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Western Price Survey

March 21, 2014
West Turned to Natural Gas in Drought Conditions

Electric-sector consumption of natural gas rose by 2 percent over last winter, according to a March 20 report from the U.S. Energy Information Administration.

From Nov. 1 to March 18, power burn rose by a combined 0.6 Bcf/d, or 11 percent, from last year's levels, in the Midwest, Midcontinent producing, Pacific Northwest, Rockies, and Southwest regions, the EIA stated.

Cold temperatures in the Midwest, and low levels of hydropower in the Northwest and Southwest, increased the power burn, according to the agency.

Working gas in storage reached 953 Bcf as of Friday, March 14, according to EIA estimates, a net decrease of 48 Bcf from the previous week. Storage levels are now 49.4 percent less than a year ago and 47.9 percent less than the five-year average.

This is the first time since 2003 that natural gas storage has fallen below 1 Tcf before the end of the winter, Barclays noted, leaving analysts to expect 850 Bcf will remain in storage by month's end.

Henry Hub natural gas values shed 4 cents since last Thursday, trading March 20 at $4.36/MMBtu. Western prices, however, rose between 6 and 20 cents, on average. Sumas rose 20 cents to $4.45/MMBtu, while PG&E CityGate was up 6 cents, trading at $4.88/MMBtu by March 20.

Average prices for peak and off-peak power seemed to recover from last week's lows. Over the March 13 to March 20 trading week, peak values at Mid-Columbia rose $20 to end at $35.70/MWh. By March 20, prices ranged from $35.70/MWh at Mid-C to $50 at SP15 (see chart).

Off-peak prices ended Thursday-to-Thursday trading mixed, with Northwestern hubs adding $8 to $9 on average while California and Arizona hubs slid between 60 cents and about $3.75. Off-peak prices March 20 ranged from $11.35/MWh at Mid-C to $40/MWh at SP15.

Hydro generation in the Pacific Northwest this week ranged between 10,000 MW and roughly 14,000 MW. In the Cal-ISO balancing area, renewables produced close to 9,000 MW of power on March 17, with much of that coming from coincident solar and wind production (see "Power Gauge," next page).

California snowpack has dwindled in recent days. As of March 21, the snow-water equivalent was 25 percent of the April 1 average.

"With the decrease in snow, the snowpack has dipped to equal to or below 1977 snow levels for this date in all three Sierra regions," the California Department of Water Resources said in its weekly report [Linda Dailey Paulson].

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


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Contact Chris Raphael, editor with questions regarding Price Survey Content.

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