Volume 15, Issue 71 | July 2, 2018

Spotlight on WGL Midstream

WGLs investments in pipeline systems are now projected to total nearly $1 billion in the near future

 
WGL Midstream, formerly known as Capitol Energy Ventures, engages in the development, management and optimization of natural gas storage and transportation projects. WGL Midstream’s customers and counterparties include producers, utilities, LNG exporters, local distribution companies, power generators, wholesale energy suppliers, pipelines and storage facilities. 
 

 
WGL Midstream is part of WGL’s effort to realize the vision of a company intent on participating in the new energy future while further growing those portions of our enterprise that have served WGL for the past 169 years. It is clear the world is moving toward cleaner energy, with natural gas a key part of that picture. That energy future also embraces wind, solar, energy efficiency, natural gas-powered fuel cells and even more from the world’s best engineering minds.
 
WGL has grown its gas infrastructure effort through its WGL Midstream business. Here we’ve extended a major presence in natural gas storage and transportation into a growing infrastructure business — our investments in pipeline systems are now projected to total nearly $1 billion in the near future.
 
In December 2014, WGL Midstream entered into a long-term relationship with Gas Authority of India Limited (GAIL) Global, a subsidiary of GAIL India, to sell up to 430,000 dths per day of natural gas for a term of approximately 20 years. This unique partnership, WGL’s first relationship with an overseas customer, is providing WGL with a predictable, low-risk, long-term earnings stream that efficiently maximizes our domestic natural gas supply without a capital investment.
 
This partnership exemplifies our corporate vision and our broader strategy to build a growing, long-term earnings stream consisting of efficient, customized energy solutions.
 
WGL’s growing presence in the regional transmission of natural gas took a major step forward in 2017 with the commencement of construction of the Central Penn Line (a major component of construction of Transco’s Atlantic Sunrise Pipeline Project), a natural gas pipeline that will provide new firm gas transportation capacity through Pennsylvania. WGL has committed $410 million to the project as part of our overall $1 billion projected investment in regional transmission pipelines.
 
WGL Midstream is a significant investor in Central Penn, a 185-mile “greenfield” pipeline in Susquehanna County, Pennsylvania, and extending to Lancaster County, Pennsylvania. The Central Penn Line will be instrumental in addressing the current challenge of transporting natural gas from an area with abundant supply to existing established markets.
 
The Central Line will have the capacity to transport and deliver up to 1.7 million dekatherms per day of natural gas and is expected to be put into service in 2018.
 
 
Visit the WGL Midstream website to learn more. 
 
 


Editor's Note

Heat Wave

Weekly review for June 23 - 29, 2018

 

After this writing, we received additional information that the “5 CP” that PJM publishes and local distribution companies (LDCs) use for Peak Load Contribution must come from “non-holiday weekdays”. So, even if Saturday or Sunday end up among the five highest loads of the summer, they will not influence your capacity cost.

On Thursday, the U.S. Energy Information Administration (EIA) reported that working gas in storage as of Friday, June 22, 2018 was 2,074 BCF. This was an increase of 66 BCF from the previous week, lower than market expectations. Inventories are now 735 BCF lower than last year at this time and 504 BCF below the 5-year average.

This week, the NYMEX natural gas 12-month strip fell 0.7% while the PJM West Hub 12-month forward curve was up 1.3%. The power increase was dominated by the July 2018 contract which was up more than 7% on expectations of high heat through the beginning of the month.  

Friday marked the beginning of a heat wave in the Mid-Atlantic and Northeast regions of the U.S., with forecasts calling for temperatures in the 90s over a period of several days. This heat is expected to drive PJM system load to some of the highest values of the summer. The five days with the highest peaks for the summer will be used to determine a commercial customer’s Peak Load Contribution (and, thus, future Capacity Cost). Therefore, reducing consumption during these peak hours can significantly reduce future energy bills. 

On Thursday June 28, WGL Energy issued its second electricity reduction notice of the year (the first was for June 18).  We are recommending that commercial customers reduce their electricity consumption during the next several days, from June 29 to July 3 (3:00 p.m. to 6:00 p.m. on Friday, Saturday & Sunday and from 2:00 p.m. to 6:00 p.m. on Monday & Tuesday).

Monday and Tuesday have the highest probability of ending up as peak days for this summer. It is rare that a weekend would end up having one of the peak hours, but forecasts for Saturday and Sunday were both above levels that made the top 5 last year. It is impossible to know in advance exactly which of the five days & hours will end up as the highest five for the year, given the uncertainty in each day’s forecast and the even greater uncertainty around what the daily load volumes will be for the rest of the summer. In order to confidently catch all five of the peak days, we will usually  recommend curtailing electricity consumption during at least ten days each year.

Visit our website to view the current electricity reduction notice.

 
 
This past week's market information is provided as a courtesy to our customers and is not indicative of, nor should be relied upon, as representative of future transactions. 


Energy Management

WGL Energy Issues Notice Regarding Peak Electricity Usage

Reduced usage during peak periods now can lower your costs next year

 

After this writing, we received additional information that the “5 CP” that PJM publishes and local distribution companies (LDCs) use for Peak Load Contribution must come from “non-holiday weekdays”. So, even if Saturday or Sunday end up among the five highest loads of the summer, they will not influence your capacity cost.  

On Thursday, June 28, 2018, WGL Energy Services (WGL Energy) issued an important notice to commercial and government customers recommending they reduce electricity usage during the afternoon hours between 3:00 p.m. and 6:00 p.m. from Friday, June 29 through Sunday, July 1 and again from Monday through Tuesday, between 2:00 p.m. to 6:00 p.m. This is the second advisory issued by WGL Energy this summer, and is intended to alert customers of potential peak load periods.

High temperatures can impact the cost of your Capacity Peak Load Contribution (PLC). Your PLC can influence 10-30% of your electricity bill, so by lowering your PLC this summer you will be able to reduce your PLC and overall electricity costs for a full 12-month period starting next summer (June 1, 2019 to May 31, 2020).

A copy of this notice is included below. If you did not receive your email copy, please contact your account manager and ask to be included in the distribution of future notices. For a summary of notices issued during 2018, please visit our website.

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IMPORTANT NOTICE
 Electricity Use Reduction Recommendation

 Friday, June 29 - Tuesday, July 3, 2018
  From 3:00 p.m. to 6:00 p.m. Friday through Sunday
From 2:00 p.m. to 6:00 p.m. Monday and Tuesday 

 

Tomorrow through Tuesday – Friday, June 29 through Tuesday, July 3 – daily maximum temperatures during this five-day period are expected to be in the '90's, possibly reaching 100. These high temperatures could impact your Capacity Peak Load Contribution (PLC) and future electricity costs. There is a high likelihood that an hour between 3 p.m. and 6 p.m. Friday through Sunday and/or 2 p.m. and 6 p.m. Monday and Tuesday will end up as one or more of the five highest peak loads of the year. 

 

About PLC

On June 1 of every year, each building is assigned a PLC number by your utility. Your PLC is based on your peak usage during the five hours of the prior year with the highest system demand. (Note: The selected hours come from five different 24-hour periods.)  Peak usage generally occurs on the five hottest days of the year – and your usage this summer will affect the PLC for next summer.


Our Recommendation

We recommend that you reduce, whenever possible, your electricity usage from 3:00 p.m. to 6:00 p.m. tomorrow (Friday), Saturday & Sunday, and from 2 p.m. to 6 p.m. Monday & Tuesday. Your PLC can influence 10-30% of your electricity bill, so by lowering your PLC this summer you will be able to reduce your PLC and overall electricity costs for a full twelve-month period starting next summer (June 1, 2019 to May 31, 2020).

If you have any questions, please call your business development manager listed below:


Julio Astorga                                                 (703) 287-9493
Tim Bagley                                                    (202) 997-8262
Nipa Clark                                                     (410) 209-2448
Jamie DiBartolo                                            (856) 872-7194
Diane Ekonomou                                          (703) 287-9494
Les Lewis                                                      (410) 209-2441
Laurie Muldoon                                             (410) 209-2442
Kent Peterson                                               (703) 287-9496
Karen Pinder-McDuffie                                  (410) 209-2444
Olga Riggs-Miller                                          (703) 287-9498
Salvatore Ritorto                                           (908) 616-0520
Jaison Staab                                                 (330) 721-1648

These conditions change periodically and we will send updates as information becomes available.


Weather

Local Cooling Degree Days*

 


Cooling Degrees Days* 

 

May - 18

June - 18

July- 18

Aug- 18

Sept - 18

Oct - 18

 Actual

231.5 

 

 

 

 

 

 Normal

115.9

 

 

 

 

 

 Departure from Normal

 99.7%

 

           

 

 

 

 Warmer

 

 

 

 

 

*Cooling degree days are calculated by comparing the day’s average temperature to a 65 degree baseline.  If the day’s average temperature is below 65, there are no cooling degree days that day.  If the average temperature is greater than 65 degrees, then subtract 65 from the average temperature to find the number of cooling degree days.