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Western Price Survey

Week's End Edition
May 11, 2012
Western Power Prices Continue Higher

Peak-power prices in the West continued to increase, supported by warmer weather, slowing Pacific Northwest hydropower generation, and higher natural gas prices.

In May 4 to May 11 trading, peak prices ranged from averages of $20.30/MWh at Mid-Columbia to $36.70 at South of Path 15. California-Oregon Border led Western hubs with a gain of roughly $7.90/MWh over the trading period.

Off-peak power values finished the week at averages ranging from around $5.80/MWh at Mid-C to about $22.90/MWh at SP15. Values gained $2 to $3 on average since last week.

Mid-C prices climbed from an average of 12 cents/MWh on Thursday to $5.82/MWh Friday (see table).

The Henry Hub average spot price for natural gas gained 6 cents over the trading period to $2.36/MMBtu, but gains at Western hubs were more substantial.

Southern California Border gas rose 30 cents to end at $2.53/MMBtu Friday. PG&E CityGate spot natural gas prices rose 23 cents to an average of $2.77/MMBtu, while the average spot price for Malin gas was up 12 cents to $2.21/MMBtu.

In its Short-Term Energy Outlook, released May 8, the U.S. Energy Information Administration said it expects the average 2012 Henry Hub natural gas spot price to be $2.45/MMBtu. That forecast is down 2.5 percent from the previous month's forecast of $2.51/MMBtu, and is $1.55/MMBtu less than the 2011 average spot price.

Working gas in storage reached 2,606 Bcf as of Friday, May 4, according to EIA estimates, a net increase of 30 Bcf from the previous week. Storage levels are now 44.2 percent higher than a year ago and 44.5 percent above the five-year average.

With a record 2,576 Bcf in storage as of April 27, the agency projects that anticipated additions to natural gas storage -- 1,623 Bcf between March and October -- will be the smallest since 2002.

"Limits on storage capacity, as well as high demand from the electric power sector this summer, will limit the overall level of injections," according to the agency. Production also has been flat. "In 2013, working inventory levels [will] recede from record highs," adds the analysis, "although they will still remain robust compared with recent history."

Peak use on the Cal-ISO grid this week reached a 33,171 MW high on May 9. Northwest Power Pool demand reached 48,191 MW Thursday, May 10.

What's ahead: Following sunny weather and a 77 °F high Monday, May 14, Seattle temperatures will drop to 69 °F Tuesday and remain in the mid-60s through Thursday. Rain is possible for the area Wednesday or Thursday. Similar conditions -- minus the rain -- are forecast for the Portland area, which will drop from 85 °F Monday to 75 °F Tuesday.

Sunny skies with temperatures in the high 60s are predicted for the San Francisco area Monday through Thursday. Mostly sunny conditions should keep temperatures in the Los Angeles area near the 70s into Thursday.

Meanwhile, Palm Desert and the Phoenix area should have 100-plus-degree weather Monday through Thursday. Near Palo Verde, temperatures of 104 °F are expected Monday and Tuesday [Linda Dailey Paulson].

Western Electricity Prices
Week's End: May 7 - 11, 2012
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 11.24-111.24 7.01-18.17
Mid-Columbia 9-27 (-)1.25-8
COB 16.50-29.50 3-11.50
NP 15* 26.50-30.75 16-17.25
SP 15* 28.75-37.50 16.50-23.25
Palo Verde 25.50-31.50 15.50-22

* 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.

Please contact with questions or comments about this site.

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

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