Western Price Survey
February 24, 2017
Sierra snowpack to date is at 190 percent of average for Feb. 24, according to a report from California’s Department of Water Resources. Reservoir levels, meanwhile, are at 123 percent of average.
Expect “a long snowmelt season this spring/summer,” tweeted the National Weather Service’s California Nevada River Forecast Center.
Officially, California’s last water forecast of the year comes on May 1, and there’s no telling where snow-water content and reservoirs will be then. However, CAISO is already predicting a heavier runoff season than last year. The grid operator said it may need to curtail up to 8 GW of generation this spring as it copes with runoff season and increasing amounts of solar on the grid, which is consistently producing at around 8 GW.
This week, working natural gas in storage was 2,356 Bcf as of Feb. 17, according to U.S. Energy Information Administration estimates. This is a net decrease of 89 Bcf versus the previous week.
Storage levels are now 10 percent less than a year ago and 7.1 percent greater than the five-year average.
Natural gas demand across the U.S. decreased 15 percent week over week, according to the EIA. Natural gas used for power generation decreased 3 percent compared to the previous week. Continued soft demand in recent weeks has the EIA sticking with its forecast for a record level of natural gas in storage by the end of winter.
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Henry Hub gas spot values dropped 32 cents between Feb. 16 and Feb. 23, ending at $2.60/MMBtu. Western natural gas prices followed suit, losing between 19 cents and as much as 36 cents. El Paso-Permian natural gas posted the greatest loss, down 36 cents to $2.32/MMBtu. PG&E CityGate gas lost 19 cents in trading, ending at $3.11/MMBtu.
Western peak and off-peak power prices varied in the abbreviated Feb. 17-24 trading period.
Demand peaked on the CAISO grid at 29,035 MW Feb. 23 which should be the week’s high. Northwest Power Pool demand reached 59,814 MW that same day, but the week’s peak demand is forecast to occur Feb. 24, when demand should reach 60,773 MW.
What’s next: The most recent Climate Prediction Center forecast expects California to have a “below normal” probability of precipitation into the first week of March. –Linda Dailey Paulson [Linda Dailey Paulson].
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