I am pleased to forward 5’s fourth quarter overview of the energy market. This issue focuses on two topics that were particularly significant in 2015. The first is the continued decline of the price of natural gas and electricity. While the price decline creates an opportunity for energy buyers, it is also accelerating the shift in generation from coal to natural gas. If continued, this shift should put upward pressure on natural gas and electricity prices. The second topic is the increasingly complex international, federal and state regulations that impact renewable energy development, and in particular, how these shifting regulations could impact on-site generation projects. The shifting regulatory landscape underscores the importance of fully understanding the utility tariff structure and potential regulatory risk before investing in an on-site renewable project.

I am pleased to forward 5’s third quarter overview of the energy market. In this quarter, energy markets continued the stable trend that characterized both Q1 and Q2. We continue to urge clients to take advantage of these historically low prices. The energy market’s price movement during the first three quarters of 2015 is shown in the following chart:

I am pleased to forward 5’s second quarter overview of the energy market. In this quarter, energy markets continued the stable trend that characterized Q1. The relative calm is unusual and presents an excellent opportunity for customers to mitigate the risk of future periods of higher volatility and take advantage of historically low prices. The energy market’s price movement during the first 2 quarters of 2015 is reflected in the following chart:

I am pleased to forward 5’s first quarter overview of the energy market. For the most part, energy markets stabilized in Q1 2015, a significant change after the collapse in oil and natural gas prices experienced in Q4 2014. The following chart shows how electricity and natural gas prices have moved during Q4 2014 and Q1 2015. While electricity prices were flat in PJM and NYISO, they continued to decline (albeit at a slower rate) in ERCOT. We also saw a continued move down in the price of NYMEX natural gas. These trends continued in April.

I am pleased to forward 5’s fourth quarter overview of the energy market. Our last letter started with the statement “The speed and scope of changes in the energy market continues to astound us.” The trend continues. Q4 featured a spectacular sell off in crude oil. The price dropped from June highs of $112 per barrel for Brent and $105 per barrel for WTI to $62 per barrel for Brent and $59 per barrel for WTI in December. This sell off continued in January, with crude falling down to almost $45 per barrel. In this issue, we focus on increased volatility in natural gas and power driven, in part, by the drop in oil and natural gas prices in Q4, and two other significant topics, (i) new evidence of the energy market’s fundamental transformation, and (ii) the GOP’s sweeping victory in the November elections.

I am pleased to forward 5’s third quarter overview of the energy market. The speed and scope of changes to energy market continues to astound us. In this letter, we focus on the impact that changes in technology and consumer demand are having on another major industry player, traditional utilities, as well as the potential impact of such changes on our clients.A lead story by Rebecca Smith in the WSJ on July 28, 2014, “Electric Utilities Get No Jolt From Gadgets, Improving Economy – Electricity Sales Anemic for Seventh Year in a Row”, summarizes this turmoil very well. The story observes that for the first time, an improving economy and consumers’ purchases of more and more energy consuming devices, are not translating into increased consumption of electricity. This trend is reflected in current electricity and natural gas prices.

I am pleased to forward 5’s second quarter overview of the energy market. Weather was our key issue in Q1. This quarter we focus on demand response, another trend which can be linked, in part, to the high short term electricity and natural gas prices we saw in the first quarter.Many markets now have regulated and market driven demand response (or DR) programs. These programs pay customers during periods of peak energy demand when they (i) run on-site generation and/or (ii) take steps to reduce their electricity usage. While Q1’s prices caused immediate pain to consumers and many energy suppliers, this same volatility increased the value and importance of demand response. At 5, we see this trend not just in reported data; we are spending an increasing amount of time working with our clients on new and innovative ways to install and realize the value of on-site generation assets.

I am pleased to forward 5’s first quarter overview of the energy market.

In some quarters we struggle to select the key energy issue or issues to be discussed. In Q1 2014, the choice was an easy one. Unprecedented cold weather gripped a large portion of the US this winter. The polar vortex impacted almost all de-regulated energy markets. After the first bout of arctic air flowed down from Canada, Eric Plateis, our resident market guru and Chief Risk Officer, stated in our weekly market report that when the weather gets very cold, it tends to stay that way for a long time. That is exactly what happened. Energy markets are still digging out, and regulators are exploring ways to avoid a similar spike in natural gas and electricity prices next winter.

I am pleased to forward 5’s 2013 fourth quarter overview of the energy market.

Before discussing the energy market, I would like to take a moment to thank our many clients and partners for their support over the past 24 months.We formed 5 in December 2011 and began working with clients in early 2012. Since that time, we have advised over 800 commercial and industrial clients, and we now assist our clients in managing almost 2 billion kWh of electricity and an increasing amount of natural gas as well. We could not have achieved this success without a long list of friends and supporters. Thank you. In 2014, we look forward to helping clients manage an increasingly wide variety of issues in a changing energy market.

I am pleased to forward 5’s 2013 third quarter overview of the energy market.

This quarter’s letter is divided into two sections. In the first, we focus on an important issue facing the retail market in Texas, the expected bankruptcy filing of one or more companies affiliated with Energy Future Holdings (EFH).The second section of the letter provides summary comments on continued developments in the energy market.