Posted: May 1, 2026, 12:55 pm

MISO Capacity- Not high as expectations

Capacity has been a big topic with the WPO over the last year. We aren’t going to dive into the fundamental workings of the capacity market, but we did want to report that MISO released their 2026/2027 Planning Resource Auction (PRA) or capacity auction. The auction cleared at an annual rate of $126/MWd in the north with summer again being the majority of the cost. There had been speculation that the market might eclipse last year’s auction, software adjusted (see previous editions), but new supply was enough to meet margin requirements for all seasons with summer being the lowest, thus the highest price.

Most of the new supply came from solar. What is interesting is this solar gets favorable accreditation for all seasoens except winter. As we’ve discussed in the past, solar on hot fall days when the sun sets early have been an issue. Only time will tell if this will add to the issue or not.

Natural Gas Market Commentary

provided by

Volatility is starting to pick up just a bit in the natural gas market, but things are still calm overall. This week saw the expiration of the May 2026 NYMEX contract, which rolled off the board on Tuesday at $2.559 per MMBtu. This is the lowest contract expiry since November 2024 and continues the three-month streak of 2026 contracts coming in lower than their 2025 counterparts. June became the prompt-month at a premium and so far is exhibiting some strength, trading back above $2.70 per MMBtu as of Friday morning.

The lower price environment in 2026 so far is having an impact on market fundamentals. Namely, we are seeing flat demand from power generators despite milder weather on average in recent months. In other words, we are seeing more gas burned per degree day than we were at this point last year. This appears to be coming at the expense of coal-fired generation. Even though thermal generation has been about flat compared to 2025, natural gas is making up a larger share of the pie, as utilization of existing infrastructure has increased due to more favorable generation economics.

Being that we are still in the midst of a very tame shoulder season, this has yet to move the needle much for the gas market. However, as temperatures heat up and cooling demand ramps in the coming months, this trend could be more consequential to the overall balance. This is especially true if production remains stagnant and new LNG export demand comes online as scheduled.

For now, the path of least resistance still looks sideways, but underlying market conditions remain supportive and could turn bullish quickly once the heat shows up.

Miami is Saved!!!

If you’ve been in the world of electricity over the last decade, you’ve witnessed a transition toward renewable generation. The topic of climate change has been the genesis for policy meeting finance meeting technology sparking this transition. Notice we didn’t include science. Not that science hasn’t been involved, but the case can be made in some instances, science has bordered on opinion. If that seems a little hyperbolic, you need to only listen to “climate scientists” discussing the merits of climate change. In some cases, the “science” folks back and forth debate makes politicans looks rational and sane.

If you’ve been a reader of the WPO, you know we are big on Occam’s Razor which basically states the simplest answer is usually the right answer. We are fond of that line of thinking because it has a common sense ring to it which has always been how we’ve tried to think about climate change. For instance, we’ve tended to be skeptical (that’s being kind, in reality, we roll our eyes) when proclamations like Miami will be underwater in ten years, or we have to be net zero by 2050 to save the planet are made….just to name a couple. When pressed for scientific sources for some of these grand proclamations, a UN body, the Intergovernmental Panel on Climate Change (IPCC) is often cited.

This week, chatter in the science world has been an article from climate scientist, Roger Pielke, who we are kind of a fan of. Not everyone is as fond as he garnered his fair share of ire, even making some lists for “climate disinformation” amongst some of the climate watchdogs. Pielke wrote a piece regarding some news from the IPCC that has gone under the radar. Every few years IPCC updates climate scenarios that are used in modeling. In the newest published climate scenarios, IPCC has stripped out some of the most extreme scenarios that have been used to generate the eye rolling headlines. Pielke pointed out the the words of the committee stating some of the extreme scenarios have become “implausible”. It’s hard to say how this might alter the narrative, but it’s possible some of the extreme headlines might be gone, and we stress possible. Ultimately for most of us, this is probably meaningless, for those that were thinking of selling their Miami condo before it was underwater (literally, not financially) this might be huge news.

Cocktail Corner

Over the last couple weeks there’s been a clamoring for Cocktail Corner. If you recall, the Corner was created last holiday season to give readers some talking points for when they found themselves stuck in a corner looking to make conversation at the various holiday gatherings on the docket. As we head into this weekend, we have Derby parties, graduation gathering are around the corner, and numerous other shindigs….it’s a good week for Cocktail Corner.

Google, the noun, is this week’s topic. Datacenters have been a hot topic in the electric world and on the pages of WPO and one of the biggest players is Google. This week Google released their latest quarterly earnings which is of interest to us because they comment on capex, or the money they are going to spend on various business lines next year. We care about capex as a barometer of the datacenter landscape, and to say the spending trend is continuing the upslope might be an understatement. Google raised fiscal year 2026 capex spending to $185-$190B, that’s “B” as in BILLION along with the commentary 2027 spending will be “significantly higher”. Fair to say datacenters aren’t yesterday’s news just yet.

The spending, and valuation, numbers of companies is starting to get comical, or hard to quantify. For some context, and a conversation starter, Google’s stock added $420 billion of market cap Thursday after reporting numbers. In other words, Google finished the day a full Union Pacific (UNP- $160B), Fedex (FDX- $95B), United Airlines (UAL-$30B), and Starbucks (SBUX- $120B) COMBINED higher than it started with $15B leftover. How about that, wake up and buy the biggest coffee franchise in the world, add the largest railroad, cargo logistics airline, and passenger airline by dinner time. If the remaining $15B is burning a hole in the pocket, the Dallas Cowboys are valued at $13. Not a bad day.