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Western Price Survey

Week's End Edition
April 20, 2012
Henry Hub Spot Price Hits 10-Year Low

Beleaguered natural gas prices continued to fall this week with the average price for Henry Hub spot gas reaching $1.82/MMBtu Friday -- its lowest mark since December 2001.

The price broke a previous low, recorded in 2009, of $1.83.

Natural gas demand is typically lackluster in the shoulder season, but record gas storage and warmer-than-normal weather throughout the nation are also deflating prices.

In addition, there's no sign of natural gas production tapering off. Working gas in storage reached 2,512 Bcf as of Friday, April 13, according to U.S. Energy Information Administration estimates, a net increase of 25 Bcf from the previous week. Storage levels are now 53.1 percent higher than a year ago and 57.7 percent above the five-year average.

Western natural gas prices edged lower in the April 13 to April 20 trading period. PG&E CityGate spot gas dropped 9 cents, ending at an average of $2.26/MMBtu. Southern California Border and Ruby-Malin gas each lost a nickel, ending Friday at $2.15/MMBtu and $1.76/MMBtu, respectively. Malin lost 4 cents, trading at $1.77/MMBtu.

In its weekly report, the EIA noted California natural gas continues to have a wider price differential compared to the Henry Hub price as the result of increased regional demand. The continued outage of the San Onofre Nuclear Generating Station, which may remain out of service until the end of July, coupled with Southern California pipeline constraints has kept California prices a bit higher than the Henry Hub's.

Southern California electricity prices have recently shown this same expanded differential. South of Path 15 peak power gained almost $5/MWh on average since last Friday, finishing at an average of $34.45/MWh. Peak prices at SP15 remain about $9/MWh above both North of Path 15 and Palo Verde values. Palo Verde's Unit No. 3 resumed operation April 18 after a refueling outage. It was operating at 70 percent of capacity at the close of the trading week, according to the U.S. Nuclear Regulatory Commission.

Daytime power prices at Western hubs all gained value, with the average price up between 85 cents and $5/MWh. Prices April 20 ranged from $16.30/MWh at Mid-Columbia to about $34.45 at SP15.

Peak use on the Cal-ISO grid reached 29,511 MW the evening of Thursday, April 19. The week's high of 30,295 MW was expected April 20, when Los Angeles-area coastal temperatures were forecast to reach the mid-70s and temperatures near 100 °F were forecast for inland Southern California. Northwest Power Pool reported peak use of 49,123 MW Tuesday, April 17.

For off-peak power, Western hubs gained between 50 cents and $5.80/MWh on average compared to last Friday. Both Mid-C and California-Oregon Border continue to trade at low values from ample hydro generation. Average off-peak prices Friday ranged from $2.85/MWh to $23.85/MWh (see table).

What's ahead: Pacific Northwest temperatures gradually decrease starting April 23, with Portland expected to have a daytime high of 59 °F by Thursday. The region should have showers through Thursday as well. San Francisco expects sunny, clear conditions until Thursday, when showers are likely. Southern California is forecast to have dry, cooler weather through Wednesday, with showers forecast either Thursday or Friday [Linda Dailey Paulson].


Western Electricity Prices
Week's End: April 16 - 20, 2012
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 11.28-890.77 10.56-40.33
Mid-Columbia 12.25-18.75 (-)1.50-6
COB 14.25-20.50 1.50-7.50
NP 15* 23-26 16.35-19
SP 15* 29.50-35 13-24
Palo Verde 21-26.25 12.50-18.50

* 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.


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

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