Western Price Survey
March 8, 2019
Northwest energy prices sprang to record highs in Feb. 28 to March 7 trading, with Sumas natural gas above $100/MMBtu and Mid-Columbia peak power values above $900/MWh.
By all accounts, these were record prices, but analysts are wary of pointing to any single factor as having triggered the price jump. Natural gas constraints, cold-weather high demand, and decreased hydro generation have all been implicated.
Sumas natural gas gained $136.11, or 540 percent, in a single day. The hub ended at $161.30/MMBtu March 1. Intra-day trading was between $125/MMBtu and $200/MMBtu, according to the U.S. Energy Information Administration. In Thursday-to-Thursday trading, the hub lost $18.31 to end at $6.88/MMBtu.
Mid-Columbia and California-Oregon Border daytime power prices began their ascent March 1, spiking March 4 to $964.90/MWh and $400/MWh, respectively. By March 7, Mid-C ended at $42.25/MWh, a drop of $25.
Considering the varied market drivers, “These prices are just so high it’s hard really point to something that would justify that type of move,” Matt Hong, director of power and gas research for Morningstar Commodities, said of Mid-C prices.
“[T]he difference between a typical year—in the $30 to $40/MW[h] range—and a record year used to come down to hydro, all else equal,” Hong said. He said there has been less hydro reported at the Bonneville Power Administration week over week, but still, “The relationship between natural gas basis prices and power prices is so strong, a move like we’ve seen cannot really happen without higher natural gas prices. Not only were natural gas prices high at Sumas, but Malin prices were also slightly higher this year than last year.”
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Enbridge scheduled maintenance on its T-South natural gas system through March 6. Additional regional constraints resulted from compressor problems at the Jackson Prairie storage facility that hindered withdrawals.
Other Western natural gas hub prices generally moved lower by between 5 cents and as much as 57 cents. SoCal CityGate gained the most in Feb. 28 to March 7 trading, up 70 cents to $5.87/MMBtu.
Western peak power prices trended lower by between $3.65 and $25 in Thursday-to-Thursday trading, but Palo Verde daytime values ended even at $28.25/MWh. By March 7, prices ranged from $28.25/MWh at Palo Verde to $43/MWh at COB.
Off-peak power prices dropped between $2.75 and as much as $19.35. Mid-C lost the most, falling $19.35 to $42.35/MWh. Palo Verde added $1.25 in trading to reach $30.50/MWh.
California Independent System Operator demand reached 28,183 MW March 6, which should be the week’s high. Northwest Power Pool demand reached 64,172 MW March 4.
Archives of the Western Price Survey for the past year are also available online.
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