In addition to the wholesale cost of energy, other items such as capacity combine to make the total cost of a customer’s electric bill. A portion of a customer’s capacity payment is determined by what is referred to as a Capacity Tag (can also be called peak load contribution (PLC), Installed Capacity (ICAP) or peak monthly demand depending on the customers location). A capacity tag is set for a customer by using their peak demand during a specific peak day/hour/timeframe. Each ISO calculates and records this differently per their requirements....Continue Reading
Electricity Market NYISO and PJM saw almost no change week over week. ISO- NE also continues to be relatively steady, no big movements around the forward price of energy. However, forward quotes still may come in higher than expected in this region due to capacity, ancillaries, RECS and other factors. These are not going away regardless of low wholesale energy prices! The day-ahead market has remained somewhat volatile, based on the below-normal weather in much of the Northeast especially. Natural Gas Markets The price of the 12-month strip averaging May...Continue Reading
Electricity Market While most of the ISO’s have remained quiet, ERCOT is back on the rise. On peak pricing, especially in July and August is anticipated to be very high, running up the 12-month forward average. Also note that some ISO-NE zones will experience an increase in their capacity market starting in June. Any clients currently on market variable programs should be advised of this change. Spot pricing in New England has bounced up and down with the changes in weather. However, the volatility has not been as severe as...Continue Reading
Electricity Market NEISO, PJM, and NYISO remained flat overall since last week’s report. ERCOT experienced a slight bump up after the drop-off. The Department of Energy released a study on future coal and nuclear generation retirements, which examined NEISO, NYISO, PJM, and ERCOT during historical high demand periods, and said that additional coal and nuclear retirements could result in future grid instability. If coal and nuclear generators are kept online, there could be less demand for natural gas for electricity generation. The Day-Ahead market remained quiet, as temperatures have come...Continue Reading
Electricity Market The wholesale electric market did not see much movement from last week’s report. NYISO slightly decreased while NEISO and PJM remained steady. ERCOT saw a drop-off, as additional capacity projects are planned to come in service between 2018 and 2022. Spot market pricing on the day-ahead shot up in PJM, while NEISO is returning to normal post-storm. Natural Gas Markets The natural gas market 2018 forward curve is trending down across the board. With strong production matching higher demand, the market is content to hover in its...Continue Reading
Electricity Market The electric market has shown some volatility, but it is still a good time to hedge. ISO-NE remains flat, while NYISO and PJM moved up slightly from last week. These markets haven’t seen a spike since the cold weather in January. ERCOT, however, continues to climb as a result over concern from the tightening of reserve margins for the coming summer. The Day-Ahead market continues to trade in a fairly tight range. The market will need an indication of warmer weather before any severe drops occur. Natural...Continue Reading
Electricity Market Wholesale electric prices over the report week were overwhelmingly flat, with the exception of ERCOT which again moved higher. In addition to the coal plant closure announcements and nervousness about load reliability during the summer, the economy in Texas has been heated. Energy prices in this market are unrestrained which could cause some anxiety moving forward. As the long run of above average weather ended, more normal conditions caused a slight uptick on the day-ahead market for ISO-NE. The storm at the beginning of the report week did...Continue Reading
When evaluating natural gas contracts, one component that you may consider is the suppliers offering of swing options. Swing refers to your business being able to go above or below the amount to be supplied, while still being billed or credited for any used/unused volume at your fixed or index price. Sometimes also referred to as “contract quantity”, the variance in swing ranges from 0-100%, while most suppliers will give you the option to have 0% swing, 10% swing or 100% swing. Typically, if you choose a 100% swing option,...Continue Reading
The price consumers pay for electric supply is made up of a series of components. Although the price of wholesale energy is often the focus, it is actually only a portion (recently 50% or less) of the overall cost. One element that has recently increased significantly, especially in the New England market, is capacity. Capacity prices are set through periodic auctions where New England power plant owners bid to assure that there will be enough generating capacity on the hottest and coldest days. The bidders compete with each other and...Continue Reading
Yesterday, Power Management attended the 2015 IREM Vendor Showcase. IREM, known as the Institute of Real Estate Management, is a resource for property managers that serve the multi-family and commercial sectors. The organization provides educational opportunities and related resources to their members. The showcase featured people from the Western New York Chapter 58, which covers 23 counties in upstate NY from Syracuse on West. Power Management had the opportunity to visit with some current clients, and also saw a lot of new faces! We met a lot of great individuals,...Continue Reading
For energy customers in Ohio, the importance of deregulation is again being challenged. Claiming they are unable to compete in the deregulated market, some Ohio utilities including AEP and FirstEnergy are asking for assistance from the Public Utilities Commission of Ohio (PUCO). Their concern is directed at the coal power plants and they are requesting the PUCO to allow them into a power purchase agreement (PPA) to guarantee pricing to keep them running. If approved, consumers will not benefit from a truly competitive market. Consumers hooked up to the grid will have...Continue Reading
