Gas

[colinpbowen]

I heard it said once that the expected value of the electricity price is the natural gas price for delivery in that region (subject to the appropriate thermodynamic conversion). Gas markets behave similarly to other commodities markets, with supply and demand fundamentals driving the behavior of futures markets and spot (physical delivery) markets. From Wikipedia:

The standardized NYMEX natural gas futures contract is for delivery of 10,000 million Btu of energy (approximately 10,000,000 cu ft or 280,000 m3 of gas) at Henry Hub in Louisiana over a given delivery month consisting of a varying number of days.

Futures exchanges such as ICE settle most of their exchange products (including various futures products and different spot delivery points) against this standardized NYMEX contract. Afterwards, spot prices indexes are estimated from ICE exchange data at sources like Natural Gas Intelligence and S&P Global Platts Gas Daily (the only two providers of spot prices based on ICE exchange data, and both FERC-approved price reporting agencies). Unfortunately, these two products are paywalled, costing many thousands of dollars a year for the data.

The actual physical delivery of gas in futures vs. spot markets is up to the individual consumer's risk preferences.

The US. Energy Information Administration (EIA) is the primary provider of free gas data, which they source from CME Group (the owner of NYMEX), Refinitiv, and others. Historicals for spot and futures for the NYMEX Henry Hub product are found here. They also publish a daily data feed for select spot prices here, sourced from SNL Energy (a subsidiary of S&P Global). Table below disambiguates the precise spot delivery points in the different regions. Some combination of the Henry Hub historicals (which are published with a week's delay) and the select daily spots can paint a picture as to the behavior of natural gas markets and their influence on electricity price.