Western Price Survey
March 29, 2019
Lagging demand, natural gas constraints and healthy renewables generation converged, suppressing Western power prices as March drew to a close.
Western power prices dropped by between roughly $5 and as much as $10.25 in March 21 to March 28 trading. Palo Verde daytime power fell the most, losing $10.25, or 36 percent, to end at $18.25/MWh. Prices ranged from $18.25/MWh at Palo Verde to $22.75/MWh at North of Path 15.
Off-peak power prices tumbled between $2 and as much as $11. Palo Verde nighttime power lost the most value, down $11 to $18/MWh.
California Independent System Operator demand reached 27,105 MW March 25, which should be the week’s high. This is roughly 1,100 MW less than the March 6 high of 28,183 MW.
Total renewables on the CAISO grid reached 14,146 MW March 28, supplying roughly 54 percent of demand. Solar resources contributed 10,808 MW or almost 40 percent of demand on March 25.
Permian Basin natural gas prices dropped into negative territory as a result of three different force majeure events constricting flows west.
El Paso-Permian Basin natural gas plunged $1.63 to minus $1.43/MMBtu by March 28. El Paso-San Juan Basin gas dropped to 54 cents/MMBtu. Waha Hub natural gas ended at minus $2/MMBtu March 28.
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A force majeure called March 18 by El Paso Natural Gas Co. at its Lordsburg and Florida compressor stations in New Mexico was extended. Another force majeure on that system was called at the New Mexico-Colorado border, and Transwestern Pipeline Co. called a force majeure March 27 at a Carlsbad, New Mexico-area compressor station. The mechanical failure was quickly repaired and flows fully restored the following day.
Other Western natural gas hubs fell by between 10 cents and 91 cents in March 21 to March 28 trading. Apart from the Permian hubs, March 28 Western natural gas prices ranged between $1.36/MMBtu at Alberta and $3.63/MMBtu at SoCal CityGate.
Working natural gas in storage was 1,107 Bcf as of March 22, according to U.S. Energy Information Administration estimates. This was a net decrease of 36 Bcf compared with the previous week.
The agency projects that, should the pace of withdrawals meet the 2.4-Bcfd five-year average through the end of the withdrawal season, there will be 1,085 Bcf of natural gas in storage March 31. This is roughly 550 Bcf less than the five-year average.
Storms are expected in the Sierra Nevada, with even more rainfall forecast across Northern California starting April 1, according to the California Department of Water Resources. The statewide snowpack has a 44.9-inch snow-water equivalent, which is 161 percent of the March 28 average.
Archives of the Western Price Survey for the past year are also available online.
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