Western Price Survey
May 9, 2014
Western power prices had a lull on Thursday, but rebounded on expectations of warm, dry weather in the Northwest starting Monday.
In the Northwest, the water-supply forecast at The Dalles is now at 111 percent of normal for the water year. The region's water supply rebounded the past three months after four very dry months, said Bruce Anderson, senior hydrologist with the Northwest River Forecast Center. Although there is an above-normal amount of water in the system, when the peak flow will occur is "the million-dollar question," he said. Cooler temperatures, generally less than normal throughout April, have delayed snow-melt throughout the region. Based on the historical data, peak flow is generally mid-May to mid-June.
Peak flow generally brings lower power prices, but Northwest peak prices shot up this week on expectations of dry weather. Mid-Columbia prices, after descending close to a low spot price of $20/MWh on May 8, rose to $41.40/MWh, on average, and California-Oregon Border values reached $52.25/MWh.
Northwest nighttime power prices, meanwhile, added $23 in a single day's trading between May 8 and 9. Mid-Columbia prices reached an average of $23.20/MWh, up from -10 cents/MWh. California-Oregon Border traded at $29.20/MWh, up from about $6/MWh.
Temperatures in the 80s are expected for the Portland area by May 13, with a high of 76 °F forecast for Seattle that same day. Dry conditions are expected throughout the week across the region.
In California, meanwhile, runoff has started -- however much of a relative trickle that might be in a severe drought year. The California Department of Water Resources in its latest report found that, of 171 snow courses measured this month, 73 were completely bare. As of May 9, the statewide snow-water equivalent was at 2.5 inches, or 14 percent of normal for this date.
Working gas in storage reached 1,055 Bcf as of Friday, May 2, according to U.S. Energy Information Administration estimates, a net increase of 74 Bcf from the previous week. Storage levels are now 43 percent less than a year ago and 48.2 percent less than the five-year average. The U.S. Energy Information Administration noted that to reach the five-year average, weekly injections would have to be 105 Bcf through the end of October.
The EIA is also projecting that Henry Hub natural gas prices will average $4.74/MMBtu in 2014 and $4.33/MMBtu in 2015. This is an increase of roughly 20 cents from the April projections [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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