Western Price Survey
February 21, 2014
News of an impending polar-vortex weather system -- yet another cold blast in the coldest U.S. winter in 30 years -- sent energy prices higher by the end of the week.
On Feb. 21, as the polar vortex was expected to hit the Midwest and East, spot gas prices in certain areas rose sharply, with Chicago CityGate gas reaching $31/MMBtu and the Dracut, Mass., hub hitting $24/MMBtu. Despite balmy weather predicted through Monday for Northern California and moderate weather in the Pacific Northwest, Western gas hubs also climbed, no doubt dragged higher by the vortex conditions to the east. Malin gas, for instance, shot up more than $2/MMBtu between Tuesday and Friday, and hit a high of $9/MMBtu as trading closed.
Working gas in storage reached 1,443 Bcf as of Feb. 14, according to U.S. Energy Information Administration estimates, a net decrease of 250 Bcf from the previous week. Storage levels are now 40.3 percent less than a year ago and 33.9 percent less than the five-year average. Enerfax noted current natural gas storage levels "are higher than anticipated but still at the lowest level for any week in February since 2004." The Western region saw a 30 Bcf withdrawal during the agency's report period.
Western power prices followed on the heels of natural gas values. Average prices for peak power gained between $7.75 and $18.15 in the Feb. 14 to Feb. 21 trading period, with most of that gain coming at the close of the trading week. By Feb. 21, prices ranged from $56.85 at Palo Verde to $73.20 at SP15 (see chart).
Off-peak prices also soared, with Northwest hubs adding roughly $23 on average in Friday-to-Friday trading. Mid-Columbia led gainers, up $23.45 to $62.05/MWh. Off-peak prices Feb. 21 ranged from about $50.85/MWh at Palo Verde to $65/MWh at the California-Oregon Border.
Peak demand on the Cal-ISO grid reached 28,801 MW Feb. 18, which should prove the week's high. Northwest Power Pool demand reached 56,863 MW Feb. 19.
What's ahead: California could be hit with another Pineapple Express storm system starting Feb. 28. The informal name for a large plume of moisture that originates in the Pacific near Hawaii, these systems typically bring extreme amounts of precipitation with them when they hit the North American coast. The National Weather Service eight- to 10-day forecast calls for both above-normal temperatures and precipitation from Washington into Southern California and Arizona Feb. 28 through March 2 [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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