Western Price Survey
Week's End Edition
Drier-than-expected weather from the Pacific Northwest through California may mean less hydro generation throughout the western U.S. this spring.
Forecasters have been busy adjusting water-supply estimates in recent weeks.
The Northwest River Forecast Center's latest estimate calls for the Columbia River at The Dalles Dam to be 92 percent of average during the peak hydro generation period from April through September. The forecast results from a drier January in which precipitation was 66 percent of normal for the month. The center recently changed its reference period for The Dalles' water supply from a span of 1971-2000 to 1981-2010.
Less hydro could increase natural gas use in the region. "While not significant enough to cause a meaningful uptick in natural gas prices, the incremental demand in the Pacific Northwest will marginally alleviate the need for gas to displace coal in the East," noted Barclays in a Feb. 22 report.
In California, February so far has been uncharacteristically dry, according to the California Department of Water Resources. Statewide snowpack is at 70 percent of average for this time of year and 56 percent of the April 1 average, the agency said in a Feb. 19 update.
Working gas in storage reached 2,400 Bcf as of Friday, Feb. 15, according to U.S. Energy Information Administration estimates, a net decrease of 127 Bcf from the previous week. Storage levels are now 9.2 percent less than a year ago and 17.1 percent above the five-year average.
Henry Hub natural gas values gained 8 cents since last Friday, trading Feb. 22 at $3.27/MMBtu. Western prices followed suit, with Southern California Border up 12 cents to $3.48/MMBtu and Malin natural gas adding 11 cents, trading at $3.38/MMBtu Friday.
California power trades were slow during the trading period, with only one day of peak-power trading recorded at North of Path 15. In contrast, Northwest hubs' peak-power prices posted gains of as much as $3.50 in the abbreviated trading period.
Here's how average peak prices at Western hubs fared since last Friday:
Off-peak power prices gained roughly three to four dollars since last Friday. Prices Feb. 22 ranged from $30.70/MWh at Palo Verde to $41/MWh at SP15.
Peak demand on the Cal-ISO grid reached 30,749 MW Tuesday, Feb. 19, which should be the week's high, according to the grid operator's forecast. Northwest Power Pool demand reached 56,251 MW Thursday.
What's ahead: Temperatures along the West Coast continue warming. The San Francisco area should have a daytime high of 62 °F with downtown Los Angeles at 75 °F by Thursday, Feb. 28.
The National Weather Service forecasts an increased probability of above-normal temperatures from Washington to California from Feb. 27 through March 7 [Linda Dailey Paulson].
* 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.
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