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Western Price Survey

March 3, 2017
Gas Addition Tempers Power Prices

Mild temperatures across the country resulted in a net addition to natural gas storage—the first time a weekly net injection for the United States has been reported in February.

“There have been three other occasions when net injections have been reported during the peak heating demand months (December-February) in the 23-year history of the weekly working gas estimates,” noted the U.S. Energy Information Administration. All were in December.

Working natural gas in storage was 2,363 Bcf as of Feb. 24, according to EIA estimates. This is a 7 Bcf net increase versus the previous week. The five-year average net withdrawal is 132 Bcf.

Despite warmer weather and decreased heating demand, natural gas use was up 8 percent week over week. Natural gas used for power generation increased 9 percent over the previous week.

Henry Hub spot values shed a penny between Feb. 23 and March 2, ending at $2.59/MMBtu. Western spot gas prices varied little in trading. El Paso-Permian natural gas posted the greatest gains, adding 5 cents to reach $2.37/MMBtu. PG&E CityGate lost 8 cents, ending at $3.03/MMBtu.

Peak power prices in the West dropped as much as $5.30 in the Feb. 24 to March 3 trading period; however, only two hubs had posted trades Feb. 24.

Average nighttime power prices fell between roughly $2 and $4 in trading. Mid-Columbia prices saw the sharpest swing, with spot prices ranging from an average low of $3.75/MWh to a $14/MWh high during the week.

Operations at the 819 MW Edward Hyatt power plant, suspended following damage to Oroville Dam, resumed March 3 at 1,750 cubic feet/second, with plans to ramp up in the following days to 14,000 cf/s, according to the California Department of Water Resources.

Demand peaked on the CAISO grid at 29,214 MW on Feb. 27, which should be the week’s high. Northwest Power Pool demand reached 61,405 MW that same day.

In February, average natural gas prices were higher than those in February 2016 (see “Price Trends,” next page). The average high price at Henry Hub was $3.11/MMBtu, which was about 90 cents more than in 2016. Prices at Western hubs were roughly 80 cents to $1.10/MMBtu higher than in the same month last year.

Average Western power prices in February were between $1.65 and $11 greater than the same month last year, with the greatest hike at Pacific Northwest hubs [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 Chris Raphael, editor with questions regarding Price Survey content.

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