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Friday Jul 29, 2016   
A large portion of our work at EnergyGPS pertains to shedding insights into risk and price. We analyze everything from next day power, to next month natural gas, to next year’s heat rates, to the long term prices. As any trader can attest, it is a difficult game. Some might even argue the price prediction business is a fool’s errand. Back in the trading days we used a litany of metrics to evaluate trading skill. One of those metrics was “batting average” which attempted to measure how often a trader was right. The rock star traders had batting ... » read more
Thursday Jul 28, 2016   
As we wind down the month of July, lets take a look at how the weather has impacted the record setting power burns and what that means as we head into August.  As we look back on July 2016, we will most likely see one of the warmest months on record as widespread well above normal temperatures created what was being called heat bubbles all over the Midwest and Eastern portions of the country. Figure 1 | Average Temperatures by Region - Daily and Month to Date Compared to Normal What you quickly see in the last two columns is the delta from normal is not much ... » read more
Wednesday Jul 27, 2016   
Heading into the back half of this month we faced a a known maintenance outage on the Rex pipeline that threatened to push production offline in the Marcellious region. Figure 1| Rex Pipeline Maintenance Announcement    The maintenance work began on schedule shutting in nearly 1.6 BCF of production across 5 different points. The maintenance missed its initial return date for Friday and withheld production through the weekend.  Figure 2| Rex Marceullus Production 7/17 - 7/26  The delay in production combined with a bullish demand outlook for ... » read more
Tuesday Jul 26, 2016   
Under normal circumstances, the natural gas merchant generators in the Desert Southwest dedicate their output towards the Southern California energy markets. That is until they get the proper price incentive to keep the generation east of the Colorado River. Recently, with some of the coal generation activities in Arizona and New Mexico, and the typical summer heat, the Palo Verde Switchyard has had to price itself over the CAISO SP15 energy market to meet the needs of their evening peak because of an unlikely culprit. Typically the coal fleet in the west has been ... » read more
Monday Jul 25, 2016   
Over the past week or so, the country's energy grid has been seeing record net load.  In fact, the entire month has been running at a rate higher than what we saw last year during the month of June. Figure 1 | US Net Load - 7 Day Rolling Average This is due to the heat bubble that sat over most of the country all month.  California and the Pacific Northwest were the two regions shielded by the heat wave earlier in the month.  That all started to change last week as Southern California's load shifted up with Burbank's highs over 100 degrees for a ... » read more
Friday Jul 22, 2016   
The future of batteries in the electricity grid continues to capture our attention at EnergyGPS. Part of the intrigue around our shop is the lack of good, public analysis associated with costs and benefits associated with the deployment of batteries in the power grid. If you plug any number of search terms into Google to find out about batteries on the grid dozens and dozens of results pop up. More than half of the results are some form of battery hype. The publishers of these materials are mostly environmental or tech operations. They discuss the declining cost of ... » read more
Thursday Jul 21, 2016   
On a daily basis, Texas production is hard to quantify as most wells are sitting on intra-state pipelines which are not subject to FERC jurisdiction.  In our daily scapes (shown later in this newsletter), we can see some of the points and have a regression model that uplifts the South Central regions total daily production to what we think is going on within the state.  The way we calibrate the numbers on a monthly basis is to look at both EIA and the Texas Railroad Commission monthly data.  The latter posted new data yesterday and here is what we have ... » read more
Wednesday Jul 20, 2016   
The CAISO Day-Ahead auction for today saw a binding constraint (congestion) over path 26 N to S.  As far as we can tell, this was an unplanned reduction in capacity on the line as the posted Path 26 capacity rating was unchanged day on day.  As a result, the SP15/NP15 day-ahead heavy load spread widened to $6.66 pre-carbon and $5.18 for the energy only component.  Figure 1 breaks down the Path 26 congestion by hourly buckets and shows the day on day change.  As you can see by the first column flat, the Path 26 constraint was new for today's flow ... » read more
Tuesday Jul 19, 2016   
Rockies Express Pipeline will have construction this week as part of the expansion of the Zone 3 delivery capabilities. During this construction several meters will have to be shut down to accommodate the additional tie ins. As per the REX Informational Postings page, the Markwest Seneca meter point is expected to be out of service July 19 - 22. Checking the volumes this morning, we see no drop off in activity.   Figure 1 | Rockies Express Meter Posting This outage is expected to start today. We checked the outage listings on the Tallgrass Partners page and ... » read more
Monday Jul 18, 2016   
With the dog days of summer are upon us in most parts of the country starting last week and continuing on into this week.  Comparing the recent heat to last year, you can see that the net load is coming in about a week ahead of where things peaked last year. Figure 1 | Net Load for US - 7 Day Rolling Average As load started to march higher over the last two weeks we have see a strong response from the the coal fleet. Last Wednesday's coal generation topped 188 GWs which is is the strongest we have seen all year. Thursday's output looked down but ... » read more
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