World Energy

Daily Update by Melissa Depanian

2012-05-16T14:55:34Z

The price of gas continues to rise, closing yesterday up 7 cents at $2.50/MMBtu. With above average temperatures across most of the US, the market should continue to grow as the summer cooling season begins. Currently gas is trading up 6 cents at $2.56/MMBtu.

The extremely low natural gas prices from Q1 2012 severely affected the use of coal fired generation during the early stages of the year. Coal powered generation was down to 36% of the total power mix in Q1 compared to 44% in Q1 2011. As gas prices begin to rise we shall see how coal is affected in the coming months.

Want to learn more? Review our Technical, Fundamental, and Regulatory Analysis here: http://www.worldenergy.com/tag/market-edge/

http://www.pattonboggs.com/

Fundamental Analysis by Melissa Depanian

2012-05-10T15:12:18Z

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The EIA reported a 30 Bcf build in natural gas storage for the week ending 5/4/2012, within analyst predictions of a build in the 21 to 55 Bcf range. Working gas in storage was 2,606 Bcf as of Friday, 799 Bcf higher than last year’s 1,807 Bcf stock and 803 Bcf above the 5-year average of 1,803 Bcf.

The natural gas contract was last seen trading at $2.459/MMBtu, 0.6 cents below yesterday’s close.

Want to learn more? Review our Daily Pricing Updates as well as Technical and Regulatory Analysis here: http://www.worldenergy.com/tag/market-edge/

Technical Analysis by Melissa Depanian

2012-05-09T20:43:54Z

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Natural Gas
Since our last report posted on April 24th, Natural Gas prices seemed to get touched by Lazarus as prices momentarily broke below the key 2.00 level only to bounce all the way back up to and slightly above the long term low set in August 2009 at 2.40 MMBTU. While a counter trend rally of some sort was expected after such ferocious downside action, it will take a lot more upside movement to convince traders and investors to reposition for a Long Term bullish Change In Trend. Unfortunately the fundamental picture remains quite hostile to NG’s prospects of doing much more that wandering around the $2.00 – $2.50 area, because there is simply too much NG coming from production with no where to go. Inventories continue at all time records as production remains in high gear especially from the new shale areas. Ironically, NG is trading at $16.8 MMBTU in Japan, but there is no way to get the US production to their shores. Chief among the problems is that the US has no LNG liquefaction plants (the last US operating facility, the Kenai facility in Alaska closed in 2011). No plants means no export capability so all the gas produced in the US must be for US consumption where demand for our oversupply has yet to emerge. This anomaly will undoubtedly be addressed but certainly not in the near term. In the meantime those able to procure and hold NG are living in the best of NG times.

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Electricity
Since our last report on April 24th, The PJM Index backed down slightly and then made a small run back up, adding another part to an emerging bowl shaped bottom that looks to be describing a good structure from which to launch the summer season’s run-up in PJM demand. And too, the MACD clearly indicates that the underlying momentum is already in gear and standing by. Aside from the usual weather turmoil of this shoulder season, nothing will stand in the way of the inevitable warmer temps to come. This week’s NOAA predictions looks to be warmer than normal for all PJM regions but especially for the Great Lakes, Ohio River Valley, and the area from New England, where it has been cooler than normal for several days , south thru the mid-Atlantic region.

Want to learn more? Review our Daily Pricing Updates as well as Fundamental and Regulatory Analysis here: http://www.worldenergy.com/tag/market-edge/

Newton is First Community in MA to be Powered 100 Percent by Renewable Sources [Video] by Melissa Depanian

2012-05-11T14:41:11Z

Source: Newton.Patch.com

2012 Investment Opportunity by Melissa Depanian

2012-05-03T12:40:40Z

Special Delivery – ReCharge NY Allocations are in! – What to do next? by Luke McAuliffe

2012-04-27T15:32:03Z

On Wednesday, April 25, many businesses and non-profits across New York found out how much of the electrical power they use would be provided at a discount rate under the “ReCharge NY” program. This economic development plan provides a long-term price signal and commitment (via the state-owned utility NYPA) to employers in that the discounted electricity rate extended to participating companies is available for an initial 7 year period.

As with anything in the energy industry, though, it is not that simple. The allocations provided through NYPA are broken down into two parts:

There is an allocation for a specific amount of energy through “Hydro Power,” which comes at a steeply discounted rate (a win for all customers)
There is an additional allocation for a specific amount of energy through a “blended discounted rate” that includes Hydro Power + purchase of market power

What does this mean for you? In our view, customers should seriously consider taking the first option, as these rates are better than what companies can get on the open market. On the second, however, you have options, and are in a unique position to get rates that are possibly better than what is being offered through NYPA. It is important to understand that you are allowed to choose ONLY the “Hydro Power” rate if desired, as this comes with no strings attached.

Most companies have one month to decide what allocation(s) they will take. This puts you in a great position to “test” the market and see what prices you can get outside of what is currently being offered to you by NYPA. By purchasing the balance of the power you will need through a competitive reverse auction, you can have all the largest suppliers in the Northeast bidding against each other to win your business. A hyper-competitive environment, as provided by the auction process, will give you added price discovery, a fair and transparent mechanism for transacting, and, most likely, favorable prices for your energy needs. If you are interested in getting an objective opinion on the rates World Energy is seeing in the market via our reverse auction processes, give us a call (508) 459-8183 or email us at info@worldenergy.com.

City Sports Taps World Energy for $300,000 in Energy Savings by Melissa Depanian

2012-04-27T13:41:37Z

Source: Environmental Leader

Making Energy Easy Again by Admin

2012-05-03T12:38:19Z

Doing Good: Starbucks, Insourcing and Community Service by Phil Adams

2012-03-23T14:13:50Z

I was flying back from Florida late last night on Jet Blue, and I caught Howard Schultz on Piers Morgan. Turns out Starbucks announced it is building a new plant in Georgia, insourcing 140 jobs from Latin America. As the interview went on, I learned of Howard’s commitment to public-private partnerships to drive job growth in the US. In my opinion, this “Create Jobs for USA” program is inspired leadership.

It seems you see this more and more… companies trying to be better citizens, and business leaders who take that responsibility seriously.

Obviously on a different scale, but, here at World Energy we’ve created a program where we do community service as part of our summer and holiday parties (that’s some of our team in the photo above, in fact). We do some good and then have some fun. Not only do we help groups that need it, but also add some depth to what it means to work at World Energy. For some of our employees this is their first job out of college, and hopefully this experience is something they can take forward in their careers.

I welcome thoughts in the comments section below on what else you think companies can do to be better citizens and any positive experiences you have had personally on this front. Most of all, I encourage you to pursue a path to do some good from whatever business you’re sitting in right now.

ReCharge NY, but Avoid the Seven-year Itch by Luke McAuliffe

2012-03-15T18:41:29Z

As many of you know, the “ReCharge NY” program is replacing the old “Power for Jobs” program that has been in place for many years. Both of these programs are economic development plans that provide deeply discounted electricity rates to organizations across New York State in hopes of helping them retain and/or hire more workers. The Power for Jobs program was very successful, but one big problem was that participants were re-allocated these discounts on an annual basis. This understandably created tension, because participants were never sure if their allocations would be renewed.

The new ReCharge NY program attempts to solve this issue by providing up to 50% of applicants’ power at exceptionally cheap rates (via hydropower), with customers having a one time option of securing the balance of their power at market rate for up to seven years.

Securing the hydropower for up to a seven year period is a no-brainer, in my opinion, and the kind of clear market signal that members of associations like Multiple Intervenors, the Manufacturers Association of Central New York, and the Buffalo-Niagara Partnership have been looking for. This allows them to budget/plan on a multi-year basis with a fixed price for power on the hydro allocation they are provided by NYPA. However, what should organizations do about the “market rate” option that NYPA is providing?

This is where customers have options. While participants can accept the hydropower allocation, they will only be given a “one-time opportunity” to take a NYPA market rate or go to market on their own. Which leads to the million dollar question: Is accepting a long-term price by NYPA on “market rate” power really in a customer’s best interest? Or, put another way, is NYPA going to provide a better price point than organizations can get by going to market themselves?

I think there is good reason to explore the market. If you look at the price of energy over the last seven years, you’ll see that energy prices are considerably lower today than they were back then. If you had taken even a discounted market rate seven years ago, you might be paying a premium for your energy today.

Alternatively, if budget certainty is your concern, then you may want to consider signing a multi-year agreement – like GSA NY did in a recent auction – but only at the end of a competitive, transparent process where you know you are getting the best price in the market.

Either way, 7 years just seems like too long a time horizon in my opinion.

Bottom line, when you work with World Energy, you will find out what price point to expect through a competitive auction in your region where all suppliers will be invited to compete for your available “market rate” power. We’re hosting a webinar on March 22^nd at 2pm to further discuss the “market rate” option for ReCharge NY program applicants and how a competitive auction can yield the best available rates for your organization. If getting the best available price is your energy goal – please join us!