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Energy Market Update: May 15, 2018

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What’s the pricing forecast for peak electricity prices in Q3?

In this week’s Energy Market Update, Direct Energy Business Strategist, Tim Bigler, talks about summer forecasts and regional electricity prices.

Watch the video below to learn more.


Summer Weather Outlook

  • Direct Energy Forecast calls for 940 PWCDDs this summer.
  • Forecast now runs warmer than market consensus.
  • Lack of drought improvement model trends away from El Nino development and current trends toward less North Atlantic blocking (+NAO) drive the warmer changes.
  • Most significant warm changes are for Texas. Little change to the Eastern US.

Related Content: Watch our full on-demand summer energy outlook webinar

Q3 2018 Regional Peak Electricity Prices

  • ERCOT prices have remained at a straight-line average of $131 for peak prices, and going up
  • California prices are also elevating, due to retiring power plants, which lower reserve margins.
  • MIDCON, WEST PA, and NYISO A Regions see rather flat prices, with the exception of PJM Allegheny Power System. Despite being in a zone with lower gas and coal prices relative to the rest of the country, there is some potential for transmission congestion.
  • East US prices are primarily stable.

Stay tuned to the Direct Energy Business Blog for the latest market news and information.

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Posted: May 15, 2018