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Western Price Survey

October 20, 2017
Pipeline Disruptions & Power Price Spikes Lead to Mixed Prices

Electricity and gas prices were mixed this week, as natural gas pipeline disruptions in Southern California sparked gas values to rise, while power prices saw late-week spikes at some hubs.

Average peak power prices at South of Path 15 traded Oct. 20 at $78.11/MWh, up $31.27, or 66 percent, compared with Oct. 13. Average off-peak prices traded at $37/MWh on Friday, up about $3.50 compared to the previous week. Other hubs posted mixed prices, with daytime values generally higher and off-peak average prices mostly lower by a few dollars.

There was no major reason other than some local grid congestion for Friday’s price spikes, said Steven Greenlee, a spokesman for the California Independent System Operator.

Natural gas spot prices were mixed for the week ending Oct. 18, according to the U.S. Energy Information Administration’s Natural Gas Weekly Update, with Henry Hub spot prices dipping 12 cents, or 4 percent, to $2.81/MMBtu. NYMEX contracts for November delivery fell 3 cents, to $2.85/MMBtu.

In the West, gas prices at PG&E CityGate in Northern California inched up 5 cents, or 1.5 percent, to $3.18/MMBtu, according to EIA. The price at SoCal CityGate jumped 86 cents, or 31.8 percent, to $4/MMBtu as of Oct. 18, after hitting an intra-week high of $5.30/MMBtu on Oct. 16 due to hot weather in the Los Angeles region and pipeline outages that have hindered gas deliveries across the southern border of California.

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In its Winter 2017-18 Energy Market Assessment, the Federal Energy Regulatory Commission highlighted the continued expansion of the energy imbalance market in the West, with Portland General Electric’s participation effective Oct. 1. That development, along with phased-in performance requirements in the PJM and ISO New England balancing areas, is expected to improve electric market operations over the winter months, FERC said.

Southern California Edison’s Aliso Canyon storage facility, while back in service, remains a concern, the federal regulator said, noting that operational issues may continue to pose risks to Southern California natural gas and electric markets during peak winter conditions. The gas system in Southern California currently has just 65 Bcf in storage, which is the lowest level on record since at least 2001, according to FERC.

While the low inventory level did not impact the gas system over the summer, it is conceivable “that limitations at Aliso Canyon during periods of the highest winter demand could challenge regional stability and increase natural gas and electricity prices,” FERC said. –Mavis Scanlon.

Archives of the Western Price Survey for the past year are also available online.


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Contact Mavis Scanlon, editor with questions regarding Price Survey content.

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