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The November wholesale exchange contract rose a bit in the face of the higher than expected EIA storage injection from everyone’s forecast yesterday settling the contract at $3.531, up $0.042 on the day. It appeared initially that this would be the straw that broke the camels back. But after a quick dip to the low of the day, the November wholesale contract rallied right back up and spent the rest of the session around the $3.50 area. The official figure was an injection of 112 Bcf for the week ending October.7. This storage build pushed inventories to 3,521 Bcf, contracting the year over year deficits to 56 Bcf, and implying an end-of-season inventory of equivalent 3760 Bcf assuming similar year over year injections for the balance of month. The 112 Bcf injected not only beats the all-time high of 91 Bcf for the same week, but also sets the record for the first triple-digit weekly injection in October. One other point to note is that there are reports of increased seismic activity around the Katla volcano in Iceland. This volcano erupted last in 1918 and prior to that 1783. The winter of 1784 in North America was the coldest and longest in recorded history. As we found out several years, volcanic activity affects the trade winds and the atmosphere producing anomalies in weather patterns. Could that be what is heading our way?
In the continuing story of the Constellation/Exelon merger, despite continuing challenges to Constellation Energy Group's plans to sell itself to Exelon Corp., analysts say the $7.9 billion deal is likely to overcome major regulatory obstacles, including those in Maryland, where critics are seeking concessions to make the merger more palatable. On Wednesday, even as the companies and merger opponents continued to spar over details of the deal, energy analysts said the merger scheduled for a shareholder vote next month is expected to go through. At this point, energy analyst Paul Fremont said, the two companies are "not signaling that there is an obvious deal-killer." But the process of reaching a merger agreement acceptable to all parties is complicated.
Constellation and Exelon on Wednesday rejected some of the main conditions proposed by critics, including the state consumer advocate's proposal for a three-year rate freeze. The companies also rebuffed a recommendation by Gov. Martin O'Malley's administration that they develop more state-based renewable energy resources. Instead, the companies made a counteroffer that they said would provide Baltimore Gas and Electric Co. a stronger voice in the bigger, combined company and address concerns that the merged company would push up prices in the mid-Atlantic electricity grid. Meanwhile, EDF Group, Constellation's second-largest shareholder and a partner in its nuclear business, said Wednesday that state regulators should reject the merger unless EDF's concerns over the governance and management of their partnership were addressed. EDF is France's national utility. Negotiations involving the companies and state, consumers and other interested parties are not unusual in energy deals requiring regulatory approval. The Maryland Public Service Commission, or PSC, which has the power to veto the merger, is scheduled to begin its review on Oct. 31. Shareholders are to vote on Nov. 17.
For our friends from West Virginia, the coal industry has been a major force in keeping West Virginia out of a recession but the industry's and state's fortunes may be about to change. West Virginia's exports soared 43 percent in the first six months of 2011 to $4.4 billion, led by coal, which accounted for $2.6 billion of the total. Most exported coal is metallurgical or coking coal, which is used to make steel (didn’t know that). It commands a much higher price than steam coal, which is used to make electricity. Mark Muchow, state deputy revenue secretary, has noted that higher coal exports and higher coal prices continue to result in double-digit gains in severance tax receipts. The state collected a record $526.9 million in coal severance taxes in the fiscal year that ended June 30, Muchow said Wednesday. Of that amount, $390 million was deposited in the state General Revenue Fund. The official forecast predicts coal severance tax collections will decline to $519 million in the fiscal year that began July 1. The forecast was made in December.
On the innovation front in the City Of Houston, Reliant will use 12 homes in Houston as a laboratory to evaluate a suite of smart energy tools and services, dubbed Reliant Innovation Avenue. Over two years, families will provide feedback on a variety of smart energy solutions, which will inform Reliant's design of future services. Each of the families, whose homes have provisioned advanced meters, has been provided with a customized set of products and services. These tools include current Reliant "e-Sense" offerings such as time-of-use price plans, home energy monitors, weekly usage summary emails, a mobile App, and iGoogle Gadget. Other Reliant services provided to participants include a home energy check-up and filters. Additionally, one family elected Reliant's distributed solar leasing program, with Reliant's plan offering to buy-back excess distributed generation. Additional solutions provided to participants include smart appliances and home automation. Participants were not required to be Reliant customers; however, 11 of the families are served by Reliant at the participating home (the other has Reliant for another property but the included home is under contract to a competing REP). The street chosen by Reliant was selected due to the diverse properties on it, including homes that are original designs built at the turn of the century, others that have been substantially renovated, and others that are newly built. The project was implemented in conjunction with CenterPoint Energy and the City of Houston. Reliant received a Department of Energy grant to support the project.
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