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Western Price Survey

Week's End Edition
April 12, 2013
After Gas Withdrawal, Power Prices Make Sharp Gains

Western energy prices rose sharply by week's end, with both natural gas and power prices up significantly compared to the previous Friday.

Working gas in storage reached 1,673 Bcf as of Friday, April 5, according to U.S. Energy Information Administration estimates, a net decrease of 14 Bcf from the previous week. Despite an addition of 7 Bcf in the West, national storage levels are now 32.5 percent less than a year ago and 3.8 percent less than the five-year average.

Weekly natural gas withdrawals during March 2013 averaged 99 Bcf -- the highest average weekly net withdrawal recorded during four full weeks of March since 2002, according to the EIA.

There may be yet more withdrawals from natural gas stores, according to Barclays analysts, based on continuing colder weather throughout the nation.

Henry Hub natural gas values gained 23 cents since last Friday, trading today at $4.21/MMBtu. Western prices moved even higher with Southern California Border soaring 35 cents, trading at $4.17/MMBtu April 12. PG&E CityGate natural gas, which posted the highest average price among Western hubs, rose 25 cents to $4.24/MMBtu by Friday.

In electricity markets, the Bonneville Power Administration has seen both strong hydro and wind production. Hydro has been consistently around 12,000 MW since April 8, while wind production peaked at around 4,000 MW April 7 and 10.

Regional spring runoff typically reaches its height in the May-June period, according to BPA spokesman Kevin Wingert. Agency meteorologists say the past week's flow was "interesting," but much higher flow rates -- exceeding 500,000 kcfs -- were previously measured in January and February.

In California, Cal-ISO saw wind break historical production levels, peaking at 4,196 MW on Sunday, April 7.

By the end of the week, however, Western power values seemed more responsive to colder weather and the gas-storage report. Here's how average peak prices fared over the April 5-12 trading period:

  • Mid-Columbia: Up $10.60 to $38.95/MWh.
  • California-Oregon Border: Gained $13.60 to $46.75/MWh.
  • North of Path 15: Rose $4.45 to $49.15/MWh.
  • South of Path 15: Gained $5.15 to $53/MWh.
  • Palo Verde: Up $2.55 to $38.40/MWh.

Average off-peak power prices at most Western hubs were also up, gaining between $1.35 and $10.95 over the trading period. Mid-C, where off-peak prices had dipped to a low of 25 cents/MWh during the week, jumped about $19.50 from Thursday to Friday, to $20.75/MWh.

Peak demand on the Cal-ISO grid reached 29,948 MW Wednesday, April 10, the week's high according to the grid operator. Northwest Power Pool peak demand reached 50,728 MW Tuesday.

What's ahead: The National Weather Service forecasts an increased probability of above-normal temperatures in California April 17-21, with colder conditions expected in Washington and Idaho during that same period. Forecasters expect warmer temperatures to persist in California, spreading into Oregon and Arizona, between April 19 and 25 [Linda Dailey Paulson].

Western Electricity Prices
Week's End: April 8-12, 2013
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 14.47 -202.55 13.02-42.02
Mid-Columbia 24.00-43.25 0.25-26
COB 29-48 10.25-32
NP 15* 43-49.25 30-38
SP 15* 52.50-60.25 36-42
Palo Verde 34.25-38.75 23-33.50

* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.

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

The Western Price Survey is excerpted from Energy NewsData's comprehensive regional news services. See for yourself how NewsData reporters put events in an accurate and meaningful context -- request a sample of either or both California Energy Markets and Clearing Up.

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

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