Western Price Survey
March 6, 2015
Natural gas used for power generation reached record levels in January and February, according to the U.S. Energy Information Administration.
The EIA attributed the increase to relatively low natural gas prices and an increasing amount of natural gas generation capacity that has come on line. "Retirements of nuclear and coal capacity have also supported the growth of the share of natural gas in the electric generation fuel mix."
Working gas in storage reached 1,710 Bcf as of Feb. 27, according to EIA estimates, a net decrease of 228 Bcf from the previous week. Storage levels are now 40.4 percent greater than a year ago and 7.7 percent less than the five-year average.
Western natural gas prices fell between 8 and 42 cents in the Thursday-to-Thursday trading period. Opal natural gas posted the greatest loss, down 42 cents to $2.54/MMBtu.
Western power prices, meanwhile, varied little in the Feb. 27 to March 6 trading period (see charts).
California continues to suffer from record drought. The state's Department of Water Resources reported March 3 that the snowpack's water content, at 19 percent of average, has been historically low for March. Only in 1991 was the water content of the snowpack lower -- 18 percent of the early-March average.
"California's historically wettest winter months have already passed, and it's now almost certain that California will be in drought throughout 2015 [and] for the fourth consecutive year," DWR stated in a press release.
Observed precipitation at the Columbia River above The Dalles is 14 inches for the water year to date, or about 91 percent of normal as of March 5, according to Taylor Dixon, Northwest River Forecast Center hydrologist. Last March, observed precipitation was around 72 percent.
Western natural gas prices as a whole were significantly lower in February 2015 compared with last year. The higher 2014 natural gas prices -- which exceeded $20/MMBtu -- were related to extreme Arctic cold that brought snowstorms to the Northwest and Sierra Nevada in early February 2014. For power, average prices at Western hubs during February 2015 were also lower, since there simply hasn't been significant cold weather across the region [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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