Energy Management

Webinar Analysts: Summer Solstice: Let the Games Begin

Energy Market Intel Webinar Series
2 min read

During the June Constellation monthly Energy Market Intelligence Webinar, Constellation’s commodities management group (CMG) provided the summer outlook for El Niño, natural gas fundamentals, regional markets, and the broader economy.

Weather Outlook

Chief Meteorologist, Dave Ryan, kicked off the webinar with continued coverage of the warming impacts of El Niño in the Pacific Ocean. This weather pattern is contributing to extended droughts, especially in the Midwest and Great Plains. Looking at the upcoming summer weather, drought in Texas and the Plains will contribute to above-normal temperatures, while the East will be more variable. In the West, Dave expects higher-than-normal temperatures as the main heat ridge expands across the Rockies. Moving to tropical storms, an average number of storms is expected for the summer.  The East Coast, Florida and the Southeast are most at risk of impacts from the expected 12-14 named storms.

All Things Economic

Next, Chief Economist, Ed Fortunato covered macroecnomic conditions. The tight labor market in the U.S. has kept wage growth strong and contributed to continued consumer spending growth. On the potential recession side, there are conflicting signals between the bond markets and equity markets. The team discussed how the “tipping of the scale” between these two markets affects the economy and the Fed’s actions in the next 18 months.

Natural Gas Fundamentals

Spring storage injections have surpassed both 2022 and the 5-year average. Mild weather, LNG export train maintenance, and steady production have created ideal storage conditions. Production continues to outperform the EIA’s Short Term Energy Outlook (STEO); however, declining rig counts and low NYMEX prices are pressuring producers to curtail less profitable production. In the Haynesville shale basin, IRRs for producers have fallen below the critical 10% threshold.

On the supply side, under a provision in the Fiscal Responsibility Act, the Mountain Valley Pipeline, which connects Marcellus and Utica shale gas to the hungry Southeast gas market, has the necessary permits and authorization to complete construction begin initial operations and pursue remaining approvals.

Regional Updates

Looking at regional fundamentals, California is experiencing full water reservoirs after a record-breaking snowfall this winter, allowing for optimal storage and hydro generation. This will allow the state to rely less on thermal generation and enable more natural gas storage, especially crucial for late-day solar transition periods.

In Texas, the legislature held its 88th session, where there was a strong focus on energy reliability. The team covered the potential impacts of HB 1500 (the “PUCT Sunset Bill”) and SB 2627 (“The Texas Energy Fund Bill”) as the state works through insufficient thermal capacity, rapidly growing renewable installations, and robust population growth. The team also covered ERCOT’s reliance on wind power, which has rrecently contributed to price swings between regional averages and $5,000 MWh.

Finishing in the PJM states, there has been further uncertainty around PJM’s Base Residual Auction and future capacity outlook. FERC has issued an order accepting PJM’s proposal to revise upcoming Base Residual and Incremental Auction schedules for the 2025/2026 through 2028/2029 delivery years.

Market Trends and Temperature

The team concluded the webinar by looking at NYMEX natural gas prices, forward power charts, the “Market Temperature,” and other factors affecting the energy market.

Watch Webinar Recording

We invite you to join us for our next Energy Market Intel Webinar on Wednesday, July 19th at 2 pm ET, where Constellation energy experts offer detailed and timely updates on factors affecting energy prices such as weather, gas storage and production, and domestic and global economic conditions. Register by visiting

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