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Fall 2011  Issue 7
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:


Energy Price Outlook  



Well this year we have had a reverse fall. Cold snowy weather in October and warm weather in November. In fact the warm weather is part of the story and for energy buyers the story is a good one. When we examine the fundamentals they all line up in the buyers favor. Nothing is forever so so lets examine what we need to keep an eye on during the upcoming months.



The Economy
The economic news continues to be mixed bag. While on the domestic front GDP has increased from 1.3% to 2.0% from the 2nd to the 3rd quarter in 2011 and unemployment figures seem to be getting better, the uncertainty caused by the European debt crisis and the inability of Congress to find a suitable compromise could create a second recession.  On net, assuming Congress and Europe resolve their issues, the economy will slowly add demand and therefore put upward pressure on prices. Slow is the catchword here so current projections do not make the economy much of a factor until next fall. As a buyer pay attention to news of higher than anticipated economic growth.  

Through the early summer the amount of natural gas injected into storage lagged last year and the five year average. From mid-summer through November the amount of natural gas injected into storage exceeded both last and the five year average. Moderate weather this fall and a lack of hurricanes resulted in a record amount of natural gas injected into storage.  As a result ample supply has acted to dampen prices. 



This past hurricane season which ended on November 30th, barely affected the Gulf of Mexico, which meant energy producers did not have to suspend operations. We are now entering the coldest months of the year. If there is a sustained cold spell, you could expect prices to run up. Through this fall temperatures have been very moderate to the extent that the injection season for natural gas storage was extended nearly two weeks.
Outlook and Buying Strategies:
While the economy is improving slowly indicating increased energy demand weather has been moderate and there is a large supply of natural gas. From September 1 to December 1 of 2011 power prices have fallen 8%. If you are in the market now you are seeing the lowest prices of the year. If the term of your contract extends past the winter of 2011-2012 you may see higher prices than you might expect since those prices assume more normal economic activity, weather and storage conditions.
Possible strategies include:

  • Weak current conditions mean that the near term energy prices are affected more than longer term prices. Buyers in the market today can lock in very competitive pricing.


  • Buyers with contract terms that end in 2012 may want to test the market now to set a baseline price.  Have a price in mind and  if the market can get to your price you should execute a power or natural gas contract. 
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 13 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
CL&P Standard Service Rates
Natural Gas Storage
What Does Full Requirements Mean?

The Market Still Beats CL&P's Projected  2012 Standard Service Rates


CL&P has filed for approval with the Connecticut Public Utility Regulatory Authority its 2012 Standard Service Rates. If you are a Rate 30 or 35 customer the rate filed by CL&P is 8.735 cents/ KWh.  If that sounds good to you, then you should definitely check out the market which can be as much as 8% lower than the projected CL&P price! 


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What is Natural Gas Storage?



When discussing supply in this newsletter natural gas storage is often referenced. Natural gas storage is used by those people responsible for developing retail power and natural gas pricing as an indicator of whether demand in the energy market is rising or falling.   


When natural gas storage increases relative to the five year average the market sees this as an indicator that supply is in excess of current demand. Suppliers not finding consumers for production will often resort to injecting the surplus into storage which in turn leads to falling natural gas prices. Likewise with power since much of present day generation is fueled by natural gas. Simply put, as the price of natural gas goes so goes the price of power.   


This why each Thursday pricers examine closely the US Energy Information Administration's announcement of how much natural gas has been injected/withdrawn from storage.  


So where exactly are these storage facilities? Many are located in the Pennsylvania in salt domes. When demand for natural gas is high the demand all along the eastern pipeline is high and suppliers add in natural gas to meet the needs of northern consumers. A run on storage due to a cold winter can significantly affect prices, which is why so many users hedge their supply. 



To see a map of natural gas storage facilites follow the link below:


Contact Howell Energy Consulting at 860-205-3863 to learn more about natural gas storage.


What does Full Requirements Mean?


To most people outside the energy business full requirements means that all of the products needed to bring power or natural gas to your meter are included in the price. For some energy suppliers particularly those that were formed from former wholesale companies full requirements means that all the products required to deliver power or natural gas to your meter will be purchased and used to deliver the energy.  The difference?  These suppliers formed from the wholesale end of the business did not say that all of those products were included in the price.


If you would like to protect yourself from differences in understanding like this please contact Derek Howell at: 





To learn more about Howell Energy Consulting Go to:
Derek Howell
Howell EnergyConsulting LLC