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Western Price Survey

March 2, 2018
Energy Prices: Nowhere to Go but Down

Price volatility in Western energy markets has lessened as values settle from weather-driven highs.

Western natural gas prices fell in the Feb. 22 to March 1 trading period, with hubs losing between 12 cents and as much as $1.71 in trading. Southern California CityGate lost the most, down $1.71 to $2.70/MMBtu.

Southern California Gas Co. withdrew 0.93 Bcf of natural gas from its Aliso Canyon storage facility on five occasions between Feb. 19 and Feb. 28 to help it meet high demand in the region, according to notifications the utility filed with the California Public Utilities Commission.

A total of 0.8 Bcf was withdrawn from storage in the region Feb. 28, according to the U.S. Energy Information Administration. The Aliso withdrawal that day amounted to 30 percent of that total. The greatest sendout was 3.73 Bcf, recorded Feb. 27, according to the EIA.

Peak power values in the West also dropped from weather-driven highs. Hubs lost between $6.85 and as much as $35.40 in trading. South of Path 15 lost the most, down $35.40 to $38.70/MWh.

Off-peak power values lost between $6.30 and as much as $29.50 in trading. Palo Verde fell $29.50 to $28.75/MWh by March 1.

Demand on the California Independent System Operator grid reached 29,423 MW Feb. 27, which was the week’s high. Northwest Power Pool demand was 61,588 MW Feb. 26.

Meanwhile, working natural gas in storage was 1,682 Bcf as of Feb. 23, according to EIA estimates. This is a net decrease of 78 Bcf compared to the previous week.

In February, average natural gas prices varied compared with 2017 (see “Price Trends,” next page). The average high price last month at Henry Hub was $3.21/MMBtu, 10 cents less than last year. Among Western gas hubs, Southern California Border gained the most, up $1.30 to an average high price of $4.32/MMBtu. PG&E CityGate shed 15 cents year over year, with an average high price of $3.34/MWh.

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Average Western peak power prices in February were higher year over year by between roughly $10.35 and as much as $78.85. South of Path 15 gained the most via weather-driven pricing that had pushed the hub to $112.90/MWh Feb. 21.

Mid-Columbia prices were tempered by “a small fleet of natural gas fired power plants that stepped up to the plate and kept prices at a very reasonable level,” according to EnergyGPS. Peak power prices at the hub in February traded from $8.05/MWh, on average, to $49.20/MWh.

“Overall this has been a quite crazy month out west,” said the analysts. “[I]f hydro generation wasn’t 3-4 GWa above normal, this past week’s loads at the Mid-C would have sent WECC prices into the $100s. Fortunately this did not happen.”
–Linda Dailey Paulson .

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.

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Contact Mavis Scanlon, editor with questions regarding Price Survey content.

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