Larger Logo
Summer 2011  Issue 6
Welcome to Howell Energy Consulting  


Howell Energy Consulting brings you the opportunity to focus on the core mission of your business, while allowing an energy professional to create competition for your electricity and natural gas requirements through managed procurement.

Howell Energy Consulting is a licensed energy professional in Connecticut and Massachusetts. For more information :

phone: 860-205-3863
web site: HowellEnergyConsulting.com

 

Energy Price Outlook  

 

It is nearly September already...why does the summer go so fast! The Atlantic hurricane season is upon us and I hope everyone came through Irene without too much property damage. As of this writing there have been ten named storms with two more potential weather systems in the wings. We will have to hold our collective breaths through October before we can relax. Once the threat of hurricanes is diminished and Summer passes a buying opportunity will present itself and if you are looking to procure energy the Fall will be a great time to buy.

 

The Economy
 
The economy has temporarily become the most important factor in determining energy prices.  S&P's downgrade of the the U.S. credit rating may have been the last straw for those economists anticipating a better second half for the U.S. economy. At this point the markets are just trying to determine how slow economic activity will be. As a result natural gas and power forward markets nudged down roughly 5%.
 
Supply 
 
Natural gas injected into storage lags last year and the five year average. Since early July though, the amount of natural gas injected into storage has exceeded expectations and the gap is closing.  A weaker economy will add to supply which could allow prices to fall off again prior to the summer.
 

Weather

 
While there have been ten named storms this hurricane season, (Jose is the latest) there has not been any major disruption to natural gas production. The hot weather though has created new peak consumption in Texas, New England and the Mid-Atlantic(PJM) with New York just barely missing a new peak has mitigated the impact of supply on prices.

Outlook and Buying Strategies:
 
All of the major indicators, the economy, weather and supply are pointing to a weak market ahead. When the market gets past the hot weather and the hurricane season, there is a good chance that prices will drop further from the levels we are currently seeing.


Possible strategies include:

  • Energy may be a great buy in the early fall. Consider longer terms prices because there is very little premium when adding a second year to your contract.
  • Return to utility service for the fall and time your next contract to begin in November.
     
To understand how these strategies apply to your business call Howell Energy Consulting to to create a procurement plan for your organization.
 
  
 
About Derek Howell 
 

With over 30 years in the energy industry and 12 years of experience in the deregulated energy business, Derek Howell's expertise covers the broad expanse of the electricity and natural gas markets.  


Prior to the founding of Howell Energy Consulting. Mr. Howell  was Direct Energy's Director of Retail Pricing for  New England and New York regions. 

  

.
In This Issue
Energy Price Outlook
Institute for Supply Management
Contracts: Force Majeure
Curious about Hurricanes?

Howell Energy Consulting featured in the Connecticut Institute for Supply Management's Summer newsletter! 

 

Follow the link below to see what professional procurement managers want to know about buying energy!

 

 

http://www.capminc.org/downloads/Summer%20Negotiator%202011.pdf 

Join Our Mailing List

Contracts: Force Majeure 

 

If you are currently being served by a third party supplier you have a "Force Majeure" (superior force) clause in your contract.  This clause releases both parties from the expectation of consumption and supply in the event of natural disasters like hurricanes or earthquakes. 

 

Third party suppliers do not own the assets required to deliver electricity or natural gas and therefore can not accept the liability for a failure to deliver during a Force Majeure event. On the customer side during a Force Majeure event the business is released from the liability of out of bandwidth consumption.

 

If your business or property has been affected by Hurricane Irene call your  supplier to discuss your situation and when you expect to operations to return to normal. This phone call will help the supplier balance the deliveries to the distribution system during the upcoming days.

 

If you would like help in interpreting your contract contact Howell Energy Consulting at 860-205-3863 for a free contract review.

 

Curious about Hurricanes?

 

Folks in the energy industry and particularly energy marketers pay a great deal of attention to hurricanes, and the projections of the number of hurricanes. The best place to view the hurricane and tropical depression activity in the Atlantic is the National Oceanic and Atmospheric Administration's website http://www.nhc.noaa.gov/.

 

Weather Service International (WSI) provides periodic projections of the number of named storms and the number of storms that will hit land. These projections are often quoted in the Wall Street Journal and typically cause energy markets to move if the projection changes. As recently as August 24th, WSI increased their projection from 15 named storms to 18 (looks like a good call!)

 

http://wsi.com/01539683-1ecd-4135-80b2-01034a9d4f14/news-scheduled-forecast-release-details.htm

 

Feel free to e-mail your questions or concerns to

derek@howellenergyconsulting.com

 

 



 

 

To learn more about Howell Energy Consulting Go to:

 HowellEnergyConsulting.com
 
Derek Howell
Howell EnergyConsulting LLC
howellenergyconsulting.com
860-205-3863