NEU Electric and Natural Gas Price Update
Electric: Short-Term Outlook
Oct-09
$28.26
$33.67
$23.81
$28.02
$33.85
$23.22
$4.31
Nov-09
$26.36
$31.82
$22.00
$26.55
$31.16
$22.88
$3.79
$100
Dec-09
$33.42
$40.02
$27.49
$34.86
$42.24
$28.23
$5.53
$90
Jan-10
$39.89
$47.33
$34.27
$38.52
$46.36
$32.59
$5.98
$80
Feb-10
$37.19
$43.23
$31.70
$36.84
$42.19
$31.98
$5.47
Mar-10
$30.31
$35.89
$24.84
$28.77
$35.02
$22.64
$4.46
$ / MWH
Jun-10
Apr-10
Feb-10
Dec-09
Oct-09
Aug-09
Jun-09
Apr-09
Feb-09
Dec-08
Oct-08
Aug-08
$60
Apr-10
$26.99
$33.84
$20.44
$26.28
$34.85
$18.09
$4.09
$31.43
$40.60
$26.11
$32.44
$42.77
$26.46
$4.17
Jun-10
$38.46
$46.98
$30.31
$38.97
$47.46
$30.85
$4.81
Cal '08
$50.50
$66.24
$36.74
$49.38
$65.70
$35.11
$8.82
$30
Cal '09
$28.94
$35.06
$23.61
$29.05
$35.35
$23.55
$3.95
$20
Cal '10
$34.01
$40.84
$27.91
$33.60
$40.96
$27.03
$4.80
$10
$50
$40
Peak
Off-Peak
Round-the-Clock
* ComEd prices are about $2 per MWH higher than NI-Hub prices. Peak prices are
based on NERC wholesale pricing periods (6AM to 10 PM, M-F).
Jul-10
May-10
Mar-10
$0
Jan-07
Progressive Energy Solutions, LLC
July 28, 2010
Jun-08
$70
May-10
* NERC Hours (6 AM TO 10 PM)
Apr-08
NYMEX N. Illinois Hub Electric Prices
12-Month Forward Prices Through July 15, 2010 *
Jan-10
$3.04
Nov-09
$3.21
$20.78
Sep-09
$22.66
$29.07
Jul-09
$34.06
$24.65
Mar-09
$27.81
$20.06
May-09
$22.64
$29.60
Jan-09
$33.30
$24.51
Nov-08
$27.45
Sep-09
Month Average
Jul-08
Aug-09
Daily Average
Sep-08
$3.31
May-08
$20.22
Mar-08
$29.86
Jan-08
$24.99
Nov-07
$19.08
Sep-07
$30.61
Jul-07
$24.78
Mar-07
Jul-09
Mar-08
Daily
Nat Gas
$/MMBtu
May-07
ComEd Zonal Price - $/ MWH
Day-Ahead LMP
Real-Time LMP
Mo Avg
Peak *
Off-Peak
Mo Avg
Peak *
Off-Peak
$110
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
Jan-08
PJM Day-Ahead and Real-Time Prices
ComEd Zone
PJM Day-Ahead Prices for ComEd Zone
Average of Daily Hourly Prices Through 7/15/10
$/MWH
NYMEX Northern Illinois Hub forward prices for the August 2010 to July
2011 period are approximately $32.20 per MWH (3.22¢ per kWh). Peak
prices are about $40.60 per MWH and off-peak prices are about $25.20 per
MWH. PJM Chicago Zone Day-Ahead hourly index prices in June averaged
$38.46 per MWH and Real-Time prices averaged $38.97 per MWH. These
prices are up about $7.00 per MWH from May index prices. For the period
July 1, 2010 through July 15, 2010, ComEd Day-Ahead prices are
averaging about $38.00 per MWH and Real-Time prices are averaging
about $44.00 per MWH. The Real-Time price difference is due to warmer
than normal temperatures. Supplier margins, distribution costs, and PJM
costs (transmission, capacity, ancillary, balancing operating reserve) must
be added to obtain a ComEd metered cost.
NEU Electric and Natural Gas Price Update
NYMEX Natural Gas Forward Prices
Through July 15, 2010
Natural Gas: Short-Term Outlook
$16
The Energy Information Administration (“EIA”) reported in its
monthly Short-Term Energy Outlook issued on July 7, 2010 that
Henry Hub natural gas prices are expected to average about
$4.70 per MMBtu. This is an increase of $0.22 per MMBtu from
its price reported in June 2010. The increase is due primarily to
weather and increases in hurricane activity in the Gulf of Mexico.
Prices in 2011 are expected to be about $5.11 per MMBtu.
$ per MMBtu
$14
$12
$10
$8
$6
$4
NOAA issued its hurricane outlook report in late May predicting
above normal tropical weather activity during the 2010 hurricane
season. An EIA computer simulation indicates a 17% to 20%
probability that some natural gas and oil will be shut-in due to
hurricanes in 2010. The volumes could equal or exceed 2008
volumes shut-in due to Hurricanes Gustav and Ike. Natural gas
shut-in by these these hurricanes was about 166 Bcf.
$2
12-Month Forward
Natural gas storage through July 9, 2010 was 2,840 Bcf, slightly
less than the 2,873 Bcf amount reported a year ago. Current
volumes are about 11% higher than the five-year average..
Jul-10
Apr-10
Jan-10
Oct-09
Jul-09
Apr-09
Jan-09
Oct-08
Jul-08
Apr-08
Jan-08
Oct-07
Jul-07
Apr-07
Jan-07
$0
Prompt Month
NYMEX Natural Gas Settlement Prices on Last
Trade Day of July 2010 Contract
$8
$5
NYMEX
12-Month Average:
Six-Year Average:
$4
$3
$5.160/MMBtu
$6.013/MMBtu
Chicago Swap (Basis)
12-Month Average: -$0.0268/MMBtu
$2
$1
Jul-15
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
$0
Jan-11
Progressive Energy Solutions, LLC
July 28, 2010
$6
Jul-10
Settlement Prices ($/MMBtu)
$7
NEU Electric and Natural Gas Price Update
EIA Weekly Storage Report
January 2007 through July 9, 2010
Utility Natural Gas Supply Costs – July 2010
$ per Therm
1,500
1,000
500
($0.0008)
($0.0001)
Current
Five-Year Average
Natural Gas Rig Count Through July 16, 2010
Gas
Oil
Misc.
Total
2,500
Oil
16-Jul-10
Current Last Year
979
665
580
244
12
11
1,571
920
Nat Gas
2,000
1,500
1,000
500
Jul-10
Apr-09
Nov-09
Jan-08
Aug-08
Oct-06
Jun-07
Mar-06
Aug-05
Dec-04
May-04
Oct-03
Feb-03
Jul-02
Nov-01
Apr-01
Jan-00
Sep-00
Jun-99
Nov-98
Mar-98
Aug-97
0
Jan-97
Progressive Energy Solutions, LLC
July 28, 2010
Jul-10
Jan-10
Aug-09
Mar-09
Oct-08
May-08
Dec-07
Jul-07
0
Feb-07
ICE Natural Gas Index Prices
$ per MMBtu
Averge
Monthly
Month
Daily
Index
Jan-09
$5.59
$6.215
Feb-09
$4.48
$4.925
Mar-09
$3.54
$4.037
Apr-09
$3.36
$3.54
May-09
$3.71
$3.11
Jun-09
$3.61
$3.42
Jul-09
$3.31
$3.56
Aug-09
$3.21
$3.50
Sep-09
$3.04
$2.79
Oct-09
$4.31
$3.87
Nov-09
$3.79
$4.82
Dec-09
$5.53
$4.75
Jan-10
$5.98
$6.18
Feb-10
$5.47
$5.90
Mar-10
$4.46
$5.01
Apr-10
$4.09
$4.00
May-10
$4.17
$4.29
Jun-10
$4.81
$4.13
Jul-10
$4.52
$4.75
-1.1%
10.7%
2,000
Sep-06
($0.0051)
(33)
274
2,500
Apr-06
$0.0149
$0.0000
% Change
3,000
Nov-05
$0.0026
$0.0005
Difference
BCF
3,500
Jun-05
$0.0260
4,000
Billion Cubic Feet (Bcf)
$0.0037
NICOR
$0.5101
$0.4622
$0.0479
$0.5225
Jan-05
Chicago citygate natural gas
prices
reported
by
Intercontinental
Exchange
(“ICE”) for the January 2009 to
July
2010
period
are
summarized in the adjacent
table. The July 2010 index
price of $4.75 per MMBtu is
$0.62 per MMBtu higher than
the reported June 2010 index
price. Daily prices in July,
(through July 15, 2010) have
averaged $4.52 per MMBtu
which is about $0.23 lower
than the July index price.
North Shore
$0.5758
$0.4961
$0.0797
$0.3048
BCF
2,840
2,873
2,566
Current Total
Last Year
5-Year Average
4,500
# of Rigs
Gas Supply Costs:
Bundled Gas Supply Cost
Commodity
Non-Commodity Charge
Demand
Environmental Surcharges
Rider 11, Peoples and North Shore
Rider 12, NICOR - Small C&I
Rider 12, NICOR - Large C&I
Rider VBA - Balancing Adjustment
Hub Service Credit
NICOR Transportation Service Adj.
NICOR, Rider 5 Storage Adj. Factor
Peoples
Gas
$0.5751
$0.5258
$0.0493
$0.2017
On-Going NEU Regulatory Issues
ComEd Files New Rate Increase Proposal
on June 30, 2010
Commonwealth Edison Company (“ComEd”), filed its previously
announced rate increase on June 30, 2010. In its petition filed with the
Illinois Commerce Commission (“ICC”), ComEd has requested a $396.1
Million increase (20.4%). It is expected that this rate filing will be
suspended for hearings by the ICC. The ICC has 45 days to act on the
initial petition filed by ComEd. The ICC will have 11 months from the June
30 filing date to issue a final order.
Summarized below are the proposed rate increase percentages by
customer class. Results show that ComEd is proposing increases for
Residential, Small and Extra Large customers greater than the overall
percentage increase.
State of Illinois assesses this electric distribution tax on all utilities, and
ComEd has historically recovered the tax in the monthly Facilities
demand charge.
The impact of the proposed IEDT charge will cause the average rate
increase for large high-load factor customers, and for customers who
use a significant amount of off-peak electricity, to be significantly more
than the class average.
The following summarizes ComEd’s proposed distribution rates.
ComEd’s Proposed Distribution Rates
ComEd Rate Increase Percentages by Class
% Inc.
20.4%
All Customers
Residential
23.97%
Small (< 1000 kW)
Medium( 100 kW to 400 kW)
Large (400 kW to 1 MW)
Very Large (1 MW to 10 MW)
Extra Large (Over 10 MW)
High Voltage (Total)
Railroad
31.43%
6.98%
7.48%
14.94%
33.30%
9.57%
5.15%
The proposed class increase percentages are somewhat deceiving.
ComEd is proposing to remove the Illinois Electric Distribution Tax
(“IEDT”) from its base rates and collect this tax as a line item on customer
bills. The line item tax would be a per kWh charge of all customers. The
Progressive Energy Solutions, LLC
July 28, 2010
Customer Class
Small Load
Medium Load
Large Load
Very Large Load
Extra Large Load (Over 10-MW)
High Voltage (Other)
High Voltage (Over 10-MW)
June 30, 2010
Proposed Rates
$ per Month
$ per kW $ per kWh
Customer
Meter
Facilities
IEDT
$12.72
$8.92
$5.88 $0.00123
$14.80
$19.47
$5.55 $0.00123
$59.23
$20.63
$6.06 $0.00123
$47.39
$21.45
$6.04 $0.00122
$944.47
$50.99
$3.76 $0.00122
$488.85
$41.70
$2.51 $0.00122
$488.85
$41.70
$0.79 $0.00122
Dist. Loss
7.70%
6.73%
6.32%
5.91%
5.87%
2.33%
1.93%
ComEd is also proposing the following changes:
1. Changing how residential rates are designed by moving towards a
“Straight Fixed/Variable” method. Under the SFV method more
costs are recovered through fixed charges. The SFV method will
benefit ComEd by reducing revenue fluctuation due to changes in
customer usage.
2. ComEd indicated they would file an Alternative Rate Regulation
Plan (“ARRP”) in this proceeding within 60 days. Under this ARRP
ComEd would propose additional rate increases. These rate
increases would likely be included as additional surcharges on
customer bills.
On-Going NEU Regulatory Issues
– Continued –
ComEd’s June 30, 2010 Rate Increase Proposal
Based on preliminary information ComEd may request special
cost recovery for new programs such as:
$19,608 per MW-Year = $0.0537 per kW day
$0.0537 x 2,500 kW 8 30 days = $4,027.50
ComEd sets the customer Network Transmission PLC based
on peak demands from the prior summer period.
a) Accelerated Smart Grid investment
b) Electric vehicle pilot program
c) Accelerated infrastructure replacement
It is uncertain what programs the filed plan will actually contain or
what the proposed costs will be. This ARRP is similar to a
proposal submitted by ComEd during the 2010 Legislative session
that was subsequently withdrawn.
ComEd proposed investing nearly $900 Million in smart grid
technologies in its 2007 rate case. This proposal was eventually
denied but a small pilot program was approved and implemented.
The ICC recently approved an accelerated infrastructure program
for Peoples Gas.
Results 2013 Capacity Cost
The June 1, 2013 capacity value of $27.73 per MWH day was
set by a PJM capacity auction in May 2010. The following
figure shows capacity values since PJM implemented its
Reliability Price Model (‘RPM”). All customers must pay for
capacity to ensure generation reliability and send the proper
forward price signal to attack new generation.
PJM Capacity Values
$200
$174.29
$180
$160
PJM Transmission and Capacity Charges
On June 1, 2010 Exelon Transmission updated its transmission
charge effective June 1, 2010. The new Network Transmission
Service Charge is $19,608 per MW-Year which is lower than the
June 1, 2009 rate of $20,980 per MW-Year.
Customers generally see transmission costs listed as a line item on
their invoice from their supplier. If this cost is a direct pass-through it
is generally shown as a daily cost per kW times the customers PLC
(“peak load contribution”) times days in billing period. For example:
$ per MW-Day
PJM/Exelon Transmission Charge
$140
$120
$111.92
$110.00
$102.92
$100
$80
$60
$40.80
$40
$20
$27.73
$16.46
$15.00
$0
Prior to Jun07
June 1,
2007
June 1,
2008
June 1,
2009
June 1,
2010
June 1,
2011
June 1,
2012
June 1,
2013
NEU Energy Price Update is prepared by:
Progressive Energy Solutions, LLC
July 28, 2010
Brad Fults, NEU Staff Support, Progressive Energy Solutions, LLC
Email: bfults@progressiveenergyllc.com; Phone: 763-424-2377
Contact either Brad Fults or Charles Drake if you have questions about information
in this bulletin or if you would like information about the NEU. Charles Drake can
be reached at (630) 631-7963.