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Monday May 9, 2016   
Over the next few days, both Northern and Southern California are looking at above normal temperatures once again with Sacramento showing highs in the upper 80's/low 90's by Wednesday/Thursday and Burbank in the mid/upper 80's for the same time period. Figure 1 | Sacramento Temperatures - Actual and Forecast As you can see in Figure 1, the warmer temperature fits the pattern since the beginning of April, where we have a few days of moderate temperatures only to give way to above normal for a 4-5 day period. From a load perspective, California is calling for higher ... » read more
Friday May 6, 2016   
We’ve been having some fun lately digging around the CAISO solar production and price data. The grid and corresponding price action is changing so quickly – each month brings new data and new insights as the solar penetration rate continues to grow. In this newsletter we take a look at what is happening to the real-time price distributions and look into some things that may be causing these changes. We start with a monthly view of the distribution of SP15 real-time prices. We have created three bins for the prices: Negative – This includes all ... » read more
Thursday May 5, 2016   
The natural gas market has steadily increased over the the last two days with Henry Hub's June contract trading up 6 cents to close at $2.14 yesterday.  Part of the bullish market sentiment is driven by strong power burns which have sat around 26 BCF/day to start the month. Figure 1 | North American Power Burns - BCF/day  This is surprising considering that total power burns are averaging 1.5 BCF above last May's average yet net load is down compared to last May.  See yesterday's newsletter "On Big Turbine" for a robust ... » read more
Wednesday May 4, 2016   
Over the past 5-6 years, the Renewable Energy drive has kicked into high gear with California taking the bull by the horns and implementing its Renewable Portfolio Standards program.  This kicked off the whirlwind growth of both wind and solar across the West.  Across the rest of the country, the penetration has been made up of wind capacity as certain states mandated their own program or the economics of wind generation (including the Federal Tax Credits) penciled out.  The most notable increase over the past 12-18 months has been seen in both SPP and ... » read more
Tuesday May 3, 2016   
On Friday one of the oldest and most reliable pipelines in the country ruptures right in the heart of the Marcellus producing area. The rupture on the TETCo Pipeline in the M3 delivery zone stopped 1.4 BCF per day from flowing from the Delmont compressor station east of Pittsburgh to the Mid Atlantic. Immediately, upon hearing of the news front month NYMEX futures jumped 10 cents on the news to close the day at $2.18 cents. The market assumption that losing such a critical pipeline would cause supply disruptions and production to shut in after such a catastrophic ... » read more
Monday May 2, 2016   
Time time has come where the rubber is going to start to meet the road when it comes to the issues surrounding Aliso Canyon this summer.  Just to get everyone up to speed, since the leak they found last Fall was plugged, there has been a mandate that Aliso Canyon cannot inject any gas.  This mandate is in effect until they have inspected all the wells to make sure the valves are safe.  As a result, the gas that is in storage is what it is and that has both SoCal Gas and CAISO worried during the extreme hot days this summer when the power demand sores in ... » read more
Friday Apr 29, 2016   
Spring is always an interesting time in the Pacific Northwest. The size and timing of the spring runoff varies from year to year. Fortunes are made or lost as energy traders try to anticipate the relationship between runoff, production, and price. Peak and off-peak prices during the second quarter are often the most volatile of the year in the western markets. April is so complicated that the reliability planners split it into two months. During early April, the threat is cold weather combined with low runoff can strain the system -- especially during the morning ... » read more
Thursday Apr 28, 2016   
As we get closer to the end of April, this past week has seen some record wind which has resulted in the middle of the day clears to come in negative for the first time in 5 years during a weekday. Let's take a look at the data. First, wind generation within the state of California has been on a tear as of late. Figure 1 | Daily California Average Wind Generation - 7 Day Rolling Average Breaking it down by zone (NP15 and SP15) you can see the steady output down in the Southern part of the state, while the North has been a little choppy. Figure 2 | CAISO Wind ... » read more
Wednesday Apr 27, 2016   
Yesterday's newsletter covered a recent update from the Texas Railroad Commission which indicated that total natural gas production in Texas had declined 1.25 BCF/day between February and January of this year and fell over 4 BCF/day from February last year. Texas has multiple shale plays, all with different economics, fortunately the commission provided district level information which allows us to match production levels to an individual region.  In Figure 1 below we break out Oil, NG, and Associated NG production for Districts 1 & 2 which are primarily ... » read more
Tuesday Apr 26, 2016   
Trying to estimate natural gas production in Texas is a tricky proposition. Since most of the production is metered on intrastate versus interstate pipelines they are not under FERC jurisdiction to post meter data to a bulletin board. Forecasting services are left with the few long haul pipes that run through the state to gather their sample size. When reconciling the data, most forecasters will go back to the Texas Railroad Commission or EIA data to true up the actual volumes. To complicate matters, a significant amount of Texas natural gas comes from crude ... » read more
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