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Western Price Survey

Week's End Edition
January 20, 2012
Gas Futures Hit Record Lows

Natural gas futures reached what should prove to be a 13-year low at the close of trading Friday, Jan. 20, ending at $2.34/MMBtu.

The last year that near-month futures went this low was 1999, according to the U.S. Energy Information Administration. There is "no bottom in near sight" for futures, Barclays Capital analysts said in a report published this week.

Spot natural gas prices also have been affected. Henry Hub lost 44 cents over the trading period, ending Friday at $2.23/MMBtu. Prices at many Western hubs reached lows not seen since the summer of 2009. SoCal Border, for instance, at a low of $2.53, has not been that cheap since June 2009.

A lack of support for prices persists as natural gas inventories continue to increase and temperatures throughout most of the United States are forecast to remain well above seasonal norms.

Working gas in storage reached 3,290 Bcf as of Friday, Jan. 13, according to EIA estimates, a net decrease of 87 Bcf from the previous week. Stocks were 539 Bcf more than last year at this time and 566 Bcf above the five-year average.

Meteorologists have been predicting a dry water year for the Pacific Northwest and Northern California, though a series of major winter storms hit both areas this week, bringing high winds, rain and snow. However, these colder, wet conditions lent little immediate support for Western power prices, which slid with natural gas prices.

Here's how average peak prices fared over the trading period:

  • Mid-C: Dropped almost $4.65 to $23.60/MWh.
  • California-Oregon Border: Dipped $3.90 to $25.30/MWh.
  • NP15: Down around $2.45, ending Wednesday at about $27.70/MWh.
  • SP15: Lost roughly $2.15 to $27.55/MWh.
  • Palo Verde: Dropped about $2.65, ending at about $25/MWh.

Average nighttime electricity prices also lost value, with Northwest hubs down around $4.75. Prices ranged from $19.50 to about $21.50/MWh (see chart).

Spurred by record electricity use in chilly Alberta -- which had lows around -22 °F with wind chill of about -58 °F -- Northwest Power Pool demand reached 62,462 MW on Monday, Jan. 16. Peak demand on the Cal-ISO grid also reached the week's high of 31,328 MW Monday evening, though demand has remained flat at around 30,000 MW since then.

What's ahead: Wet, stormy weather should continue throughout the Pacific Northwest into Thursday, Jan. 26. Portland should experience the heaviest rain either Tuesday or Wednesday. Wednesday may prove the warmest day for both Seattle and Portland, with a high of 51 °F expected. In San Francisco, after light rain on Monday, the area should be dry the majority of the week with temperatures in the 50s. Stormy weather is forecast for the central and southern California coasts Monday. Warmer and drier weather is expected for Los Angeles starting Tuesday, with mostly clear skies and temperatures reaching 75 °F Thursday [Linda Dailey Paulson].

Western Electricity Prices
Week's End: January 16 - 20, 2012
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 16.11-999.99 12.31-452.36
Mid-Columbia 22.25-30 20-28.25
COB 24.75-30.50 20-26.50
NP 15* 27.50-31.75 22.25-24.50
SP 15* 26.50-29 20.85-22.95
Palo Verde 24-28.25 19-22

* 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.

Please contact with questions or comments about this site.

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

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