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Xcel EnergyNatural Gas Supply & Price Outlook
Blue Flame Gas ConferenceMike Boughner
9/22/2015
Xcel EnergyNatural Gas Supply & Price Outlook
Blue Flame Gas ConferenceMike Boughner
9/22/2015
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Xcel Energy Footprint
Northern States PowerMinnesota
Northern States PowerWisconsin
Public ServiceColorado
SouthwesternPublic Service
Fully Regulated Operate in 8 statesElectric No. 1 wind power provider 5th largest solar power provider 26,000+ MWs of Generation 3.4 million customersGas 6th largest consumer 400 BCF/year Control ~1.5% of US Storage $1.5 billion annually 1.9 million customers
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Emerson
Joliet
Demarc
Ventura
Cheyenne
CIG
WAHA
Permian
Pipelines and Trading Locations
NSP
PSCo
SPS
Great Lakes
Viking
NNG
CIG
WICEl Paso
Major Trading Hubs
Major Pipelines
ANR
Westex
WBINorthern Border
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Near Term Outlook
Structural Market Change
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0
2
4
6
8
10
12
14
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Do
lla
rsp
er
MM
Btu
Historical NYMEX Settlement
How does our gas cost compare to Nymex?
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$(2.00)
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
1/4/2010 1/4/2011 1/4/2012 1/4/2013 1/4/2014 1/4/2015
$/D
th
Nymex - Ventura BasisNymex Henry Hub
NNG Ventura
Basis
Polar Vortex &TransCanada Event
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Natural Gas Production and RigCounts
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Crude Oil Crash impact on Drilling
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Production Dropping Due to Low Oiland Gas Prices
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Production Costs Have DroppedSignificantly
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Storage Inventory Back to Normal
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• Strongest El Nino since1997
• Most forecasters agreeon a patter similar to theCPC forecast at left.
Below Normal Demand This Winter?
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Current Winter Strip(Nov, 15 – March, 16)
• Demarc: $3.07• Ventura: $3.19• Emerson: $3.22• Joliet: $3.15
Average: $3.16
Winter 2015/16 Price Outlook
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Longer Term Outlook
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Higher Demand is Coming
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Clean Power Plan Projections
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Ten Year Supply/Demand Balance
Supply: 33.7Demand: 34.6
Net: -0.9 Bcf/d
Ten Year Forward Market
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Source: DTN Prophet X
8/19/2012: $5.07/Dth8/19/2013: $4.84/Dth8/19/2014: $4.47/Dth
8/19/2015: $3.55/Dth
Conclusions
Demand has not yet caught up to the prolific year overyear production increases
Storage expected to be above normal heading intowinter.
Prices for this coming winter trading near fifteen yearlows
How long can this last?
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Questions?
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