APRIL 2024

Strategic Energy Newsletter

Hi !

"We have this handy fusion reactor in the sky called the sun; you don’t have to do anything, it just works. It shows up every day.”

Elon Musk

Industrialist

Azi Feifel

COO PROSPECT RESOURCES

Trends in the Energy Market

Current Market News

NYMEX futures have continued to rise mildly, at least for the near term. Prompt-month NYMEX settled at $1.932 / MMbtu on Tuesday, April 16. Futures rise to $3.72 mid-winter.
Natural gas production is holding steady, though rig count has fallen
The mid-range forecast shows above-average temps in the most of the country, excluding CA and the west coast. The center of the country will be highest above normal. Above average precipitation is also expected.

Natural gas storage inventories remain very high; 23% higher than last year and 38.4% higher than the 5-year average.

The US exported 10% more natural gas in 2023 than in 2022,

And yet more...

Crude oil futures have been rising, especially as conflicts with Iran and its proxies intensify. WTI contracts have been holding above $84 / barrel with a spike near $87 on April 5.
Economy - The economy grew 3.3% in Q4, well above expectations and by far the strongest in the G7. US Inflation Rate is at 3.48%, compared to 3.15% last month and 4.98% last year. The US added 303,000 jobs in March, the largest gain in more than a year. The unemployment rate also edged lower, to 3.8%
PJM forwards through 2028 have definitely been rising; 2024 is still a pretty good mid-market bargain. ERCOT markets remain backwardated.

Discuss with Azi

ComEd Billing Disruptions

Let us help!

Please be aware that due to the new Account and ESID numbers that ComEd recently rolled out, some customers are experiencing delays and inconsistencies with their utility invoices. PRI can limit the hurt and disruption for its clients. Just give us a call!

ComEd Account Number Look Up

ComEd and Carbon-Free Resource Adjustments

Impacting Your Electricity Bill

The Carbon-Free Resource Adjustment (CFRA) was created by a provision in the 2021 Climate and Equitable Jobs Act, or CEJA, landmark energy legislation in Illinois. The CFRA was meant to give a subsidy over five years to Illinois nuclear power plants to support lower-cost carbon-free energy when market prices were below a certain level. Over its first year, the CFRA delivered a total of about $2.4 billion in credits to consumers. But now, with a lower market, the CFRA is resulting in highly inflated ComEd utility bills. Customers cannot budget for CFRA as the rate is only published monthly. It has become a quite onerous utility burden. Unfortunately this is built into the legislation and cannot be hedged away and smoothed.

ComEd CFRA

♦♦♦ CURRENT NEWS ♦♦♦

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ELECTRICITY:

Electricity Prices Rise Faster Than Inflation
Industry groups say transmission costs drove the 5 percent annual increase.

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NATURAL GAS:

Mild Winter Weather May Lead to Persistently High Natural Gas Inventories Through 2025
U.S. working natural gas inventories ended the winter heating season (November 1–March 31) at 2,290 billion cubic feet (Bcf), 39% more than the previous five-year (2019–23) average. Relatively high natural gas inventories all winter have contributed to record-low Henry Hub natural gas spot prices.

The surplus to the five-year average grew over winter 2023–24 because of mild weather, low natural gas consumption, and high natural gas production. In the April Short-Term Energy Outlook (STEO), it expects natural gas inventories to remain relatively high and natural gas spot prices to remain relatively low through 2025.

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WHOLESALE ELECTRICITY:

Introducing the Wholesale Electricity Market Portal
This month the IEA publicly released the new Wholesale Electricity Market Portal to help users examine and access electricity markets data in the seven Regional Transmission Organizations and Independent System Operators.

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SOLAR:

Solar Capacity Additions are Changing the Shape of Daily Electricity Supply in Texas
The electricity mix of energy sources in Texas, managed by the Electric Reliability Council of Texas (ERCOT) electricity grid operator, changed noticeably in 2023. Although wind power remains the largest source of renewable power in the state, the installation of new wind turbine capacity slowed in 2023, while additions of solar generating capacity, often co-located with storage, grew rapidly.

With more solar capacity on the ERCOT electricity grid, the IEA expects less use of natural gas generation during the middle of the day when solar generation displaces it. Also, expect less use of natural gas in the summer when electricity demand is at its highest in Texas. However, natural gas will continue to be a key source of electricity generation in the evening when demand is high and solar generation diminishes as the sun goes down. Data source: U.S. Energy Information Administration, Hourly Electric Grid Monitor

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CHEMICAL:

U.S. Refiners and Chemical Manufacturers Lead Hydrogen Production and Consumption
U.S. manufacturers specializing in chemicals and petroleum refining have traditionally accounted for the largest shares of both hydrogen consumption and production, and they pay the least for it. With new legislation, we expect changes to how hydrogen is consumed and distributed in the country.

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LNG:

The United States was the World’s Largest Liquefied Natural Gas Exporter in 2023
The United States exported more liquefied natural gas (LNG) than any other country in 2023. U.S. LNG exports averaged 11.9 billion cubic feet per day (Bcf/d)—a 12% increase (1.3 Bcf/d) compared with 2022, according to data from our Natural Gas Monthly.

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