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Western Price Survey

January 4, 2019
California Snowpack Depth Below Average

Despite early snowfall, which should typically produce a deeper snowpack, the California snowpack water content is currently below average, which may ultimately affect hydro generation.

Precipitation is falling as rain, not snow, at higher elevations, according to the California Department of Water Resources. In its initial manual snow survey, conducted Jan. 3, the agency reported a snow depth of 25.5 inches in the Sierra Nevada. This is 9 inches of water content—80 percent of average.

The statewide snowpack contains 9.5 inches of water equivalent, or 30 percent of the Jan. 4 average. The snowpack provides for about 30 percent of California’s water needs as it melts in the spring and early summer. Regular measurements allow the agency to more accurately forecast spring runoff.

“Total precipitation so far this water year, which began Oct. 1, has been below average,” said DWR State Climatologist Michael Anderson in a press release. “We still have three wet-season months ahead of us, so there is time for the snowpack to build and improve before it begins to melt, which usually starts happening around April 1.”

Western power prices saw modest post-holiday movement. California daytime power prices added $8 in Dec. 27 to Jan. 3 trading, while Pacific Northwest power prices dropped by as much as $9.20. South of Path 15 jumped $8.25 to $47.65/MWh, while Mid-Columbia values tumbled $9.20 to $33.40/MWh. Palo Verde nighttime power added $5.25 to reach $35.25/MWh, and Mid-Columbia fell roughly $8 to $31.30/MWh.

California Independent System Operator demand reached 29,134 MW Jan. 2, which should be the week’s high. Thermal generation of 11,476 MW delivered roughly 39 percent of demand that day. Total renewables on the CAISO grid reached 12,208 MW Dec. 30, satisfying almost 46 percent of demand.

Henry Hub natural gas spot prices lost 38 cents in trading, ending at $2.69/MMBtu.

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Western natural gas prices varied. Most hubs’ prices fell between 9 cents and as much as 95 cents; however, five hubs posted gains. SoCal Border gas jumped 60 cents to $4.44/MMBtu, while El Paso-San Juan Basin gas lost 95 cents to $2.30/MMBtu.

In December, the average high peak price at Henry Hub was $4.63/MMBtu, $1.45 more than in 2017 (see “Price Trends,” next page).

Western hub prices in December were roughly $4 more year over year. In December 2018, PG&E CityGate natural gas was $7.99/MMBtu—$4.69 greater than in 2017.

Average Western power prices in December exceeded $100/MWh at three of five hubs, thanks to inconsistent natural gas supplies and colder weather early in the month. North of Path 15 was $58.30 higher than in 2017, at $112.30/MWh.
–Linda Dailey Paulson

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

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