To quickly access the page content, please click on the links below.
TRADE DATE |
HUB |
PRODUCT |
STRIP |
SETTLEMENT PRICE |
PERCENTAGE DIFFERENCE FROM DEC 22 |
6/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-22 |
122.95000 |
100% |
6/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-23 |
78.35000 |
64% |
6/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-24 |
78.05000 |
63% |
6/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-25 |
76.80000 |
62% |
6/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-26 |
66.55000 |
54% |
6/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-27 |
68.65000 |
56% |
6/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-28 |
64.95000 |
53% |
6/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-29 |
60.30000 |
49% |
6/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-22 |
132.95000 |
100% |
6/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-23 |
90.45000 |
68% |
6/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-24 |
79.05000 |
59% |
6/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-25 |
92.45000 |
70% |
6/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-26 |
81.60000 |
61% |
6/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-27 |
88.70000 |
67% |
6/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-28 |
84.25000 |
63% |
6/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-29 |
81.05000 |
61% |
6/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-22 |
87.30000 |
100% |
6/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-23 |
51.60000 |
59% |
6/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-24 |
45.80000 |
52% |
6/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-25 |
49.40000 |
57% |
6/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-26 |
53.25000 |
61% |
6/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-27 |
56.05000 |
64% |
6/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-28 |
56.35000 |
65% |
6/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-29 |
57.15000 |
65% |
6/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-22 |
67.45000 |
100% |
6/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-23 |
39.95000 |
59% |
6/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-24 |
36.25000 |
54% |
6/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-25 |
35.55000 |
53% |
6/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-26 |
40.50000 |
60% |
6/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-27 |
41.45000 |
61% |
6/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-28 |
42.10000 |
62% |
6/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-29 |
42.80000 |
63% |
NYISO J Off-Peak: The curve from Dec ’22 to Dec ’26 is backwardated/flat. The perceived market confidence for a 2024 start date has declined significantly in the last 8 months. Emission Advisors has not seen a formal change of course from New York other than a continued slow pace during the process. The market is currently not pricing in carbon fee as it did back in 2019/2020.
PJM PSEG: Power Prices for Dec-24 to Dec-25 is lower than Dec 22 and Dec ‘23. The market is not appear to be pricing in any additional carbon (besides RGGI) as the CPSTF is sunsetting.
The Supreme Court has limited the EPA's authority to establish climate standards for power plants. On June 30, the United States Supreme Court limited the EPA's authority to set rules for climate-changing greenhouse gas emissions from existing power facilities. The court ruled 6-3 that only Congress, not the EPA, has the authority to establish a wide system of cap-and-trade regulations to limit emissions from existing power plants in an effort to shift away from coal and toward renewable energy sources. The ruling represents a big blow for the Biden administration's climate change program, notably the objective of zeroing out carbon emissions from power plants by 2035 and cutting emissions in half by 2100. The case originates from the EPA's 2015 order to coal power plants to either limit production or support other energy sources. That order was never carried out because it was quickly contested in court. According to the EPA, fossil fuel-fired power plants are the second-largest source of pollution in the United States, trailing only transportation. The United States is also the world's second-largest emitter of greenhouse emissions, after only China, making it a critical role in global efforts to tackle climate change.
New York has selected solar farms for Tier 1 RECs. To help meet the state's clean energy mandates, New York will purchase renewable energy certificates (RECs) from 22 solar projects. The projects will add 2,408MW of photovoltaic capacity to New York's grid as the state strives to get 70% of its electricity from renewable sources by 2030 and 100% from zero-emission sources by 2040. The contracts signed by the state will also result in 159MW of utility-scale energy storage. The awards were made as part of New York's Tier 1 REC solicitation for 2021. The state's selections range in size from 18MW to 350MW. Six of the projects, including EDF Renewables' 350MW Columbia Solar Energy Center and 350MW Ridge View Solar Energy Center, will include energy storage systems. All are expected to be operational by 2027. The projects are expected to generate 4.5 million MWh per year, enough electricity to power more than 620,000 homes, and to reduce CO2 emissions by approximately 2.2 million metric tons per year. According to the New York State Energy Research and Development Authority (NYSERDA), the contracts include the index REC structure created by the state in 2020. In an index-price system, the compensation for RECs is determined by a regularly updated index that reflects market price fluctuations. The index for New York will be updated monthly over the delivery term specified in the contracts. The contracts, according to NYSERDA, will result in an average $0.13/month increase in ratepayer bills once all facilities are operational.
Advocates for the New York fuel standard weigh their options. After a late push failed this legislative session, supporters of the New York Clean Fuel Standard will weigh their options this summer. For the first time this year, a proposed low-carbon fuel standard (LCFS) advanced from a state legislative committee to the Senate floor. However, the latest legislative session in New York ended without a vote on the bill, and a companion bill in the state Assembly never made it out of committee. To continue pushing the policy for a closely watched foothold for LCFS programs on the US Atlantic coast, supporters will weigh resources across next year's session and an ongoing state climate plan process. The concept must still win over critics who favor a more rapid, top-down transition. Opponents prefer more aggressive measures to electrify New York transportation and are concerned that the market-driven nature of LCFS programs will leave low-income communities behind in pollution hot spots. Supporters had focused on the previous two legislative sessions as a means of expediting the program's passage. However, ongoing work on the state's climate scoping plan — a massive document incorporating a wide range of emissions-reduction strategies for the state to pursue — could shift focus away from the legislature and toward advancing the program through state agencies.
New York lawmakers postpone a bill on utility renewables. On June 3, the New York State Assembly declined S 6453, a bill that would have allowed the New York Power Authority (NYPA) to develop, own, and operate renewable energy projects while requiring the utility to phase out all use of non-renewable generation by the end of 2030. On June 1, the state Senate passed the legislation, known as the Build Public Renewables Act, and sent it to the lower chamber. However, Assembly Speaker Carl Heastie stated that this left lawmakers with insufficient time to iron out the kinks in the proposal. Heastie plans to convene the Assembly Energy, Corporations, and Environmental Conservation committees on 28 July for a hearing to review a number of issues related to the bill, which would also make NYPA the sole provider of renewable energy to all state-owned and operated properties beginning in 2030, as well as the sole provider of renewable energy to all municipal properties beginning in 2035, though the latter would have had some leeway to opt out of the requirement if they m NYPA would also be allowed to provide renewable energy to residential customers and communities receiving electricity through community choice aggregation.
New York extends comment period on climate change plan. After 11 public hearings across the state and receiving over 18,000 public comments, the state's Climate Action Council extended comment on its draft plan until July 1. Public hearings included a debate over whether New York should implement a low-carbon fuel standard (LCFS) program similar to those that are spreading along the west coast of the United States. Proponents see New York as an important starting point for launching low-carbon competition for Atlantic coast transportation fuels. Opponents have warned that LCFS programs risk extending the use of petroleum fuels and concentrating pollution in low-income areas. The draft document released by the council last December included discussion of an LCFS similar to programs in California and Oregon. However, the text reduced support for such programs to recognizing LCFS as one of several options. The Climate Action Council must make policy recommendations to the governor and legislature by January 1, and the state's environmental commission must issue legally binding emission reduction requirements by the beginning of 2024.
May saw a slowdown in New Jersey's solar growth. After a strong performance in April, the growth of New Jersey's solar industry significantly slowed down in May. The New Jersey Clean Energy Program reported on 22 June that the state added 10.9MW of photovoltaic capacity in May, significantly less than the 41MW initially reported in April. About 7.6MW of the new capacity fed In the state's transition incentive program, which issues transition renewable energy certificates (TRECs) at a base price of $152/MWh for a 15-year period and requires the state's four electricity distributors to buy the credits. The remaining 3.3MW were included in New Jersey's administratively determined incentive (ADI) program, the fixed-price portion of the state's new SREC-II incentive program. Every month this year so far, with the exception of April, the state has seen relatively slow solar growth in the state. For January through March, New Jersey initially reported 9 to 15MW per month.
BOEM published New Jersey wind farm environmental review. On June 17, the US Bureau of Ocean Energy Management (BOEM) released a draft environmental impact statement for the Ocean Wind 1 project, a collaboration between Newark-based utility PSEG and Danish developer Orsted. With a few exceptions, BOEM determined that the project's environmental impacts would be negligible to moderate. The agency identified fisheries, marine mammals, and scenery as areas where the facility could have a minor to major impact. The agency's approval would allow for the construction of "an approximately 1,100MW" facility, which would be operational in 2024. It would be capable of supplying the equivalent of approximately 500,000 households per year. The draft statement will be published in the Federal Register on June 24, kicking off a 45-day public comment period. During that time, the agency will hold three virtual public meetings and accept feedback that will help shape the final report. The environmental assessment will ultimately determine whether BOEM approves the construction of Ocean Wind 1. The first virtual meeting is scheduled for July 14th.
Pennsylvania officially joined RGGI July 1 and activated 61 RGGI compliance accounts. While the court cases discussed in next paragraph are still pending Pennsylvania and RGGI have officially opened accounts for its power facilities and preparing for the next auction which is in September 7th. RGGI joined with a cap of 40.7 million for 2nd half of 2022 which is above the full year budget of any other state in RGGI. The full year budget for Pennsylvania if they joined January 1st, 2022 would have been of 78 million for 2022. AEGIS anticipates a number of PA facilities will not come out immediately and buy RGGI with hopes the court case may be decided in their favor. This may cause some demand to be deferred for a number of months or even quarters.
Judge denies requests to intervene in the RGGI case. A judge ruled on June 29 that utility Constellation Energy and a coalition of environmental nonprofits could not intervene in two court cases concerning the legality of Pennsylvania's regulations authorizing the state to join the Regional Greenhouse Gas Initiative (RGGI). Judge Michael Wojcik of the Commonwealth Court of Pennsylvania did not immediately elaborate on his reasoning for rejecting their applications to intervene, but did state that "an opinion in support of this Order will follow." The court is currently hearing two RGGI-related cases, one involving Republican lawmakers and the other involving a coalition of mostly coal-related groups. In both cases, opponents of the RGGI have requested that the court issue an injunction preventing the rule's implementation now before ruling on its legality later this year. Constellation and the environmental groups both sought to intervene in the two cases, arguing that their interests differed from those of the Pennsylvania Department of Environmental Protection (DEP). Environmental groups, in particular, wanted to be involved in case the state ever pursued a settlement that changes how auction proceeds are invested or requires the state to make RGGI rule less stringent. Constellation or environmental groups may appeal the judge's decision to the Pennsylvania Supreme Court, which is expected to rule on the regulation eventually. The DEP has stated that if the court does not explicitly reject the injunction requests by the end of the week, the state will be unable to participate in the RGGI auction on September 7th.
Green group has petitioned the Virginia Air Board to keep RGGI. A coalition of environmental, energy efficiency, and housing organizations has petitioned Virginia's key regulatory body to keep the state in the Regional Greenhouse Gas Initiative (RGGI). The groups urged the Air Pollution Control Board to reject any proposal to withdraw Virginia from the US northeast cap-and-trade program, citing benefits such as lower air pollution and increased auction revenue for the state. "Virginia is participating in a time-tested, market-based program for reducing carbon pollution from our region's electricity sector in a way that protects all Virginians," the groups wrote to the board in a letter.pdf. The environmental groups refrained from making specific legal arguments in their letter, instead focused on the program's benefits. The groups also pointed out that "RGGI reduces Virginians' electricity burden by focusing on energy efficiency," a rebuttal to Virginia Governor Younkin’s claim that RGGI's effects on power bills constitute an emergency that the state must address.
Virginia approved the request to stop the RGGI rate hike. The Virginia State Corporation Commission granted Dominion Energy's request to suspend rate increases intended to recover costs associated with the Regional Greenhouse Gas Initiative (RGGI). Virginia ratepayers will no longer see any explicit RGGI-related charges on their monthly bills beginning July 1st, as Virginia governor Glenn Youngkin plans to propose an emergency rule to exit the CO2 cap-and-trade program. Dominion has been charging the average Virginia ratepayer an extra $2.39/month in an explicit "Rider RGGI" charge since January 1. Under state law, utilities may raise rates to comply with environmental regulations if the commission approves.
RGGI CO2 allowance auction has reached a new high. The Regional Greenhouse Gas Initiative (RGGI) concluded the 1 June CO2 allowance auction at a record high price of $13.90/short ton, selling all 22.3 million allowances offered and generating approximately $310 million. The auction was the sixth consecutive RGGI auction with a record high clearing price. Compliance-oriented entities purchased 66 percent of the allowances available, down from 72 percent in the March 9 auction. According to the program, 49 percent of all allowances in circulation are held for compliance purposes. Bids ranged from the program's price floor of $2.44/st to $27.00/st, with bid volumes 2.6 times greater than available allowances. Allowances were awarded to 59 of the 69 bidders at the end of the auction. Five bidders purchased more than one million allowances, while 36 bidders purchased at least 100,000 allowances, an increase from 30 at the previous auction. The next RGGI auction is scheduled for September 7, but which states will participate is unknown. The Cost Containment Reserve (CCR), which adds supply to the auction if hit, is at $13.91 for calendar year 2022 and increases by 7% next year and each year thereafter.
A budget agreement in Virginia would redirect RGGI funds. Virginia lawmakers reached an agreement on a budget that will redirect funds generated by the Regional Greenhouse Gas Initiative (RGGI), but will keep the state in the program for the time being. The revised 2020-22 budget would direct $11.4 million from RGGI auction proceeds to flood relief efforts in Hurley, a rural Virginia town that flooded last year. A compromise budget for 2022-24 would redirect $25 million in RGGI funds to the new Resilient Virginia Revolving Loan Fund, which would lend and grant money to local governments for resilience projects. Virginia is required by law to direct RGGI proceeds to low-income energy efficiency programs and the state Community Flood Preparedness Fund, but RGGI states have frequently used budgetary maneuvers to avoid similar spending restrictions. Both budget bills, which were passed by large bipartisan majorities in the House of Delegates and Senate on June 1st, now go to Governor Glenn Youngkin . If he makes his own recommendations or exercises his authority to line-item veto individual provisions, lawmakers will have until June 30 to reach a final budget agreement.
Questions? Contact our team for more information: environmental@aegis-hedging.com
CONFIDENTIAL – UNAUTHORIZED THIRD-PARTY DISTRIBUTION PROHIBITED