May 3, 2024

Show Me the Money

PJM Regulatory Review

  • New EPA rules on emissions limitations will almost certainly add both costs and uncertainties to proposed thermal additions in areas seeing significant load growth. The EPA’s analysis concludes that due to advances in pollution control technology, it expects little adverse financial impact to ratepayers.
  • Offshore wind continues to face difficulties in New York as GE Vernova scrapped plans to build 18 MW turbines forcing the developers to add sites to deliver the agreed-upon amount of power utilizing only 15.5 MW turbines.
  • The Electric/Gas Coordination Senior Task Force is expected to codify the endorsed solution in a May 3 call.
  • The FERC approved PJM’s $5.1 billion transmission expansion plan which has been proposed to deal with the massive load growth originating from data center expansions in Virginia and Maryland.

Energy Market Update

  • After years and years of delays caused by various environmental concerns and a doubling of the cost ($3.5 billion to $7 billion), Mountain Valley Pipeline has asked for permission to commence commercial operations in May.
  • Natural gas prices remain under pressure after a 93 BCF injection was reported last Thursday and the transition from heating-degree-days to cooling-degree-days accelerates with the first 90-degree day of the year in Washington DC.
  • US gas production continues to come in around 100 BCF/D as producer shut-ins and natural well declines help low prices solve low prices. Freeport LNG’s extended outage has not helped as more gas is now available to inject into storage facilities which are already too full for this time of year.
  • Power prices in PJM reacted to the first real hot weather seen this year by trading up to $55/MWh for Monday as PJM demand pushed back above 100 GW.
  • The great data center demand growth story continues to percolate through the ether as forward demand forecasts continue to escalate and market participants debate the veracity of the growth projections.  

Forward Pricing