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Managing Extreme Volatility in California Energy Prices

Abstract

California energy markets are on a virtual island, isolated from the rest of the country. This can be of benefit during times when energy costs are being driven higher elsewhere. However, that isolation has been a detriment of late as the impact of regional heat waves and cold snaps has been exacerbated thanks to the extended outage at the Aliso Canyon natural gas storage facility and pipeline maintenance that has created bottlenecks in the delivery of natural gas supplies. In addition, a pipeline explosion in British Columbia temporarily shut off natural gas flows from Canada into the Northwest, causing prices to surge. In the wake of that event, energy pricing in Northern California has remained elevated amid intermittent outages. As a result, the past 12 months have been marked by extreme volatility in natural gas and electricity pricing across the state.

From dramatic shifts in the generation mix to the boom of natural gas production in the Southwest, California’s energy markets are in a constant state of change, introducing risk and uncertainty to businesses of all types. This presentation will go in depth on the national and local drivers that influence energy prices in California and how end users can best manage risk and take advantage of both short and long-term market opportunities.

Speaker

Andy Huenefeld
Price Risk Manager
Kinect Energy Group

As the Director of Energy Price Risk for Kinect Energy Group, Andy is responsible for helping clients navigate the volatility of energy markets through the use of a variety of risk management tools. Andy delivers clients constant market analysis, structured risk planning, and informed financial and physical hedging strategies.  He acts as Kinect Energy Group’s primary communicator of the many drivers that impact near-and long-term energy costs. Daily, Andy monitors, measures and evaluates energy market risks and opportunities to develop strategic and tactical risk management planning. Before getting his start in energy, Andy had a background in financial services. He holds a Bachelor of Science degree with a concentration in finance from the University of Louisville.