EPA Memo-Cogen

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(914) 381-6300 F (914) 381-6303 September 21, 2009

EPA Memo-Cogen’s Energy Price Commentary & Technical Research

atural Gas

Front Month Natural Gas has rallied 50% from this months new 7 1/2 year low. This has occurred despite record levels of gas in
storage, poor weather factors and diminished levels of industrial demand. The markets short-term focus is clearly on expectations of
an economic recovery and the possibility that a drop is gas rigs has finally begun to curtail production levels as we enter into this
years upcoming heating season.
While a 50% rally off of short-term lows certainly sounds impressive, what we have found much more intriguing is that despite the
significant short-term price spike there HAS NOT been a significant change to our long-term charts or our negative long-term view.
While we have seen a week over week increase in Natural Gas Strip prices we have not seen any significant buy signals on the long-
term charts. One of the many reasons we prefer our method of technical analysis is that it has the ability to filter out what we con-
sider to be insignificant short-term moves in the market place. Said another way, it allows us to concentrate on what matters instead
of getting caught up in the hype. We continue to have a negative bias on Natural Gas prices both in the short-term and over the next
year.

Natural Gas Strip Current Price* Price Target

6 Month 4.96 +.29 6.6
12 Month 5.31 +.22 3.7
24 Month 5.95 +.23 4.7

Electric

PJM Electricity prices have also showed some increases on a week over week basis, and as might be expected have shown similar
chart patterns as Natural Gas. What is interesting is that while shorter term prices on electricity have continue to rise we are starting
to see some weakness farther out on the curve. We are still a long way off from backwardation (near term prices higher that long
term prices) but this situation reinforces our negative bias on electric prices at the moment.

PJM Electric Strip Current Price* Price Target

6 Month 4.52 +.36 3.10
12 Month 5.12 +.31 3.70
24 Month 5.58 +.27 4.20

PJM Electric 12 Month Strip

* prices are a snapshot at time of composition. Price changes are on a week over week change

This Newsletter is authored by Michael E. Mollin. Michael E. Mollin is the principal of M.E. Mollin & Company LLC a Registered Investment Advisor in
New York State. The information contained herein is believed to be reliable, however, Energy Portfolio Associates ("EPA") and M.E. Mollin & Company
LLC ("MEM") do not warrant it's completeness or accuracy. Quotes are estimates and are not guaranteed by either EPA or MEM. Neither EPA or MEM is
acting as your advisor and the decision to proceed with any transaction rest solely with you. Copyright 2009, M.E. Mollin & Company, LLC