The Kobiona Monitor

Volume 3 / Number 8 August 26, 2021

Kobiona’s leadership has enlisted the help of our Market Intelligence Desk to craft this monthly publication to share major market dynamics impacting future power and gas prices. As every client’s situation is unique, we encourage you to review market movements with us to decide whether any action on your part could serve to lower your future costs or avoid known, coming increases.

Natural Gas Storage Deficit Shrinks
After a few stronger-than-anticipated injections, albeit slightly, storage inventories have made up a little grown. Now standing at 2,822 BCF, the deficit to the 5 year average has shrunken to 4.9%. For those looking for the “seasonal dip” in natural gas and power future pricing, this very likely could be the best numbers we see before the Fall buying season.

Graph of undeground gas

Impact on Future Power Prices: “The Little Dipper”
Those with 2021 contract expirations should already have a procurement strategy decided. If that includes buying any more power to cover open requirements, trading should be watched daily for potential opportunities to catch small retractions.

As you can see, future power prices for 2022 and 2023 have dipped slightly for all regions after recently hitting 5 year highs.

Graph of forward power price trends

Source: Constellation

Gas Finally Dips Below $4
After hovering above $4/MMBTU for close to a month (marking the 2nd highest point prices have hit in a five year period) natural gas spot pricing has finally dipped just below that threshold.

Henry Hub stock price

Season to Date Preliminary Summer System Peaks
With Summer winding down, here’s a recap of annual system peaks to date for the East
Coast:

New England (ISO-NE)
Peak set on Tuesday June 29th HE 18 (5:00 – 6:00pm) at 25,101 MWs

New York (NYISO)
Set Friday August 13th HE 17 (4:00 – 5:00pm) at 29,896 MWs

Mid-Atlantic (PJM) – Top 5 Coincident Peaks

    8/12/21 5:00 PM 148,209 MWs

    6/29/21 5:00 PM 146,855 MWs

    7/6/21 5:00 PM 146,007 MWs

    7/7/21 3:00 PM 142,693 MWs

    8/13/21 4:00 PM 141,841 MWs

High temperatures are expected in both NY and PJM through month end, so these dates/values may be challenged.

Customers’ demand during system peak hours will either set or inform their capacity obligations for future contracts, depending their procurement strategy and term. Please do reach out with any questions.

Note these values are preliminary and subject to adjustment my the Independent System Operators.

Questions? For those tasked with procuring power and gas for the first time — or the tenth time — the industry can seem overwhelming with densely-technical and sometimes conflicting information. We welcome your questions on how to apply our observations, as well as your feedback on The Kobiona Monitor. Please share how we can make this publication more useful by calling us on 844-209-7972, or contacting us via email, info@kobiona.com.