Western Price Survey
March 7, 2014
Despite lower inventories of natural gas, both power and gas prices fell in the West along with the rain.
Working gas in storage reached 1,196 Bcf as of Friday, Feb. 28, according to U.S. Energy Information Administration estimates, a net decrease of 152 Bcf from the previous week. Storage levels are now 43.2 percent less than a year ago and 38.8 percent less than the five-year average.
Natural gas storage levels are now at the lowest level for any week since February 2004, according to Enerfax, which also notes that traders are concerned storage levels could fall below 1 Tcf by the end of March and may not be fully replenished by the end of fall.
Nevertheless, Henry Hub natural gas values fell $1.04 since last Thursday, trading March 6 at $4.90/MMBtu. Western prices dropped between $1.23 (SoCal Border) and $1.61 (Stanfield) in Thursday-to-Thursday trading after a midweek bump.
Western power prices experienced similar drops with peak prices in the Northwest falling roughly $28 since Feb. 28. Earlier in the week, prices fell more than $20 in a single day. By March 7, prices ranged from $28.65/MWh at Mid-C to $50.10/MWh at South of Path 15.
Off-peak prices also moved lower. Values by March 7 ranged from $38.25/MWh at NP15 to $17.05/MWh at Mid-C.
A series of storms hit California throughout the week, and the California Department of Water Resources reported March 7 that the statewide snow-water equivalent was at 32 percent of normal. That was a significant improvement from early February, but still not enough to end drought conditions. However, the National Weather Service issued an El Niño Watch this week, which means the likelihood of an El Niño in the next several months is now greater than 50 percent. El Niño conditions typically bring above-average rainfall to California.
Meanwhile, observed precipitation at the Columbia River above The Dalles is 11 inches for the water year to date, or about 73 percent of normal, according to the Northwest River Forecast Center. A "very wet" February "brought the numbers up," said Brad Gillies, hydrologist with the forecast center. The water-supply forecast at The Dalles is now at 98 percent of normal. Snowpack has also increased throughout the region.
Power generation at Washington's 624 MW Rock Island Dam was halted March 4 and power generation at Wanapum Dam was reduced to 360 MW from about 700 MW after a large crack was discovered in a Wanapum spillway [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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