What's New?
Snowman melting with scarf blowing away into Christmas trees

Weather forecasts have had a large impact on electricity and natural gas prices alike. Warmer weather is predicted to return again later in January due to a strong El Nino pattern, as opposed to the last two years.  Natural gas production is slipping and is below 2014 levels and storage is increasingly high, reaching all-time record levels.   This is creating bearish pricing in both the electricity and natural gas markets.

Electricity pylons electricity meter money and a document with the german word  Stromrechnung  for electricity bill, symbolizing the supply of electricity and its cost.
Supplier Changes  - DLE, Guttman, DPL Energy Resources

We often see suppliers that we work with, purchase another supplier book of business. Sometimes when this occurs, our customers may receive a letter from their utility company indicating that they switched suppliers.  Don't be confused by these notifications in thinking that an interruption to your electric supply service will occur or that you have been slammed.  Here are a few such recent supplier purchase acquisitions:

Effective January 6, 2016,  NextEra Energy, LLC (NES) has purchased Duquesne Light Energy's (DLE) book of business and will be servicing the accounts previously held by DLE going forward.  If you are a current DLE electric generation supply customer, there will be no interruption in your electric supply service.  However, depending on your meter read cycle, you may see a final bill from DLE with a partial month's bill from NES in January.  Your current contract terms will remain the same.  The only change you will see is the name of your supplier on your electricity bill.  If you are looking to make a change to your payment method from DLE to NES, you will receive a welcome packet of additional information from NES.  
Should you have billing questions, you may contact NextEra Energy directly at 827-528-2890 or visit:   http://www.nexteraenergyservices.com/.   You may also contact your Premier Power Solutions representative for any additional questions.

GDF Suez Energy Resources NA, Inc. and Guttman Energy, Inc. announced that they have entered into an agreement under which  GDF Suez Energy Resources NA, Inc. will acquire Guttman's electricity supply customers.  This transaction is expected to close by the end of February.  GDF Suez Energy Resources NA, Inc. is the third-largest non-residential electricity provider in the U.S.

IGS Energy has acquired the retail supply business of DPL Energy Resources
effective January 1, 2016.
Electricity

The bearish tone to the wholesale electricity market this past fall and early winter has been due largely in part to temperatures being 5 to 10 degrees warmer than normal, causing low demand.  Also contributing, are lower natural gas prices, record production in the Northeast, and U.S. storage at record setting levels.

We should begin to see prices on the upward climb in 2016 due to coal plant retirements and higher efficiency from natural gas power plants, as well as capacity increases.

Most of the utilities in our Premier Power service footprint have updated their price to compare rates as of December 2015.  Customers in FirstEnergy-owned utilities in Ohio ( Illuminating Company, Ohio Edison and Toledo Edison) will also see new "rider" rates effective January 1, 2016.  If you are under contract with an electric supplier, you will not be subject to these rider changes.

Source:  Premier Power Solutions, LLC
Natural Gas 

U.S. natural gas prices fell 19% in 2015 due to long-term oversupply concerns, with prices hitting a 16-year low in December caused by weak demand and warmer than normal weather temperatures.

Underground storage facilities are now around 92% full nationally.  Low prices and strong production helped natural gas surpass coal as the leading source of electricity generation on a monthly basis for the first time in April, and again in July through October. H owever, as a whole, coal still surpasses natural gas as the most prevalent fuel used for electricity generation.  This incremental gas demand as a result of coal-to-gas switching has been a key price support for natural gas during much of 2015.

Gas storage inventories peaked at an all-time record of 4,009 Bcf during November.  As of January 1, 2016, working gas storage was 3,643 Bcf, which is +17.2% higher than last year. The larger-than-expected fall led to a mammoth rise in natural gas prices. 

Both gas & coal continue to face pressure from record setting inventories, a bearish weather outlook and economic growth that has been below normal. In December, Spot Henry Hub prices were trading below the $2/MMBtu range for the first time since 2012. They averaged $2.61/MMBtu in 2015, making it the lowest annual average since 1999. The  Monthly average Henry Hub spot prices are forecast to remain less than $3/ MMBtu through August 2016, and average at $2.88/MMBtu this year.  Currently, natural gas prices are close to the resistance level of $2.4/MMBtu.

Source:  EIA

Average annual natural gas spot price in 2015 was at lowest level since 1999
Source:  EIA

Recap on PJM Capacity Performance & Its Impact on You

On August 10, 2015, PJM began implementing its new Capacity Performance plan to correct problems during the 2014 polar vortex, in which record peak demands could not be delivered.  This caused numerous generation failures and operation issues, leaving more than 20% of the region without power. The exact outcome of this plan won't be fully realized until 2018, but here is some information you should know:

If you signed a contract with a supplier before Mid-September 2015, and the contract extends beyond June 1, 2016, you will likely see some form of a pass-thru charge to cover this Capacity Performance, beginning on June 1, 2016.  If you are renewing your contract or signing a new one after Mid-September 2015, you can expect to have this Capacity Performance cost increase built into your energy price.   We have reached out to each supplier we do business with and have asked them to forward to us the amount of the incremental cost that will be passed on, as well as their method of billing that amount to you.

It has been reported that the average customer will likely see an increase of $2 to $3 per MWh across the PJM region by the time the plan is fully implemented in 2018. We  welcome any questions you may have regarding these charges and the impact they may have on your business.

Public Utilities Commission of Ohio (PUCO) Order Regarding "Fixed" Supply Offerings

The PUCO has dictated changes to how retail suppliers must market "fixed" offerings when a customer's contract price can change due to pass thru provisions or changes in the law.  Any product with reference to a pass thru or Change in Law provision must be marketed as a "variable" product or introductory term.  Here is a link to the Order:   http://codes.ohio.gov/oac/4901:1-21-05
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