January 19, 2024

CPV Retail Blog

New Product Offering

CPV Retail is excited to announce the launch of our new energy transition product – The Carbon Footprint Report.

Whether organizations are just beginning the sustainability journey or have well established climate goals and targets established, CPV Retail Energy as a “Greentailer” is a trusted renewable energy solutions provider. Regardless of where organizations are on the sustainability “learning journey”, or in the energy transition, we are focused on matching our unique set of renewable energy solutions to specific goals and objectives. The old saying “what gets measured gets managed” is especially true when it comes to realizing lower emissions goals. The Carbon Footprint Report is an important first step on this journey.

Please reach out to your contact at CPV Retail Energy for more information or contact us at retailinfo@cpv.com.

PJM Regulatory Review

Additional Agenda Items

  • Regional Greenhouse Gas Initiative Allowance prices continued to tick up with a few trades reported at $16.65/Allowance.
  • PJM issued a cold weather alert for its Western Region in anticipation of the recent outbreak of Arctic conditions between January 14-17. PJM utilizes the alert primarily to defer planned generation and/or transmission outages.
  • PJM formally released its new long-term load forecast which essentially doubles the growth estimates from last year’s estimates.
  • Debate continues at FERC and at PJM regarding proposed capacity market reforms with a lot of back and forth between and amongst various constituents who will be impacted the most by the recent proposals. PJM states that its proposed accreditation will increase the accuracy of resource accreditation over the existing approach and has not been questioned. According to PJM the proposed revisions are just and reasonable and should be implemented without delay. While uncertainty remains, the next auction is still scheduled for this June.

Market Drivers

Energy Market Update

  • We are through the worst of the Polar Vortex and the market seems to have survived with fairly minimal damage unless you carried a fixed price short position into the storm.
  • Production freeze-offs peaked at around 12 BCF/D with almost every major producing basin impacted as record cold slowly ebbed south and initially hit Bakken production, which helped push Chicago City-Gate prices above $30/MMBtu over the MLK weekend.
  • Commercial/residential demand set all-time records above 70 BCF/D which was covered by record storage withdrawals, increased Canadian imports and LNG export reductions of about 4 BCF/D. Additionally, coal power plants in PJM performed well during the brunt of the vortex, which helped keep day-ahead power prices in check given double-digit natural gas prices.
  • Storage withdrawals this week are expected to come in above 300 BCF which will be one of the top 5 inventory draws since data started to be collected.
  • Oil prices continue to be volatile, battling bearish news out of China while the off-setting bullish news out of the Middle East as tanker traffic in the Red Sea comes under periodic missile attacks from rebels in Yemen.
  • Consolidation continues in the E&P space as Chesapeake Energy and Southwestern Energy merged to create the largest natural gas producer in the United States, thus overtaking EQT which produces about 6 BCF/D.
  • Lower global LNG prices helped US export terminals curtail shipments over the recent cold spell and create peaking supplies into the US pipeline system. LNG exports dropped by about 4 BCF/D over the past week as Asian and European markets were well supplied coming into the recent peak demand period.

Potpourri Comments

The nation’s power grid is being asked to do things today that were not envisioned when the majority of the current transmission and distribution system was installed. Widespread electrification efforts continuing contemporaneous with renewable energy installation is stressing the grid and threatening to dampen the environmental benefits. Some believe that the United States will have to double the size of the existing transmission and distribution network to adequately transmit the power produced to where it is consumed. A fact of the renewable build out is that large swaths of land are needed and that those areas are generally not found right next to population centers, so all that nice and cheap subsidized juice has to be transmitted long distances to be consumed. Another anachronistic legacy hurdle to overcome is the massive bureaucracy involved in permitting new power lines. The TransWest Express project took almost 20 years before it finally received all the necessary approvals and will take another 5 years to construct. This is not exactly the formula for expeditious achievement of the decarbonization lobby and certainly will make broader adaptation of EV’s more difficult. Nonetheless, your CPV Retail Team is ready to help you meet your decarbonization goals and provide strategic power procurement advice with products tailored to your specific requirements. Let’s talk soon!

Forward Pricing

Renewable Energy

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