Tag: gas

Holiday travel expected to spike despite high prices at the pumps

While gas prices in the Rochester area topped out at $3 per gallon this week — the highest Memorial Day week average locally since 2018 — experts are predicting a spike in travel for the holiday.

9-in-10_2021-memorial-day-holiday-travel-forecast

GasBuddy this week said the average price of a gallon of gas in Rochester rose 2.5 cents to $3, while AAA Western and Central New York reported an average price of $3.02. A year ago, the average price at the pump was $2.17 locally.

Statewide, AAA reported the average price as $3.07, up from $2.18 a year ago. Nationally this week, the average price for unleaded gas was $3.04, according to AAA and $3.02, according to GasBuddy.

“In the lead up to Memorial Day, we haven’t seen gas prices come down much, though with oil’s recent move lower we should start to see more drops at the pump materialize in the days ahead,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “With the Colonial Pipeline situation continuing to improve in Southeastern states, fueling up for the holiday weekend shouldn’t be too challenging, save for a few pockets in Georgia, North Carolina and South Carolina, where outages remain a bit higher than neighboring states.”

De Haan said we can expect prices to continue to inch lower and advised motorists to wait to fuel up for weekend travel.

“Motorists need not rush to fill their tanks as the drop in oil prices should manifest into lower gas prices as we begin the summer driving season,” he said.

GasBuddy is not expecting summer gas prices to set any records; rather the company is predicting a settling to levels similar to 2018.

AAA is expecting a significant rebound in the number of Americans planning to travel this weekend. From May 27 through May 31, more than 37 million people are expected to travel at least 50 miles from home, a 60 percent increase from last year when just 23 million people traveled. Last year’s travel, during the height of the pandemic and stay-at-home orders, was the lowest on record since AAA began keeping records in 2000.

“As more people get the COVID-19 vaccine and consumer confidence grows, Americans are demonstrating a strong desire to travel this Memorial Day,” said Paula Twidale, senior president of AAA Travel. “This pent-up demand will result in a significant increase in Memorial Day travel, which is a strong indicator for summer, though we must all remember to continue taking important safety precautions.”

In a press conference Thursday, AAA said that daily car rental rates have doubled compared with last Memorial Day, topping out at $134. Some consumers have experienced high costs and limited availability of rental cars in some markets due to rental companies selling off their fleets last year, as well as the chip shortage impacting auto manufacturers limiting inventory among rental companies.

AAA also noted that average airfares have increased 14 percent over last Memorial Day and mid-range hotel rates have increased between 29 and 34 percent, with nightly rates between $140 and $181 for AAA Two Diamond and AAA Three Diamond hotels, respectively.

The Transportation Security Administration (TSA) this week said it is prepared for an expected increase in the number of travelers who will be flying out of Frederick Douglass Greater Rochester International Airport.

“We are prepared to handle the expected increase in travel volume this summer and at the same time, TSA is committed to supporting a healthy and secure environment for airline passengers, security personnel and airport employees,” said TSA’s Federal Security Director for Upstate New York Bart Johnson. “For those who will be traveling this summer, travelers need to know that the checkpoint experience will look different to those who have not flown since the start of the pandemic, and individuals flying out of Rochester should be prepared for those changes.”

Everyone in the airport is required to wear a mask when they are in airports, bus and rail stations, as well as while on passenger aircraft, public transportation, passenger railroads and over-the-road buses operating on scheduled fixed-routes, officials noted. If a traveler does not have a mask, a TSA officer will offer one to that individual at the checkpoint.

“We have what I call a ‘new normal’ at airport security checkpoints since the start of the pandemic,” Johnson said.

A TSA officer cleans a bin at Frederick Douglass Greater Rochester International Airport. (provided)
A TSA officer cleans a bin at Frederick Douglass Greater Rochester International Airport. (provided)

Travelers and security officers will be wearing masks and there will be reminders to socially distance posted at the checkpoint. Security officers will change their gloves between each pat down and travelers can request that an officer put on a new pair of gloves at any time. Security employees will be conducting routine cleaning and disinfecting of frequently touched surfaces and security screening equipment at the checkpoints.

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Avangrid companies file energy plan

New York State Electric & Gas Corp. and Rochester Gas & Electric Corp. have filed their 2020 Distributed System Implementation Plan, the Avangrid Inc. subsidiaries’ strategy to integrate distributed energy resources (DER) into the New York grid.

The plan outlines the framework for how the companies will support New York state energy and decarbonization goals by building integrated planning and interconnection, grid operations and market services functions.

“The electric power industry is in the midst of unprecedented change, enabled by innovation and advances in emerging clean energy, power delivery, and information technologies,” said Rita King, senior director of Smart Grids Innovation and Planning at Avangrid. “The DSIP provides an actionable roadmap for our companies to support the decarbonization of New York’s economy, including the electrification of transportation and buildings, and will enable the integration of greater amounts of DER within our service areas. Our approach is customer-centric, clean, integrated and smart.”

The five-year implementation plan involves investments in several key areas, including grid automation, energy storage, electric vehicles (EV), smart meter (advanced metering infrastructure) implementation and market services.

Within those areas, the utilities plan to:
• Make significant progress in implementing a long-term grid automation program to improve the responsiveness, reliability, and efficiency of the distribution system. Investments will be made in grid devices that measure, monitor and control electric power flows along the network;
• Proactively support the identification and development of energy storage projects that benefit customers and the grid and are attractive to developers;
• Support the development of the EV market within its service territories through continued development of capabilities, including integrating EV load while minimizing the impact on peak demand, supporting EV growth with sufficient charging infrastructure while understanding impact and needs on the system. As part of the recent rate case settlement filing, the companies proposed and are preparing to implement a comprehensive EV Program that would accelerate EV adoption throughout its service territories;
• Deploy smart meters, planned to begin in the spring of 2022, after approval of the recent rate case settlement filing. Smart meters will help customers manage their energy usage, and support time-varying pricing and innovative rate structures; and
• Develop an online marketplace. The platform will empower customers to make better energy management decisions by connecting them to pricing options and programs, as well as to products and services offered by competitive suppliers.

In June, after months of negotiations, NYSEG and RG&E agreed to a slate of gas reduction strategies, retracted $128 million for gas infrastructure including pipelines and funded $1.5 million for renewable heating systems for low-income residents.

As part of the settlement agreement on the gas case, filed on June 22, environmental groups secured utility commitments to plan their systems around no growth in gas use and to offset new customers’ gas use through energy efficiency, heat pumps, and other non-gas alternatives. The companies also plan to study and possibly implement district geothermal pilots. The companies further agreed to end their oil-to-gas conversion incentives in favor of approximately $1.5 million for low-income renewable heating rebates.

“We celebrate the efforts of all the groups that worked together to achieve these precedent-setting concessions in the gas rate cases,” said Jessica Azulay, executive director of Alliance for a Green Economy. “Most of the organizations who worked together to win this agreement had never been involved in a rate case before, but together we successfully went toe-to-toe with a multi-billion-dollar multinational corporation to advance our renewable energy transition.”

As part of the settlement, RG&E average residential bills will rise over the next three years to $100 more per year than before the rate case started, based on an increase of 15.5 percent in delivery rates, environmental organization officials noted.

“The transition to a clean energy future must be affordable for all New Yorkers to be sustainable,” said Kristen Van Hooreweghe, project manager for Rochester People’s Climate Coalition. “The gas case settlement, even with its environmental initiatives, has nominal rate increases. Conversely, the companies and Gov. Cuomo’s Department of Public Service failed to develop a rate plan on the electric case that adequately addresses the disproportionate energy burden facing our low-income community members, especially during the current COVID pandemic.”

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COVID-19 fuels reduction in gas and oil prices

(Velvet Spicer)
(Velvet Spicer)

Despite a steady drop in gasoline prices in the last few weeks, one thing remains constant: drivers in New York State will continue to pay more at the pump than many of their counterparts nationwide.

It’s a combination of gas taxes—which, at nearly 64 cents per gallon, ranks the state among the highest nationwide—and the lack of a refinery here.

“There’s no refinery in the state and we’re at the so-called end of the pipeline, so we’re usually slower to see the lower prices,” said Elizabeth Carey, director of public relations & corporate communications for AAA Western and Central New York. “Prices here have been dropping, just not as drastically as some other places across the country.”

In fact, the average price for a gallon of gas statewide this week was $2.29, according to AAA. Last week it was $2.33 and a month ago it was $2.57. Last year at this time, a gallon of gas would have cost $2.76 in New York State.

In Rochester, the average price of gas was $2.27 per gallon this week and $2.32 a week ago. A year ago, a gallon of gas in Rochester cost $2.75, AAA reported.

That compares with the national current average of $1.92 per gallon, which is down from $2.40 a month ago and $2.74 a year ago.

(Velvet Spicer)
(Velvet Spicer)

Similarly, GasBuddy this week reported the average price for a gallon of gas in Rochester as $2.24, roughly 26 cents lower than a month ago and 51 cents lower than a year ago. Buffalo’s gas prices also stand at $2.24 per gallon, while Syracuse drivers are paying on average $2.14 per gallon.

“The national average continues to fall as every state has seen yet another decline in average gas prices over the last week as overall oil demand remains constrained due to COVID-19,” said Patrick DeHaan, GasBuddy’s head of petroleum analysis. “The decline has been most significant thus far in the Great Lakes due to the region being landlocked and challenging to ship gasoline out of. Prices have been depressed significantly, driving these states to some of the lowest prices in the country.”

The U.S. has an unusually high amount of the cheaper winter-blend gasoline still available, which prompted the Environmental Protection Agency to extend the sale of the winter-blend gas past the May 1 deadline to May 20 this year.

“The EPA’s extension of the winter-blend gasoline waiver will contribute to sustained lower prices, especially as U.S. gasoline demand readings look more like winter driving season than spring,” Carey said.

The EPA also plans to give small refineries more time to meet the U.S. biofuel mandate.

“By waiving the low volatility and blending limitations through May 20, EPA will ensure a steady supply of gasoline,” the agency said in a statement. “EPA will continue to monitor the adequacy of gasoline supplies and, should conditions warrant, may modify or extend this waiver at a later date.”

Typically in April, drivers begin to brace themselves for the summer increase in gas prices, but in addition to the availability of winter-blend gas, prices have been on the downswing due to the recent plunge in demand for oil and gasoline attributed to the COVID-19 pandemic.

“It started with China. They’re the biggest user of oil out there,” Carey explained. “The factories shut down there and that really sent the demand down and prices started to come down.”

Now that the virus has become a global pandemic and people are social distancing and working from home, demand for gas has declined.

Map of state and local tax rates on gas from the Institute on Taxation and Economic Policy
Map of state and local tax rates on gas from the Institute on Taxation and Economic Policy

A report from Oil Price Information Service (OPIS) by IHS Markit for the week ended March 14 shows that same-store gasoline sales at U.S. gas stations were down 2.4 percent nationwide, when compared to the same week last year.

According to the latest OPIS demand data for the week ending March 28, same-store sales were down 46.6 percent nationwide, and that is not expected to improve anytime soon.

“At a time when rapidly decreasing oil prices would theoretically lead to an increase of consumer demand for gasoline, much of the country is shutting down economic activity due to the COVID-19 outbreak,” said Tom Kloza, global head of energy analysis at OPIS. “We are likely to see weekly gasoline demand numbers drop to levels last witnessed in the Nixon Administration, and we’ll see those lower levels in April.”

The Northeast region, where New York State has restricted non-essential businesses to work from home where possible and set guidelines for social distancing, saw year-on-year fuel demand decline 3.7 percent during the week ended March 14, OPIS officials said. Conversations with retailers in some of the impacted states suggested year-on-year volume losses of 20 percent to 40 percent, OPIS reported.

“At the same time, there’s an oil price war between Russia and Saudi Arabia, so that’s been pushing oil prices down,” Carey noted. “When oil prices come down that directly impacts the prices that we pay at the pump.”

In February, the International Energy Agency said that oil demand growth would fall to its lowest rate since 2011, with growth falling by 325,000 barrels per day to 825,000 barrels per day, and a contraction in consumption by 435,000 barrels per day. At an OPEC summit in early March, Saudi Arabia agreed to reduce production by 1.5 million barrels per day and called on Russia and others to also reduce oil production.

Russia declined and Saudi Arabia launched an oil price war with the country, although neither country admits to doing so. U.S. oil prices have fallen 34 percent and the price cuts are believed to have triggered the stock market crash currently being experienced around the globe.

[email protected] / (585) 653-4021 / @Velvet_Spicer