March 2016   Volume 6 | Issue 3
New Reports Research On The Horizon Information
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New Reports - Commodity DataServer and Marketplace

Nodal Exchange

Morningstar now offers the following from Nodal Exchange:
 End-of-day future settlement price, volume, and open interest

Path: TopRelation:Energy:Forwards:Electricity:NodalExchange:Isone:Eod
Granularity: Daily
Ex. Feed: NodalExchange_EODFutures
Ex. Key: AAA; 12/31/2016

Net Connect

Morningstar now offers the following from Net Connect:
 Price of Conversion Neutrality Charge

Path: TopRelation:Energy:EuropeanNaturalGas:DEUNGas:NetConnect:Fees
Granularity: Daily
Ex. Feed: NetConnect_ConversionNeutralityCharge
Ex. Key: Conversion Neutrality Charge

Commodities Research

PJM 2019-20 CP and Base Auction Outlook: Premium Here to Stay with Help from Higher Coal and Peaking Unit Offers

Since the lower New England Forward Capacity Auction No. 10 clear, PJM participants fear a similar fate for the PJM RPM 2019-20 capacity auction that opens May 17. We believe this fear is unwarranted. PJM will have to clear a significant amount of coal and peaking gas capacity in the upcoming auction. We expect a flatter coal capacity supply curve associated with lower dispatch, higher cycling costs, and energy revenue. We also see higher capacity offers from peaking gas units as a result of lower option premiums in fixed-price forwards. We also believe that generators will continue to demand a performance premium associated with potential performance penalty risks in the energy market. The implied premium that marginal generators priced into previous auctions is already on the low end. The market-implied expected value of shortfall hours is less than two hours per year compared with the base auction.

We forecast the PJM RTO 2019-20 auction to clear $160 per megawatt-day for capacity performance, or CP, units and $150/MW-day for base units. We believe the base auction, which will clear the lowest quality assets, will continue clearing at a small discount to CP because of the high marginal cost of capacity of these assets. The continued coupled bidding behavior between the CP and base auction and high rates of market mitigation for the base auction also supports a small base discount to CP. In the last base auction, 46% of units were mitigated.

For the cost-of-new-entry, or CONE, areas, we see the potential for lower EMAAC separation as a result of higher year-over-year CETL values. However, we also see the potential for SWMAAC to break out. The lower year-over-year CETL values could have a big impact given how small SWMAAC is compared with other CONE areas. Given the age and relatively higher gas prices in SWMAAC, we are surprised that this region has not previously separated, while this CONE area remains highly constrained in the energy market

On the Horizon

Energy Management Institute

EMI uses its market expertise to publish business critical indices and newsletters that provide market news and analysis, including purchasing and hedging advice, pricing, and more. EMI publications are trusted by thousands of organizations for daily financial and physical market guidance including key benchmark contracts. They provide the following 6 reports:

    1. Gasoline and Diesel Volumes: Data Report
      Volumes represent weekly prime supplier sales of motor gasoline and no. 2 distillate.

    2. Wholesale Fuel Market Assessment: Data Report
      Wholesale Fuel Rack averages for more than 80% of all markets nationwide for gasoline and distillate.

    3. Pipeline Tariff Report: Data Report
      Intra- and interstate transportation. Tariff rates for approximately 250 delivery points across U.S.

    4. Alternative Fuels Index: News and Pricing Report
      Weekly wholesale prices for Biodiesel, Ethanol, Propane, Methanol, Electricity, Natural Gas, & CNG.

    5. Energy Market Analysis: Analytical Report
      EMI closely monitors and analyzes market dynamics that impact price, supply and trading conditions.

    6. Daily Hedger: Analytical Report
      The Daily Hedger has been designed to mirror a typical trading operation as closely as possible.

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