Western Price Survey
Week's End Edition
It's supposed to start getting hot. There's supposed to be a drought. But a deus ex machina of sorts arrived this week courtesy of the Pacific Northwest, where steady rainfall substantially dampened power prices. Cool California temperatures also kept demand down, and with no major transmission outages, prices around the West took a dive.
Welcome to spring in June, where the lowest price for Mid-Columbia peak power was 12.50 mills/kWh on Thursday and where the California Independent System Operator reported a load drop of almost 4,000 MW Wednesday to 30,000 MW. Thursday and Friday demand ticked up only another 1,000 MW.
The 1,243 MW Unit No. 1 of the Palo Verde Nuclear Generating Station remained off line for planned maintenance while temperatures in the area continued to be the warmest in the West. Daytime power packages spread between 54 mills and 71 mills/kWh Monday, but settled down and averaged about 60 mills/kWh through Friday trading. Nighttime power declined all week, from an average of 40 mills/kWh Monday to about 32 mills/kWh Friday.
In California, at South of Path 15, cool temperatures produced less demand and lower power prices. Peak power reached 71 mills/kWh Monday and fell to 53.50 mills/kWh on Thursday. Monday deliveries brought some upward movement, but not enough to top 60 mills/kWh. Nighttime power hovered in the mid-40s Monday, then skated into the low 30s Thursday before finishing in the mid-30s Friday.
North of Path 15 heavy power, which traded as high as 71 mills/kWh Monday, calmed and dropped to the mid-50s. Friday's regular rally failed to move the price above 60 mills/kWh. Off-peak power mirrored peak's slide. It averaged 48 mills/kWh Monday but only 35 mills Friday.
At the California-Oregon Border, rain dampened Oregon and Washington all week and the California-Oregon Intertie was wide open for southbound power. And with California demand down, average peak values sank from 65 mills/kWh Monday to 45 mills/kWh Thursday. Friday's slight climb was not nearly enough to recover the week's slide. Nighttime power also moved down. It went from 45 mills/kWh on Monday to 17.50 mills/kWh on Thursday.
At the Mid-Columbia zone, temperatures were the coolest in the West, but the maintenance outage of the 1,107 MW Columbia Nuclear Generating Station helped hold peak prices around 50 mills/kWh during most of the week. By Thursday, all that rain had dampened values and heavy power traded for about 40 mills/kWh.
With more rain forecast for next week, Monday heavy deliveries averaged 45 mills/kWh. Light power at the zone tumbled, starting the week at an average of 40 mills and falling to 26 mills by Friday. Welcome back to spring [Charles Redell].
Natural Gas Goes Out of Style With Cool California Weather
Demand for natural gas was weaker than expected during the latest reporting period. The U.S. Energy Information Administration reported Thursday that storage injections for last week were on the high end of expectations, while prices around the West tanked Thursday and Friday.
According to the EIA, the West injected 16 Bcf into reserves last week. Nationwide, 110 Bcf were put into storage.
Wet, cool weather this week provided an excess of hydroelectric power in the Northwest, while cool, dry weather in California kept demand low. As a result, natural gas prices at every hub were below $7.00/MMBtu this week, and in some cases even lower.
At the Permian Basin in Texas, prices were strong Monday, reaching $7.20/MMBtu, but turned weak Friday, dropping as low as $5.85/MMBtu.
In New Mexico at the San Juan Basin, prices dropped even more than in Texas. Monday's $7.20/MMBtu was a distant memory on Friday, when the low was $5.57/MMBtu.
In Southern California, gas prices fell below $6.00/MMBtu for the first time this spring.
Only Malin, Ore. and Alberta stayed above $6.00/MMBtu. Malin's prices were above $7 Monday but lost 90 cents by Friday [C. R.].
Archives of the Western Price Survey for the past year are also available online.
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