Washington Gas Energy Services: A Washington Gas Affiliate Complany
Volume 10, Issue 11
We Know Energy
March 16, 2012 Energy Update
In this Issue
Editor's Note
Storages Hit Record High Levels After Fourth Warmest Winter on Record
Natural Gas Fundamentals
Natural Gas Storage Update: Data Released March 15, 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' Parent Company Announces Plans to Jointly Develop 200-mile Interstate Gas Pipeline (March 2, 2012)


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)


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
Storages Hit Record High Levels After Fourth Warmest Winter on Record
Week in review for period of March 9 - 15, 2012

Although natural gas and electricity prices decreased during the two week period of February 24, 2012 to March 8, 2012, prices unexpectedly rose this week. For this seven-day report period, the 12-month average price for natural gas on the NYMEX rose 3.7% and the 12-month average price for peak power on the PJM rose 3%.

It is hard to explain this week's price increase given the fact that the gas surplus is now 51% greater than the five-year average and unusually warm temperatures are predicted for the next week. We are assured of ending the traditional withdrawal season on March 31, 2012 with a record gas surplus in storage.

Despite this week's price increase, natural gas and electricity prices are still trading near a ten-year low. It is easy to explain these low prices when you look back at our winter temperatures. This was one of the warmest winters on record which minimized the demand for natural gas heating. In fact, November weather was 21% warmer than normal, December weather was 22% warmer than normal, January weather was 17% warmer than normal, February was 18% warmer than normal, and the weather during the first 15 days of March was 37% warmer than normal. Low heating demand leads to low prices.

Where do prices go from here? Is this the bottom? One area worth watching is the fuel switching that is occurring at the U.S. power plants. According to the U.S. Energy Information Administration, "coal-fired generation decreased in favor of natural gas in all regions in December when compared to December 2010. In all regions natural gas is replacing coal as the fuel used in electricity generation."

If the weather stays unusually warm, and the natural gas-fired generators are needed to meet the air conditioning demands this summer, we may begin to see some upward pressure on prices.

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