The July natural gas wholesale contract dropped further yesterday settling at $4.412, down $0.165 on the day. The EIA storage change number came out at a build of 69 bcf which was supposedly bullish, meaning this news should have taken the natural gas market higher, however energy traders overrode this news with the knowledge that weather forecasts just continue to get milder as in comparison to last week’s torturous weather, so the market took it as bearish (lower natural gas prices) and never looked back. Currently, the storage levels are 275 bcf below last year’s levels at this same time last year and any potential concerns are being overridden with forecasts that July and August will be mild as compared to this month (June) and last year’s hotter than normal weather in the Northeast. Today, we’ll have to see if the natural gas market continues lower or finishes unchanged due to folks leaving early on this warm summer Friday and waiting until next week to do anything else to their natural gas positions. One other point to note is that consolidation in this industry continued with Energy Transfer yesterday purchasing Southern Union for $4.1 billion and creating the largest pipeline company in the United States. Energy Transfer is the company that is on floor’s 6th through 9th and parts of the 11th floor in our same building.
As we mentioned the advance payment program from TXU earlier this week, a regulated power provider in North Carolina is borrowing some of the unique ideas that are offered by unregulated power providers in other states by offering a, “Advance Pay Program”. The town of Selma, North Carolina will be the first power provider in the state to introduce FlexPay, a prepaid electricity program. It's billed as a voluntary program to help residents keep track of their power costs, but in Selma, it'll be required of folks who have been cut off repeatedly for failing to pay their bill. Participants in the program will get a special meter showing how much is left in their accounts. And once the account is empty, its lights “OFF” until more money is deposited. Residents who sign up for the program will pay less on their deposit. FlexPay participants will pay a $50 deposit instead of the $300 deposit most residents pay. Existing customers who switch will get $250 of their deposit credited to their account. But when FlexPay users add money to their account, they'll pay a $2.50 transaction fee. If they pay for electricity in small amounts, these fees could add up. Some of the unique rules that are applying to these residents is that anyone who's had power cut for not paying three months in a row or six times in a year will have to prepay for electricity. Selma officials hope FlexPay will cut down on people who leave town with hundreds of dollars in unpaid electric bills and they hope this saves the town up to $100,000 a year.
On the regulatory side of the business this morning, Connecticut Light & Power informed the Connecticut DPUC that it is unaware of any rule or law that states electric suppliers may not automatically re-enroll customers should the customer's underlying customer contract provide for such action. The DPUC is examining issues regarding an original supplier's re-enrollment of customers who have been switched away from their incumbent supplier, on the basis that the customer did not provide notice of the switch to the incumbent supplier. This issue arose since this process was being used by ResCom, in what ResCom says is a protection against slamming. ResCom was re-enrolling customers for whom it received a drop transaction if these customers did not provide notice of contract termination to ResCom. The re-enrollment is "automatic" in that ResCom relies on the customer's original contract and verification for the enrollment, and does not seek a new verification. It seems that in ResCom’s T&C’s, customers agreed to this automatic re-enrollment provision as part of ResCom's terms of service, to prevent unauthorized switches. ResCom noted that it borrowed the policy from a Dominion Retail terms of service dated January 2009. It seems that without customers notifying Rescom, they were on a perpetual state of re-enrollment.