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Western Price Survey

Week's End Edition
January 18, 2013
Natural Gas Prices Up Sharply

Buoyed by a week of colder weather and additional withdrawals from storage, domestic natural gas prices rose in the Jan. 11 to Jan. 18 trading period.

Working gas in storage fell to 3,168 Bcf as of Jan. 11, according to U.S. Energy Information Administration estimates, a net decrease of 148 Bcf from the previous week. Storage levels are now 4.4 percent below a year ago but 11.1 percent above the five-year average.

Henry Hub natural gas values gained 36 cents since Jan. 11, trading Jan. 18 at $3.54/MMBtu. Western prices followed suit, with Malin natural gas rising 17 cents to roughly $3.60 and Southern California Border gas up 15 cents to $3.64/MMBtu by Friday.

Barclays' analysts attributed the higher prices to the combination of colder weather forecasts plus "a very bullish storage withdrawal," which they characterized as a surprise to the market.

"Storage changes are very difficult to predict during this time of the year when production freeze-offs may lead to big changes in line pack," noted analysts, adding that the market was temporarily tightening in response to recent withdrawals. "What also helped to paint this tightening picture was production shut-ins due to freeze-offs in the western region of the country. Production curtailment due to freeze-offs is estimated to be as large as 1 Bcf/d."

Western peak electricity prices generally lost value since Jan. 11, down roughly $3.85 to nearly $5.25 on average. South of Path 15 was the only hub to post gains in Friday-to-Friday trading, up about $1.05 to roughly $48/MWh Jan. 18.

Here's how average peak prices at other Western hubs fared:

  • Mid-Columbia: Lost $3.85 to $29.10/MWh.
  • California-Oregon Border: Down $4.10 to $33.10/MWh.
  • North of Path 15: Posted no trades Friday, Jan. 18; last traded Jan. 16 at $39.50/MWh.
  • Palo Verde: Dropped $5.25 to $29.25/MWh.

Nighttime power also posted losses in the trading period, dropping between $2.65 and $5.75. Average prices for off-peak electricity in the West today ranged from about $24.15/MWh at Palo Verde to $33/MWh at NP15.

Peak demand on the Cal-ISO grid reached 32,614 MW Jan. 14, which appears to be the week's high. Northwest Power Pool demand hit 63,133 MW the same day.

Palo Verde Unit No. 3 was operating at 90 percent of generating capacity on Friday after being powered down the previous day to repair a heater drain pump. APS spokeswoman Betty Dayyo said the unit will remain at 90 percent until repairs are completed.

What's ahead: Rain is expected through at least Wednesday in the San Francisco Bay Area, with a continued possibility through Thursday for Seattle and Portland. Downtown Los Angeles should reach a daytime high of 79 °F Monday, with temperatures remaining in the 70s through at least Thursday.

The National Weather Service forecasts an increased probability of above-normal temperatures in Southern California and Arizona Jan. 23 through Jan. 27 [Linda Dailey Paulson].

Western Electricity Prices
Week's End: January 14 - 18, 2013
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 23.96-111.78 15.05-40.52
Mid-Columbia 26.75-38.25 24.75-30
COB 28-39 27-30
NP 15* 39.50-42.75 32.75-34.50
SP 15* 43-51 40-44
Palo Verde 27.25-39 24-30

* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.

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

The Western Price Survey is excerpted from Energy NewsData's comprehensive regional news services. See for yourself how NewsData reporters put events in an accurate and meaningful context -- request a sample of either or both California Energy Markets and Clearing Up.

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Contact Chris Raphael, editor with questions regarding Price Survey Content.

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