Washington Gas Energy Services: A Washington Gas Affiliate Complany
Volume 10, Issue 8
We Know Energy
February 24, 2012 Energy Update
In this Issue
Editor's Note
January and February Wrestle to a Draw
Natural Gas Fundamentals
Natural Gas Storage Update: Data Released February 23, 2012
Baker Hughes Rotary Rig Count For Natural Gas
NYMEX Natural Gas Monthly Settlements For the Past 12 Months
NYMEX Values Per Month For the Forward 12 Months
NYMEX Graph For Natural Gas - 12 Month Average Price Per Therm at the Well-Head
PJM Electricity
Graph - PJM 12-Month Average Peak Power Price
Local Heating Degree Days*
Recent Features
WGES Customers Show How Small Changes Make a Big Difference (Jan. 27, 2012)


D.C.'s Dumbarton House Reduces its Carbon Footprint with Purchase of Carbon Offsets from WGES (Dec. 30, 2011)


U.S. EPA Honors the District of Columbia with the Green Power Community of the Year Award (Dec. 9, 2011)


WGES Receives Prestigious Green Power Supplier of the Year Award (Nov. 18, 2011)


WGES Selected to Supply 1.5 Million Megawatt Hours Per Year to the Baltimore Regional Cooperative Purchasing Committee (Nov. 14, 2011)

WGES and Kent County, Maryland Announce 1.58 Megawatt Solar Project (Nov. 4, 2011)

Our New Wind Power Partners
Green Power Leadership Award Winner - U.S. Department of Energy

Panera Bread of Maryland (Lemek LLC)
Calvary Baptist Church
Mountain View Community Church
Caser Chavez Public School
PB Dye Golf Club
Behnke Nurseries
Townes of North Creek
Victory Racing Plate Company
Village Management, Inc.
Mt. Airy Bicycles
College Park Bicycles
Donatelli Development
Blue Ocean Realty
Mandarin Oriental
Bank of Georgetown
Embassy of Bosnia Herzogovina
Baltimore International College Foundation
The Shakespeare Theatre Co.
Kaiser Foundation Health Plans of Mid-Atlantic States

Visit wges.com/partners for full list of WGES Wind Power Partners.

To find out more about a green power purchase for your organization, call 703-793-7578, or visit wges.com/commercialwind.

For more information, contact your WGES Account Manager or wges_lgc@wges.com.
Editor's Note
January and February Wrestle to a Draw
Week in review for period of Feb. 17 - 23, 2012

For this seven-day report period, the 12-month average price for natural gas on the NYMEX rose 1% and the 12-month average price for peak power on the PJM rose 2%.

During the month of February, natural gas and electricity prices have slowly risen. This increase was enough to neutralize most of the price decrease that occurred in January. Specifically:

  • In January, the 12-month average price for peak power on the PJM fell approximately 9%. But, in February, the 12-month average price for peak power on the PJM rose approximately 5%. The result was an average price decrease of 4% over the two month span.
  • The 12-month average price for natural gas on NYMEX decreased 12% in January but increased 11% in February. The result was an average price decrease of 1% over the two month span.

In other words, natural gas and electricity prices appear to be range bound.

Where do prices go from here? Natural gas and electricity prices are hovering near a 10-year low because supplies are high, thanks to shale gas production, and demand is low, due to one of the warmest winters on record.

Although natural gas supplies are very robust to date, analysts continue to point out that natural gas producers are beginning to shut-in some of their gas wells in an effort to place upward pressure on prices. For example, Gas Daily reported this week that two more producers, Carrizo Energy and Cabot Oil and Gas, were shutting-in some of their natural gas wells because it was economically unattractive to drill.

On the demand side, analysts note that the coal-fired electricity generation plants are getting displaced by natural gas-fired generators because gas is cleaner and less expensive to burn than coal. This switch to natural gas will create a larger demand for gas than we have seen recently.

As producers shut-in their natural gas wells and electricity generators switch their plants to gas, we may begin to see some upward pressure on natural gas and electricity prices. But for now, prices continue to look great.

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