), Gulfport Energy (GPOR), Newfield Exploration (NFX), and Diamond Offshore (DO).

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Working gas in storage was 3,408 Bcf as of Friday, September 15, 2017, according to EIA estimates. This represents a net increase of 97 Bcf from the previous week. Stocks were 136 Bcf less than last year at this time and 67 Bcf above the five-year average of 3,341 Bcf. At 3,408 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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