President Obama’s health-insurance fix not such a fix. President Barack Obama might have said that consumers will be allowed to keep canceled health-insurance policies for another year, but at least five states – including New York and Washington – won’t let plans be reinstated, as they believe it would harm their exchanges. Many carriers are also not allowing their customers to extend their old policies, due to time constraints and other obstacles. And firms that do reverse the cancellations could increase premiums.
Experts recommend closing Obamacare site due to security fears. The HealthCare.gov Web site should be shut down as it is full of security flaws that could expose the user data of millions of people, IT experts warned a Congressional hearing yesterday. The experts also said the site should be completely rebuilt so that it would run better, as well as making it easier to protect.
Inflation seen easing. U.S. inflation data for October is scheduled to be released this morning, with economists expecting that CPI was flat on month after rising 0.2% in September. On year inflation is seen slowing to 1% from 1.2%. The data will be followed later in the day by the minutes of the latest FOMC meeting, which will no doubt be scrutinized for any hints as to when the Fed might finally start scaling back QE. Given Ben Bernanke’s comments earlier today, the taper might be a few months away yet.
Eurozone business activity losing momentum. Eurozone composite output has declined to 51.5 in November from 51.9 and fallen short of forecasts, with a slowing of services growth offsetting an increase in manufacturing PMI to a 29-month high of 51.5. While Germany powered ahead, France slipped back into contraction and the country could be on course for a return to recession. “Deflationary forces may be gathering,” says Markit of the eurozone, while growth outside the “big two” of Germany and France “slowed to near-stagnation.”
German investor confidence hits 4-year high. The German ZEW survey of investor confidence has climbed to its highest in over four years in November, rising to 54.6 from 52.8 in October and topping consensus of 54. However, the current situation print surprisingly fell. “Economic expectations for Germany have been hovering at a high level for months,” says ZEW President Clemens Fuest. “The slightly improved economic outlook for the eurozone might have contributed to this development.”Read More
Natural Gas Storage Facts
EIA (Energy Information Administration) reported a net withdrawal of 45 Bcf (billion cubic feet) for the week ending November 15, 2013.
Inventories are at 3,878 Bcf, which is down 2.3% or 89 Bcf from last year and 15 Bcf above the 5-year average or 0.4%.
Natural gas spot prices fell slightly over most of the country, with the exception of prices in the Northeast. The Henry Hub spot price declined from $3.68/MMBtu last Wednesday, November 13, to $3.62/MMBtu yesterday.
At the New York Mercantile Exchange, however, the December 2013 contract rose from $3.566/MMBtu last Wednesday to $3.674 yesterday.
Working natural gas in storage decreased to 3,789 Bcf as of Friday, November 15, according to the U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report (WNGSR). Marking the first storage withdrawal of the 2013-14 heating season, stocks declined by 45 Bcf for the week, resulting in storage levels 2.3% below year-ago levels, but 0.4% above the 5-year average.
The Baker Hughes natural gas rotary rig count totaled 370 this week, an increase of 5 from the previous week, according to data released November 15 by Baker Hughes Inc. The oil rig count rose by 2 to 1,385 active units. The total rig count is 1,762, up 8 rigs from the previous week and down 47 from a year ago.
The weekly average natural gas plant liquids composite price rose this week (covering November 11 through November 15) compared to the previous week by 1.6%, and is now at $10.65/MMBtu. Ethane rose by 3.2%, while natural gasoline, propane, and isobutane rose by between 1% and 3%. Butane increased by 0.9%.
12/24-Month Strip (NYMEX) Price
12 Month Strip 24 Month Strip
$3.772 MMBtu $3.871 MMBtuRead More
Crude Oil Price: $93.85
Oil Little Changed After Fed Minutes Released
NEW YORK (AP) — The price of oil showed little change after the minutes of the last Federal Reserve meeting indicated that policymakers intend to soon begin winding down the central banks’ economic stimulus.
Benchmark U.S. crude for December delivery fell 1 cent to close at $93.31 a barrel on the New York Mercantile Exchange. The more heavily traded January Nymex contract slipped 4 cents to $93.85.
Members of the Federal Reserve agreed last month that they would likely start reducing their bond purchases in coming months if the job market improved further. They also weighed the possibility of slowing the purchases even without clear evidence of a strengthening job market.
The Fed’s bond purchases have been intended to keep long-term borrowing rates low to spur spending and growth.
Meanwhile, the Energy Department said crude oil supplies rose by 400,000 barrels for the week ending Nov. 15, the 9th straight weekly increase. But gasoline supplies fell by 300,000 barrels, and the agency said the average demand for gasoline over the past four weeks was about 4 percent higher than for the same period last year.
Oil has traded between $93 and $96 a barrel this month and is down from nearly $110 a barrel in early October due to ample supplies and tepid demand.
At the gas pump, the average price for a gallon of gasoline stayed at $3.21, down 14 cents from a month ago and 20 cents cheaper than at this time last year, according to AAA. Brent crude for January delivery, the benchmark for an international variety of crude, gained $1.14 to $108.06 a barrel on the ICE Futures exchange in London.Read More
Reg Down: $0.00504
Reg Up: $0.00817
NYC LBMP: $0.04337
AEP GEN HUB LMP: $0.031455
Mass. Boston Day Ahead LMP: $0.03851
Illinois Hub Hourly LMP: $0.01843Read More
Tropical Storm Melissa Churns in the Central Atlantic
Tropical Storm Melissa is racing east-northeast over the north-central Atlantic Ocean, about 600 miles west of the Azores. Melissa began as a “subtropical storm,” a sort of hybrid between a tropical and mid-latitude storm system. Over time, it has developed a tighter core of convection (thunderstorms) close to its center, which led to Melissa taking on tropical characteristics late Wednesday morning despite being centered north of 35 degrees North latitude, about the same latitude as Charlotte, N.C.
Even so, an approaching cold front over the western Atlantic should catch up to Melissa by Thursday, heralding its inevitable transition to a post-tropical low.
Melissa should pass north of the Azores and is no direct threat to land.
Melissa is the 13th named storm and 14th tropical cyclone of the 2013 Atlantic hurricane season.Read More
Dear Texas Client,
Please read this email due to the direct effect it has on your future energy costs in Texas. If a capacity market is implemented, your energy costs will rise.
As the State of Texas considers the most significant change to the deregulated energy market since its start in 2002, your opinion and action is necessary. RPM has devoted significant resources into deciphering the pros and cons of Texas moving to a capacity based market. From what we have gathered, creating an additional layer of government regulation and increasing end-user cost for a false market created by regulators is not in the best interest of our clients.
Electricity generation in Texas has functioned under a non-binding target reserve margin of 13.75% to ensure stable grid operation. A mandatory capacity reserve margin could result in excessive unnecessary, unavoidable costs. A reserve margin refers to the amount of available power capacity above the capacity needed to meet normal peak demand levels. That is, the amount of power available above and beyond the normal usage in Texas. The target reserve margin is set by the Public Utility Commission (PUC) in an effort to avoid rolling blackouts during extreme weather circumstances. The PUC is governed by an appointed board of three members.
Recent hearings at the PUC have indicated that two of the three board members may support the implementation of a mandatory reserve margin – meaning a capacity market would be implemented. In basic terms, a capacity market provides guaranteed payments to electricity generators, outside of free market forces, to encourage additional generation investment.
Currently, generators are paid based on the electricity they produce. A capacity market would pay generators regardless of whether they produce power or not.
Why is RPM against a capacity market and for the current energy-only market?
1) Texas consumers are adverse to additional taxes or fees on their electricity bill.
2) The current energy-only market has provided sufficient reserves even during the period of rapid growth in the population and Texas economy.
3) The free market will encourage additional generation when needed.
4) Encouraging fewer regulations/ barriers-to-entry for electricity generators could spur additional investment without raising costs for consumers.
5) Mandatory reserve margins will not guarantee the prevention of rolling blackouts during extreme weather conditions. Additionally, ERCOT has never experienced a grid collapse, unlike many other parts of the US where capacity markets are used.
6) Energy efficiency programs remain in their infancy and such programs have significant room for growth.
7) Innovative, free market solutions like Demand Response programs are just gaining momentum and a great way to deal with times when demand is high.
8) ERCOT will not dip below its 13.75% target reserve margin until after 2018. Please see page 14 of the presentation given by Commissioner Kenneth W. Anderson here.
9) Renewable energy costs continue to decline and implementation continues to grow.
10) Smart meter technology will allow Retail Electric Providers the ability to provide time-of-use pricing for consumers, providing an additional free market option to reduce peak demand.
In addition to the points listed above, please find two links below which dive deeper into the issue.
If you agree with our assessment and the information found in the linked articles below, please take action immediately by contacting the PUC and your local legislator. If you have additional questions or concerns, please call your RPM Energy Manager for further discussion on this important, albeit complicated, issue.
Who Represents Me in the Texas Legislature?
Supporting articles on the subject:
November 2013 Capacity Report: A Retreat From Electric Competition:
RPM’s president and owner, JD Dodson, was pleased to serve as a member of TEPA’s panel discussion yesterday at the annual conference. He joined other highly ranked professionals in the energy industry to discuss key issues for 2014 and beyond.
TEPA is an organization that assists retail electric providers and brokers/consultants in standardizing processes and maintaining an appropriate level of knowledge in the energy marketplace. It also holds members to several sets of standards to ensure all clients are provided a quality and ethical service. For more information on TEPA please visit this link.Read More