The April natural gas wholesale contract dropped further yesterday as the April contract finally settled for all of eternity and energy traders continued to look closer at near term weather forecasts. It seems that the forecasts of average temperatures starting next week for 11 days are waking up the bears (folks that believe that natural gas prices are too high and should go lower) and they believe that lower prices are in order. Early estimates for Thursday’s EIA storage change are calling for builds of about 10 bcf but the range of estimates runs from draws of 10 bcf to builds of 15 bcf. The EIA released a report yesterday stating that the total production for the lower 48 states had dropped to 66.67 bcf/day in January compared to 67.01 bcf/day in December.
On the utility front this morning, National Grid is getting closer to releasing an internal investigation into its accounting and expensing practices to regulators after the issue became a huge distraction during its $360 million electric rate hike request last year. The state Public Service Commission ultimately approved only a $113 million increase, although $50 million of that is subject to the outcome of a separate PSC audit into the London-based utility company's financial practices between various affiliates. National Grid's accounting and internal expensing system came under scrutiny last year as regulators from both the PSC and Massachusetts were poring over the company's internal accounting documents that were submitted as justification for the $360 million electric rate increase and a $100 million gas rate increase in the Bay State. Regulators found questionable expenses that such as private school tuition and shipment of a private wine collection that ratepayers were being asked to pay for and also discovered that National Grid's Niagara Mohawk affiliate, which serves upstate New York, may have been paying for expenses at other National Grid affiliates in New England. Depending on the findings of the PSC's audit, National Grid could have to return up to $50 million to upstate electric customers.
One of the energy industries icon’s is touting his own energy plan this morning across news services indicating that after spending three years and $80 million of his own money, a bill, known as the Natural Gas Act, will be introduced again in Congress. The billionaire oilman says the legislation has the votes to pass this time around. The measure, called the NAT GAS Act, aims to boost use of natural gas as a fuel in the transportation sector. The Natural Gas Act would dramatically expand the use of natural gas as a transportation fuel among heavy-duty truck fleets, including 18-wheelers and garbage trucks. Pickens sees the legislation as a key first step in broader adoption of natural gas in the transportation sector and weaning the U.S. from foreign oil. . Lasting five years, it would provide vehicle tax credits to buyers of vehicles powered by natural gas, giving automakers greater incentive to build them. About 110,000 natural gas vehicles are on U.S. roads today, and more than 12 million are in use worldwide, according to the Natural Gas Vehicles for America, a Washington trade group. Pickens said his priority is getting heavy vehicles like garbage trucks and city buses, which account for much petroleum use in the U.S., to convert to natural gas. Private passenger cars and trucks are a longer-range goal.