Western Price Survey
Week's End Edition
Power prices in the West trended lower over the past week as much of the region continued warming and natural gas values fell. Above-average temperatures are expected to continue in the days ahead.
Working gas in storage reached 1,734 Bcf as of Friday, April 19, according to U.S. Energy Information Administration estimates, a net increase of 30 Bcf from the previous week. Storage levels are now 31.8 percent less than a year ago and 5.1 percent below the five-year average. During the report period, the Western region withdrew 2 Bcf of natural gas, the only region to do so.
Nationally, natural gas demand has dampened, according to the EIA, with consumption for power generation falling by 6.1 percent on average between April 17-24. Overall, natural gas demand in the electric power sector is down 23.3 percent relative to last year, partly due to higher gas prices and their relative value to coal -- "which may influence electric power plant dispatch decisions," the agency noted in its April 25 natural gas report.
Henry Hub natural gas values fell 22 cents compared with April 19, trading April 26 at $4.16/MMBtu. Last year at this time Henry Hub prices were closer to $2/MMBtu.
Western gas prices dropped between 21 and 25 cents over the April 19 to April 26 trading period, with Ruby-Malin losing 25 cents to $3.94/MMBtu and Southern California Border down 23 cents to $4.07.
Western peak-power prices also lost value in the trading period, though Palo Verde prices gained $1.25 on average to $41.50/MWh since April 19. Temperatures in the Phoenix area are nearing the century mark, and Unit 1 of the Palo Verde Nuclear Generating Station remains off line for scheduled refueling and maintenance.
Here's how average peak prices at other Western hubs fared since last Friday:
Average off-peak power prices in the West posted similar declines, down between $1.45 and $5.75 in the trading period. Prices April 26 ranged from $24.60/MWh at Mid-C to $49.80 at SP15. Palo Verde, by contrast, gained $2.55 to $33.70/MWh.
Demand on the Cal-ISO grid reached 31,187 MW Monday, which was the week's high according to the grid operator. The next peak in demand should occur April 29, when use may reach 32,098 MW. Northwest Power Pool peak use reached 49,769 MW Tuesday.
What's ahead: California expects sunny conditions starting April 29. San Francisco should have daytime highs near 70 °F for the week; temperatures in Los Angeles could reach a 79-degree high by Thursday. After showers Monday, Seattle should be partly to mostly sunny with temperatures warming to 66 °F, while Portland should have rain into Tuesday with daytime highs around 70 degrees midweek. The National Weather Service forecasts above-average temperatures in California and Arizona between May 1 and May 9. Oregon anticipates above-normal temperatures May 3 through 9 [Linda Dailey Paulson].
* 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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