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Western Price Survey

March 15, 2019
SoCal Natural Gas Stocks Halved, Prices Up Since November

There has been a roughly 55-percent drop in Southern California’s working natural gas in storage since last November, with a correlated increase in prices, according to the U.S. Energy Information Administration.

The 81 Bcf of Southern California Gas Co. natural gas stocks in storage recorded in November 2018 dropped to 35.9 Bcf, the agency said in a March 12 report.

“SoCal Gas natural gas stocks have not been as low as they are now since February 2014, when natural gas stocks fell materially throughout much of the country because of episodes of cold weather related to polar vortex weather conditions,” the EIA said.

The average SoCalGas CityGate natural gas spot price between Nov. 1 and March 11 was $7.39/MMBtu—78 percent greater than the $4.15/MMBtu average spot price recorded in winter 2017-2018.

“High average spot natural gas prices this winter may have provided incentives to withdraw natural gas supplies from storage instead of purchasing natural gas on the spot market,” the EIA said.

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Working gas in storage nationally was 1,186 Bcf as of March 8, according to EIA estimates. This is a net decrease of 204 Bcf compared with the previous week. National storage levels are now 23.2 percent less than a year ago and 32.4 percent less than the five-year average.

Western natural gas prices seemed to settle from recent volatility. Sumas natural gas dropped the most in March 7 to March 14 trading, down $3.37 to end at $3.51/MMBtu. El Paso-Permian Basin added 89 cents to end at $2.23/MMBtu by March 14. PG&E CityGate natural gas remained at $3.91/MMBtu.

Meanwhile, California hydro generation conditions continue strengthening, as projected median April to July runoff rates for California Sierra river basins have increased since March 1. All are now greater than average.

There have been significant gains in precipitation since March 1, according to the California Department of Water Resources. The Tulare Basin had the largest week-over-week increase, moving from 129 percent of average last week to 190 percent of average March 14, according to DWR.

The statewide snowpack has a 42.7-inch snow-water equivalent, which is 159 percent of the March 14 average.

Northwest and Palo Verde peak power prices trended higher in Thursday-to-Thursday trading, while California daytime values sagged. North of Path 15 peak power dropped $4.10 to $38.40/MWh in March 7 to March 14 trading. Off-peak power prices were higher by between $3.95 and $6.25/MWh.

California Independent System Operator demand reached 27,607 MW March 11, which should be the week’s high. Northwest Power Pool demand reached 61,988 MW that same day.

Total renewables on the CAISO grid reached 13,865 MW March 13, satisfying roughly 52.6 percent of demand. –Linda Dailey Paulson

Archives of the Western Price Survey for the past year are also available online.


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