Wholesale Natural Gas is currently trading at $2.961 per DTH
The natural gas market continues to be driven by short-term weather forecasts. Last week the market gapped lower in light trading around the July 4th Holiday only to recover much of that value due to forecasts calling for warmer weather. One news item did catch my eye as it involved my old friends at TVA. TVA set a new demand high for this summer when it sent out 28,033 MW at 5:00 pm on July 11th at an average temperature of 91 degrees F. First, I would note that that power demand is more than 5,000 MW lower than peak summer demand before the Great Recession. Second, I would mention that TVA has retired roughly 5,000 MW of coal-fired generation, so that even at this lower power demand level they had to be consuming gas at near previous peak levels. They should have been helped by the new Watts Bar 2 nuclear unit, but that unit has been off-line almost since it came on-line when support beams for a condenser unit collapsed and ruptured the condenser. FYI, the 28,033 MW send-out is roughly 5X the power demand of Wisconsin (and at a 40% cheaper rate than Wisconsin retail power).