Power Management

[JamesD]

An energy mgmt co named Power Management gave a big presentation at the last NJ CLA meeting. Did anyone get a quote from them?

What was it? I haven't been able to find anyone that they responded to. They talked a good game but I was wondering if anyone heard back from them.

[Howard]

They offered me a three year fixed rate of $1.11/therm. Don't think that sounds too good. Assuming interest rates keep rising and Iran stops making threats oil prices should drop in the next 12-18 months and gas prices should follow. Futher, if the economy slows down so will energy consumption which means gas prices will fall as demand drops.

What do you think???

[JamesD]

Given the current market, $1.11 does seem high. You are probably paying less than 90 cents now and the futures drop long-term.

As far as the direction of the market, your argument makes sense.

Then again if we get a few big hurricanes, a hot summer, and cold winter all bets are off.

Did you get any NYMEX plus quotes? I am trying to get through this winter with a floating contract.

[Howard]

They only offered me a fixed three year contract, I told them to go back and offer me a NYMEX plus for the first two and an option for the third year out at a fixed rate, as they suggested at the meeting.

While Hurricanes can have a short-term impact I am fairly confident that the LONG-TERM trend is lower.

[petefritz]

I agree with Howard, the trend is lower. The caveot is the WTI crude price is still very high in relation to NG, so it is possible commercial users such as power plants, who have dual energy capabilities, may switch to NG, driving up demand and pricing. The real overall factor will be crude prices. I am on floating rates have been for years.