W. Edwards Deming, the father of Total Quality Management, famously stated,"Without data, you're just another person with an opinion." Deming was instrumental in using data and statistical process controls to make better business decisions. When it comes to energy markets, there is a data deficiency and a lack of price transparency for most clients. Without adequate energy market data, many energy-related decisions are made on speculation, inadequate or inaccurate information that can lead to actions taken on biases and false assumptions.Level5 is a proprietary platform built entirely in-house by 5’s industry-leading development team. For clients, it serves as a data repository, usage analysis tool, and supercharged market analysis engine. Since 5 is a data-driven company, Level5 forms the foundation of our energy advice and is at the core of our customized energy strategies. 5 firmly believes that better energy decisions are formed from better energy data.  

One of the most common questions clients ask when purchasing electricity or natural gas is, “How much money am I going to save?” This is a reasonable question and for many years, savings could be realized because energy prices had been trending lower. Figure 1 shows how the NYMEX has settled over the last 31 years. This chart shows that natural gas hit its peak in 2006 in the wake of Hurricane Katrina and Rita where gas prices approached $14/Dth. 

On behalf of the team at 5, I am pleased to forward our May 2024 market letter.  In this edition, we discuss several interrelated topics.  First, we look at ongoing legal challenges to two new federal energy regulations, (i) the SEC’s climate change reporting rules, and (ii) the EPA’s new power plant emission standards. Second, we address a question we are hearing often from our clients, especially those faced with rising energy prices: “Could President Trump’s election reduce the price of electricity?”  

On behalf of the team at 5, I am pleased to forward our September market letter. If you had any doubts that the energy transition is happening, recent events in Texas and New York confirm that the answer is yes. As discussed below, these states have very different approaches to energy regulation, and both have struggled to incorporate intermittent resources in the energy mix. For clients in Texas, New York, or any other deregulated market, planning for the challenges of the energy transition, including increased regulatory risk, should be a key component of your energy management strategy.