November 2017 Energy Market Update
- Increasing NG exports
- Increasing NG use in electric generation by replacing coal
- Stable to growing industrial demand for NG
- Winter is expected to be colder than last two winters
- Short-term 6-8 and 8-14 days above normal temperature forecast
- Upcoming storage injections expected to be at or above 5 year injection averages
- NG storage injection season will likely be extended a couple of weeks due to 6-8 and 8-14 above normal temperature forecasts.
SPECIAL FOCUS COMMENTARY
Because the key drivers and energy market update is essentially the same this month as it has been the past few months we are taking the opportunity to focus our commentary on a PJM product called Demand Response. The Demand Response program is created by PJM to reduce peak electric demand on the power grid during critical peak emergencies and pay its program participants for helping out.
RD Energy has helped facilitate manufacturers, distributors, lumber companies, schools, cities and villages to be enrolled in the PJM Demand Response Program. Some of those we’ve helped get into the PJM program have back-up generation while others are able to reduce their usage for the one hour test and could also do it during a critical usage event. Many of those participating use the income earned to reduce their energy budget while others use it to help fund other capital expenditures. Schools often use it to help fund some project like new computers or supplies. Cities and villages use the money as a way to reduce the income needed from the tax payer and is often used to help renovate ball fields or buy other important equipment. The great thing is the income can be used any way the customer wants. Depending on the KW demand reduction placed in the program and based on the one hour test results, participants in the PJM program can earn hundreds, thousands or tens of thousands of dollars each year.
A PJM critical emergency event in Ohio is an extremely rare. Those participating in the voluntary program will be paid annually to be on stand-by in case there is a critical peak emergency. Participants will decide what part of their kW demand they can reduce if the critical peak emergency occurs. Each participant will receive annual income based on the KW reduction placed in the program. Each program participant will be asked to reduce their kW demand amount in the program one hour each summer to prove to PJM that they can reduce if called upon during the critical usage peak event. Once they pass the one hour test customers will start receiving their quarterly income checks soon after the summer is over.
The other nice aspect of the PJM Demand Response program is that it runs completely independently from your electric supply contract. Even if a customer has 3 years remaining on their supply contract, participating in the PJM Demand Response program is still on the table. If your company would like to learn more about the income potential as part of the PJM Demand Response Program, RD Energy is available to send you more detailed information about the program as well as be available to discuss the program’s features in more detail.