Record U.S. Natural Gas Demand this Winter Led to Largest Storage Withdrawal in Four Years

Net withdrawals of natural gas from U.S. storage totaled 2,264 billion cubic feet (Bcf) this winter (November through March). This amount is the most natural gas withdrawn from storage since the winter of 2017–18 and 10% more than the previous five-year (2016–17 to 2021–22) average. Typically more natural gas is withdrawn from storage in the United States than is injected during the winter heating season as demand (including consumption and exports) exceeds supply (including production and imports). During the heating season, natural gas must be drawn from storage to meet this excess of demand over supply.

On average, demand for natural gas in the United States exceeded supply by 14.9 billion cubic feet per day (Bcf/d) this past winter. Average U.S. supply and demand of natural gas both set record highs this past winter with supply at 104.3 Bcf/d and demand at 119.2 Bcf/d. U.S. natural gas supply and demand had been further out of balance during the winter of 2017–18, resulting in more natural gas withdrawn from storage that winter.

Production of dry natural gas increased in the United States last winter compared with the one before, averaging 95.6 Bcf/d, or close to the 2019–20 winter record of 96.0 Bcf/d. U.S. production has been generally increasing since 2020, after declining because of lower prices and reduced natural gas demand, but natural gas production during the winter did not reach its pre-COVID-19 pandemic level. Imports of natural gas also increased last winter compared with the one before, averaging 8.7 Bcf/d.

 

Go-Broke Dates Pushed Back for Social Security, Medicare

The time frame for Social Security and Medicare to go-broke has been pushed back, helped by a stronger-than-expected economic recovery from the coronavirus pandemic.

The annual Social Security and Medicare trustees report says the Social Security trust fund will be unable to pay full benefits beginning in 2035, instead of last year’s estimate of 2034. The projected depletion date for Medicare’s trust fund for inpatient hospital care moved back two years to 2028 from last year’s forecast of 2026.

According to the report, “Economic recovery from the 2020 recession has been stronger and faster than assumed in last year’s reports, with positive effects on the projected actuarial status of the trust funds in these reports.”

Social Security pays benefits to more than 65 million Americans, mainly retirees as well as disabled people and survivors of deceased workers. Medicare covers roughly 64 million older and disabled people.

A main source of financing for the programs is payroll taxes on earnings paid by employees and employers. About 183 million people paid those taxes in 2021.

Wisconsin Supreme Court Rejects Business Insurance Coverage for COVID Losses

Wisconsin’s highest court on Wednesday became the third state top court in a row to rule that businesses are not entitled to insurance coverage for losses resulting from the COVID-19 pandemic and government-imposed restrictions on gatherings.

The Wisconsin Supreme Court ruled that neither indoor dining restrictions nor the presence of the virus within restaurants like Colectivo Coffee Roasters triggered coverage under property insurance policies issued by Society Insurance.

The unanimous decision reversed a February 2021 ruling by a Milwaukee judge who allowed Colectivo to proceed with a proposed class action on behalf of businesses insured by Society seeking coverage for financial losses under several clauses of the policies, including for business-income interruption.

But Justice Rebecca Frank Dallet, writing for the 7-0 court, said Milwaukee-based Colectivo, which operates a chain of cafes, had failed to allege that the presence of COVID-19 particles or the loss of the use of its properties created a “tangible harm” necessary to trigger coverage.

Citing the “overwhelming majority” of courts that have ruled in similar cases, Dallet said the presence of COVID-19 cannot constitute a physical loss of property or damage to it because the virus does not alter a property’s appearance or structure.

She said emergency orders the Wisconsin Department of Health Services issued starting in March 2020 at the onset of the pandemic that prohibited in-person dining to slow the spread of the coronavirus likewise did not qualify under Society’s policy as a physical loss of property.

The ruling followed a string of similar decisions by courts nationwide rejecting efforts by businesses to force insurers to cover the billions of dollars in losses they suffered following lockdowns and other restrictions prompted by the pandemic.

Most rulings came from federal courts interpreting state insurance laws, and lawyers for businesses have urged state supreme courts to turn the tide and rule for them.

But in April, the top courts of Massachusetts and Iowa reached the same conclusion as the Wisconsin Supreme Court in interpreting property insurance policies by other insurers.

Op-Ed: Next-Gen Nuclear Power can Augment Renewable Energy Sources

Brent Ridge worked for years just a few hundred yards from a nuclear waste storage site at the Columbia Generating Station near Richland, Wash. Because he was vice-chairman of the Nuclear Safety Review Board for Columbia, Ridge was confident he wasn’t putting his health in danger by working that close to radioactive material.

Today, as the chairman and chief executive officer for Wisconsin’s Dairyland Power Cooperative, Ridge is convinced the far bigger health danger facing him, his utility customers and the world is climate change – and he thinks more nuclear generation of electricity can help avoid irreversible damage.

“The bottom line is: If we are for a less-carbon future, if you are against carbon, you need to be for nuclear. I don’t know a simpler way to put it,” Ridge said during a May 24 Wisconsin Technology Council luncheon in Madison. “If you want there to be less carbon, and you want a reliable, safe, economic grid that will keep together our economic 24/7 engine, nuclear is part of that future.”

The type of reactor envisioned by Dairyland isn’t your grandfather’s nuclear power plant – or Homer Simpson’s, for that matter. It would have independently operating modules that provide emissions-free energy as demand rises and falls, helping to smooth out the peaks and valleys of solar and wind power.

Rather than a replacement for solar, wind and other renewables, next-generation nuclear is being touted as a reliable supplement that can help meet peak demands in a transmission grid that must stop burning coal, sooner than later.

Will others Wisconsin utilities follow Dairyland’s lead? Jeff Keebler, the president and CEO of Madison Gas & Electric, told the May 24 group the utility will continue to track a mix of low-carbon sources. In a regional grid that covers much of the Midwest and part of Canada, he noted, electrons can and will come from various generation sources.

Nuclear energy need not compete with renewables, but it can augment them in a world that needs both climate remedies and reliable power.

President Biden lays out Plan to Fight Inflation

President Biden laid out a three-part plan on Tuesday for combating high inflation.

The first part of his plan was an acknowledgment that the Federal Reserve “has a primary responsibility to control inflation.”

The second part involved making goods more affordable for families with a focus on high gas prices. His administration has blamed Russia’s invasion into Ukraine for the high price of gas and Biden touted the release from global oil reserves and called on Congress to pass clean energy tax credits. Biden’s plan to make goods more affordable also includes fixing supply chains, improving infrastructure, “and cracking down on the exorbitant fees that foreign ocean freight companies charge to move products.”

The third part of the president’s plan involved reducing the federal deficit through “common-sense reforms to the tax code.” “We should level the international taxation playing field so companies no longer have an incentive to shift jobs and profits overseas. And we should end the outrageous unfairness in the tax code that allows a billionaire to pay lower rates than a teacher or firefighter,” he said.

 

Consumer Prices Rose at Slightly Slower Rate in April, New Data Shows

Consumer prices grew at slower yearly and monthly rates in April, according to data released Friday by the Bureau of Economic Analysis.

The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred gauge of inflation, rose 6.3 percent in the 12 months ending in April, down from a 6.6 percent annual inflation rate in March.

The index rose 0.2 percent in April alone, well below the 0.9 percent monthly gain from March.

Inflation may have reached its peak earlier in the year as rising interest rates, shifting consumer spending habits and deepening concern about the global economy begin to weigh on price growth. Even so, the annual inflation rate remains close to four-decade highs and well above the Fed’s ideal level of 2 percent annual price growth.

Consumers also powered through rising prices to increase their spending overall, even as their disposable income flattened out last month. Personal consumption expenditures, a measure of consumer spending, rose 0.9 percent in April and 0.7 percent when adjusting for inflation. While disposable personal income rose 0.3 percent, the gain was wiped out after adjusting for inflation.

Americans also reduced their savings in April as they continued to spend amid high inflation. Households saved 4.4 percent of their disposable income last month, the lowest rate since September 2008, according to the BEA.

DATCP Continues to Waive Fee for Agricultural Chemical Cleanup Program Fund

The Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) will continue to waive the fee for the Agricultural Cleanup Program (ACCP). The fee holiday will extend through June 2023 for fertilizer sales and through the 2022-23 license year for other licensees.

The surcharge is based on the level of the ACCP fund on May 1 of each year, when DATCP is required to review the program funds. The fee holiday first took effect in 2018. ​Fertilizer and pesticide businesses normally pay this fee when renewing their license, and farmers pay it when purchasing fertilizer. The fee goes into the ACCP fund to help pay for cleaning up agrichemical spills. When the fund remains above $1.5 million, DATCP can waive the fee.

This will be the fourth year in a row fertilizer dealers will omit the ACCP surcharge from their customers’ bills. It is the fifth year that pesticide and fertilizer businesses, commercial pesticide applicators, and pesticide manufacturers will not have to pay it as part of their license fees.

For more information about the ACCP fund and surcharges, visit https://datcp.wi.gov/Pages/Programs_Services/ACCPFundSurcharges.aspx.

The Alliance: Study Ranks Wisconsin as 4th Most Expensive State for Hospital Prices

In round four of the RAND Hospital Price Transparency Study, we see the same message confirmed again from the last round: hospital prices remain high.  Prices paid to hospitals during 2020 by employers and private insurers for both inpatient and outpatient services averaged 224% of what Medicare would have paid, with Wisconsin averaging 307%. 

This point is especially important as premiums and deductibles have outpaced wages over the last decade.  One key driver of the price increases was demonstrated in the study to be market share and the impact of market consolidation which explains 7% of the variation in costs. And The Rand study shows that this provider consolidation does not lead to better quality. 

“High health care prices hurt us all, and this should be a call to action for employers and willing providers to work together to make health care more affordable. High health care prices are a drag on the economy, negatively impacting business growth and employee wages,” said Cheryl DeMars, President and CEO of The Alliance. “What’s more, we know that consumers avoid or delay needed care due to concerns about the cost. This has to change.”

 In addition to overall spend, the study included information on the price differences based on the site of service to better understand the importance of where an individual gets care. “We’ve long known the importance of the site of care and regularly utilize data to help our employers guide their employees to the best place of care at the best price.  We believe this study provides even more valuable data to help our employers with their benefit plan designs to be good fiduciary sponsors – and to help The Alliance better negotiate with willing providers to pay a fair price and make healthcare more affordable for everyone,” said Dr. Melina Kambitsi, Senior Vice President of Business Development and Strategic Marketing.

The RAND Hospital Price Transparency Study round four includes information from more than 4,000 hospitals in 49 states and Washington D.C. from 2018 to 2020.  It expands and refines earlier research by RAND on the topic. The analysis includes facility and professional claims for inpatient and outpatient services provided by Medicare-certified short-stay hospitals and other facility types. And for the first time, the analysis also includes more than 4,000 ambulatory surgical centers, which are free-standing facilities that perform outpatient surgical services.

Defendants who Delay can Lose their Chance to Arbitrate, Supreme Court Rules in 9-0 Decision

The Supreme Court on Monday unanimously ruled against a fast-food franchise owner in a procedural dispute over whether a wage-theft lawsuit belongs in federal court or in arbitration. Justice Elena Kagan wrote the opinion in Morgan v. Sundance, Inc.

Plaintiff Robyn Morgan worked at a Taco Bell franchise owned by Sundance. When she came to believe that some of Sundance’s pay practices violated federal wage-and-hour law, she filed a class action lawsuit against the company.

However, the job application that Morgan completed before Sundance hired her contained a clause that committed her to resolve any future disputes with the company in individual arbitration. In previous cases, the court has held that such clauses are typically enforceable under the Federal Arbitration Act. The question in this case was whether that still holds true if the company waits to demand arbitration. The court held that defendants can lose their chance to arbitrate if they wait too long.

When a plaintiff who is subject to an arbitration agreement files a lawsuit in court, the defendant usually seeks to move the case to arbitration without delay. But this case was unusual: Sundance waited for eight months, during which time the parties began to litigate the case and also discussed settlement. The district court concluded that Sundance had waived its right to arbitrate because its actions had prejudiced Morgan, but the U.S. Court of Appeals for the 8th Circuit disagreed.

On Monday, the justices reversed the 8th Circuit. Kagan wrote that the FAA does not authorize “special, arbitration-preferring procedural rules” like the one the 8th Circuit created.

Electric Grid Monitor Warns of U.S. Blackouts in ‘Sobering Report’

The central and upper Midwest, Texas and Southern California face an increased risk of power outages this summer from extreme heat, wildfires and extended drought, the nation’s grid monitor warned yesterday.

In a dire new assessment, the North American Electric Reliability Corp. (NERC) described regions of the country pushed closer than ever toward energy emergencies by a combination of climate change impacts and a transition from traditional fossil fuel generators to carbon-free renewable power.

NERC’s analysis examined the potential punch of extreme weather, which may wreak havoc on everything from reduced hydropower to transmission lines brought down by wildfires. Grid operators are dealing with an increasing reliance on intermittent resources like wind and solar as coal units retire and the reliability and emissions of gas resources comes under scrutiny. How the summer unfolds also may have political ramifications, as it could affect public support for President Joe Biden’s push to decarbonize the U.S. grid by 2035.

The NERC report also highlighted what it called an increased, urgent hazard to grid operations from the electronic controls that link wind and solar farms to high-voltage grid networks. The devices, called power inverters, must be programmed to “ride through” short-term disturbances, such as the loss of a large power plant or high-voltage line, but too often they are not, Moura said. Those that shut down compound stress on the grid, he added in a briefing yesterday.

The report cited incidents in May and June of last year when the Texas system was hit with widespread solar farm shutdowns, followed by similar outages in California between June and August. The unexpected events disrupted traditional power plants, interfered with grid recovery operations and caused some outages of customer-owned power units, NERC said.