Western Price Survey
April 4, 2014
The Sierra snowpack in California was boosted by late-March storms, but the state is poised for one of the driest years on record, according to the Department of Water Resources.
DWR's April 1 snow survey, which is a crucial barometer for water availability and hydropower production in the Golden State, showed snow-water equivalent at 32 percent of normal. An April 4 survey put the figure at 35 percent.
"We're already seeing farmland fallowed and cities scrambling for water supplies," DWR Director Mark Cowin said in a press release. "We can hope that conditions improve, but time is running out and conservation is the only tool we have against nature's whim."
Last year's drought led Cal-ISO to derate hydro-power production by more than 1,000 MW, and this year's derate will be listed in the grid operator's forthcoming summer assessment. Lack of hydro-power, along with the absence of the 2,200 MW San Onofre Nuclear Generating Station, led to an increased reliance on natural gas units, leading to higher wholesale prices and more emissions. Southern California Edison, for instance, has calculated that buying replacement generation last year cost $1 million more a day than SONGS power.
Another trend to watch is the growth of renewables on the grid. This week Cal-ISO reported that renewable-energy production surpassed 8,000 MW around 3 p.m. on March 30, outpacing thermal sources of power, and helped by coincident production of solar PV and wind (see "Power Gauge," next page).
Working gas in storage reached 822 Bcf as of Friday, March 28, according to EIA estimates, a net decrease of 74 Bcf from the previous week. Storage levels are now 51.6 percent less than a year ago and 54.7 percent less than the five-year average. The Western region saw a 4 Bcf withdrawal.
Over the Thursday-to-Thursday trading range, Henry Hub natural gas values added 9 cents on average to $4.48/MMBtu. Western hub prices were generally higher, with EP-San Juan Basin and PG&E CityGate each adding 11 cents to trade at $4.42 and $5.03/MMBtu, respectively. Stanfield proved the exception, down a cent to $4.41, while Sumas traded even at $4.40/MMBtu.
Northwest peak-power prices rose from hydro-prompted lows this week, adding between $7.25 and about $11/MWh over the trading period. Prices at California and Arizona hubs were mixed, with SP15 shedding 35 cents to end at $46.10/MWh. Prices ranged Thursday from $23.45/MWh at Mid-C to $48/MWh at North of Path 15. Off-peak power prices moved higher, with gains ranging from 95 cents at Palo Verde to $12.50/MWh at Mid-C (see chart) [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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