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Friday Mar 13, 2020   
It won’t be long before we’ll start looking to the summer season in various power markets to see how the supply demand balance is fairing. Just last week ERCOT published its Seasonal Assessment of Resource Adequacy (SARA) for Summer 2020. Table 1 shows ERCOT’s overall projected supply-demand balance picture for Summer 2020 along with comparable values from ERCOT’s final Summer 2019 assessment.  Table 1 shows major resource categories and planning reserve margin (PRM), which is the percent by which total resources exceed expected (1-in-2) peak demand.  The table shows that year on year, ERCOT has significantly improved its position.  ERCOT is experiencing only  modest retirements, an increase in “mothballed-but-available” units, the ... » read more
Thursday Mar 12, 2020   
Being the team manager for my son's travel soccer team has been quite interesting over the years.  For example, in December of 2018, the team traveled to North Carolina for the first of two National League weekends where they had four matches on the schedule. As they finished playing the second match on Friday, the news broke that the league was cancelling the remaining two matches due to severe weahter moving into the region.  Since I did not travel on this trip, I had to stop what I was doing here in Portland, OR and get on the phone with the airline where I booked the block of 18 tickets to see what my options were to try and get out before the storm hit.  I had no luck at the time as the only option would have been to potentially drive from Raleigh, NC to New ... » read more
Wednesday Mar 11, 2020   
The chaos in the market this week has been well documented as the stock market saw its biggest drop since the housing crash over a decade ago, crude prices moved down almost $10.00 prior to the US markets opening up Monday morning and the natural gas space started to follow suite as the prompt month was down $0.08 prior to the open.  All of this downward movement was tied to the COVID 19 virus spreading across the world with countries like China and Italy in full lockdown mode as the number of cases grew.  In the US, the weekend was filled with news tied to the COVID 19 virus being detected amongst many within cities across the country.  This has led ompanies and state agencies to implement tele-communting procedures, travel bans and actual closures to minimizing the ... » read more
Tuesday Mar 10, 2020   
As part of the ongoing build out of the Nova Gas Transmission system in Alberta, TC Energy is expanding their pipeline footprint into the United States. The West Side Expansion is a 1 billion dollar investment to bring more Foothills gas production into British Columbia and the Pacific Northwest. But this is only feasible if downstream paths increase their capacity to take the additional gas. Appropriately, they have announced a 335 million dollar expansion of the Gas Transmission Northwest Pipeline which connects down to the PG&E system in Northern California. The new capacity would add another .25 BCF to the existing 2.8 BCF of deliverability onto the Kingsgate compressor station at the Canadian Border. Figure 1 | Kingsgate Compressor Flows to GTN Pipeline The GTN ... » read more
Monday Mar 9, 2020   
This blog reports on a paper co-authored by REsurety and Energy GPS titled The “P99 Hedge” That Wasn’t which was originally released in the spring of 2018 and was updated on March 3rd 2020. A copy of the original paper and the update can be found here: For a number of years, ERCOT generation owners, retail electric providers, and traders have anxiously awaited the hot summer months to see if spot prices would finally experience sustained price spikes up into the thousands of dollars per MWh. They rarely did. Forward contracts for on peak August 2018 and then August 2019 deliveries ranged in value from $75 per MWh to more than $200 per MWh in advance of the delivery month. » read more
Friday Mar 6, 2020   
Over the past few months, EGPS has been watching the basis story unfold in the Desert Southwest area. We found that the area, dominated by huge amounts of solar, has been experiencing congestion with almost exactly a solar shape: as solar generation ramps up, basis increases, and as solar declines in the evening, basis declines with it. The historical basis in the area is interesting to examine, as the influence of solar becomes more and more obvious over the years. If you missed our two articles on this topic, you can purchase either a la carte by clicking on the links provided (Basis Story Part 1, Basis Story Part 2) as well as our third one in the serios published today (Basis Story Part 3).  The other option you have is to sign up for either our Gold or Platinum ... » read more
Thursday Mar 5, 2020   
It is the beginning of March and the 15 day weather model runs are showing nothing but below normal HDD accumulation across the Lower 48.  This means that the natural gas landscape will be trying to find its way as the daily balancing act is holding on for dear life.  Speaking of holding on, the Lone Star state is going to have a situation of its own this weekend as the wind looks to be picking up a head of steam.  For example, the current flat daily average for the wind output is just under 10.0 GW while Sunday is looking at doubling that amount with just under 20.0 GWa in the forecast. Figure 1 | ERCOT Daily Summary Breakout If you combine the uptick in the wind generation with the fact that the power demand is shifting lower due to it being a weekend and moderate ... » read more
Wednesday Mar 4, 2020   
The month of March is off to a similar start as to how the month of February played out inside of California and tis precipitation pattern.  If you look back at the month of January, it started out with somewhat of a reasonable start to the 2019-2020 Water Year as the precipitation pattern was tracking that of normal and the prior couple of years.  It was at the halfway point of the month that things started to change as the jet stream was holding any type of precipitation out in the Pacific Ocean and not letting it onshore. Figure 1 | California's Northern Region Snow Water Percent as of April 1 This trend continued on through the month of February as the northern portion of the state basically dried up as there was no snowpack accumulation or rainfall to speak of.  If ... » read more
Tuesday Mar 3, 2020   
Over the past decade, Columbia Pipeline has recreated itself. The pipe was originally designed to take natural gas from the gulf of Mexico back up to Kentucky and West Virginia. But with the blooming production idustry out of the Marcellus Basin the compression on the pipe has been progressively reversed. The pipe now has over 2 BCF of capacity from the Midwest down to the Gulf designed to feed the growing LNG exports. Last month that capacity was cut from 2.1 to 1.5 BCF as a forced outage was initiated. The lost volume was the catalyst for large storage draws out of the South Central caverns. Figure 1 | Columbia Pipeline Back Haul Flows South of Leach The outage lasted from January 24 into this past weekend. Once the derate was lifted the balancing in the Gulf flipped ... » read more
Monday Mar 2, 2020   
It is now March 2020 and the winter season will be coming to an end over the next 28 days.  Now some might argue the end was a few months ago as Mother Nature sprinkled warmer than normal dust across the Lower 48 early and often.  This has led to a natural gas storage level that is just over 600 BCF higher than last year at this time.  If you take into account the fact that the latest 15-day forecast is showing above normal temperatures (below normal HDD accumulation), it might be time to officially move this year's month of March into the summer strip. Figure 1 | Lower 48 HDD Accumulation Forecast The yellow line represents last year's HDD accumulation by day while the blue line is this year's forecast.  As you can see, the 1-5 day period is well below that of ... » read more
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