EPA Memo-Cogen

www.energyportfolioassociates.com
The Spark
(914) 381-6300 F (914) 381-6303 October 1, 2009

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

atural Gas & Electricity

Natural Gas and Electricity prices have made a decided jump over the last week and half since our last report. As a result our charts
have put in fresh new buy signals. That being said we are not falling all over ourselves to lock in prices in for the next 6,12 or 24
month periods quite yet. Today's Natural Gas stockpile numbers rose to a record high topping the prior record from November of
2007. With another month to go before supplies begin to drop as the heating season kicks into gear, stockpiles may actually push the
limits of U.S. storage capacity for the first time in history! As the supply continues to rise demand has continued to slow. Septem-
ber's ISM factory gauge decreased to 52.6 from 52.9 in August, and the Energy Department also has predicted that consumption by
industrial users will drop 9.8% in 2009.

Even though our charts have given intermediate buy signals, these buy signals are not confirmed. In addition, the price gains further
out on the curve have been less severe that the gains in the near-term. Typically this type of pattern is more indicative of a short-term
move rather than the start of a long-term trend.

As contrarians we prefer to buy when there is confirmation in a chart signal. Confirmations only happen when there is a pullback
after a price spike followed by a positive reversal and the commodity putting in a higher bottom. We are of the belief that in light of
the very negative fundamental picture for Natural Gas, that a near-term pullback in prices is likely in both Natural Gas and Electric-
ity. We will be looking to lock in prices on a subsequent reversal after the expected pullback if in fact a higher bottom in established.

Natural Gas Strip Current Price* Price Target

6 Month 5.41 +.45 7.7 Incomplete
12 Month 5.68 +.37 8.4 Incomplete
24 Month 6.20 +.25 8.0 Incomplete

PJM Electric Strip Current Price* Price Target

6 Month 5.02 +.50 7.1 Incomplete
12 Month 5.54 +.42 7.2 Incomplete
24 Month 5.90 +.32 7.4 Incomplete

PJM Electric 12 Month Strip

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