SOURCE: Genscape, Inc.

August 19, 2005 06:04 ET

Genscape's Daily Gas Burn Report Helps Users Extend Streak of Accurate EIA Storage Predictions

LOUISVILLE, KY -- (MARKET WIRE) -- August 19, 2005 -- For the fourth week in a row the commonly used industry indicators misled most analysts about the amount of gas being added to inventories. Users of Genscape's Gas Burn Report again got it right.

Market expectations were for a gas injection, or increase of storage, of about 49 billion cubic feet. The EIA reported an injection of 52 BCF. The discrepancy between expectation and actual injection immediately drove prices lower by 12¢ and set the market on a downward path.

Temperatures did not change much from the prior week, and published pipeline data was showing additions to storage roughly in line with the week before. Most importantly, the overall level of power generation was steady compared to the prior week. This led most analysts to underestimate the storage build.

What Genscape data showed, however, was that gas had contributed a lot less to total power output than in the previous week. The analysts that relied on the Genscape data were thus able to accurately predict a bigger storage build.

"It's not enough to know how much power is being generated. You need to know the contribution of gas to that total," Sterling Lapinski, co-founder and chief operating officer of Genscape said, "and users of Genscape data are able to determine, on a daily basis, the contributions from all the different fuel sources into the generation mix, thus giving them the much more accurate gas burn figure."

Over the previous three weeks, most analysts over-estimated the injection figure because they assumed a lower share of gas generation that had occurred and that was measured by Genscape.

The Genscape gas burn estimate is based on direct measurements of generation and power flows. Genscape monitors electricity flows at more than 1200 points across the United States.

ABOUT GENSCAPE

Genscape's information gathering and distribution system consists of technology to monitor the real-time power output of power plants and load on high-voltage transmission lines. Information reported to customers includes highly accurate estimates of the real-time power output for generating facilities, power flows over strategic transmission paths, and associated information.

Genscape Inc. is the only company to have commercialized the provision of real-time power supply information to support decision-making for energy traders, power plant and line owners and operators, regulators, and other energy market participants. Genscape maintains a 55 person staff and an international headquarters in Louisville, Kentucky.

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