NECA Natural Gas 101 Seminar: Wholesale Market Presentation Recap

Melissa Whitten, Senior Consultant with Daymark Energy Advisors, participated as a faculty member for the Natural Gas 101 Seminar offered by the Northeast Energy and Commerce Association (NECA) in April. NECA is a nonprofit trade association that has recently started offering a series of “101” courses to help new professionals learn about the evolution of competitive energy markets.

The one-day seminar sought to answer the questions: What makes natural gas a specialized area within the energy sector? Why do we regulate it? What will be the impact of planned interstate gas pipeline expansion projects for the region? What is the motivation to purchase natural gas at the wholesale market level?

During her presentation, which focused on wholesale markets for natural gas procurement, Whitten noted, “Wholesale market procurement may offer as much as 20 percent savings over retail service, but achieving those savings depends upon the buyer’s end-use process, resources and risk tolerance.”

She discussed with attendees that energy buyers need to understand important aspects of the gas market and best practices for contracting, in order to identify and efficiently allocate risks and achieve savings, including:

· The counterparty risk

· The difference between spot and futures prices for natural gas, and what is driving that difference

· The location of greatest risk in the supply chain (it’s not just about commodity)

· Where and how the futures market helps to manage risk

Connect with Ms. Whitten on LinkedIn or contact her here to continue the conversation.

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