Western Price Survey
April 18, 2014
Western energy prices dropped back from last week's heat-prompted highs, failing to gain any momentum in the abbreviated trading week.
For peak power, day-ahead average prices at South of Path 15 tumbled $9.80 to $41.15/MWh over an April 10 to April 16 trading period, with markets closed on Good Friday. Power prices traded Tuesday for Thursday delivery, and Wednesday for Friday delivery. Northwest peak prices dipped drastically at the start of the week, then made up some ground (see chart).
Off-peak power prices tumbled significantly in the Northwest. Average day-ahead prices plummeted roughly $25 over the trading period, and at one point, Mid-Columbia off-peak power was trading for 65 cents/MWh. Nighttime prices April 16 ranged from an average of $1.15/MWh at Mid-C to $41/MWh at North of Path 15 (see chart).
Renewable-energy production on the Cal-ISO grid edged past 9,800 MW at 1 p.m. April 12, constituting the single largest category of power for the grid during that hour. Solar production kicked in more than 4,200 MW and wind contributed 4,008 MW (see "Power Gauge," next page).
The California Department of Water Resources reported that, as of April 18, the statewide snow-water equivalent was at 5.5 inches, or 21 percent of normal for this date. Last year Cal-ISO had to derate hydro-power by more than 1,000 MW, although the grid operator has not yet released this summer's operational assessment.
Working gas in storage reached 850 Bcf as of Friday, April 11, according to U.S. Energy Information Administration estimates, a net increase of 24 Bcf from the previous week. Storage levels are now 50 percent less than a year ago and 54.3 percent less than the five-year average. The addition was less than market expectations.
Natural gas prices remained somewhat inert at the end of the trading period, with average Henry Hub values down 6 cents since last Thursday to $4.63/MMBtu. Western hubs moved even less (see chart).
The Western region posted an 8 Bcf addition to natural gas storage during the week. It was the only region to record a larger-than-average addition during the report week.
Thus far, gas demand in the shoulder season "looks relatively mild and uneventful," note Barclays analysts, as natural gas production levels continue to reach new record highs. The production growth forecast through summer should be sufficient to narrow the current storage deficit by the end of the injection season, according to Barclays [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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