Summary: Summer 2011 Temperatures and Natural Gas Forecast

By Vernon Trollinger, May 11, 2011, Energy Efficiency, News, Save Money

With most of Texas under burn bans and wildfires carving up the state like an Easter ham, some people are dreading what the summer weather might be like. The National Weather Service predicts that the current La Nina pattern in the Pacific will gradually deminish in the Pacific Ocean reaching a neutral effect by June. What that all means is that Texas’ warm, dry conditions will probably stay about the same through the summer then likely moderate gradually through August into the autumn. Normal conditions will re-emerge by October and November. Unfortuantely, that means the wildfires threat will continue through the summer.

Yes, you will run your air conditioner a lot. And if petroleum prices are rising, then you’re probably worried you’ll spend a fortune on Texas electricity rates.

Whoa! Not so fast. When you look at the facts and market data, Texas electricity prices don’t look to be as grim.

About half of all Texas electricity is generated by burning natural gas. But, a lot has happened in the natural gas industry since the 2008 summer price shocks.  The use of hydraulic fracturing (called “fracking”) and discoveries in in the Marcellus shale in the Appalacians and the Barnett shale in Texas helped drive prices down and kept supplies at high levels. Of course, the technology is not without problems.

Meanwhile,  the Electricity Reliability Council of Texas (ERCOT) released its 2011 summer assessment.  ERCOT anticipates peak usage of 64,964 mW.  Consequently, it raised its reserve generation margin from 12.5% to 14.3% —an increase in existing certain generation to carry a peak load of 72,255 mW. Much of the existing certan generation comes from renewables, such as wind and bio mass.  Another full gigawatt (gW) will be brought online over the course of the summer and will include both coal and natural gas generators.

East Texas also contains everal bottle necks for transmission lines that add to the cost of electricity.  The report includes information on transmission line project completion which builds onto capacity.

So, you can keep your cool.  The enhanced reserve and broader transmission capacity should cushion against demand and price spikes.

However, nothing about natural gas is written in stone.  Fortunately,  best thing an electricity consumer in Texas has right now is the power to choose. If you want to learn more about what to expect for the rest of the year and a bit beyond, read the full article here: Summer 2011 Temperatures and Natural Gas Forecast.

EIA Henry Hub Natural Gas Price Predictions April 2011

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