2025/2026 Capacity Auction Results
Impact on Electricity Costs: The capacity charge portion of your electricity rate will see a sharp increase in June of 2025 through May of 2026 due to a record high capacity auction this past July. This change will affect all future and existing contracts.
Contract implications: Suppliers do not normally pass through capacity price changes but an increase this large will be passed to the consumer and is allowed under exemption clauses in nearly every electricity contract.
Efficiency Opportunities: The rise in capacity costs are unavoidable, but you can mitigate the increases by lowering consumption through investment in efficiency projects such as LED lighting, lighting controls and power conditioners.
What Can Your Business Do to Negate This Cost? Don’t Put Off That Efficiency Project
An efficiency project, like an LED Lighting upgrade or HVAC Upgrade, can significantly reduce your energy consumption by 50% or more in some cases.
Benefits of an efficiency project include:
• A lower monthly electric bill.
• Reduced maintenance.
• The opportunity for project rebates or incentives.
TPI has solutions to help reduce your energy usage, with products like PowerHouse, demand response, solar and efficiency products.
Weather:
July 21, 22, and 23 each set a record for the hottest day in recorded history, one right after another. We already had the hottest June in recorded history this year, and July also broke a record.
Natural Gas
• LNG (Liquid Natural Gas) Exports and Power Burn surged this past week, reducing available supply. Freeport is now less than 3% below full capacity output.
• Exports are now back near 13 Bcf/d and could steadily rise as LNG facilities are past seasonal maintenance. There is still plenty of room for growth as the largest LNG facility is still 22% below full capacity
• Not including the Mexican NG pipeline, which exports about 6-7 Bcf/d, the U.S. will be exporting upwards of 20 bcf a day by the end of 2030. Right around the corner.
NATURAL GAS STORAGE REPORT
• Injections continue to historically lag behind past years as gas demand ramps up in the summertime due to higher demand. Last week’s report of -6 withdrawal is historically low for the middle of summer.
NYMEX NATURAL GAS CALENDAR STRIPS
ALL ABOUT THE NYMEX TWELVE-MONTH STRIP
• The NYMEX Twelve Month Strip is the average of the upcoming 12 months of closing Henry Hub natural gas futures prices as reported on CME/NYMEX.
• A futures strip is the buying or selling of futures contracts in sequential delivery months traded as a single transaction.
• The NYMEX Twelve Month Strip can lock in a specific price for natural gas futures for a year with 12 monthly contracts connected into a strip.
• The average price of these 12 contracts is the particular price that traders can transact at, indicating the direction of natural gas prices.
• The price of the NYMEX Twelve Month Strip can show the average cost of the next twelve months’ worth of futures.
• The NYMEX Twelve Month Strip is also used to understand the direction of natural gas prices and to lock in a specific price for natural gas futures for a year.
