Volume 18, Issue 10 | May 17, 2022

Editor's Note

Prices “Ease” From New Highs

Week in review for May 8 - 14, 2022

In a sign of the times, this week it was reported that inflation “eased” to 8.3% annual rate in April. While it was down slightly from the previous month, it was still almost 2 full percentage points higher than it had been at any time from 1984 through October 2021 as illustrated in the first chart below. Somewhat similarly, energy prices “eased” this week but remain much higher than recent averages after screaming to new highs last week. For example, Cal 2023 NYMEX Natural Gas was down 8% this week but remains 50% higher than it had been at any time prior to October 2021.

For yet another week, prices have been swinging wildly and remain near the 5-year highs. Falling even further than the Cal 2023 strip mentioned above, the prompt 12-month NYMEX natural gas strip (Jun22-May23) was down 10.7% and the 12-month PJM STD 7x24 down 18.0% for the week. As has been the case since the near-term run up began in 2021, both natural gas and power prices for the near term are significantly higher than further out (Apr 2023 and beyond) with the discount for Natural Gas in years 2024-2026 versus 2023 still at $1.25/MMBtu after reaching over $1.50/MMBtu last week (see second chart below).

Thursday, the U.S. Energy Information Administration (EIA) reported that working gas in storage as of Friday May 6, 2022, was 1,643 Bcf. This was an increase of 76 Bcf from the previous week, a bit lower than expectations as it appears US production is still unable to ramp up significantly in the face of the very high prices. Inventories are now 376 Bcf lower than the same time as last, and 312 Bcf below the 5-year average.

 

 


Energy Market Charts

 

 

 

 


Feature

Energy Saving Ideas for Commercial Buildings

With summer slowly approaching, brings to light warmer temperatures and humidity. Energy consumption for indoor climate control is likely to be one of your largest operating expenses during this season and we want to make sure you are prepared. Here are some tips to consider for reducing energy consumption this summer:

  • Replace inefficient cooling equipment with new high-efficiency equipment that has a higher coefficient of performance (COP) than the existing equipment.
  • Set back the thermostat in the evenings and other times when your building isn’t occupied. Set up trend logs of your HVAC systems to collect data on whether your systems are operating throughout the night.
  • Visually inspect the condition of the heating and cooling coils and the AHU filters. If the coils are dirty or the filters are clogged, change out the filters and clean the coils.
  • Eliminate Single Pass Cooling Systems. Single-pass cooling systems use water to cool equipment, and the water is circulated only once before being dumped. If possible, modify these systems to be closed loop.
  • Educate employees and building occupants about how their behaviors impact energy use.

To learn more about saving with WGL Energy this upcoming summer season, visit https://promo.wglenergy.com/gogreen/ or call 1-833-61-GREEN (1-833-614-7336) to speak with one of our energy experts.


Weather

Washington, D.C. Area Cooling/Heating Degree Days

  

 

Nov-21

Dec-21

Jan-22

Feb-22

Mar-22

April-22

Normal 

467

669

848

677

529

236

 Actual

513

541

943

626

455

236

Departure from Normal 

10%
Cooler

19%
Warmer

11%
Cooler

8%
Warmer

14%
Warmer

6%
Cooler

Cooling degree day (CDD) data is for the Washington, D.C. area and is 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 day’s average temperature is greater than 65 degrees, then subtract 65 from the average temperature to find the number of cooling degree days.

*Heating degree day (HDD) data is for the Washington, D.C. area and is calculated by comparing the day’s average temperature to a 65 degree baseline. If the day’s average temperature is above 65, there are no heating degree days that day. If the day’s average temperature is less than 65 degrees, then subtract that average temperature from 65 to find the number of heating degree days.