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Thursday Feb 9, 2017   
We sent out a market flash yesterday afternoon detailing the enormous amount of precipitation the state of California has been getting, especially Northern California as of late.  Per CDEC, the current precipitation level has surpassed last year's aggregated total for the entire water year.  Some forecasters are calling for more precipitation after a little reprieve over the weekend. Figure 1 | Precipitation Forecast for the 1-15 Day Period - California   The massive precipitation has led to several inches of rain hitting the already saturated ground as ... » read more
Wednesday Feb 8, 2017   
Heading into this winter we saw record high gas storage at facilities across North America.  Alberta storage was no exception as we rolled into October with over 420 MMCF in the ground which was 40 MMCF more than last year and 90 MMCF above 2015 levels.   Figure 1 | AB Storage Total NG Storage  Considering the unprecedented amount of natural gas in the ground both producers and storage facility operators hoped for an especially strong demand this winter or else the lack of storage space would limit flexibility moving ... » read more
Tuesday Feb 7, 2017   
Looking at the Northeast and Midwest portions of the country, we are starting to see a similar theme. Storage levels are on par with last year while underlying demand wanes with the gas to coal substitution in the power generation dispatch. As we look forward, this drop in power burns can be extrapolated right into the Q2 horizon. If those areas remain low, we will see storage injections outpace last year's rate.  Figure 1 | Northeast and Midwest Power Burns But with little additional transportation flows down to the Gulf and South Central portions of the ... » read more
Monday Feb 6, 2017   
Now that the first full week of February is upon us and the weather forecasts show warmer temperatures across most of the county in the 1-5 and 6-10 day periods, the question needs to be asked is winter over?  When it comes to the fundamentals, the warmer forecast is putting a damper on the overall rescom demand across the Midwest, Ohio Valley and the East.  For example, Chicago is looking at highs around 50 degree for today with the overnight lows in the upper 30's.  Tuesday will be a little colder while the latter part of the week drops down to ... » read more
Friday Feb 3, 2017   
In 1991 I was in my early 20’s living in New York City. My good job working for a major Wall Street bank wasn’t cutting it for me. I was looking for the next move in my career. As luck would have it, I was forced to spend more than a week in my tiny, third floor, walk-up apartment as I recovered from knee surgery. For those of you not familiar with the early 1990’s, Al Gore had not yet delivered the internet to the people. I didn’t have cable TV. I decided to put together a pile of books and articles to read to inspire my next career move. » read more
Thursday Feb 2, 2017   
Per out market flash we sent out the other day on wind generation across North America, the one area that really stuck out was the South Central where ERCOT and SPP saw a big increase in output in January compared to the previous month as well as last year.  This led to the net load in both ISO's to post lower net loads than they otherwise would have in years past.  Lets first take a look at ERCOT where January averaged over 1.7 GW higher this year compared to last year (7.2 compared to 5.5 GWa). Figure 1 | ERCOT Monthly Flat Average Wind Generation As you ... » read more
Wednesday Feb 1, 2017   
We always talk about California as being a three storm state, meaning that if it gets three decent size precipitation events throughout the year, the hydro streams/rivers and reservoirs will be in good shape to help with the supply of energy as well as the irrigation needs within the state.  For a couple of years (4 to be exact), the state saw less than three storms, which resulted in drought-like conditions and ultimately restrictions of water usage and hydro generation output.  This year, it looks like it is game on as we have seen several storms move ... » read more
Tuesday Jan 31, 2017   
It has been a full ten months since we last had any injection or withdrawal activity from the Aliso Canyon storage facility. In the meantime, SoCal Gas along with the California Public Utilities Commission, Department of Conservation, California ISO and the rest of the market stakeholders have been wrestling with the forward use plans for the cavern. Talk of shut down and retirement became the most favored option noting the political unpopularity of having underground natural gas storage next to the Porters Ranch residential area and a shopping mall. What continues to ... » read more
Monday Jan 30, 2017   
Last week at this time, the west was looking at below normal temperatures across the entire region with California and the Desert Southwest showing the biggest delta. This led to SoCal Gas's Sendouts to top the 4.0 BCF mark for three consecutive days.  With natural gas imports topping the 3.1 BCF mark, that left the grid short by 1.0 BCF.  As a result of having to draw from storage at this level, system operators sent out a critical notice that they were having to resort to pulling gas out of Aliso Canyon.  Albeit, only for a couple of hours during the ... » read more
Friday Jan 27, 2017   
Some of the best academic research related to power markets comes out of the University of California at Berkeley’s Energy Institute. In August of 2016 a California power markets academic dream team of Severin Borenstein, James Bushnell, Frank Wolak, and Matthew Zaragoza-Watkins published a paper titled “Expecting the Unexpected: Emissions Uncertainty and Environmental Market Design.” This is an update, re-work, and extension of a paper that the same crew published back in 2014. There are a number of very interesting insights and findings hidden ... » read more
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