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Monday Mar 26, 2018   
Every time I open an industry publication it feels like I am reading something about cryptocurrency miners seeking electricity supply sources in the Pacific Northwest.  Public Utility Districts (PUD) in Northern Wasco, Chelan, Grand, and Douglas counties, as well as many others have been inundated with requests for service in their respective regions.  The reason for the the increased requests as you know is the combination of skyrocketing cryptocurrency prices and the PUD's $.02-.04/KWh electricity rates (the nationwide average is more than $.10/KWh) combine to create quite an attractive spread for potential miners.  Many of the PUD's have started to put the kibosh on the run on their electrons, with a concern that they are selling their surplus to customers (miners) that ... » read more
Friday Mar 23, 2018   
I really like the SPP market. In terms of centralized markets, it’s still the new kid on the block. It began operating a real-time imbalance market in 2007. It didn’t implement an integrated day-ahead, real-time, and ancillary service market until 2014. The market is comprised almost entirely of vertically integrated utilities. There is little merchant generation in the market. There is little direct access or retail competition. The market footprint is comprised entirely of “red” states.  You wouldn’t consider this region a bastion of progressive thinking. The individual states have no or relatively low renewable portfolio standards. Despite that, between 2014 and 2017 installed wind capacity has more than doubled from about 8,000 MW to more than ... » read more
Thursday Mar 22, 2018   
In a previous newsletter, we took a look at how the wind penetration within SPP was impacting the overall generation stack as well as curtailments on the grid.  In today's newsletter we dive into the neighboring Independent System Operator (ISO), known as MISO, to see how the wind penetration is impacting its respective supply stack. In order to fully understand what is happening on the grid when wind generation ramps up, it is important to know the location and composition of the supply stack in each ISO.  For example, MISO has the majority of its wind output in the northern region, which is dependent more on coal for baseload power. In SPP, the southern portion of the footprint has the majority of wind (Oklahoma and parts of Texas). The good news is that is right in the center ... » read more
Wednesday Mar 21, 2018   
The northeast celebrated its first day of spring (3/20) prepping for yet another winter storm as a low pressure system barrels up the coast bringing snow and high wind.  This will be the 4th "Nor'easter" to hit the region in about three weeks as March has turned out to be a brutal end to an otherwise mild winter.   Figure 1 | Satellite Image of the First Three March Nor'easters  The storm system is expected to form over the Outer Banks by Wednesday morning and begin tracking towards the Northeast.  The system will hit DC first and move its way up to Philadelphia by Wednesday afternoon.  The storm is expected to drop a foot of snow over Philadelphia which would the the largest Spring snowfall the city has seen in over 100 years. The snow ... » read more
Tuesday Mar 20, 2018   
Over the past ten years we have seen a litany of pipeline projects in the Northeast designed to reverse the flow of natural gas that typically flowed from the Gulf. Transco, Texas Eastern, Tennessee Gas Pipeline, Columbia and Texas Gas Pipeline have all reversed course with the growth of Marcellus and Utica production. Earlier this month, that flow had jumped all the way out to 7.4 BCF per day that is moving from the production basins down to the Gulf. But since that point, the volume has continually slid lower as a number of factors have weighed on the transport economics.  After seeing a mild month of January, the Northeast and Midwest have flipped around to the cold side providing well above normal space heating in the Northeast. Dominion LDC load is averaging .3 BCF above the ... » read more
Monday Mar 19, 2018   
In case you are not aware, it has been a very volatile winter down in Southern California.  Not only have the gas prices been volatile, due to SoCalGas' system having both pipeline receipt and Aliso Canyon storage limitations, such that even normal temperatures can result in price spikes, but also the politics have been quite volatile.  In this Newsletter we want to bring to light a recent series of letters between California Senator Henry Stern, the California Public Utility Commission (CPUC), and SoCalGas.  The spat between these three brought me great reading joy, so sharing is a must. Starting things off at the beginning of March was a very reasonable letter from SoCalGas to the CPUC, found here (snippet in Figure 1).  The letter requested immediate ... » read more
Friday Mar 16, 2018   
ERCOT is the only centralized market in the US without a capacity market. Generators in ERCOT are expected to earn their revenue via the short term energy and ancillary services markets. ERCOT has been tweaking its market design over the years so that real-time energy prices will spike during times of shortage. Along those lines, in June of 2014 ERCOT implemented its Operating Reserve Demand Curve which is known by its acronym, ORDC. The ORDC creates an adder to the real-time price under certain scarcity conditions. When operating reserves fall below a certain level the ORDC kicks in, increasing the real-time price by increasing amounts as reserves become increasingly scarce. The following figure depicts the ORDC in general terms. Figure 1 | ERCOT Operating Reserve Demand Curve ... » read more
Thursday Mar 15, 2018   
The Northeast just can’t seem to get a break. There have been 3 Nor’easters that landed in the region over the past 3 weeks. While none of the recent storms have matched the bomb cyclone of January, each wintry blast brought massive snowfall and heavy winds to the region that has not been able to shake 'Ole Man Winter'. Figure 1 | Northeast Blocking Pattern Nor’easters develop when arctic winds blow down from Canada. The cold air moves southeast, and storms begin to brew as the winds reach warmer air generally found in high pressure systems over the ocean. This has made New England a prime breeding ground for these storms to develop. Over the course of this year, a blocking pattern has held with a low pressure system sitting over the East Coast and a high pressure ... » read more
Wednesday Mar 14, 2018   
After a warm and volatile end to February, we have seen temperatures across the Northeast trend down and shift below normal to start this week.  Average temperatures in Philadelphia fell into the mid-30s with similar downside seen across the other major PJM load zones.   Figure 1| Philadelphia Temperatures Feb 1st - ... » read more
Tuesday Mar 13, 2018   
Winter weather is not going away any time soon. This is a stark contrast to what the forecasters called for just four weeks weeks ago. By this time we were expected to have broad warming across the West with normal temperatures in the East and Gulf. This was seen as an early beginning to spring and an early end to space heating for many areas of the country.  ... » read more
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