Bids were hard to find in Texas last week. Clear Energy was offered Friday at $2.35 for v2012 and $2.45 for v2013 with two v2013 trades (vol 20K & 25K) settling at $2.35. Pricing for v2013 continue to slip and is well off its March high of $2.65+. It is yet unclear what is driving this downward trend but the lack of bids any level may have something to do with it.
One theory worth investigating is that the larger compliance entities have maximized their banking flexibility and have stepped away from the market. If this is true, it doesn’t augur well for continued strength in forward market prices. However, Clear Energy is quick to point out that there could be other, equally valid, reasons for this decline; namely a natural market trough on the heels of an active Q1.
In the retail space, the City of Houston announced they’re increasing their renewables commitment to 50% of projected load between July 2013-June 2015. Their annual commitment was increased from 440,000 MWh to ~623,000 MWh with about 2/3rd of the volume being a National Green-e product and 1/3 from Texas Green-e facilities. The BH13-FH15 National Green-e portion traded at $1.15 while Texas portion traded at $2.75. The City of Houston was already the second largest purchaser of Green Power by a local government in the county and may command the top spot over Washington D.C. when the July rankings come out.
Clear Energy is a boutique environmental brokerage firm specializing in renewables and emissions markets. For additional color on the Texas REC market, feel free to contact John Friskel at the coordinates below.back