AUSenergy News Update 02/05/2014
Feb 5, 2014

In today’s AUSenergy News Update: The unprecedented cold weather conditions have created extreme volatility in the market. Below are some key points that have recently been reported:


The heat rate spiked in parts of the PJM area as a result of the recent use of Peaking Power Plants (a power plant that generally runs only when there is high demand and the power supplied from these plants commands a much higher price per kilowatt hour than base load power). That being said, customers that are considering any fixed actions in the short term may see higher pricing then that of longer term fixed pricing.


The average hourly spot-market price of electricity on the regional power grid was three times as expensive in January as it was a year ago, according to an analysis of prices posted by the grid operator, PJM Interconnection Inc…. PJM, which oversees power markets in parts of 13 states and the District of Columbia, described last month’s power demand as the highest in its 87-year history. Eight of its 10 highest days for winter demands occurred last month. – Philly News


PJM announced that it will ask members to pay more than $2 million in defaults by two undetermined retail marketers unable to cover high power costs during January’s arctic cold. There are some concerns that this may be the beginning of a string of defaults. – RTO Insider


As a result of the continuous cold temperatures plaguing the entire US, your facility is more than likely consuming a much larger amount of gas and electricity to heat your property. Therefore some customers may see an increase in their monthly usage by 10%, 20%, or possibly more , all of which will result in higher energy bills.


Strong demand for space heating and power from the next cold snap is expected through mid-February, which drove the market up. The next cold snap threatens to erode an already low supply of gas in storage. – Restructuring Today


AUS Comment: If AUS can help advise you during this crisis, please let us know. We’re here to help.

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