Gas prices creep up for Thanksgiving travel
About 43 million Americans will travel at least 50 miles to visit friends, relatives, and loved ones during the Thanksgiving weekend, which means gas prices are on the rise. Although the price per gallon is 15 cents lower this year than last year, the cost has been increasing as the weather has turned colder.
After falling to a multi-year low of $3.18 per gallon on Nov. 12, the national average price of gas has now increased for 13 straight days and jumped 10 cents to a current average of $3.28, according to AAA. This streak of rising prices comes on the heels of a stretch where the national average ticked lower on 65 of 72 days from Sept. 1 until Nov. 12 and fell 41 cents during that span.
Today’s national average price at the pump is 7 cents more expensive than one week ago, but it remains 2 cents cheaper than one month ago and 15 cents less than the same date last year.
After several months of steady declines nationwide, average gas prices in many states and Washington, D.C. have moved higher over the last two weeks. Drivers in 38 states and Washington, D.C. are paying more at the pump than one week ago, including 10 states where prices have jumped 10 cents per gallon or more: S.C., Md. and Mo. (+10 cents); N.C., Va. and Miss. (+11 cents); D.C. (+12 cents); La. (+13 cents); Tex. (+16 cents); and Fla. (+18 cents).
This increase in retail prices has been keyed by increases in Southeastern and Mid-Atlantic states due to planned and unplanned maintenance at a number of Gulf Coast refineries and seasonally stronger demand for gasoline.
One factor not contributing to rising pump prices has been the price of crude oil. On July 3 the price of West Texas Intermediate (WTI) crude oil rose above $100 per barrel where it remained for 15 straight weeks. This streak came to an end on Oct. 21 and WTI has now settled below the $100 per barrel mark for six straight weeks. This decline continued today with WTI settling 75 cents lower at $93.09 per gallon at the close of formal trading on the NYMEX.
Contributing to this downward pressure was this weekend’s announcement of a six-month agreement to relax some sanctions on Iran.
While the deal is expected to have a limited impact on global crude oil supplies – the White House has indicated that Iranian oil exports will remain below one million barrels per day during the next six months – the deal does help to ease geopolitical tensions in the region and further reduces some of the “fear premium” that has been baked into oil markets and contributed to higher prices. Iranian oil exports this October averaged an estimated 700,000 barrels per day, which is down significantly from the 2.2 million barrel per day average in 2011.
Even with oil prices widely expected to move lower on this agreement, the impact on pump prices will not be immediate. Changes in oil prices take a week or so to make their way through the supply chain and fully impact retail prices for consumers.
However, as gasoline refined from likely cheaper crude oil makes its way to consumers and refinery issues are resolved, AAA continues to predict that the national average will fall to about $3.10 per gallon before the end of the year and an increasing number of motorists will enjoy local prices below $3 as the holidays draw near.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.