February 2015   Volume 5 | Issue 2
New Reports Research On The Horizon Information
> California ISO
> Coal Desk
> Gaspoint Nordic
> TFS Tradition
> ISO-NE Winter Reliability Program
> PJM Price Formation Before FERC
> U.K. Capacity Auction Post-Partem
> Scheduled Market Changes
> Completed Market Changes
> Contact Us
> Feedback

Morningstar is pleased to announce the availability of the following data sets. Please note our new Commodities Research section. To add any optional offering to your Morningstar data feed, please contact your Sales Director or email commoditydata-sales@morningstar.com.

New Reports - Marketplace

Coal Desk

Morningstar now offers the following from Coal Desk:
  Coal Prices

Feed: Coaldesk_CoalPrices
Ex. Key: CAPP Coal BS Rvr 11500 2
Granularity: Daily


Morningstar now offers the following from ICAP:
  Gas Forwards
  Power Forwards
  ERCOT Ancillaries Forwards

Feed: ICAP_GasForwards
Ex. Key: Product: Fxd Off-Peak
Granularity: Daily

Feed: ICAP_PowerForwards
Ex. Key: Product: Basis CGPR
Granularity: Daily

Feed: ICAP_ErcotAncillaries
Ex. Key: Product: Down Reg
Granularity: Daily


Morningstar now offers the following from ICE:
  ICE Markers

Feed: ICE_Markers
Ex. Key: ProductName: Heating Oil Futures
Granularity: Daily


Morningstar now offers the following from PVM:
  PVM Forwards

Feed: PVM_AO
Ex. Key: Code: HPVM055480
Granularity: Daily

TFS Tradition

Morningstar now offers the following from TFS Tradition:
  Gas Basis Prices

Feed: TFS_GasBasisPrices
Ex. Key: Location: Algonquin
Granularity: Daily


Morningstar now offers the following from UXC:
  Uranium Price Indicators

Feed: UXC_UraniumPriceIndicators
Ex. Key: Id: UxEUConv
Granularity: Daily

New Reports - Commodity DataServer and Marketplace

California ISO (CAISO)

Morningstar now offers the following from CAISO:
  Scheduling Point/Tie Combination LMP Day-Ahead Prices

Ex. Description: CASIO Scheduling Point/Tie LMP, AMARGOSA_1_SN001, AMARGO
Path: TopRelation:Energy:Electricity:Iso:CaliforniaMRTU:DAMMarket:LmpSchedPointTie:
Granularity: Hourly


Morningstar now offers the following from CME:
  European Natural Gas Futures

Ex. Symbol: CME.ASE_2015H
Ex. Description: CME: Austrian Natural Gas (ICIS Heren) Calendar Futures
Path: TopRelation:Futures:Cme:
Granularity: Daily

Commodities Research

ISO-NE Winter Reliability Program: Update on This Winter and Next

On Jan.23, ISO New England CEO Gordon van Welie gave his usual prepared remarks to the participants committee. In his update, he said that 550,401 barrels of Winter Program oil were used in December. This was interesting not only because it was a mild December but also because the data in the ISO-NE operational reports doesn’t show the oil burn in December. Only the primary fuel shows up on the fuel burn. Therefore oil burn is being recorded only if oil is the primary fuel and actual oil burn is showing up as either coal or gas incremental burn (switching).

With Salem Harbor in Massachusetts out of the supply stack, that leaves only Brayton Point in Massachusetts, Bridgeport Harbor in Connecticut, and Merrimack in New Hampshire, for a total of 1,905 megawatts of coal capacity. These three plants running at full capacity on coal around the clock could produce a maximum of 46,720 megawatt-hours. But this would likely deplete coal stockpiles quickly, and shipments have been very hard to come by this year. Units with gas as their primary fuel have probably been burning plenty of oil as well.

For more information about Morningstar Research or to recieve the full report please email Commodity-research@morningstar.com

PJM Price Formation Before FERC: What’s at Stake

PJM Reserve Pricing Proposal:Why Is This Important?

As we have discussed many times before, reserve and scarcity pricing are a large component in pricing forward spark spreads in summer and winter months. Summer and winter average clearing prices are simply a function of the expected value of a few days of blowout spark clears averaged with many normal spark clears. In general, these blowout spark days in summer and winter occur when PJM Interconnection is being penalized for being short of its daily reserve requirement (zonal or regional transmission organization). PJM submitted a proposal to help move uplift costs into locational marginal pricing, or LMP, in December. The Federal Energy Regulatory Commission has now issued a deficiency letter, and PJM has 15 days to respond. We believe FERC will accept some form of this PJM proposal and the effect will be bullish on energy prices.

Please click on the title to see the full report: PJM Price Formation Before FERC

U.K. Capacity Auction Post-Partem: EDF’s Moat Shines

The U.K. government recently approved the results of its inaugural electric capacity auction. These results confirmed the key analysis presented in our Utilities Observer "Europe's Power Plates Are Spinning," published in October 2014. The market power and cost advantage supporting a moat for Electricite de France’s generation in the U.K. drove outperformance in the auction and brings significant incremental cash flow for EDF’s investors. EDF secured EUR 318 million in new pretax margin for 2018 and won a 25% share of awarded contracts while only one competing newbuild gas plant cleared the auction, confirming our analysis.

Among European diversified utilities, we think EDF offers the best combination of valuation, yield, and dividend stability, with modest growth during the next three to five years for patient investors in the downtrodden space. Other diversifieds have more upside to power prices and similar competitive advantages, but none has EDF’s cash-flow consistency and near-term visibility to support a narrow economic moat and a strong dividend with a 5.1% current yield. EDF stands head and shoulders above peers in upside potential from new European capacity markets, as the inaugural U.K. capacity auction clearly demonstrated. EDF also could realize significant incremental value from newbuild nuclear in the U.K.

Please click on the title to see the full report: U.K. Capacity Auction Post-Partem: EDF's Moat Shines

On the Horizon

Scheduled Market Changes

Morningstar is planning on completing the following maintenance items:

Description: MISO is implementing ELMPs
Live Date: March 1, 2015

Source: Platts
Description: Platts FTP Upgrade
Live Date: March 2015

Please visit our website to learn more about these market changes.

Completed Market Changes

Morningstar has successfully completed the following maintenance items:
  Nordpool to Gaspoint Nordic vendor change
  Nodal Exchange FTP Migration
  Source data from new ENTSO-E Transparency Platform

Please visit our website to learn more about these market changes.

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