January 2018 Energy Report
Happy New Year to all! Good or bad; 2017 is in the past and let’s make 2018 a great year! This email contains the month over month comparison of energy prices as well as the monthly commodity settlement prices. If you have any questions about your energy and waste portfolio or for an invoice and energy audits, price quotes for natural gas, electricity or waste, please contact RJ Consulting today.\
Natural Gas – WOW and WRONG
For most of 2017, the wolfs of Wall Street and pretty much every commodity analyst had natural gas by January 2018 between $3.50 and $4/Dth, especially with a cold winter like some projected. The wolfs came up short but it might not be for long. Last month my projection was, “A cold winter will shake the gas market and make $3/Dth or lower gas a number for the history books, and a warm winter could send gas prices down to the $2.75/Dth range.” Surprise! The frigid weather which is worse than what was projected sent prices crashing hitting the 2017 low set on December 21; just five days before the start of the arctic blast and the market rebound taking back $0.45/Dth in five trading days. The last week of December and the first ten days of January has some of the coldest and longest temperatures below freezing many states have seen in years; creating HUGE heating demand. Natural gas was the only commodity to settle the January contract down compared to December against the other heating commodities. The natural gas drop was mainly due to the increased rig activities and traders being very long on natural gas. The gas decrease might be short-lived as 2018 will start to show some of the highest exporting the US has ever done and is expected to increase each year. Over the past three winters, February contracts have always settled less than January but don’t think this will be the case due to this cold snap; we are burning a lot of gas! My projection for the February 2018 natural gas settle is between $3.20/Dth to $3.55/Dth.
Sun+Solar Panels+Your Roof/Field=Electricity
Since everyone’s New Year’s resolution was to install a solar system in 2018 with RJ Consulting; let’s get started? As of right now, the 30% tax credit for solar systems was not impacted by the tax reform. With many VERY attractive rebates and incentives combined with panels that are making more power than ever (every year panel output increases), 2018 might be a good year to revisit a solar system. The hardest challenge many face with commercial applications is the ROI (usually seven-plus years) and owners not knowing if they will be at the same location for 20 to 25 years (warranty of the system). Solar is a shifted cost; you stop paying the utility company like we have done for 100 plus years and pay yourself. Once paid, you have free electricity. True, the panels and inverter will need replacing in 20 to 25 years, this is only 1/3 of the original solar cost, and in 20 years, the power output should be triple the power initially installed. This upgrade would produce more power so you won’t need as many panels or the percentage of electricity the solar system could make will bring you closer to net zero with new panels. Let’s face it, without a 30% tax credit and huge incentives, very few would go solar as most only want to go green if it does not cost anything extra. If you think 2018 is the year to go solar, let’s get started and see if it’s a sound investment.
Peak Demand-Brrrr is COLD!
With what looks to be the coldest temperatures of the season, you can bet the peak demand for natural gas was or will be set by January 10. Unfortunately, everyone will see a peak demand cost increase on the utility bill this month and is something that should be reviewed to make sure the peak usage set is correct as the utility does make errors. If something does not look right or would like a utility bill audit, let’s talk.
Please contact RJ Consulting if you would like to review your energy and waste portfolio. If you have any feedback or suggestions on the monthly emails, please share!
January 2018 Energy Report
If you have any questions or concerns about your current energy portfolio, please call or email to discuss.
Roman Katynski, CEP
Energy & Waste Consultant, Owner
RJ Consulting LLC
An Energy and Waste Consulting Company