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TPI Market Snapshot for Monday April 3 2023

FirstEnergy, Ohio Edison, and Illuminating Company Customers will see their Electric Rates Double

energy bill review
Energy Bills Set To Nearly Double

First Energy announced the results of their last auction for the utility rate and announced that the final utility rate for June 2023 through May 2024 would be 10.2 cents per kWh, almost twice what it had been the previous year.

NATURAL GAS IS STILL LOW, BUT WARNING SIGNS ARE ON THE HORIZON

NYMEX Natural Gas Chart

SUPPLY IS UP, BUT SO IS DEMAND.

  • After a short uptick in gas pricing in mid-March, gas is cycling downwards again, with the 12-year strip now just over $3.00
  • Freeport has been approved to resume operations. They have offloaded existing inventories, accepted new shipments of natural gas via pipeline, and are ramping up production to produce LNG for export.

LNG EXPORTS

LNG Exports Chart

With the Freeport LNG facility finally approved to begin full operations for processing LNG, it is worth noting that the facility, which closed after an explosion last June 8th, took roughly 2.3 Bcf a day off the export market.

  • Multiply that by seven days which is 16.1 Bcf a week that was not exported.
  • Multiply that by the roughly 42 weeks since the explosion, which is 676 billion cubic feet still in storage.
  • Without that extra gas, we would have a little more than 134 fewer Bcf than last year and almost 350 billion cubic feet less than the five-year average.
  • That would also mean significantly higher gas and electricity pricing than we have now.

EIA: NATURAL GAS STORAGE REPORT

EIA Natural Gas Storage Report Chart

PJM BGE HUB FORWARD POWER PRICING

PJM BGE HUB FORWARD POWER PRICING

PJM ADHUB HUB FORWARD POWER PRICING

PJM ADHUB HUB FORWARD POWER PRICING

AVERAGE US TEMPERATURES FOR MARCH

As we move into Spring, we will see average temperatures rise and heating demand for natural gas decrease, especially as we have not yet reached the time of the year when air conditioners increase natural gas demand for electricity. As you can see on the maps, much more of the country saw average temperatures above freezing in March.

US Average Temperatures for March

This week, the eastern half of the U.S. will be mild to warm with highs in the upper 50s to 80s, while Texas and the South will be hot with highs in the 80 to 90-degree range.

Later in the week, the great Plains weather systems will track eastward across the rest of the U.S. We will see lows in the 10 to 30-degree range, driving a robust national demand for natural gas!