OE ENERGY MARKET SNAPSHOT · Markets Cautiously Optimistic Nearing Winter Natural gas and power prices are likely to be higher than last winter Normal to above average temperatures

Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight

OE ENERGYMARKET SNAPSHOTNational – Data Through October 2016

Office of EnforcementFederal Energy Regulatory Commission

November 2016


2016/2017 Winter Assessment

2

Markets Cautiously Optimistic Nearing Winter

Natural gas and power prices are likely to be higher than last winter Normal to above average temperatures are expected Normal residential and commercial natural gas demand are expected,

but lower power burn Falling production offset by plentiful storage with potential for imports

from Canada New pipelines will reduce regional price differences New England and Southern California present challenges Renewables are changing California ramping requirements Entrants are small to mid-size generators and renewable projects, which

are accompanied by new transmission projects Electric generation mix is changing

3

*January - February 2017

^January - February 2016

*Power Note: Prices in $/MWh. Peak financial swap prices.

*Gas Note: Prices in $/MMBtu. Regional futures natural gas prices are the sum of the Henry Hub futures contract price plus the regional basis futures.

Source: Derived from NYMEX and IntercontinentalExchange

Power

Gas

Location 2016^ 2017* ∆Algonquin (New England) $9.69 $7.71 ‐20%

Transco Zone 6 non‐NY (Mid‐Atlantic) $6.21 $6.26 +1%Chicago City‐Gates $2.62 $3.84 +47%

Transco Zone 6 NY (New York City) $9.29 $8.95 ‐4%Dominion South (Marcellus) $1.97 $2.14 +9%Southern California Border $2.85 $3.79 +33%

Henry Hub $2.77 $3.55 +28%Massachussets Hub $89.28 $78.93 ‐12% PJM Western Hub $50.56 $55.80 +10%Northwest (Mid‐C) $24.88 $32.05 +29%

Southern California (SP‐15) $33.76 $41.18 +22%

Futures Prices Higher4

Forecasters Call for Broadly Normal Winter Temperatures

Source: National Oceanic and Atmospheric Administration

5

Gas Demand Likely to Rebound in 2016-17

Sources: Derived from Bentek, EIA

‐4

‐2

0

2

4

6

ResComm LNG Exports Industrial

Exports To Mexico Power GenerationBcfd

6

Production Sees First Decline of Shale Era


7

Strong Storage Inventories Keep Market Well Supplied


0

1

2

3

4

5

2010‐2011 2011‐2012 2012‐2013 2013‐2014 2014‐2015 2015‐2016 2016‐2017

Start Season (Nov) End Season (Mar)

Tcf

8

Canada and LNG Imports Fill in Supply Gaps


Winter

9

Pipeline Additions Help Ease Market Area Prices

Sources: Derived from Velocity Suite, ABB Enterprise Software and Bentek, in MMcfd

10

NYC has Nation’s HighestWinter Gas Prices ($/Mmbtu)

Source: Derived from IntercontinentalExchange

11

Aliso Canyon Outage Stresses California Markets

12

CAISO: Adapting to the Widening “Duck” Curve

Sources: Derived from Velocity Suite, ABB Enterprise Software

13

Recent/Upcoming Developments: Power Plants & Transmission

Sources: Data derived from U.S. Electric Transmission Projects ©2016 The C Three Group LLC and map created using Velocity Suite, ABB Enterprise Software; Note: Winter 2016‐2017 Expected In‐Service Transmission Projects

Number of Expected Transmission Projects

120kV+ October 2016-Feb 2017

>129-12

5-8<5

14

Historical Year-over-year Electric Capacity Change

Source: Derived from Velocity Suite, ABB Enterprise Software

15

Conclusion Supply and demand are balancing in the natural gas market Prices in both power and natural gas have responded to

rebalancing, but remain relatively low New pipeline connections have strengthened deliverability Gas storage leaves markets well supplied for winter The Northeast and Southern California may experience localized

challenges Increased renewable generation requires flexible resources for

evening ramp in CAISO Transmission projects may help to relieve price divergences Natural gas for electricity generation continues to increase

16


National Slides

17

Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight18

NOAA November 2016 Through January 2017 Outlook


2181

Pittsburgh

Boston

Calgary

City Location

ChicagoNYC

OklahomaCity

DallasLosAngeles

Sacramento Denver

Portland

Houston New Orleans Miami

Vancouver

This Year

Last Year

5 Year Average

Cumulative HDDs by CityApr 2016– Oct 2016

Source: Bloomberg Weather (daily data summed quarterly)

Atlanta

Updated

19

Nov‐2016

‐ ‐ 1

906 862 885

8 2

25

886 845 928

225 247 315

41 52

104

9 ‐ 35

1,408 1,380 1,312

1,186 1,185 1,123

828 809 784

769 764 886

205 175 228

776 632 608

1,166 1,135 935

55 88 96

210 196 258


2181

Pittsburgh

Boston

Calgary

City Location

ChicagoNYC

OklahomaCity

DallasLosAngeles

Sacramento Denver

Portland

Houston New Orleans Miami

Vancouver

This Year

Last Year

5 Year Average

Cumulative CDDs by CityApr 2016– Oct 2016

Source: Bloomberg Weather (daily data summed quarterly)

Atlanta

Updated

20

Nov‐2016

1,005 890 862

1,451 1,532 1,252

3,613 3,761 3,398

1,118 942 848

3,227 3,469 3,061

1,422 1,120 1,136

2,139 1,984 2,197

3,157 3,147 3,135

3,319 3,210 3,038

25 82 57

853 848 925

30 76 51

524 755 528

1,260 1,566 1,335

1,281 1,632 1,257

2,167 1,893 1,751


$ = Average 2016 Spot Price*% Decrease from 2015*Average On-Peak Day-Ahead from January to OctoberSPP Price is an average of the North and South Hubs Source: RTO/ISO and ICE Data

NP 15

Palo Verde

Mid-Columbia Indiana

Hub

SPP

ERCOTNorth

PJM WestNYISO ZJ

Mass Hub

SOCO

2016 Spot Power Prices ($/MWh)

$21.83-4%

$30.60-15%

$25.55-9%

$33.13-9%

$25.90-5%

$26.84-15%

$28.27-12%

$33.13-37%

$34.88-34%

$34.88-24%

21


2181

ColumbiaTCO

AlgonquinCitygate

AECO

Pricing PointBOLD – This YearGreen – % increase from previous yearRed – % decrease from previous year

ChicagoCitygate

TranscoZ6-NY

NGPLTex-Okla

El PasoPermian

SoCal Border

PG&ECitygate

CIG

HSCHenry Hub

FGT-Z3

Spot Natural Gas Prices Average ($/MMBtu)Apr 2016 – Oct 2016

Source: ICE Updated

22

Nov‐2016

2.60$ 5%1.66$

‐24%

2.54$ 5%

2.63$ ‐13%

2.55$ 5%

2.50$ 2%

2.45$ 4%2.33$

3%

2.52$ 5%

1.57$ ‐16%

2.28$ 3%

2.76$ 1%

2.47$ 3%


2181

ColumbiaTCO

AlgonquinCitygate

Pricing PointBOLD – This yearGreen – % increase from previous yearRed – % decrease from previous year

ChicagoCitygate

TranscoZ6-NY

NGPLTex-Okla

El PasoPermian

SoCal Border

PG&ECitygate

CIG

HSCHenry Hub

FGT-Z3

Spot Average Natural Gas Trading Volumes (MMBtus)Apr 2016 – Oct 2016

Source: ICE Updated

23

Nov‐2016

8,819 ‐89%

70,631 ‐10%

106,309 ‐17%

28,000 14%

212,221 9%

371,498 ‐21%

258,082 ‐31%

222,467 ‐13%

27,265 22%

32,633 ‐25%

448,201 ‐26%

261,201 ‐15%


U.S. NG Supply and Demand

Apr 2015 – Oct 2015 vs Apr 2016 – Oct 2016

National Natural Gas Market Overview: U.S. Supply and Consumption

Note: Balance includes all amounts not attributable to other categories.Source: Derived from Bentek Energy data

2163

24

0102030405060708090

100

2015 2016

Ave

rage D

aily

Volu

me (

Bcfd

)

US Natural Gas Supply

LNG ImportsNet Pipeline Imports

Net Dry GasProduction

14.5%4.4%

-0.4%

Total Change in Supply -0.4%

0102030405060708090

100

2015 2016

Avera

ge D

aily V

olu

me (

Bcfd

)

US Natural Gas Demand

Power Generation

Total Change in Demand

Industrial

1.5%

Residential/ Commercial

5.9%

2.1%

-0.9%

Updated Nov‐2016


National Natural Gas Market Overview: Canadian Imports

Regional Imports from Canada

Source: Derived from Bentek Energy data

(2)

0

2

4

6

8

10

Jan-

11

May

-11

Sep-

11

Jan-

12

May

-12

Sep-

12

Jan-

13

May

-13

Sep-

13

Jan-

14

May

-14

Sep-

14

Jan-

15

May

-15

Sep-

15

Jan-

16

May

-16

Sep-

16

Bcf

dNorthwest Net ImportsMidwest Net ImportsNortheast Net Imports

25

Updated Nov‐2016


Total U.S. Natural Gas Demand All Sectors

National Natural Gas Market Overview: Total US Gas Demand

Source: Derived from Bentek Energy data, derived from interstate pipeline flow and modeled data.20009

0

20

40

60

80

100

120

140

160

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Bcf

d

2011-15 Range 2016

26

Updated Nov‐2016


U.S. Natural Gas Consumption for Power Generation

National Natural Gas Market Overview: NG Consumption for Power Generation

Source: Derived from Bentek Energy data20024

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

MM

cfd

2011 - 2015 Range

2016

27

Updated Nov‐2016


EIA National Storage Inventories

National Natural Gas Market Overview: Natural Gas Storage Inventory

Source: Derived from Bloomberg Data

Notes:

Updated

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Stor

age (

Bcf)

5 Year Range 2016-2017 2015-2016

Nov‐2016

28


EIA Regional Storage Inventories

National Natural Gas Market Overview: Natural Gas Storage Inventory

Source: Derived from Bloomberg Data

Notes:

Updated Nov‐2016

29

0200400600800

1,0001,200

EAST

0

500

1,000

1,500 WEST

0

100

200

300

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

5 Year Range 2016‐2017 2015‐2016

PRODUCING

0100200300400500 PACIFIC

0

500

1,000

1,500

SOUTH CENTRAL


Monthly U.S. Dry Gas Production – Lower 48 States

National Natural Gas Market Overview: Monthly U.S. Dry Gas Production

Note: Prior to July 2010, chart was derived from a combination of EIA and Bentek Energy dataSource: Derived from Bentek Energy data

20021

10

20

30

40

50

60

70

80

Bcf

d

Dry Production

30

Nov‐2016Updated


Rigs by Type

National Natural Gas Market Overview: Rig Count by Type

Source: Derived from Bloomberg data

Notes:

Updated

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800Oc

t‐14

Jan‐15

Apr‐1

5

Jul‐1

5

Oct‐1

5

Jan‐16

Apr‐1

6

Jul‐1

6

Oct‐1

6

Baker H

ughe

s Rig Co

unt (Rigs)

Oil Rigs Gas Rigs

31

Nov‐2016


Gas vs Coal

National Natural Gas Market Overview: Rig Count


Notes:

Updated

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$0

$1

$1

$2

$2

$3

$3

$4

$4

$5

$5Oc

t‐14

Dec‐1

4

Feb‐15

Apr‐1

5

Jun‐15

Aug‐15

Oct‐1

5

Dec‐1

5

Feb‐16

Apr‐1

6

Jun‐16

Aug‐16

Oct‐1

6

Conv

erted O

il Price ($/M

MBtu)

Gas a

nd Co

nverted C

oal P

rice ($/M

MBtu)

Nymex Henry HubCentral App CoalWTI Crude Oil

Nov‐2016

32


Daily Gas Sendout from Existing U.S. LNG Facilities

National Natural Gas Market Overview: LNG Market-Daily Gas Sendout

Notes: Everett data includes flows onto the AGT and TGP interstate lines, plus estimates of flows to the Mystic 7 power plant, Keyspan Boston Gas, and LNG trucked out of the terminal. Excludes flows to the Freeport LNG which flows via intrastate pipelines and flows to the Mystic 8 and 9 power plants.

Source: Derived from Bentek Energy data3007

33

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000D

aily

LN

G S

endo

ut (M

Mcf

d)Sabine PassLake CharlesGolden PassFreeportNortheast GatewayExcelerateCameronElba IslandCove PointEverett (Grossed)

0

1,000

2,000

3,000

4,000 Monthly Average

Updated Nov‐2016


Source: Waterborne Energy, Inc. Data in $US/MMBtuNote: Includes information and Data supplied by IHS Global Inc. and its affiliates (“IHS”); Copyright (publication year) all rights reserved.Landed prices are the monthly average of weekly trades from the prior month.

World LNG Estimated Landed Prices: Oct 2016

National Natural Gas Market Overview: World LNG Landed Prices

Cove Point$4.50

India$11.55

UK$8.75

Spain$9.05

Belgium$8.84

Japan$12.40

Korea$12.40

Lake Charles$3.96Altamira

$4.60

Cove Point$4.40

India$11.55

UK$8.75

Spain$9.15

Belgium$8.99

Japan$13.10

Korea$13.10


$4.57

Cove Point$4.50

India$11.55

UK$8.75

Spain$9.05

Belgium$8.84

Japan$12.40

Korea$12.40


$4.60

Cove Point

India

UK

Spain

Belgium

JapanKorea

Lake Charles

Altamira

Rio de Janeiro

Bahia Blanca

Canaport

China

34

Updated Nov‐2016

3.29$

6.44$ 6.26$

6.41$ 6.41$

5.59$

3.06$

6.19$

4.35$ 5.81$

6.05$

6.26$

6.30$


Historical and Future World Gas Prices

National Natural Gas Market Overview: LNG Competitive Price Hubs


Notes:

Updated Nov‐2016

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18No

v‐14

Jan‐15

Mar‐15

May‐15

Jul‐1

5Sep‐15

Nov‐15

Jan‐16

Mar‐16

May‐16

Jul‐1

6Sep‐16

Nov‐16

Jan‐17

Mar‐17

May‐17

Jul‐1

7Sep‐17

Nov‐17

$/MMBtu

Henry Hub TZ6 NYAlgonquin Citygates UKNBPJapanese LNG Spot Price Futures Prices

35


National Natural Gas Market Overview: WTI vs Brent Oil Price

Source: Derived from Bloomberg data Updated

WTI vs Brent Crude Oil Price

Nov‐2016

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

Oil Pric

es ($/Barrel)

WTI Oil Price Brent Crude Oil Price

36


National Natural Gas Market Overview: Nymex Futures Curve

Source: Derived from Bloomberg data Updated

Nymex Futures Curves

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

Dec‐1

6

Feb‐17

Apr‐1

7

Jun‐17

Aug‐17

Oct‐1

7

Dec‐1

7

Feb‐18

Apr‐1

8

Jun‐18

Aug‐18

Oct‐1

8

Dec‐1

8

Feb‐19

Apr‐1

9

Jun‐19

Nymex Fu

tures C

urves ($/MMBtu)

10/31/2015 4/30/20169/30/2016 10/30/2016

Nov‐2016

37


Infrastructure Report

38

Office of Energy Projects Energy Infrastructure Update

http://www.ferc.gov/legal/staff-reports.asp

(see “Energy Infrastructure” tab)


Natural Gas Highlights

Natural Gas Activities through September 30, 2016January through September 30, 2015

Status No. of Projects

Storage Capacity

(Bcf) Deliverability

(MMcf/d) Capacity (MMcf/d)

Miles of Pipeline

Compression (HP)

Pipeline

Placed in Service through September 30, 2015

2416 4,609.3

5,505.7 274.6203.5

129,695127,925

Certificated through September 30, 2015

4626 14,382.5

7,541.0 1,136.5360.6

1,251,340247,078

Storage


05

0.011.4

053 0

4,800 Certificated

through September 30, 2015 02

0.02.7

00 0

0

LNG (Import & Export)


10

00

7000 0

0 Certificated (Import/Export)

through September 30, 2015 41

10.20

3,1811,400 0

0

Natural Gas Activities in September 2016

Status No. of Projects

Storage Capacity

(Bcf) Deliverability

(MMcf/d) Capacity (MMcf/d)

Miles of Pipeline

Compression (HP)

Pipeline

Placed in Service 6 1,345.0 85.5 36,000

Certificated 5 367.6 18.9 139,221

Proposed 2 0.0 23.2 0

39


Electric Generation Highlights

September 2016 January – September 2016

Cumulative January – September 2015

Cumulative

Primary Fuel Type No. of Units

Installed Capacity (MW)

No. of Units


No. of Units


Coal 0 0 3 45 2 6Natural Gas 14 364 77 7,371 57 5,403Nuclear 0 0 0 0 2 152 Oil 0 0 5 12 15 21 Water 0 0 27 228 21 158Wind 0 0 34 2,661 37 4,136Biomass 0 0 25 54 33 267Geothermal Steam 0 0 0 0 2 64 Solar 16 601 225 3,440 219 1,552Waste Heat 0 0 1 15 0 0

Other * 1 0 6 0 9 0 Total 31 965 403 13,826 397 11,759

Sources: Data derived from Velocity Suite, ABB Inc. and The C Three Group LLC which include plants with nameplate capacity of 1 MW or greater. The data may be subject to update.

New Generation In-Service (New Build and Expansion)

40


Electric Transmission Highlights

Transmission Projects Completed Proposed Transmission Projects In-Service by September 2018

Voltage (kV)

September 2016

September 2015

January – September 2016 Cumulative

January – December 2015 Cumulative

High Probability of Completion All

Line Length (miles)

≤230 41.5 15.1 285.9 694.3 2,654.3 5,122.9

345 36.0 82.0 199.4 1,230.5 2,208.9 3,734.7

500 0.0 0.0 43.0 355.0 925.3 2,884.3 Total U.S. 77.5 97.1 528.3 2,279.8 5,788.5 11,741.9

41


Installed Generating Capacity42

Installed Capacity (GW) % of Total Capacity

Coal 293.73 24.99% Natural Gas 510.26 43.42%

Nuclear 107.36 9.14% Oil 44.98 3.83%

Water 100.35 8.54% Wind 76.66 6.52%

Biomass 16.64 1.42% Geothermal Steam 3.88 0.33%

Solar 19.39 1.65% Waste Heat 1.17 0.10%

Other* 0.76 0.07% Total 1,175.20 100.00%

Sources: Data derived from Velocity Suite, ABB Inc. and The C Three Group LLC which include plants with nameplate capacity of 1 MW or greater. The data may be subject to update.

Total Available Installed Generating Capacity

Documents

OE ENERGY MARKET SNAPSHOT · Markets Cautiously Optimistic Nearing Winter Natural gas and power prices are likely to be higher than last winter Normal to above average temperatures