MARKETWATCH MARKET INTELLIGENCE | ANALYSIS | THOUGHT LEADERSHIP

WEEK ENDING 9.16.2016

Pg 2. BENCHMARKS | Pg 3. MARKET DRIVERS | Pg 4. STATE PROFILE

ENERGY MARKET UPDATE The Energy Research Council national average benchmark price for retail electricity rose 1.34% last week to $0.0740 per kilowatt hour (kWh). With last week’s increase, electricity prices are only 0.74% higher than this time one month ago.

Maryland (2.92%), Massachusetts (2.92%), and New Jersey (2.16%). By contrast, electricity prices declined slightly last week in Illinois (-1.07%) and Ohio (-0.09%). Electricity prices are still higher than one month ago in Maine (2.54%), the District of Columbia (2.59%), and Massachusetts

Prices increased most notably last week in

AVERAGE WEEKLY BENCHMARK PRICE FOR RETAIL ELECTRICITY

Average Benchmark Price (kWh)

0.0750

Average Weekly Benchmark Price for Retail Electricity

0.0742

0.0740

0.0740 0.0735

0.0735 0.0730

0.0730 0.0725 0.0720 8/19/2016

8/26/2016

9/2/2016

9/9/2016

9/16/2016

Source: Energy Research Council © 2016

Week Ending

SHORT-TERM PRICE TRENDS & AVERAGE WEEKLY PRICE BENCHMARKS Contract Start Oct 2016 Connecticut

0.0744

0.0745

(2.25%). In contrast, Texas and Ohio have experienced a month-over-month decline in retail electricity prices of -2.03% and -2.44%, respectively.

8/19/16 0.0805

Week Ending 9/9/16 0.0794

9/16/16 0.0805

Wk/Wk % Chg. 1.35%

Mo/Mo % Chg. 0.01%

Delaware

0.0758

0.0761

0.0767

0.89%

1.19%

District of Columbia

0.0772

0.0780

0.0792

1.58%

2.59%

Illinois

0.0605

0.0604

0.0598

-1.07%

-1.23%

Maine

0.0821

0.0832

0.0842

1.14%

2.54%

Maryland

0.0722

0.0712

0.0732

2.92%

1.42%

Massachusetts

0.0988

0.0982

0.1011

2.92%

2.25%

New Jersey

0.0938

0.0915

0.0935

2.16%

-0.33%

New York

0.0652

0.0648

0.0655

1.05%

0.45%

Ohio

0.0555

0.0542

0.0541

-0.09%

-2.44%

Pennsylvania

0.0660

0.0654

0.0664

1.43%

0.59%

Rhode Island

0.0862

0.0869

0.0877

0.85%

1.65%

Texas

0.0413

0.0402

0.0404

0.56%

-2.03%

PERCENT CHANGE IN AVERAGE PRICE BENCHMARKS 4.00%

Percent Change In Average Price Benchmarks: Week Ending 09-16-2016

about erc

3.00% 2.00%

The ERC mission is to provide facts-based thought leadership concerning energy procurement and management in deregulated markets, through primary research and analysis. Contact us at (410) 749-5519 or www.energyresearchcouncil. com

1.00% 0.00% -1.00% -2.00% -3.00%

CT

DC

Wk/Wk % Chg

DE

IL

MA

MD

Mo/Mo % Chg

ME

NJ

NY

OH

PA

RI

TX

ENERGY RESEARCH COUNCIL © 2016

Source: Energy Research Council © 2016

MARKETWATCH SPONSORS ENERGY PROFESSIONALS OF OHIO

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WEEK ENDING 9.16.2016

ELECTRICITY PRICE BENCHMARKS

$/kWh

NATIONAL AVERAGE PRICE BENCHMARKS Week Ending 9.16.16 | Contract Start Oct 2016 0.0750 0.0740 0.0730 0.0720 0.0710 0.0700 0.0690 0.0680 0.0670 0.0660 0.0650 0.0640 0.0630

National | Week Ending 09-16-2016 Contract Start Date: 10-01-2016

12 Month

4.00%

24 Month

36 Month

AVERAGE WEEKLY PRICE BENCHMARKS BY CONTRACT TERM Week Ending 9.16.16 Connecticut

Source: Energy Research Council © 2016

National | Week Ending 09-16-2016 Contract Start Date: 10-01-2016

12 Month 0.0743

24 Month 0.0813

Contract Terms 36 Month 0.0849

Delaware

0.0775

0.0760

0.0779

District of Columbia

0.0736

0.0748

0.0802

48 Month 0.0854

60 Month 0.0952

0.0723

Illinois

0.0584

0.0608

0.0639

0.0652

0.0719

Maine

0.0937

0.1012

0.1024

0.1010

0.1058

0.0691

0.0701

Maryland

0.0710

0.0712

0.0712

Massachusetts

0.0775

0.0853

0.0899

New Jersey

0.0905

0.0913

0.0926

0.0895

0.0907

New York

0.0647

0.0649

0.0654

0.0643

0.0636

Ohio

0.0539

0.0548

0.0550

0.0549

0.0557

Pennsylvania

0.0649

0.0655

0.0660

0.0643

0.0656

Rhode Island

0.0790

0.0894

0.0966

Texas

0.0403

0.0404

0.0404

0.0400

0.0417

2.00%

Long-term electricity contracts (36-60 months) were favorably priced in a number of states last week, compared to short-term contracts (12-24 months). Maryland, New Jersey, New York, Ohio, Pennsylvania, and Texas all had relatively low priced long-term electricity contracts.

$ / kWh

0.00% -2.00% -4.00% -6.00% -8.00% -10.00%

12 Month

24 Month

36 Month

Source: Energy Research Council © 2016

ERC price benchmarks are a reliable measure of the direction and velocity at which prices are changing, similar to how the S&P and Dow measure change in stock market prices over time. ERC benchmarks are derived by:

1

Aggregating daily matrix prices issued by many electricity suppliers across General Service tariff rate classes for each electric utility,

2

Averaging each utility’s price benchmark together for state-wide benchmarks, and

3

Averaging state-level benchmarks across five business days to create weekly average price benchmarks, based on next month’s start date.

A Broker’s Retailer - Quick & Accurate • Custom & Matrix pricing, contracting, credit checks • Backed by ERM Power Limited & Sumitomo Corporation • Top 3 in overall satisfaction of 40+ retailers ranked in Broker National Survey • Ability to average weight up to 10 accounts across TDSPs/Load Zones/Rate Codes with our Matrix tool • Matrix tool includes ‘sweet spot’ calculator - determines lowest price per kWh term

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WEEK ENDING 9.16.2016

ENERGY MARKET DRIVERS natural gas prices Natural gas market fundamentals are about where they have been throughout the summer. Natural gas storage maintains a surplus compared to both last year and the five-year average for the same week. This continues to tether prices below the $3.00/MMBtu threshold. October 2016 NYMEX natural gas contract boundaries are $2.78/MMBtu on the support end, and $2.92/MMBtu on the resistance side. Unseasonable weather or tropical storms are unlikely to move prices one way or the other. As a sign that production will gradually increase as prices near the $3.00/MMBtu mark, the natural gas rig count increased last week by four, bringing up the number of active drilling rigs to 92. Natural gas prices, and subsequently electricity prices, will likely continue trading in the price band they have fluctuated within all summer. Absent a pipeline disruption or an unanticipated weather event, prices should remain fairly stable until they naturally begin to trend upward as we enter the winter season.

HH SPOT PRICE AND NG FUTURES CONTRACTS HH Spot Price

Week Ending 9-9-16

NG Futures Contract

$/MMBUT

% Chg.

$/MMBUT

%Chg.

6 months

3-11-16

$1.64

-42.9%

$1.75

-36.2%

Last Quarter

6-10-16

$2.36

-17.8%

$2.52

-8.5%

Last Month

8-12-16

$2.77

-3.5%

$2.61

-5.0%

Prev. Week

9-2-16

$2.94

2.4%

$2.83

2.9%

Last Week

9-9-16

$2.87

$2.75

Net Injections Bcf

Last Week

62

% Chg.

Storage Bcf

Natural Gas Spot and Futures Prices (NYMEX) (Dollars per Million Btu) Week ending 9-9-16 $3.10 $2.90 $2.70 $2.50 $2.30

NATURAL GAS INJECTION & STORAGE LEVELS Week Ending 9-14-16

NATURAL GAS SPOT & FUTURES PRICE (NYMEX) (Dollars per Million Btu) 12 Month Trend- Week Ending

$2.10 $1.90 $1.70

%Chg.

3,499

Last Year

74

-16.2%

3,315

-5.0%

5 Year Avg.

69

-10.1%

3,200

-7.9%

$1.50 Sep-15

Oct-15

Nov-15 Dec-15

Jan-16

Weekly NG Futures Contract Price

Feb-16 Mar-16 Apr-16 May-16 Weekly HenryHub Spot Prices

Jun-16

Jul-16

Aug-16

Source: ERC and EIA.gov

natural gas production & storage The amount of gas in storage now stands at 3,499 billion cubic feet (Bcf). By the end of the injection season, natural gas supply should be near 4.0 trillion cubic feet. That storage level is just under the all-time record set last year. Compared to historical averages, the natural gas surplus has been cut significantly since the beginning of the injection season. The current surplus is 5.6% higher on a year-over-year basis, and 9.3% above the five-year average. At the beginning of this year’s injection season, natural gas surplus for both the annual and five-year comparisons was greater than 50 percent.

weather & trending topics Hot temperatures forecast for the eastern U.S. are beginning to moderate beyond next week. The middle of the U.S. is experiencing normal temperatures that are expected to continue for the next two weeks. This forecast should limit cooling demand as we head into the fall season. On the tropical storm front, the likelihood of hurricane activity will begin to diminish as we transition into the end of September. This should allow natural gas storage injections to rise, and create a storage surplus in advance of winter.

MARKETWATCH MARKET INTELLIGENCE | ANALYSIS | THOUGHT LEADERSHIP

WEEK ENDING 9.16.2016

state profile: new york

Looking back month-over-month, electricity prices have increased substantially in Orange & Rockland (4.8%) and Central Hudson Gas & Electric (3.9%). The other New York utilities have maintained fairly stable pricing.

0.0700

Central Hudson Gas & Electric | Week Ending 09-16-2016 Contract Start Date: 10-01-2016

0.0690 0.0680 0.0670 $/kWh

Based on a contract start of October 2016, the ERC benchmark price for retail electricity in New York increased 1.1% last week to $0.0655 per kilowatt hour. The benchmark price is now only 0.5% higher than this time last month, but 8.3% lower than one year ago. The biggest price gains in New York last week were in RG&E (8.5%), and Orange & Rockland (3.7%).

0.0660 0.0650 0.0640 0.0630 0.0620 Mar-16

Apr-16

12 Month

0.0880

24 Month

May-16

Jun-16

36 Month

Jul-16

Aug-16

Source: Energy Research Council © 2016

Con Edison | Week Ending 09-16-2016 Contract Start Date: 10-01-2016

0.0860

NEW YORK

Last Month 8/19/16

Prev. Week Last Week 9/9/16 9/16/16

Cent Hudson G&E

0.0665

0.0678

Con Edison

0.0775

Nat Grid Upstate

$/kWh

0.0840 0.0820

Wk/Wk % Chg.

Mo/Mo % Chg.

0.0691

1.9%

3.9%

0.0787

0.0782

-0.6%

1.0%

0.0590

0.0583

0.0583

-0.1%

-1.3%

0.0760

NYSEG

0.0636

0.0639

0.0647

1.3%

1.8%

O&R

0.0708

0.0716

0.0742

3.7%

4.8%

0.0740 Dec-15

RG&E

0.0573

0.0521

0.0565

8.5%

-1.4%

State Average

0.0652

0.0648

0.0655

1.1%

0.5%

0.0780

0.0650

Feb-16 24 Month

Mar-16

Apr-16

36 Month

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Source: Energy Research Council © 2016

National Grid Upstate NY | Week Ending 09-16-2016 Contract Start Date: 10-01-2016

0.0640 0.0630 0.0620 $/kWh

New York | Week Ending 09-16-2016 Contract Start Date: 10-01-2016

0.0690

$/kWh

Jan-16

12 Month

AVERAGE WEEKLY BENCHMARK FOR RETAIL ELECTRICITY 0.0700

0.0800

0.0610 0.0600

0.0680

0.0590

0.0670

0.0580

0.0660

0.0570

0.0650

0.0560 Dec-15

0.0640 0.0630

Jan-16

Feb-16

Mar-16

Apr-16

0.0620

12 Month

0.0610 0.0600 Dec-15

Jan-16

12 Month

Feb-16 24 Month

Mar-16

Apr-16

36 Month

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Source: Energy Research Council © 2016

24 Month

36 Month

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Source: Energy Research Council © 2016

MARKETWATCH MARKET INTELLIGENCE | ANALYSIS | THOUGHT LEADERSHIP

WEEK ENDING 9.16.2016

state profile: new york Prices for long-term contracts in New York were quite favorable last week in most utility service territories. 0.0690 0.0670

$/kWh

Looking back 30 months, electricity prices in New York declined 23% last week from where they were in March 2014.

NYSEG | Week Ending 09-16-2016 Contract Start Date: 10-01-2016

0.0650 0.0630 0.0610 0.0590 0.0570 Dec-15

Jan-16

12 Month

Feb-16 24 Month

Mar-16

Apr-16

36 Month

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Source: Energy Research Council © 2016

Orange & Rockland | Week Ending 09-16-2016 Contract Start Date: 10-01-2016 0.0750

Week Ending Contract Terms 12 Month 24 Month 36 Month 48 Month 60 Month 9.16.16 Cent Hudson G&E 0.0688 0.0690 0.0695 0.0630 0.0627 Con Edison

0.0775

0.0782

0.0789

0.0773

0.0771

Nat Grid Upstate

0.0580

0.0582

0.0586

0.0569

0.0567

NYSEG

0.0643

0.0647

0.0652

0.0625

0.0624

O&R

0.0738

0.0741

0.0747

0.0700

0.0697

RG&E

0.0564

0.0565

0.0567

0.0570

0.0569

State Average

0.0651

0.0654

0.0659

0.0636

0.0634

$/kWh

0.0730 0.0710 0.0690 0.0670 0.0650 Dec-15

12 Month

0.0610

Apr-16

36 Month

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Source: Energy Research Council © 2016

RG&E | Week Ending 09-16-2016 Contract Start Date: 10-01-2016

0.0580 0.0570 0.0560 0.0550

$0.0970

0.0540

$0.0930 $0.0890

0.0530 Dec-15

$0.0850 $/kWh

24 Month

Mar-16

0.0590 $/kWh

$0.1010

Feb-16

0.0600

AVERAGE WEEKLY BENCHMARK FOR RETAIL ELECTRICITY- 36 MONTH TREND New York | Average Benchmark Price for Retail Electricity 30 Month Trend | Week Ending 09-16-2016

Jan-16

$0.0810 $0.0770

Jan-16

12 Month

$0.0730 $0.0690 $0.0650 $0.0610 $0.0570

12 Month

24 Month

36 Month

Source: Energy Research Council © 2016

Feb-16 24 Month

Mar-16

Apr-16

36 Month

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Source: Energy Research Council © 2016