Electricity, Transmission

ERCOT congestion revenue rights value falls in February

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It is too soon for results from the nodal system changeover but this could be a sign of things to come. One of the touted advantages was the allocation of congestion costs at the point of congestion. Prior to the change the congestion was too widely spread to be effective.

ERCOT congestion revenue rights value falls in February
Houston (Platts)
Congestion revenue rights acquired in the Electric Reliability Council of Texas auction for February totaled $12.1 million, about 17.1% less than the January total, results posted Monday show.

The total February capacity acquired in the auction was 141,591 MW, about 1.3% less than the January auction’s total.

Of the February value, about $6.8 million was for 53,528 MW in obligation CRRs, and about $5.3 million was for 88,063 MW in option CRRs. The dollar value of January CRRs was $14.6 million.

An obligation CRR is a financial instrument that entitles a CRR owner to be charged or paid when ERCOT’s grid experiences congestion in the day-ahead or real-time markets.

With an option CRR, a purchaser gets revenue if congestion occurs from a particular electricity source to a…

Electricity, Natural Gas

Wrong? Anadarko CEO Says Gas Prices Will Go Up

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This opinion may come true but I think it only applies to future drilling. Wells already in production will continue filling the pipelines. My logic is that once the well is producing and the price covers the fixed costs the gas will not be shut in. The investment has been made. Balancing the current abundance is the move by electricity generators from coal to gas. This will take time.

Anadarko CEO says gas prices won’t remain at current levels for long
Houston (Platts)
The head of Anadarko Petroleum believes that the current window for bargain-basement natural gas prices is closing, as producers will decide they can’t economically keep drilling dry gas wells at current price levels.

Anadarko Chairman and CEO James Hackett said in Houston Wednesday that the current price deck below $3/MMBtu for natural gas will be short-lived.

“My view is that it will go up from here, based on reaction from companies cutting back on their drilling, but it won’t go to a level where people will be discouraged from using gas,” he told reporters on the sidelines of…

To echo the current pricing situation, the EIA reported yesterday that gas prices are staying below the $3 level with no upward pressure from a cold winter. In fact the mild winter adds to the storage balance. Over the coming months, if not year or more, natural gas will be the fuel bargain. Current prices are approaching the 1994 level.