Western Price Survey
February 26, 2016
Warmer-than-normal weather slowed natural gas use and markets responded with lower energy prices.
Warmer weather prompted a 19.7 percent drop in nationwide natural gas use for the week ending Feb. 24, according to the U.S. Energy Information Administration. "The large decline was driven by a 34.0% decrease in residential/commercial consumption, but consumption declined in all sectors," the report stated. Natural gas used for electric power generation fell 5.9 percent during the agency's report period.
Working natural gas in storage was 2,584 Bcf as of Feb. 19, according to EIA estimates. This is a net decrease of 117 Bcf compared to the previous week. Storage levels are now 31.2 percent greater than a year ago and 28.7 percent greater than the five-year average. The Pacific region recorded a 1 Bcf addition to storage.
Henry Hub gas spot values lost 13 cents in Thursday-to-Thursday trading, ending at $1.75/MMBtu Feb. 25.
Western natural gas average values fell between 4 and 16 cents. Alberta natural gas posted the greatest loss, off 16 cents to $1.05/MMBtu.
Western peak power prices moved nominally in Feb. 19 to Feb. 26 trading. California-Oregon Border prices climbed 70 cents to an average of $16.25/MWh, while South of Path 15 values eroded $1.20 to $21.85/MWh.
Nighttime power values were lower at the end of trading. Palo Verde lost $1.70 to end at an average price of $14.90/MWh. There was a single trade for Path 15 off-peak power during the week when South of Path 15 traded at $17.15/MWh Feb. 26.
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Demand peaked on the Cal-ISO grid at 29,006 MW Feb. 24, which should be the week's high. Total renewables production on the Cal-ISO grid reached 10,379 MW Feb. 19. Total solar production reached 6,551 MW Feb. 22, while thermal generation hit 12,157 MW Feb. 23.
The California snow-water equivalent measured 21.2 inches, or 77 percent of the April 1 average, as of Feb. 25, according to the California Department of Water Resources.
"As we head into meteorological spring, we expect the general El Niño-driven pattern to continue," said Todd Crawford, chief meteorologist for The Weather Company, in a forecast. Warmer conditions are expected across the West in March.
If another storm rolls through the state, the water year will bump back up over 100 percent when it comes to the actual snowwater equivalent, according to the forecast [Linda Dailey Paulson].
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