It was recently reported that a power purchase agreement between National Grid and Cape Wind was approved by the Massachusetts Supreme Judicial Court. National Grid is committed to purchasing half of the output of the project at a starting price of 18.7 cents per kilowatt-hour. This price will then escalate 3.5% per year for 15…
Read MoreWe have looked at historical and forward natural gas prices. How have electricity prices been behaving? The graph above shows the monthly average of electricity prices at PJM West (a trading hub where electric generation is concentrated) spanning the 131 month period of time of January 2001 through November 2011. Like natural gas, electricity prices…
Read MoreWe have looked extensively at historical natural gas prices, both nominal and real. What does the market tell us about where natural gas prices may be headed in the future? The above graph shows the monthly “forward curve” for natural gas at four different points in time. The forward curve represents the collective thinking of…
Read MorePrevious articles on the topic of natural gas prices have looked at natural gas prices spanning the 179 month period of time running from January 1997 through November 2011 (click here, here, and here for more information). Here is a graph of the dataset. Each time we have used this graph, we have noted that…
Read MoreLike crude oil prices, fuel oil prices have risen dramatically (click here for more information). The above graph shows the monthly average spot price history of #2 fuel oil delivered to New York Harbor. The prices shown date back to June 1986 and run through November 2011. Fuel oil is a distillate of crude oil…
Read MoreAs discussed previously on this blog, natural gas and electricity prices in the wholesale markets have declined precipitously (click here for more information). What is more obvious, certainly at the gasoline pump, is that crude oil prices, unlike natural gas prices, have been on an upward trend. The above graphs show (i) the monthly average…
Read MoreThere is a common perception that energy prices have been, and continue to be, on a one way path upwards. Is this the case? No. The graph above provides a historical view of natural gas prices. Plotted are the monthly average spot prices of natural gas at Henry Hub (a trading hub in Southern Louisiana)…
Read MoreWholesale electricity prices are volatile. Because electricity cannot be stored in any meaningful quantity, electricity load (demand) and supply must be matched in real-time. Matching load and demand is the challenging job of grid operators. To give you an idea of how volatile prices can be, take a look at the graph below (source: pjm.com).…
Read MoreDo businesses benefit by purchasing energy through trade association buying groups? In many cases “no.” How can that be? First, some background. The term “load profile” refers to the variation of an electricity user’s electrical load versus time. Load profiles vary by customer categories (residential, commercial and industrial) and by individual customer within those categories. …
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