Webinar Analysts: Energy Policy, Summer Weather Patterns, Capacity Auctions
During Constellation’s July Energy Market Intelligence Webinar, the Commodities Management Group (CMG) provided comprehensive coverage of current and future factors affecting the energy landscape, including the influence of recent legislation, weather patterns, natural gas production, LNG exports and recent regional capacity auctions.
Weather Report
Chief Meteorologist Dave Ryan provided an analysis of the ongoing summer heat wave, highlighting that the eastern United States is experiencing high humidity and above-normal temperatures due to a dual ridge pattern above the western Great Basin. This pattern has resulted in elevated cooling degree days (CDDs), with the summer currently ranking as the third hottest on record. The forecast calls for continued warm and humid conditions through July, with August’s tropical activity likely to determine whether this summer will rank among the hottest on record. Above normal temperatures in the Atlantic Ocean are fueling an active hurricane season, particularly in the Gulf region.
Impact of the “One Big Beautiful Bill” (OB3) on Energy Policy
David Gilbert, Vice President for Federal Government Affairs, explained the, “One Big Beautiful Bill” (OB3) fiscal package signed into law by President Trump. This legislation impacts the Inflation Reduction Act’s energy tax credits, affecting solar, wind, nuclear, hydrogen and carbon capture sectors. Gilbert highlighted the political complexity and compromises that shaped the bill, including the elimination of punitive excise taxes on renewables and the challenges posed by executive orders to the wind and solar industries.
Natural Gas Fundamentals & LNG Export Developments
The team covered natural gas fundamentals, noting all-time high production levels of about 106 Bcf/day month-to-date in July, resulting in pricing signals around $3.50/MMBtu. On the storage side, second quarter injections helped offset the deficit created by winter demand. Since June 1, power burns are six percent lower than last year, as higher natural gas prices and increased coal generation have reduced gas-fired generation.
Looking at Liquified Natural Gas (LNG), export terminal development continues to accelerate, with multiple projects in Canada and the U.S. progressing toward operation in the late 2020s. Europe continues to be the primary destination, while LNG Canada offers direct access to Asian markets. As Canadian gas gains export flexibility, U.S. gas prices may become more linked to international prices.
Electricity Market Dynamics & Capacity Auctions
Detailing some recent high-demand events and grid challenges from June heat waves, PJM and ISO-NE experienced some of their highest peak loads in years. Real-time prices spiked into four-digit levels as solar generation declined in the evening and grid operators relied on older, expensive oil-fired units. On the evening of June 24, ISO-NE declared a capacity deficiency, issued a Power Caution and took additional actions to maintain grid reliability during what may have been the highest peak load since 2013 – driven by extreme heat and humidity.
PJM’s 2026-27 capacity auction closed with strong demand growth driven by data centers and electrification and economic growth. . Capacity auction prices cleared the maximum revised cap of $329/MW-Day as of Tuesday, July 22, reflecting tight supply and the growing need for new dispatchable resources.
“This is a continuation of trends that we’ve been seeing: a tightening of the supply and demand conditions,” Stu Bresler, executive vice president of PJM market services and strategy, said in a press briefing after results were announced July 22.
PJM’s forecast peak load for 2026/27 increased by 5,446 MW from last year due to data center expansion, electrification and economic growth. “It’s probably a true statement to say that the majority of the demand increase we saw was … those data center additions,” Bresler said. (Source: RTO Insider).
Market Trends and Temperature
The webinar concluded with a look at forward power charts, including conversations about “the right time to buy,” the “Market Temperature” and other factors affecting the energy market.
We invite you to join us for our next Energy Market Intel Webinar on Wednesday, September 10 at 2 pm ET. Constellation will offer detailed and timely updates on factors affecting the energy landscape such as weather, natural gas storage and production, and domestic and global economic conditions. Register by visiting www.constellation.com/marketintelwebinar.
© 2025 Constellation. The offerings described herein, if applicable, are those of either Constellation NewEnergy, Inc. or Constellation NewEnergy-Gas Division, LLC, affiliates of each other. Brand names and product names are trademarks or service marks of their respective holders. All rights reserved. The Webinar, and this written recap, reflect the views, thoughts and opinions of each speaker and not necessarily the speaker’s employer (including Constellation Energy Corporation or any of its affiliates), organization, committee or other group or individual. Constellation does not make and expressly disclaims any express or implied guaranty, representation or warranty regarding any opinions or statements set forth herein or in the webcast. Constellation shall not be responsible for any reliance upon any information, opinions, or statements contained in the webcast or for any omission or error of fact.