Record temps drive more than mercury up
The heat wave continues burning its way across most of the South and Midwest with
temperatures soaring 15 degrees above average temperatures. With no immediate relief
in sight, air-conditioning loads will be expected to increase substantially as will the call for
gas-fired power generation of electricity. No surprise here that closing prices in the natural
gas market were up today $0.120 to $4.827.
More extreme weather is being debated by weather experts as a cluster of thunderstorms
in the Caribbean Sea, moving in a north-northwesterly direction, has a moderate chance
of forming into a tropical cyclone over the next couple of days (hurricane season officially
began on June 1). Approximately 10% of U.S. natural gas production comes from the Gulf of
Mexico, so hurricanes can have a significant impact on that supply/demand balance.
Will supply meet demand this summer? The Electric Reliability Council of Texas (ERCOT),
the state grid operator and manager of the wholesale electric market, seems to think so.
Their recent assessment expects adequate electricity resources to meet this summer’s
highest electricity usage in the region. ERCOT expects enough generation resources to
exceed peak demand in case of major outages or unusual temperature extremes. However,
if a prolonged period of abnormally high temperatures or other unexpected weather events
trump their report, we could expect to see emergency procedures, AKA, rolling blackouts to
occur. Hopefully, that won’t be the case this early in the season.
Extreme weather doesn’t mean you have to settle for extreme commercial electricity
rates. Live Energy provides its clients with smarter buying decisions. With proven energy
experience and unique tools, such as the Live Energy Portal, you can find, track and lock in the
best commercial rate possible.