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Monday Sep 9, 2019   
The first full week of September 2019 was full of excitement in the West as temperatures in Southern California hit the summer highs (on average) while the Desert Southwest saw a couple of unplanned outage change its thermal supply stack.  When you throw in the fact that California has some transmission constraints that locked down the overall capacity that could flow north to south on Path 15 and SoCal Gas was experiencing maintenance work at Topack, we had ourselves a mini-perfect storm.  In fact, the power supply stack marginal megawatt was shifting too the right and crossing over several inflection points to warrant some the highest prices we have seen all summer. Now the $78.91 day-ahead high print was prompted by the previous day's uptick to $91.14 with a high water mark ... » read more
Friday Sep 6, 2019   
Waiting for regionalization of energy markets sometimes feels like waiting for an earthquake.  You’re told that the big change is coming—just around the corner--only to have years go by where nothing appears to happen.   Occasionally there is a tremor, like when earlier proposals RTOs were made--and then withdrawn--or when California considered for a hot minute about sharing control of its ISO with its western neighbors.     But, maybe, regionalization in the west is more like watching the tide come in: harder to discern but apparent over time via a series of incremental waves.  The Western Energy Imbalance Market (EIM) has now been operating for five years and participation has increased every year.  Progress may not be inexorable, but ... » read more
Thursday Sep 5, 2019   
If you have been following the wave of nuclear bailouts catching on throughout the Northeast, the latest bill to be passed was a subsidy in Ohio. The legislation is intended to keep the Davis-Besse and Perry nuclear facilities on the grid. While first presented as a way to reduce carbon emissions, the bill later tacked on subsidies for First Energy coal facilities.  By tacking on the coal subsidies, it is hard to accept that the carbon emission reduction theme is true to their hear as the retirement of the coal units would be more in-line.  The one organization that stepped to the opposition plate was the Ohioans Against Corporate Bailouts (OACB) as their motto in in the name and speaks for itself. The most recent development tied to the battle of subsidies vs. a more green ... » read more
Wednesday Sep 4, 2019   
Over the past week and a half, there has been a lot of attention to what is now known as Hurricane Dorian as it is dropping plenty of rain and high winds on the Florida Atlantic coast before making its way up into the Caolinas by the weekend.  Prior to all this, the storm seemed to be at a stand still over the Bahamas as a Category 5 hurricane.  This type of action is almost unheard of as the momentum of the storm did not die down but the path it was taking did.  As a result, this did not bode well for the island as 180 mile per hour winds and rain wreaked havoc on everything and everybody as it was like a drill boring a hole in a wall or a floor joist  and all you see is remnants from the wood making its way to the outer layer. Figure 1 | Hurricane Dorian ... » read more
Tuesday Sep 3, 2019   
Dorian started popping up on the models early last week as it moved largely undeveloped through the middle of the Atlantic Ocean. Almost every model had this storm moving over Puerto Rico and then onto the Florida Straits where it would gain steam before moving into the Gulf of Mexico. Each model run prior to Wednesday was reaffirming a threat to the Gulf production complex. But then the storm made a very unlikely right hand turn. By avoiding the Dominican Republic and staying over the warm waters near the Bahamas, Dorian quickly gained steam posting speeds over 200 MPH. The track had also shifted to a Central Florida landfall. This still kept Gulf production at risk as memories of Hurricane Frances were recalled. Figure 1 | TS Dorian Path as of August 26   But as the Upper ... » read more
Friday Aug 30, 2019   
The Labor Day weekend is upon us which means the month of August is coming to an end and the homework will start to pile up as the summer lounging days will be in the past as school is in play.  On the electricity front, this means that the weather patterns are looking to change to more fall-like temperatures as we get deeper into the month.  Before we travel down that road, I thought it would be good to give you, the reader, some insight to the last few Newsletter articles and monthly reports published by EnergyGPS.  If you would like to receive such reports on a forward basis, you can do so by signing up for our Gold or Platinum packages we offer.  For more information, click here for more detail.  It should be noted you can click on the report link itself ... » read more
Thursday Aug 29, 2019   
As I drove home yesterday, it seemed the AC in my car was not quite enough to ward off the hot weather we have been having recently in Portland. With temperatures in the shade holding in the 90s, going outdoors has been more of an exercise in finding water than the usual hiking that I enjoy. After taking a look at the weather in the Northeast, I couldn’t help but feel a pang of jealousy. Over the last couple weeks, the summer heat has given way to cooler weather with temperatures dropping into a comfortable range. With few cooling degree days throughout the region, power demand also declined shifting the marginal unit towards efficient generation with what appears to be an early start to the shoulder season. Figure 1 | Major Northeast Hub Day Ahead LMPs Just taking a look at the ... » read more
Wednesday Aug 28, 2019   
The month of August has been quite interesting to say the least in the power sector.  First, the weather across North America has been somewhat mild in West, Midwest and Northeast as the power demand across each region has left the grid with not much excitement.  The second item is tied to the renewable landscape as California continues to lead the way when it comes to both utility-scaled and behind the meter solar generation.  The former is a massive number that has the CAISO grid operators needing to find the flex ramping capability needed to balance the system.  The latter continues to hold down the overall net load numbers in a way that diminishes any load growth happening within the Golden State.  Transitioning to the wind generation fleet, both SPP and ... » read more
Tuesday Aug 27, 2019   
Over the weekend the National Hurricane Center started tracking TS Dorian just east of Puerto Rico. All of the models have this feature strengthening over the next three days before it enters the Florida Straits. The market reacted Monday morning by moving the prompt month through calendar 2020 up 7 cents. This price move was one of the strongest price moves we have seen this summer but part of the problem is that this strength is not likely a result of the developing storm. The current storm track, as we see it, is bearish for supply/demand balancing because of the disruption to liquefaction demand.  Figure 1 | NHC Dorian Track The path of TS Dorian has shifted overnight to the north missing the Dominican Republic. This will keep it out of harms way and allow it to strengthen prior ... » read more
Monday Aug 26, 2019   
Over the past few years, there has been a lot of discussion around the LNG markets and facilities going up across the United States as companies try to capture the arbitrage opportunities between the less expensive natural gas and the demand for such fuel in other parts of the world.  Prior to 2017, the Lower 48 had some smaller import/export terminals, but it was not until Sabine came into play that the anchor was set for some massive grid changes in the foreseeable future. Fast forward to the current status of LNG and what we see are five facilities making up the fleet we track on a daily basis.  The most recent facility coming online is that of Cameron as it is noming around .300 BCF/d.  If you look at Sabine's month to date August-2019 average it sits around 2.6 BCF/d ... » read more
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