NEI's Energy Markets Report - March 3-March 7, 2008

Here's a summary of what went on in the energy markets last week:

Electricity peak prices increased $1-3/MWh at the Entergy, Palo Verde and SP 15 hubs and increased $13/MWh at ERCOT. The NEPOOL and PJM West hubs decreased $10-13/MWh. Except for PJM West and NEPOOL, electricity prices at all hubs were higher last week than their four-week and 52-week averages (see pages 1 and 3).

Estimated nuclear plant availability fell to 88 percent last week. McGuire 2, Quad Cities 2 and Susquehanna 1 began refueling outages. Crystal River 3 shut down to repair a reactor coolant pump seal. While returning from a refueling outage, River Bend 1 scrammed due to an apparent malfunction in the turbine control system. Hatch 2 also scrammed due to a loss of condensate feedwater (NRC, see pages 2 and 4).

Gas prices at the Henry Hub increased $0.33 to $9.35/MMBtu. High crude oil prices, cold weather across much of the country and lower working gas in storage all contributed to the increase in gas prices (EIA, see pages 1 and 3).

By 2012, the following amounts of new generating capacity are expected to come online: 41,000 MW of coal (-1,000 MW from last month’s figure); 59,000 MW of natural gas (+2,000 MW from last month’s figure); and 41,000 MW of wind (+1,000 MW from last month); see page 5.

According to EIA’s STEO, growth in total natural gas consumption is expected to slow from 6.4 percent in 2007 to 0.7 percent in 2008 and 0.8 percent in 2009. Natural gas consumption in the electric power sector (30 percent of total natural gas consumption) grew by over 10 percent in 2007 but is expected to decline slightly in 2008 due to projected milder summer temperatures. Natural gas consumption in the industrial sector is also projected to decline by 0.2 percent in 2008 due to slowing economic growth. Total electricity consumption is expected to grow by only 0.7 percent in 2008, then return to a growth rate of 1.5 percent in 2009. WTI crude oil prices, which averaged $72.32 per barrel in 2007, are projected to average $94.11 and $85.92 per barrel, respectively, in 2008 and 2009 (see pages 1 and 3).

For the report click here. It is also located on NEI's Financial Center webpage.