What’s the pricing forecast for energy in 2019?
read | Share:
What’s the pricing forecast for energy in 2019?
In this week’s Energy Market Update, Direct Energy Business Strategist, Tim Bigler, talks about regional energy fixed prices, and why you might be seeing a slight separation between gas and electricity price trends.
Watch the video below to learn more.
2019 Regional Natural Gas Fixed Prices
In most areas of the United States, natural gas is a crucial factor in power generation. So, price is important for a number of reasons.
- NE Algonquin Constraints on the pipeline are driven primarily by the basis, rather than the NYMEX. With extreme winters like the one we’ve just experienced, the market tends to readjust to higher level. That’s why we’re seeing the price fall just below $4.50.
- NY Iroquis Z2 & Transco Z6 NY These areas are also constrained due to the winter weather. But prices in both areas are flattening out without significant reaction.
- SoCal City The Aliso Canyon – a large natural gas field and storage facility – has been reduced significantly, adding stress and operational issues to storage and maintenance programs. They’ve also added a risk premium, increasing prices to just below $3.00.
- Chicago, Ohio, Pennsylvania and New Jersey These areas have good access to gas, and that’s keeping prices near to the $2.50 to $3.00 range.
2019 Regional ATC Electric Energy Prices
New England and New York City are constrained natural gas areas and are therefore seeing higher electricity prices.
ERCOT is retiring almost 5,000 megawatts of power generation. So, we’re seeing July and August prices jump up to $50-80 per megawatt hour. Regulatory risks are also lowering the reserve margin, adding strain and risk premiums in the summers.
In Illinois, we’re seeing price reactions to their access to gas through the Rover pipeline.
In PJM W Hub, we’re also seeing fear of retirement reflected in PJM W Hub electricity prices.
However, there’s something new happening across markets in many areas. Power prices are starting to reflect retirement and regulatory risks in the marketplace. We’re seeing these prices separating slightly from gas, even when gas is flat.
Stay tuned to the Direct Energy Business Blog for the latest market news and information.
Posted: April 17, 2018
Loading please wait...