DOE EIA Weekly Gas Storage Report
Working gas in storage was 3,193 Bcf as of Friday, August 28, 2015, according to EIA estimates. This represents a net increase of 94 Bcf from the previous week. Stocks were 495 Bcf higher than last year at this time and 122 Bcf above the 5-year average of 3,071 Bcf
EIA to estimate 83-87 Bcf
Actual 94 Bcf
An injection within that range would be more than the 79-Bcf build reported in the comparable week of 2014 and the 60-Bcf five year-average increase, EIA data showed. Discussing the possible effect of a high injection number Thursday, Santiago Diaz, broker at INTL FC Stone, said “if the large injection trend continues, it will translate towards more downward pressure on prices.” It is not unusual for natural gas storage injections to reach this size, but what is unusual is how early large injections are arriving. “With the third week of September traditionally marking the low point in the season for weather-related demand, this pattern change appears to be running close to schedule”
Weekly Basis Report
Here is the weekly basis report which is representing the future price change when trading natural gas, the quoted price is the difference between the Henry Hub price and a specific location’s price – called the basis price. A basis position is one that has exposure to two different locations: the Henry Hub and separate location’s price.
Here are some basic understanding on how to measure natural gas:
A BTU is the amount of heat required to increase the temperature of a pint of water (which weighs exactly 16 ounces) by one degree Fahrenheit.
Since BTUs are measurements of energy consumption, they can be converted directly to kilowatt-hours (3412 BTUs = 1 kWh) or joules (1 BTU = 1,055.06 joules).
MBTU stands for one million BTUs, which can also be expressed as one decatherm (10 therms). MBTU is occasionally used as a standard unit of measurement for natural gas, and provides a convenient basis for comparing the energy content of various grades of natural gas and other fuels.
One cubic foot of natural gas produces approximately 1,000 BTUs, so 1,000 cu.ft. of gas are comparable to 1 MBTU.
MBTU is occasionally expressed as MMBTU, which is intended to represent a thousand thousand BTUs
Cogeneration is not Deregulation
Indiana is in the midst of trying to address its high cost of electricity. Two trade associations are facing off; the industrial trade association wants to be able to build cogeneration plants (very efficient plants that produce electricity and heat) while the utility trade association doesn’t want competition on other energy sources. Both trade associations miss the evolution of energy deregulation.
Energy deregulation started during the oil crisis (late 1970s early 80s) and initially the “deregulation” manifested as competition on constructing new power plants. That is: before a utility could build a new power plant, it had to put out to bid what it was going to build and the price and see if others could build it for less and with different fuels.
The second phase of energy deregulation occurred with energy supply to customers (natural gas and electricity). First came large energy users followed over time by residential consumers. During this phase of energy deregulation, the utility became a delivery company and the energy supply (natural gas or electricity) could be purchased from the utility or other energy suppliers.
A review of the facts of energy deregulation over the last 30+ years illustrates:
- The utility model of regulated competition has been demonstrated to cost more than direct competition.
- Power plants should be sited to allow for the efficient use of its output (both the heat and the electricity)
- Customer should be allowed to choose their energy supply. Competition for retail customers in energy supply has demonstrated lower costs, improved efficiency and greater service options.
- Utilities should continue to operate their monopoly on energy delivery
Hopefully, the Indiana legislators review the history and benefits from energy deregulation.
Realgy Energy Services is a registered Retail Energy Marketer in the states of Illinois, Michigan and Indiana. We offer Service Plans that will provide electric and natural gas at wholesale pricing direct to customers without any utility markup. Our Service Plans work with the local utility to provide seamless service and annual energy savings. Service Plans include Guaranteed SavingsTM, MangedPriceTM, ManagedGreenTM and Index, Fixed pricing.
Additional information: www.realgyenergyservices.com
Supporting Article:
EIA Weekly Natural Gas Storage Report
Working gas in storage was 3,099 Bcf as of Friday, August 21, 2015, according to EIA estimates. This represents a net increase of 69 Bcf from the previous week. Stocks were 480 Bcf higher than last year at this time and 88 Bcf above the 5-year average of 3,011 Bcf.
EIA estimate 58-62 Bcf
Actual 69
A consensus of analysts surveyed by Platts expects the US Energy Information Administration on Thursday will estimate a natural gas storage injection of between 58 Bcf and 62 Bcf for the reporting week that ended August 21. An injection within expectations would be less than the 77-Bcf injection reported at this time in 2014 and similar to the 61-Bcf five-year average injection, according to EIA data. The wider range of analysts’ expectations for this week was for an injection of 47 Bcf to 67 Bcf. “US demand rose modestly from the previous week and averaged just above 64.5 Bcf/d during the week,” said Bentek Energy, an analytics and forecasting unit of Platts. “However, this did not translate to lower injection activity, as Bentek’s sample injections increased within both the East and Producing regions compared to the previous week.”
Chicago Weekly Basis Report
Here is exert from a finance book about Derivatives securities which correlates to the basis market because it can generate a higher rate of returns in the future.
Derivative securities (also called derivatives) are financial contracts whose values are derived from the values of underlying financial assets (such as securities). Each derivative security’s value tends to be related to the value of the underlying security in a manner that is understood by firms and investors. Consequently, derivative securities allow firms and investors to take positions in the securities on the basis of their expectations of movements in the underlying financial assets. In particular, investors commonly speculate on expected movements in the value of the underlying financial asset without having to purchase the financial asset. In many cases, a speculative investment in the derivative position can generate a much higher return than the same investment in the underlying financial asset. However, such an investment will also result in a much higher level of risk for the investors. Derivative securities are used not only to take speculative positions but also to hedge, or reduce exposure to risk. For example, firms that are adversely affected by interest rate movements can take a particular position in derivative securities that can offset the effects of interest rate movements. By reducing a firm’s exposure to some external force, derivative securities can reduce its risk
Realgy supports fair competition and is passing along the Deceptive Practices Warning from SEMCO
FOR IMMEDIATE RELEASE
Media Contact: Timothy Lubbers
Director of Business Development
Phone: 810-887-4208
SEMCO ENERGY WARNS OF POSSIBLE DECEPTIVE NATURAL GAS TELEMARKETING; CUSTOMERS ADVISED TO GUARD PERSONAL AND ACCOUNT INFORMATION OVER THE PHONE
PORT HURON, MI, July 07, 2015 – SEMCO ENERGY GAS COMPANY is alerting customers of possible deceptive telemarketing tactics targeting natural gas customers in the SEMCO ENERGY service areas.
The Gas Company has received numerous complaints of customers being called by people claiming to be with SEMCO ENERGY, offering to put them on a special rate and asking for personal information including the customer’s account number.
SEMCO ENERGY does not telemarket customers and ask for account information. Customers are advised to be mindful about sharing personal information, including natural gas account information that they provide in telephone or door to door solicitations. If you have questions about being contacted by someone claiming to represent SEMCO ENERGY, please call 1-800-624-2019 or e-mail customer.service@semcoenergy.com. All SEMCO ENERGY field personnel carry SEMCO ENERGY photo identification.
SEMCO ENERGY customers have the option to buy their natural gas from an alternative gas supplier, however, SEMCO ENERGY does not solicit customers to sign up for the Gas Customer Choice program. The Michigan Public Service Commission (MPSC) provides a list of all alternative gas suppliers licensed in Michigan on the MPSC web site: http://michigan.gov/mpsc/0,4639,7-159-16385_17144—,00.html. The site includes information about the gas customer choice program and a section showing authorized alternative gas suppliers active in SEMCO ENERGY service areas.
If you would like to lodge a complaint about an alternative gas supplier or their marketing practices, please contact the Michigan Public Service Commission at 1-800-292-9555.
Information about the Gas Customer Choice Program and alternative gas suppliers, including suggested questions to consider when selecting an alternative supplier, is also available on the SEMCO ENERGY GAS COMPANY web site, www.semcoenergygas.com. Just click on Natural Gas Customer Choice Program to the left.
SEMCO ENERGY Gas Company, headquartered in Port Huron, Michigan, is a regulated public utility that delivers natural gas to approximately 293,000 residential, commercial and industrial customers in Michigan. Service territories include portions of the southern half of the state’s Lower Peninsula (including in and around the cities of Albion, Battle Creek, Holland, Niles, Port Huron and Three Rivers) and in the central, eastern and western parts of the state’s Upper Peninsula.
Realgy Energy Services is a registered Retail Energy Marketer in the states of Illinois, Michigan and Indiana. We offer Service Plans that will provide electric and natural gas at wholesale pricing direct to customers without any utility markup. Our Service Plans work with the local utility to provide seamless service and annual energy savings. Additional information: www.realgyenergyservices.com
Cost Regulations
2015 ENERGY REGULATIONS LEAD TO HIGHER EQUIPMENT COSTS, BUT WILL THEY HELP YOU SAVE ON ELECTRICITY AND NATURAL GAS?
The Department of Energy has implemented new efficiency regulations on electric and natural gas water heaters as well as air conditioning equipment for 2015. The standards will make new equipment slightly more energy efficient, however, the savings will, for the most part, be insignificant. The increased cost of new equipment will be pricey for homeowners upfront. The resulting savings per household for reduced electricity and natural do pay for the upgrade.
The air conditioning equipment regulations went into effect on January 1, 2015. They apply to split air conditioners and heat pumps as well as traditional central AC compressors. The regulations call for new equipment to increase the Seasonal Energy Efficiency Ratio (SEER) from 13 to 14. The one point SEER increase is fairly negligible from a cost savings standpoint, but the reduction in energy usage across millions of household will add up. The one point translates to roughly 7% electricity savings per year for the average household. Based on national electricity usage and cost averages this would equate to savings of approximately $18 per year.
The most significant referenced downside associated with the new HVAC regulation revolves around the higher cost of the equipment and installation. New equipment will be larger and will likely require most all parts of the AC system to be replaced, not just the compressor. Also, because the equipment will be larger, some very small homes may require modifications to accommodate the larger equipment.
Regulations affecting water heaters run by electricity and natural gas took effect on April 16, 2015. The pros and cons parallel that of the AC standards. The new efficiency guidelines have resulted in more costly equipment. By some estimates new water heaters will cost roughly $120 more. In addition the new equipment means a more complex, time-consuming installation with more expensive parts. Electricity and natural gas savings will vary widely based on the size of your tank.
The changes the US Government is taking are part of a larger trend by all governments worldwide towards implementing more energy efficient regulation. Initial upfront cost is certainly a factor taken into account by such regulations, but cited more frequently are the health and environmental benefits that will compound yearly as a result of reduced emissions and improved air quality.
Realgy Energy Services is a registered Retail Energy Marketer in the states of Illinois, Michigan and Indiana. We offer Service Plans that will provide electric and natural gas at wholesale pricing direct to customers without any utility markup. Our Service Plans work with the local utility to provide seamless service and annual savings. Additional information: www.realgyenergyservices.com
Nine coal plants to be retired across Michigan as Consumers Energy looks to provide reliable, affordable, clean energy
Retiring coal plants will be replaced with renewables THAT lowers customers energy costs…..outstanding.
Due to a requirement to come into compliance with clean air regulations, mainly to reduce toxic air emissions from combusting coal (such as mercury, dioxins, etc), many coal plant owners have found it more economical to shut them down.
Nine of these plants are located in Michigan and supply about one million customers their power needs.
Replacing this power will come from renewable energy and energy efficiency programs. Reread that statement; renewable energy and a reduction in energy usage. This is due in part to Michigan’s energy policy that encourages renewables and efficiency.
After the coal plants are shut down and renewable energy and efficiency programs are in place the effect; current rates will be reduced by 5-15%.
Michigan can continue to create new jobs in Michigan, increase the use of renewable power and lower all customer energy prices by offering a customer choice program throughout the state instead of just for 10% of businesses.
Competition has been shown to reduce energy costs and provide a more robust energy mix for customers.
Consider that Illinois has documented savings of over $75 Billion since the start of their customer choice program.
http://realgyenergyservices.com/competition-work-tune-37-billion/
Realgy Energy Services is a registered Retail Energy Marketer in the states of Illinois, Michigan and Indiana. We offer Service Plans that will provide electric and natural gas at wholesale pricing direct to customers without any utility markup. Our Service Plans work with the local utility to provide seamless service and annual savings. Additional information: www.realgyenergyservices.com
Link to the original article:
http://www.mlive.com/environment/index.ssf/2015/02/nine_coal_plants_to_be_retired.html
City of Warsaw
WARSAW, Indiana (April 17, 2015) The City of Warsaw Board of Public Works and Safety (Warsaw) has issued a request-for-proposal for natural gas to service its 21 meter locations. Realgy Energy Service, a wholesaler or third party supplier in the NIPSCO Choice program, responded with a proposal that showed savings compared to the current supplier which showed an estimated savings $10,000 to 15,000 for the last year.
“We are thrilled to be able to offer Warsaw a true savings program.” said Michael Vrtis, President of Realgy Energy Services. “We submitted our analysis and agreement that substantiated the estimated annual savings Warsaw can expect to receive from purchasing their natural gas directly from a supplier without any NIPSCO Gas markup, which will provide significant cost reductions.”
The NIPSCO Choice program was initiated by NIPSCO as an opportunity for customers to purchase their natural gas supply directly. NIPSCO is currently the only utility in Indiana offering customer choice to all levels of customers; from residential to industrial.
Warsaw Clerk-Treasurer Lynn Christiansen was given the approval, with a stipulation, to drop the city’s current natural gas supplier, IGS Energy, formerly Border Energy, and sign a two-year contract with Realgy Energy. A study showed Warsaw has been paying IGS more than what NIPSCO would charge and a switch would save Warsaw an estimated$10,000 to $15,000 a year on gas costs. There is no cost to sign the contract with Realgy.
Lew Roberts of Go West, Realgy’s representative, recognizes the challenges faced by cities and municipalities in Indiana. We approached Warsaw with a Managed Price program. Mr. Roberts explained; “having over ten (10) years of service in the NIPSCO Choice program we were able to show consistent performance and real savings compared to NIPSCO and even more compared to IGS Energy.” Mr. Roberts continued; “Working with Warsaw Mayor Joe Thallemer and the board members, together they quickly understood they were overpaying with their current energy marketer and appreciated the new approach.”
Realgy Energy Services is an energy marketing serving retail customers in Indiana, Illinois and Michigan. They have been serving Indiana customers since April 2003; since that time they have a perfect record (certified A+) with the Better Business Bureau; http://ct.bbb.org and no complaints before the IURC http://www.in.gov/iurc or OUCC http://www.in.gov/oucc/
Contact:
Michael Vrtis
President
Realgy Energy Services
860-233-2270
WHY ARE NATURAL GAS PRICES SO LOW?
If you’re searching for a natural gas provider then you’re likely considering natural gas prices and may be curious about what makes the fuel such an affordable option. Natural gas prices have been cut in half over the last six years, and prices are anticipated to remain comparatively low for years to come. According to energy industry data and information specialist, IHS, and their 2014 industry study, natural gas prices are likely to stay low at least for the next 20 years. For those that are currently using natural gas this is good news. Low forecasted gas rates also provide an incentive to make the switch to natural gas for those that are considering conversion.
There are a handful of factors that contribute to the low prices. The most significant factor is America’s abundant supply, combined with very efficient extraction techniques. The nation’s existing, and forecasted, supply of natural gas will not only meet our current needs, but also the anticipated growth in demand. Demand is expected to increase into the future, particularly on the commercial side in the industrial and electrical power sectors. Although natural gas production comes from a variety of locations, the Marcellus shale deposit is currently one of the most significant contributors. The Marcellus Formation is a unit of marine sedimentary rock found in eastern North America.
Another factor affecting our nation’s supply of natural gas revolves around current export laws. Government regulations place export restrictions on natural gas, which contributes to the abundant supply within the U.S. These regulations are driven by a variety of political and industrial influences. Those that support regulation believe, in part, that exporting would lead to higher prices. It can be argued, however, that the supply is so abundant that prices could remain low, even with more export.
Consumer demand also plays a role in cost. At the moment consumers only account for about 20% of the natural gas consumption in the U.S. Power plants and industrial use account for the majority. This is in contrast to the high consumer demand for oil. Although consumers may eventually use more in the near future, the abundant supply is forecasted to meet this demand.
Forecasting natural gas use and cost is part of Realgy’s daily business. We can help position your company to benefit from changes in natural gas pricing now and in the future.
Realgy Energy Services is a registered Retail Energy Marketer in the states of Illinois, Michigan and Indiana. We offer Service Plans that will provide electric and natural gas at wholesale pricing direct to customers without any utility markup. Our Service Plans work with the local utility to provide seamless service and annual savings. Additional information: www.realgyenergyservices.com