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Tuesday Feb 14, 2023   
"Location, location, location" is an old adage that is often used in the real estate sector where the essence of the phrase states that even though you may have similar properties, the location of either makes all the difference in the world as to how they are valued. For example, two properties with the same exact footprint and square footage can have different property values given one sits on the edge of a rugged hillside overlooking the ocean while the other is on the other side of the street where the view is of the house just mentioned (not the ocean).  This type of locational pricing rings true for the natural gas market as well as this winter has seen prices diverge from coast to coast as the Gulf/East Coast are suffering from high inventory conditions where the exact ... » read more
Monday Feb 13, 2023   
The second week of February has brought much more mild weather to Texas than the start of the month. Along with the warmer temperatures have come higher wind output and lower demand, and the low net load is (for the most part) keeping prices low. Figure 1 | ERCOT RT Dashboard, 2/5/23 – 2/11/23 The image above shows the ERCOT RT dashboard for February 5th through 11th. The top pane shows the North Hub DA prices (blue) and RT prices (orange). Though prices have spiked to a little above $100 for a couple of intervals in the evening, for the most part they’ve tended to stay quite low. One event that sticks out on the real time price graph is the deep negative block, starting in the last hour or so of February 5, and lasting through the light load hours on the morning of February ... » read more
Friday Feb 10, 2023   
California renewables have taken a back seat to the higher natural gas prices across the West this winter.  As the sun continues to shine and the wind turbines spin, the hydro situation in the Pacific Northwest continues to allowed any type of megawatt to find a home throughout the month January.  This is a typical occurrance as the power load numbers are supportive to the overall supply stack megawatts throughout the day.  Once we get into the month of February, the landscape starts to change as the weather can drive the power demand numbers higher/lower depending on Mother Nature while the solar output starts to pick up as the winter days start to extend the daylight period. Figure 1 | CAISO 7-Day Renewable Breakdown - Hourly The image above displays the CAISO solar ... » read more
Thursday Feb 9, 2023   
With temperatures up a little this week in the Pacific Northwest after a some chilly weather to end January and start off the month of February last week, we’ve seen a marked change in PNW Hydro production.  During  last week’s cold the hydro system ramped up to provide over 14 GW of heavy-load generation on the first of the month.  Since then, it’s pulled back sharply to give under 10.5 GW the past three days.  This is more in line with the way the water year has played out with precipitation and snowpack lagging behind normal levels.  Last Thursday, the Northwest River Forecast Center gave a webinar presentation with their February Water Supply Forecast Briefing—a good resource to get a sense of how the water year has evolved up to this ... » read more
Wednesday Feb 8, 2023   
At the start of 2023, the West was coming out of a months-long stretch of below normal temperatures while the East was recovering from deadly storms. The country breathed a big sigh of relief as January came and went with mild temperatures from coast to coast. The Northeast saw the warmest January on record with some cities seeing above normal temperatures every day. In the West, bursts of cold hit the Pacific Northwest but the ice storms were left behind in 2022. California felt the warmth in the first half of the month, but it came along with buckets of rain causing flooding, destruction, and a boost to the hydro system. In our January monthly, it’s out with the cold and in with the new year as we look at how January warming and weather impacted power and natural gas markets ... » read more
Tuesday Feb 7, 2023   
Back in August of 2021 the El Paso Pipeline, which runs from West Texas to the state of California, suffered a rupture along its South Mainline just south of Coolidge, Arizona. The explosion had the force of over 2000 pounds of TNT killing two people and prompting a full scale investigation by the NTSB into the root causes. The pipe was built in 1986 and was intended to carry crude oil from the Permian Basin into the West. By 2001 the pipe was converted into natural gas. This was a common practice throughout the country as the fuel gained more uses for heating and power generation. In the aftermath of the explosion Kinder Morgan, the owner of the pipeline, cut the throughput of the ruptured segment by .54 BCF constricting the gas supply into Arizona and California. Figure 1 | ElPaso ... » read more
Monday Feb 6, 2023   
Brrrrr, the northeast weather that ended the week was record setting but like a good ole Calgary Chinook wind pattern, Sunday’s temperatures were substantially warmer across the board.  This has led to a substantially different balancing act compared to what transpired last Thursday for the final day of the workweek. Figure 1 | Polar Vortex – Chinook Winds The instant change in the weather pattern was seen across other parts of the country a few days earlier as the South Central started to see its wind pick up come Friday while the power demand numbers faded into the sunset as northern Texas saw the last of the earlier snowfall finally melt while the rest of Texas saw the sunshine that increased the solar output on the grid. Figure 2 | ERCOT Supply/Demand Breakdown ... » read more
Friday Feb 3, 2023   
Once again, ERCOT has been hit with a winter storm that’s wreaked some amount of havoc among Texas residents. This past week saw sub-freezing, well-below-normal temperatures for a handful of days in a row, and freezing rain that knocked down trees and caused extensive power outages throughout a number of regions. Figure 1 | Impact of Freezing Rain in Austin, from Austin American-Statesman   Although a stretch of unusual cold weather and precipitation during February in Texas immediately calls to mind comparisons to Winter Storm Uri in 2021, the ERCOT grid has certainly fared better this time around. But that’s not to say that it’s been an uneventful week. The image below shows our ERCOT Real Time Dashboard: Figure 2 | ERCOT RT Dashboard, 1/27/2023 – ... » read more
Thursday Feb 2, 2023   
After a tumultuous end to last year that brought frigid winter weather to much of the country over Christmas weekend, the start of 2023 brought a welcome change.  By comparison, for most of January the climate was positively mild.  Total rescom demand for natural gas in the lower 48 states averaged 38 BCF, down 2 BCF from December’s demand and nearly 9 BCF lower than the considerably colder January of 2022.  Just as the mother nature brought a rapid flash of cold to much of the country at the end of December, she is doing a similar thing to finish off the month of January and start off the month of February with a bang.  The winter chill has been felt all this week, making its way from the Pacific Northwest over to the Rockies and down into the South-Central ... » read more
Wednesday Feb 1, 2023   
Spring is still more than a month and a half away, but some nuclear plants are getting an early jump on outage season. Hatch 2, a 935 MW plant located in Georgia, is the first nuclear plant to completely power down in 2023 for its refueling cycle. The plant reached 100% offline on Sunday, January 29th. These shutdowns allow for important regular maintenance and are usually done in the spring and fall when temperatures and loads are mild. With a warm start to the year and more mild weather in the forecast, it makes sense that some plants will be shutting down early in the season this year. The peak for nuclear outages often occurs in April (and then again in October), but we’ll see outages rise over the course of the next couple months as more than 35 plants have scheduled ... » read more
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