January 11, Ms. Kavita Kale Executive Secretary Michigan Public Service Commission 7109 West Saginaw Hwy Lansing, MI 48917

Transcription

1 DTE Gas Company One Energy Plaza, 688 WCB Detroit, MI David S. Maquera (313) January 11, 18 Ms. Kavita Kale Executive Secretary Michigan Public Service Commission 719 West Saginaw Hwy Lansing, MI 8917 Re: In the matter of the Application of DTE Gas Company for approval of a Gas Cost Recovery Plan, 5-year Forecast and Monthly GCR Factor for the 1 months ending March 31, 18 MPSC Case No. U-1815 Dear Ms. Kale: Attached for electronic filing in the above-referenced case is DTE Gas Company s Contingent Factor Data and Determination for the February 18 Contingent Factor Period. Also attached is a Proof of Service. Very truly yours, DSM/lah Attachments cc: Service List David S. Maquera

2 DTE Gas Company Contingent Factor Data and Determination GCR Plan Period Feb 18 Contingent Factor Period Case No. U-1815 NYMEX Natural Gas Contract Closing Prices Line Close Date 1//18 1/3/18 1//18 1/5/18 1/8/18 5-Day Avg. (Col. 1) (Col. ) (Col. 3) (Col. ) (Col. 5) (Col. 6) 1 January (Close) $ 3.93 February (Close) $ March (Close) $.67 April (Close) $ May (Close) $ June (Close) $ July (Close) $ August (Close) $.79 9 September (Close) $ 3. 1 October (Close) $ November (Close) $ December (Close) $ January 18 (Close) $ February $ 3.56 $ 3.8 $.88 $.795 $.835 $ March $.973 $.931 $.813 $.75 $.77 $ April $.793 $.777 $.696 $.65 $.676 $ May $.777 $.76 $.69 $.655 $.68 $ June $.86 $.79 $.73 $.697 $.7 $ July $.83 $.83 $.765 $.735 $.758 $.783 August $.837 $.86 $.769 $.7 $.761 $ September $.8 $.89 $.75 $.73 $.7 $.769 October $.8 $.83 $.776 $.77 $.766 $ November $.897 $.885 $.831 $.86 $.85 $.89 December '18 $ 3.6 $ 3.1 $.959 $.93 $.95 $.977 $.966 Averages Jan 17 - Dec 18 5 Jan 5 Day $ X plan $ Difference $ (.5) 8 Incremental CF $ - Feb Maximum GCR Factor 9 Current GCR Factor $ Incremental CF $ - 31 Total GCR Factor $ 3.16

3 Tuesday, January, 18 NYMEX February up 3.9 cents on storage pulls With temperatures in major US demand areas in the Midwest and Northeast expected to be below freezing for several days, substantial draws from storage have been seen, giving a boost to the natural gas futures market Friday. The NYMEX February contract settled at $.953/MMBtu, up 3.9 cents. The contract traded Friday as high as $3.8/MMBtu before ending the session on a downward slope. Temperatures in Chicago were expected to be in the low teens through Tuesday, according to the US National Weather Service, while temperatures in New York and Boston were not expected to break the freezing mark through the same period. That weather pattern is expected to continue for the next 1 days, with colder-than-normal weather expected in the entire eastern half of the US. Data from Platts Analytics' Bentek Energy show US demand at Bcf/d Friday, rising to Bcf/d Saturday. Seven days out, demand is expected to average 15.3 Bcf/d. Production has been running at a steady rate, with a seven-day average of 77.1 Bcf/d. Over the next two weeks, the average is expected to be Bcf/d. With demand outpacing supply, there have been healthy draws from storage because of cold weather. Over the last five days, withdrawals have averaged 1.9 Bcf/d. That pattern looks to continue through the next week, when pulls are expected to average 8.9 Bcf/d. As expected, the withdrawals have been heaviest in the Northeast and Midwest. On Friday, those two areas combined for a 3.7 Bcf/d pull, while the West and South together had draws of 1.5 Bcf/d. As a result, inventories have taken a big hit in the Northeast and Midwest since frigid weather moved in. Stocks for those two areas stood at 1.76 Tcf December 3. Friday, that number shrunk to 1.57 Tcf, a drop of 13 Bcf. NYMEX Henry Hub gas futures contract, Dec Settlement High Low +/- Volume Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Contract data for Thursday Volume of contracts traded: 85,118 Feb, 36,13; Mar, 8,67; Apr, 16,95 Total open interest: 1,8,35. 3-Aug 18-Sep -Oct -Oct 7-Nov -Nov 1-Dec 9-Dec 3-1, Custom Weather - Dec-16 Mar-17 Jun-17 Sep-17 Dec S&P Global Platts, a division of S&P Global. All rights reserved. 1

4 Wednesday, January 3, 18 NYMEX Feb. rises 1.3 cents on cold temps With frigid temperatures gripping the Eastern US from the Canadian border to the Gulf of Mexico, the NYMEX February natural gas futures contract on Tuesday jumped 1.3 cents to its highest settle in four weeks. The February contract settled at $3.56/MMBtu. The last time the front-month contract closed at a higher level was on December 1, when the January contract settled at $3.61/MMBtu. Blustery weather was looking to be the norm for major demand centers in the Northeast, Midwest and even the South, according to the National Weather Service. Temperatures in Chicago were not expected to rise above the mid-teens through Friday, while New York was not likely to break the freezing mark over the same period. Even Houston had a bout of cold weather and was expected to have lows in the upper-s through Thursday. The cold weather pumped US demand past the 13 Bcf/d mark for the third straight day Tuesday. Consumption stood at 133 Bcf/d, according to Platts Analytics. The three-day average for demand was Bcf/d, up sharply from the 1 Bcf/d averaged during the preceding four days. The demand for the first two days of 18 also dwarfs the consumption seen over the same time last year. In 18, demand has averaged Bcf/d, compared with 8.5 Bcf/d last year. Production also tapered off a bit over the New Year s holiday. During the last five days of 17, production averaged 76. Bcf/d. The first two days of January have seen an average of 7.35 Bcf/d pulled from wells. Platts Analytics data showed that production will ramp up, however, averaging 75.6 Bcf/d over the next 1 days. Storage numbers reflect that ebb and flow. The seven-day average for draws stood at 9.93 Bcf/d. Over the next two weeks, that number falls to 3.5 Bcf/d. NYMEX Henry Hub gas futures contract, Jan settlement High Low +/- Volume Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Contract data for Monday Volume of contracts traded: 58,51 Feb, 353,1; Mar, 8,835; Apr, Total open interest: 1,36,6 Data is provided by a third-party vendor and is accurate as of 5:3 pm Eastern time Aug 19-Sep 5-Oct 3-Oct 8-Nov 7-Nov 13-Dec -Jan Note: The entire wick of the candlestick depicts the high and low daily front-month Henry Hub futures price range. The body of the candlestick depicts the price range between the open and close, with a red candlestick indicating a close on the downside and a green candlestick indicating a close on the high end. 3-1, Custom Weather - Dec-16 Mar-17 Jun-17 Sep-17 Dec S&P Global Platts, a division of S&P Global. All rights reserved. 1

5 Thursday, January, 18 NYMEX Feb. falls.8 cents as weather warms With US demand falling to its lowest levels in four days, the NYMEX February natural gas futures contract fell.8 cents/mmbtu to $3.8/ MMBtu Wednesday. The February contract had risen to a four-week high of $3.56/ MMBtu Tuesday, largely on the back of a cold snap that enveloped the eastern half of the US. Although the cold weather persisted Wednesday, it was warmer than earlier in the week, driving down demand. US demand Wednesday checked in at 13.7 Bcf/d, down 9 Bcf/d from Tuesday and the lowest since Saturday s consumption of 118. Bcf/d, according to data from Platts Analytics Bentek Energy. Although demand was down across all sectors, the largest decline came from residential and commercial consumption, which fell 5.1 Bcf/d to 66.3 Bcf/d. Meanwhile, consumption of gas for power burn fell to 8.6 Bcf/d, down.9 Bcf/d, and industrial demand slipped 7 MMcf/d to 5.5 Bcf/d. With demand down, withdrawals from storage also slowed. Wednesday s pull came in at 5.5 Bcf, down 5. Bcf from Tuesday s draw of 55.7 Bcf. Heavy withdrawals have been the norm of late and are expected to be reflected in the weekly storage report from the US Energy Information Administration, which will be released Thursday. A consensus of analysts surveyed by S&P Global Platts expected to see a draw of 19 Bcf for the week ended December 9. The predicted draw dwarfed recent withdrawals. The EIA reported storage withdrawals of 11 Bcf for the week ended December and a pull of 18 Bcf for the period ended December 15. The last time a draw from storage topped the Bcf mark was the week ended January 13, when 3 Bcf was taken out of stocks. Looking ahead, Platts Analytics data showed storage withdrawals averaging 38.1 Bcf/d over the next seven days. NYMEX Henry Hub gas futures contract, Jan 3 settlement High Low +/- Volume Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Contract data for Tuesday Volume of contracts traded: 7,33 Feb, 339,55; Mar, 8,876; Apr, Total open interest: 1,,917 Data is provided by a third-party vendor and is accurate as of 5:3 pm Eastern time Sep -Sep 6-Oct -Oct 9-Nov 8-Nov 1-Dec 3-Jan Note: The entire wick of the candlestick depicts the high and low daily front-month Henry Hub futures price range. The body of the candlestick depicts the price range between the open and close, with a red candlestick indicating a close on the downside and a green candlestick indicating a close on the high end , Custom Weather -5 Jan-17 Apr-17 Jul-17 Oct-17 Jan S&P Global Platts, a division of S&P Global. All rights reserved. 9

6 Friday, January 5, 18 NYMEX February gas drops 1.8 cents The NYMEX February natural gas futures contract fell Thursday, as forecasts for average temperatures coupled with a lower-thanexpected storage withdrawal put downward pressure on prices. The February contract was settled at $.88/MMBtu, down 1.8 cents compared with Wednesday s close. The Energy Information Administration announced an estimated 6 Bcf pull from storage Thursday for the week ended December 9, more than doubling the 99 Bcf withdrawal averaged over the past five years, according to EIA data. However, the draw from storage was below the 17 Bcf expected by a consensus of analysts surveyed by S&P Global Platts, pushing prices lower. National stocks now sit at an estimat 3.16 Tcf, a 5.8% deficit to the five-year average, according to EIA data. The draw from stocks comes as temperatures across much of the country have been well below average, giving demand a significant push since Christmas. US demand has averaged 13.8 Bcf/d month to date, well above the 86.6 Bcf/d averaged at this point in January 17, according to S&P Global Platts Analytics data. The boosted demand is expected to taper off in the coming weeks, as Platts Analytics projects US demand to average 13.5 Bcf/d over the next 1 days. The drop in demand comes as temperatures are projected to move closer to average next week. According to the most recent six- to 1-day outlook from the US National Weather Service, temperatures are forecast to be average across much of the country, including New York and Chicago, two cities that have faced frigid weather lately. Production freeze-offs have seen US dry production average 7.8 Bcf/d over the past four days, a drop from the 76.1 Bcf/d averaged the three days prior, according to Platts Analytics. That production is expected to climb over the coming weeks, averaging 75. Bcf/d over the next 1 days, as temperatures return to average across production areas. NYMEX Henry Hub gas futures contract, Jan settlement High Low +/- Volume Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Contract data for Wednesday Volume of contracts traded: 555,8 Feb, 318,81; Mar, 85,89; Apr, Total open interest: 1,11,318 Data is provided by a third-party vendor and is accurate as of 5:3 pm Eastern time Sep 1-Sep 9-Oct 5-Oct 1-Nov 9-Nov 15-Dec -Jan Note: The entire wick of the candlestick depicts the high and low daily front-month Henry Hub futures price range. The body of the candlestick depicts the price range between the open and close, with a red candlestick indicating a close on the downside and a green candlestick indicating a close on the high end , Custom Weather -5-5 Jan-17 Apr-17 Jul-17 Oct-17 Jan S&P Global Platts, a division of S&P Global. All rights reserved. 11

7 Monday, January 8, 18 NYMEX Feb. drops 8.5 cents on high storage The effects of bearish weekly storage data continued to ripple through the natural gas market Friday, with the NYMEX February futures contract shedding 8.5 cents/mmbtu to settle at $.795/MMBtu. On Thursday, the EIA announced a storage draw of 6 Bcf for the week that ended December 9. Although that withdrawal was more than double the average pull of 99 Bcf seen during the same period over the last five years, it lagged the expected draw of 17 Bcf and the February contract settled at $.88/MMBtu, a decline of 1.8 cents. Supply and demand were little changed as the week came to a close, according to Platts Analytics Bentek Energy data. Total supply Friday was 81. Bcf, down 8 MMcf day on day. While dry production remained stable at 7.1 Bcf, the difference came in imports from Canada, which dropped from Thursday s 6.3 Bcf to Friday s 5.5 Bcf. Demand rose 1.3 Bcf to 17.1 Bcf, which led to a storage withdrawal of 5.9 Bcf, according to the data. Despite the recent bomb cyclone which had winds akin to those of a hurricane rampaging up the East Coast, sending temperatures plummeting to sub-zero Fahrenheit levels and raising the spot gas price at Transco Zone 6 New York to its highest level ever at $1.85/MMBtu Thursday the futures market was not bullish looking to next winter. The December 18 contract was trading at $.93/MMBtu, down.7 cents, while January 19 closed at $3.15/MMBtu, down.8 cents and February 19 saw action at $.995/MMBtu, down.6 cents. That could be a function of the long-range forecast from the US National Weather Service, which calls for warmer-than-normal temperatures over much of the US. At the same time, US production is roaring along at a fast clip. So far in 18, dry production has averaged 73.3 Bcf/d. NYMEX Henry Hub gas futures contract, Jan 5 settlement High Low +/- Volume Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Contract data for Thursday Volume of contracts traded: 73,86 Feb, 3,15; Mar, 93,77; Apr, Total open interest: 1,13,7 Data is provided by a third-party vendor and is accurate as of 5:3 pm Eastern time Sep -Sep 1-Oct 6-Oct 13-Nov 3-Nov 18-Dec 5-Jan Note: The entire wick of the candlestick depicts the high and low daily front-month Henry Hub futures price range. The body of the candlestick depicts the price range between the open and close, with a red candlestick indicating a close on the downside and a green candlestick indicating a close on the high end , Custom Weather -5-5 Jan-17 Apr-17 Jul-17 Oct-17 Jan S&P Global Platts, a division of S&P Global. All rights reserved. 8

8 Tuesday, January 9, 18 NYMEX Feb. up cents on storage pull outlook With a potential record-breaking storage pull on the horizon, the NYMEX February futures contract started the week bullish, settling at $.835/MMBtu Monday, up cents. S&P Global Platts Analytics is predicting a 363-Bcf draw from storage for the week ended Friday when the US Energy Information Administration releases its storage report Thursday. If that projection holds true, the draw would shatter the previous record withdrawal from stocks of 88 Bcf, which occurred in January 1. The Platts Analytics estimate would be about 5 Bcf above the combined totals of the last two weeks. The week ended December saw a withdrawal of 11 Bcf, while the week ended December 9 had 6 Bcf withdrawn from stocks. The potentially record-breaking withdrawal would be a direct result of the frigid weather that sat over the eastern half of the country during the last few weeks, dropping temperatures at major demand centers in the Northeast and the Midwest into the single digits. But that is expected to change as temperatures begin to edge upward. Looking at the National Weather Service s extended forecast, warmer-than-normal weather is expected in the Midwest and Northeast eight to 1 days out. Temperatures are already starting to rise. In New York, highs were expected in the 3s Monday, while temperatures near the end of the workweek were expected to rise to the 5s. US demand is expected to fall as temperatures rise, according to Platts Analytics. Monday s consumption was set at 98 Bcf/d, down 1. Bcf/d from Sunday s demand of 11 Bcf/d. Demand is expected to continue to fall over the next week, with Tuesday set to check in at 93.7 Bcf/d and the next seven days averaging 93. Bcf/d. That s a far cry from demand seen so far this year, with January averaging 1.3 Bcf/d, 17. Bcf/d above the average consumption seen during the same period a year ago. NYMEX Henry Hub gas futures contract, Jan 8 settlement High Low +/- Volume Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Contract data for Friday Volume of contracts traded: 6,788 Feb, 9,813; Mar, 33,6; Apr, Total open interest: 1,8,53 Data is provided by a third-party vendor and is accurate as of 5:3 pm Eastern time Sep 5-Sep 11-Oct 7-Oct 1-Nov 1-Dec 19-Dec 8-Jan Note: The entire wick of the candlestick depicts the high and low daily front-month Henry Hub futures price range. The body of the candlestick depicts the price range between the open and close, with a red candlestick indicating a close on the downside and a green candlestick indicating a close on the high end , Custom Weather -5-5 Jan-17 Apr-17 Jul-17 Oct-17 Jan S&P Global Platts, a division of S&P Global. All rights reserved. 9

9 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter of the Application of ) DTE GAS COMPANY for approval of a ) Gas Cost Recovery Plan, 5-year Forecast ) Case No. U-1815 and Monthly GCR Factor for the 1 months ) ending March 31, 18 ) STATE OF MICHIGAN ) ) ss. COUNTY OF WAYNE ) PROOF OF SERVICE TANYA MARIA CARR, being duly sworn, deposes and says that on the 11 th day of January, 18, she served a copy of DTE Gas Company s Contingent Factor Data and Determination for the February 18 Contingent Factor Period, via electronic mail upon the persons referred to in the attached service list. Subscribed and sworn to before me this 11 th day of January, 18. TANYA MARIA CARR Lorri A. Hanner, Notary Public Wayne County, Michigan My Commission Expires: --

10 SERVICE LIST MPSC CASE NO. U-1815 ADMINISTRATIVE LAW JUDGE Hon. Sharon L. Feldman Michigan Public Service Commission 719 W. Saginaw Hwy., 3 rd Floor Lansing, MI 8917 feldmans@michigan.gov ATTORNEY GENERAL (ENRA) Joel King Michael E. Moody G. Mennen Williams Bldg. 55 W. Ottawa Street, 6th Floor P.O. Box 3755 Lansing, MI 899 kingj38@michigan.gov moodym@michigan.gov MICHIGAN PUBLIC SERVICE COMMISSION STAFF ATTORNEYS Meredith R. Beidler Heather M. S. Durian 719 West Saginaw Hwy, 3rd Floor Lansing, MI 8917 beidlerm@michigan.gov durianh@michigan.gov RETAIL ENERGY SUPPLY ASSOCIATION (RESA) Jennifer Utter Heston Fraser Trebilcock Davis & Dunlap, PC 1 W. Allegan, Suite 1 Lansing, MI 8933 jheston@fraserlawfirm.com CONSULTANT FOR ATTORNEY GENERAL Mr. Sebastian Coppola Corporate Analytics 598 Southgate Road Rochester, MI 836 sebcoppola@corplytics.com MICHIGAN ENVIRONMENTAL COUNCIL (MEC) Tracy Jane Andrews Christopher M. Bzdok E. Front Street Traverse City, MI 9686 tjandrews@envlaw.com chris@envlaw.com