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The August wholesale natural-gas contract rose slightly Tuesday as a heat wave moved in over the eastern half of the country as we projected yesterday and should continue through next week. Day time temperatures reached 110 degrees in Dallas and St.Louis, while Baltimore was at a hot 97 degrees with Houston humidity to go with it as I experienced first hand. The wholesale contract for natural gas for August delivery traded up 1.3 cents, or 0.3%, to $4.301 a million British thermal units on the New York Mercantile Exchange yesterday. Energy traders bet many Americans will need to stay inside to escape the heat, likely requiring more natural gas to be burned to generate electricity. The EIA yesterday increased its prediction of the average amount of natural gas used for power production in 2011 from 20.3 bcf per day to 20.63 bcf per day but they also came out and reported that they increased their prediction of the average daily production for 2011 in the lower 48 states from 64.61 bcf per day to 65.39 bcf per day. So with this increased production, the EIA also stated that end-of-October estimated inventory to be at 3,819 bcf, a 28 bcf deficit to last year’s 3,847 bcf. The key question becomes what will happen to natural gas prices from now to the end of the September calendar time frame with the October contract? Will we see another $3.21 print low on the prompt contract like last year or will the new EPA stringent emissions policy put an incentive in buyers to own natural gas wholesale contracts thus bidding up the price prior to 2012. This will be the key question being asked over the next two and half months and we’ll find out the answer by what energy traders do by betting on natural gas prices in this time frame.
On the flip side of customer satisfaction this morning, it seems a track record of frequent, long outages and customer complaints has earned energy provider Pepco, recognition as the most hated company in America, a report showed. The American Customer Satisfaction Index group said its findings indicated the regional utility for the District of Columbia and some of its Maryland suburbs were last in customer satisfaction, below Comcast, Bank of America, JPMorgan Chase & Co., UnitedHealth Group and American Airlines, the Washington Times reported Monday. The findings, based on customer interviews and reported recently by the Business Insider Web site, ranked Pepco "ahead" of several business entities that often catch flak from customers about poor service, high prices and privacy intrusions. Pepco scored 54 out of 100, the lowest of 19 companies listed in Business Insider's report, the Times said. A company spokesperson said in a statement, "For us to be distracted by this kind of sensationalism would be counterproductive."
On the EPA front as we discussed earlier this week, the Coal consortium represented by David Flannery (an attorney) said that his clients, a consortium of electric utilities in the area targeted by the Cross-state Pollution Rule, are concerned that the new rule is "largely unnecessary," and added that the existing control programs were "more than enough" to reduce the emissions that the EPA was seeking to control. "They apparently ignored those comments," Flannery said. Flannery is an attorney with Jackson Kelly PLLC, of Charleston who serves as counsel for Midwest Ozone Group said. "We believed they (the EPA) could have fixed the previous rule, but they just threw it out." As stated in the EPA’s ruling, coal-fired utilities in a 23-state region of the eastern United States will have to ramp up their emissions control efforts by Jan. 1, 2012 in order to comply with the Environmental Protection Agency's "Cross-state Air Pollution Rule" that was issued on Thursday. According to information posted on the EPA's web site, the Cross-state Air Pollution Rule "will help avoid tens of thousands of premature deaths and illnesses, achieving billions in public health benefits." According to EPA web site, the new rule will reduce between 13,000 to 34,000 premature deaths, 15,000 nonfatal heart attacks, 19,000 hospital and emergency room visits and 400,000 aggravated asthma deaths.
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