United Energy Consultants Insights
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Market Update
The natural gas storage reports expectations for week ending 11/1/2024 was for a build in the mid 60’s. The five-year average for this time is a build in the 30’s. This is a complete reversal compared to the predictions from this summer’s weekly expectations. The actual was reported to be +69 Bcf.
Over Veteran’s Day, there was a heavy push where Dec 24 briefly touched $3.00/MMbtu. A large gap up from $2.67 on Friday. Pricing is now currently trading at $2.85. Cash continues to be soft, as well.
Production is just over 100 Bcf/day last week. Most of the decrease is attributed to maintenance shut down.
Production is expected to ramp back up by 2 Bcf no later than early next week.
For week ending 11/8/24, there’s an expected build of +65. Historically, this week of the year is draw from storage. Due to the warmer than normal temps the country has been facing we are not using as much natural gas for heating demand. If any sort of build materializes it will be the largest storage inventories in the past five years and would register a storage amount just shy of 4 TCF.
FERC has approved a six-month delay of the next three scheduled capacity auctions that were able to take place beginning in Dec 2024. PJM requested the delay to study the possibility of allowing reliability must run generators to participate in the capacity auctions.
FERC Approves PJM’s Six-Month Capacity Auction Delay
The Federal Energy Regulatory Commission (FERC) approved PJM Interconnection's request to delay its next capacity auction by six months to revise market rules addressing high prices and uncertainty. Initially scheduled for December, the postponement allows PJM to tackle key challenges and give stakeholders time to adapt to new regulations.
The delay follows a complaint from environmental groups after record-high clearing prices for the 2025/2026 delivery year, which jumped to $269.92/MW-day from $28.92/MW-day for 2024/2025. The complaint blamed outdated market rules that fail to account for the reliability contributions of aging generation resources still in operation.
PJM argued that excluding these resources could result in artificially low prices, threatening the viability of essential generation. The grid operator plans targeted adjustments to market rules, particularly for reliability-must-run resources.
FERC acknowledged potential risks but found the delay justified, praising PJM for acting in good faith. Stakeholders supported the decision, emphasizing the need for meaningful reforms. FERC concluded the postponement would help resolve key market challenges while giving participants time to adapt to new rules.
2024 Election Results Reveal Divided Landscape on Energy and Climate Policy Across U.S.
The 2024 election results highlight contrasting approaches to energy and climate policies across different regions in the U.S. While Republicans gained control of both the White House and Senate, down-ballot results presented a varied landscape of energy policy preferences.
In key races, Pennsylvania elected Republican David McCormick, who opposes clean energy subsidies and emphasizes natural gas production. Texas re-elected Senator Ted Cruz, a strong oil and gas supporter, reinforcing conservative energy policies. Conversely, North Carolina's Democratic governor-elect, Josh Stein, supports renewable energy and aims for carbon neutrality by 2050. In New Hampshire, Republican Kelly Ayotte won the governorship, advocating for a technology-neutral approach and nuclear energy expansion.
In Montana, Republican wins in the Public Service Commission (PSC) are expected to promote coal and natural gas, while California passed Proposition 4, authorizing $10 billion for climate projects like renewable energy and wildfire prevention. South Dakota, however, rejected new CO2 pipeline regulations, impacting biofuel producers and carbon capture initiatives. Washington voters upheld the state’s carbon market by rejecting an initiative to repeal it, preserving the state’s cap-and-invest emissions program.
These mixed results illustrate diverse priorities at state and local levels, which will influence national and regional energy strategies, infrastructure investments, and climate-related regulatory decisions moving forward.
ISO New England’s 2025 Forecast Enhances Precision in Power Demand and Renewable Modeling
ISO New England's upcoming 2025 CELT (Capacity, energy, loads, and transmission) report aims to enhance accuracy in forecasting for power demand, heat pumps, solar, and electric vehicles by updating its modeling methods. Presented at a recent NEPOOL Load Forecast Committee meeting, the report outlines a shift to more granular, hourly forecasts based on 70+ years of historical weather data and climate reanalysis, which blend past observations with models to provide reliable climate data.
Significant updates include a new base load forecast using historical power demand adjusted for behind-the-meter solar and electrification. Heat pump demand will consider simulated, weather-driven building heating needs, while the solar forecast will account for historical hourly capacity reductions. Electric vehicle projections will incorporate policy-based adoption across five vehicle types, factoring in battery efficiency and charging profiles tied to weather conditions.
All forecasts will now be developed at a county level and aggregated into broader load zones, enhancing both spatial and temporal detail. This approach allows for combined forecasts based on weather events spanning the historical simulation period. The 2025 CELT report's advancements promise a more precise and detailed outlook on New England's energy needs, with further refinements to base load, heat pump, EV, and solar forecasts to be discussed in upcoming committee meetings.