ERCOT PRELIMINARY SUMMER RESOURCE ADEQUACY ASSESSMENT

On March 1, Electric Reliability Council of Texas (ERCOT) issued its preliminary assessment of Resource Adequacy for summer 2013.  According to the published numbers reserve margins (excess capacity over projected peak demand) will be 8.4%, well below that of last summer.  The report suggested that it is very likely that ERCOT will need to declare Emergency Energy Alerts (EEAs).  Depending on which level of EEA is declared, ERCOT will take the following corresponding actions until supply and demand are brought back in to balance:

Over the last couple of years, significant attention has been paid to the practice of “fracking” in which a slurry of water, sand, and chemicals are injected at high pressure to crack open rock formations which hold natural gas and oil.  The use of fracking has fueled the boom in natural gas production and could help the U.S. achieve energy independence by 2030 or sooner.  The boom in natural gas production from fracking has kept natural gas, and therefore energy prices, lower than expected.  In the mid-2000s, most analysts predicted natural gas prices would reach the $10-11/MMBTU range as compared with the current price of less than $3.50/MMBtu.  In short, technology improvements have allowed producers to unlock previously uneconomic or unavailable natural gas and oil deposits in the U.S. Fracking provides substantial economic benefits across the entire U.S. economy;  however, there are concerns about fracking’s environmental impact which are currently being addressed to determine if this technology is to fuel future energy independence for the U.S.

In April 2012, Cheniere Energy received final regulatory approvals to build a major liquefied natural gas (LNG) export terminal at Sabine Pass in Louisiana.  This event rippled through the energy world, with concern growing that export natural gas would lead to higher domestic prices. Currently, natural gas prices in Asia are 3-4 times higher than those in the U.S. while prices in Europe are 2-3 times higher. In light of these spreads, industrial gas producers are urging the Department of Energy to approve LNG exports. However, the export of LNG is unlikely to have significant impact on natural gas prices in the next 3-5 years.  Rather, other factors, such as new environmental regulations, are likely to be more significant drivers of natural gas prices.

If you need timely information on what is happening in the natural gas market  you need to read the Acclaim Energy Insider every week. This week his 2 page overview (see link below) focuses on  the natural gas maket and ERCOT heat rates. Don't get caught without understanding what may be in store for the days ahead.....

Video Outlook: August 2, 2012

A larger than expected injection of 28Bcf triggered a sharp selloff in the natural gas market. Likewise, a shift in forecasts calling for less intense temperatures contributed to the pullback. The September contract is now trading below $3.00/MMBtu, so such price has now become resistance. We have seen bargain hunting at this level; however, the degree of weather driven demand will dictate the next move.

Tropical Weather Outlook and Energy Management 

After some choppy trading, Natural Gas futures are pulling back slightly. A shift in forecasts are calling for less intense temperatures for the first two weeks of August.

AWBD Attendees Enjoyed a Jerry Jeff Walker Concert Hosted by Acclaim Energy and AT&T 

Last week Acclaim Energy Advisors attended the annual AWBD Conference in San Antonio, Texas. On Friday night, July 20th, Acclaim hosted a party for over 1,000 AWBD attendees where Jerry Jeff Walker put on an unforgetable performance. 

Acclaim Energy Launches New Demand Response Solution 

Acclaim Energy Advisors exhibited their new energy reliability solution at the 2012 AWBD (The Association of Water Board Directors-Texas) Annual Conference in San Antonio, Texas. Team members from AT&T and ILS Technologies accompanied Acclaim Energy in launching this low cost, auto-enabled technology that reduces energy expeditures and generates revenue for small and large commercial customers. This solution is know as  the Dynamic Load Optimization 365 (DLO 365 sm) powered by AT&T. 

Video Outlook: July 25, 2012

ENERGY INSIGHTS: JULY 18, 2012

Today above normal temperatures and nuclear outages drove prices close to $3.00/MMBtu. The imbalance between supply and demand continues to tighten, so be sure to contact your Acclaim representative to evaluate your current situation.