Natural Gas Market Update - Madison Gas and Electric · Natural Gas Market Update John Jicha, ... 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 ... the Midwest

• responsiblenergy • responsibleducation • responsiblenvironment • responsibleconomy • responsiblengagement

Natural Gas Market UpdateJohn Jicha, Director - Energy Supply and TradingMadison Gas and Electric Company


Before …


The Hurricane Triple Threat

Harvey Maria

Irma


NYMEX Natural Gas Futures

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

$/D

th

2005 2017

Source: NYMEX


Gulf of Mexico Production

0%

5%

10%

15%

20%

25%

30%

0

2

4

6

8

10

12

14

16

Jan-

97S

ep-9

7M

ay-9

8Ja

n-99

Sep

-99

May

-00

Jan-

01S

ep-0

1M

ay-0

2Ja

n-03

Sep

-03

May

-04

Jan-

05S

ep-0

5M

ay-0

6Ja

n-07

Sep

-07

May

-08

Jan-

09S

ep-0

9M

ay-1

0Ja

n-11

Sep

-11

May

-12

Jan-

13S

ep-1

3M

ay-1

4Ja

n-15

Sep

-15

May

-16

Jan-

17

Bcf

/day

Monthly Production % of Total Production

Gustav – Category 2Ike – Category 2

Katrina – Category 3Rita – Category 3

Ivan – Category 3

Earl – Category 1Georges – Category 3

Lili – Category 3

Source: EIA


GOM and Texas Shale Production

0

10

20

30

40

50

60

70

80

Bcf

/d

GOM Eagle Ford (TX) Haynesville (LA & TX) All other U.S. Production

17%


NYMEX Natural Gas Futures

$2.50

$2.75

$3.00

$3.25

$3.50

$3.75

$4.00

Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17

$/D

th

Source: NYMEX


SUPPLY FUNDAMENTALS


U.S. Supply

40.00

45.00

50.00

55.00

60.00

65.00

70.00

75.00

80.00

85.00

90.00

2005 2010 2011 2012 2013 2014 2015 2016 2017

Bcf

/d

Production Pipeline Imports LNG Imports


Map of Shale Basins


U.S. Shale Production by Basin

Source: EIA

0

5

10

15

20

25

30

35

40

45

50

Bcf

/d

Marcellus (PA,WV,OH & NY)Utica (OH, PA & WV)Haynesville (LA & TX)Eagle Ford (TX)Fayetteville (AR)Barnett (TX)Woodford (OK)Bakken (ND)Antrim (MI, IN, & OH)Rest of US 'shale'


DEMAND FUNDAMENTALS


U.S. Demand by Type

0

10

20

30

40

50

60

70

80

90

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Bcf

/d

Residential Commercial Other Industrial Electric Power Pipeline Exports LNG Exports

Source: EIA


Changes in Power Generation

0

1

2

3

4

5

6

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Trill

ion

kilo

wat

t-hou

rs

Petroleum & Other/Other Nuclear Coal Renewable Natural Gas

19%35%

40%

31%

9%

15%

16%30%

50%

Source: EIA


Liquefied Natural Gas (LNG)


World LNG Prices

Source: FERC July 2017


LNG Export Terminals

Source: FERC


Mexico Expands Infrastructure


OUTLOOK


Last Winter - 2016-17

NOAA 2016-17 Forecast Nov-Mar, 2016-17


Winter 2017-18 Weather Forecast

NOAA Farmers’ Almanac


U.S. Storage


Futures Prices Today

$2.50

$2.75

$3.00

$3.25

$3.50

$/D

th

Source: EIA


Summary• Market impacts of hurricanes is minimal due to the shifting of supply from

the Gulf of Mexico to inland shale basins.

• Weather forecasts showing normal to warmer than normal across the country.

• Primary demand drivers are power generation and exports.

• Pipeline expansions will allow low-cost supply from the East to flow back to the Midwest market to meet the demand for power generation.

• The reduced Midwest demand for Southeast and Southwest supply will be offset by increased LNG exports and new demand in Mexico.


Products and Services for Business CustomersMatthew Matenaer, Senior Account Manager - Commercial & Industrial Marketing Madison Gas and Electric Company


Renewable Energy Rider• First utility in Wisconsin to offer opportunity

• Opportunity to work cooperatively with commercial customers on a renewable energy solution

• Serve business customers with renewable energy resources

• Existing and new commercial customers on Rate Schedules Cg-4, Cg-2, Cg-6, Sp-3, and Cp-1

• Participation limit of 25 MW of existing customer load


On Demand Savings (ODS)

• 33 commercial customer sites

• “Real Time” electric consumption and demand visualization

• Alert notifications to shed load when approaching peak


ODS - Future Integration

• CX Pilot, 2017-18

• New and existing participants

• Test new AMI meters and scalability to larger customer group


Assessments

• MGE offers free energy assessments to business customers

• Tour the facility and provide a comprehensive analysis of the building systems

• Recommendations for energy-efficient upgrades tailored to your business and your budget

• Contact your MGE Account Manager to schedule an appointment


Shared Savings• Energy-efficient equipment financing

• $0 capital outlay

• Energy savings created by the project help repay the project cost

• Align loan payment to match energy savings

• $5,000 minimum project loan

• Bundle with Focus on Energy incentives

• Competitive interest rates


Transportation Electrification• MGE is helping customers plug in

to make a difference

• MGE built one of the Midwest’s largest EV charging station networks powered on 100% renewable energy produced by wind farms in Wisconsin and Iowa

• Drive Electric partnership helped double Nissan LEAF® sales in Madison area


Transportation Electrification

"Your crews did a wonderful job restoring our power in Lutz, Fla. They worked hard all day. We're very thankful. They're pretty humble. But we really appreciate them."

• Electric forklifts – help businesses evaluate the value of electric lift trucks and charging options

Lower fuel and maintenance costs

Perform similar or better than propane trucks

Lower emissions

Options for heavy-duty and outdoor applications


Workplace Charging • Why workplace charging?

Enables employees who commute longer distances to own EVs

Recruit and retain employees, support sustainability initiatives

• MGE educates and assists

Partners with business customers to install charging stations for employee use

Approximately ten businesses have installed stations for employees (American Family, Sub-Zero, Promega)


Electric Buses• Partnership between MGE and the City

of Madison

• Electrify 50% of bus fleet by 2035

• MGE pledged to provide:

100% of the required local matching funds necessary for the grant

Provide technical assistance – electric and charging infrastructure


Welcome Home

• 15 million people were without power as a result of Hurricane Irma

• MGE’s 11 Electric Operations personnel assisted in the largest power restoration efforts in nation’s history

• Assisted in Tampa and Fort Myers area

• September 10, 2017, to September 25, 2017


Welcome Home

"Your crews did a wonderful job restoring our power in Lutz, Fla. They worked hard all day. We're very thankful. They're pretty humble. But we really appreciate them.“

- Resident

Documents

Natural Gas Market Update - Madison Gas and Electric · Natural Gas Market Update John Jicha, ... 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 ... the Midwest