Western Price Survey
April 21, 2017
While ample hydro continues depressing Pacific Northwest power prices, a confluence of factors have somewhat buoyed prices in Southern California and Arizona.
Increasingly warmer, clearer weather could be influencing prices in the California-Arizona region and creating ramps that are steeper than usual.
“As Phoenix and Las Vegas continue to warm up,” Energy GPS analysts noted, “the evening ramp hours are going to have stiff competition as Southern California is going to want as many imports as it can get while the Desert Southwest will have its own power demand ramp to deal with; hence creating a situation where the neck of the duck starts to look more like a giraffe’s neck.”
The focus has been on South of Path 15, where in the evening hours “we continue to see Path 26 congestion being the key factor for the strength in the implied heat rates,” Energy GPS analysts said. “Looking at the real time market price signal over the past couple of days, the evening ramp period is having issues as some hours clear over $275.”
In addition to responding to CAISO prices, the region is compensating for reduced Palo Verde nuclear generation, according to Energy GPS.
These varied solar, import, and load-shifting issues may start to resolve once the Path 26 derate ends April 25 and Palo Verde Unit 2, which has been off line for scheduled refueling since April 8, returns to service.
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Events of the week may “give us a glimpse of what is to come as we enter early summer as load ticks up, solar is in full form and we have an in-state hydro system that is at record levels,” Energy GPS concluded.
Daytime power values reflected these observations. SP15 gained $4.90 to $33.45/MWh in Thursday-to-Friday trading, while Mid-Columbia fell $6.05 to $15.80/MWh April 21.
Markets were closed April 14 for Good Friday.
Off-peak power prices fell in trading, with Mid-Columbia plunging $13.70, ending at 80 cents/MWh by April 20. Spot prices at the hub ranged from a low of -50 cents/MWh to $6.75/MWh. Prices at SP15 and Palo Verde, although down in trading, were comfortably above $26/MWh, on average.
Meanwhile, working natural gas in storage was 2,115 Bcf as of April 14, according to U.S. Energy Information Administration estimates. This is a net increase of 54 Bcf compared to the previous week.
Henry Hub gas spot values added 11 cents between April 12 and April 20, ending at $3.11/MMBtu.
Western natural gas prices saw nominal movement, but were mixed at the end of trading. Opal natural gas gained 2 cents to reach $2.78/MMBtu in trading, while Stanfield values shed 8 cents to hit $2.62/MMBtu [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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