In today’s AUSenergy News Special Update: The energy market as a whole continues to experience extreme volatility. Below are some key points that have been reported.
This past winter’s cold temperatures depleted natural gas storage to where we are currently at a 48% deficit compared to last year. And natural gas injections are currently not at an adequate level to return storage banks back to more stable levels by October 2014.
Output by coal producers has begun to decline due to milder temperatures and conserving stockpiles; which may explain why there were stronger gas demands for the first two weeks of April.
The U.S. Supreme Court ruled to uphold the EPA’s ‘good neighbor’ ruling or Cross State Pollution Rule which forces polluting states to reduce smokestack emissions that contaminate the air in downwind states. According to EPA estimates, the ruling will cost operators $800 million annually, starting in 2014.
AUS Comment: The above points have repercussions when it comes to both the natural gas and electricity market (natural gas and coal make up about half of your electricity) which are out of the control of your energy providers. Due to the increased volatility resulting from these market impacts, AUS suggests taking measures to protect yourself from the unexpected by locking in your rates. Consider a fixed product that has a swing option to account for any overages or underages your facility may experience throughout the year.
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