Western Price Survey
Week's End Edition
Power prices in the West have gained ground as traders look to warmer weather, though surplus hydro generation continues to keep prices relatively low.
The Bonneville Power Administration continued periodically cutting non-hydro generation, including wind, to cope with the surplus hydropower and protect fish under its "environmental redispatch" initiative. The agency cut a total of 7,050 MWh of generation Monday, June 6 and Tuesday, June 7. Another 2,650 MWh of generation was curtailed Wednesday.
BPA reported June 9 that it has cut a total of 66,247 MWh of generation since May 18. The agency says these curtailments are needed to protect salmon and steelhead, maintain the reliability of the power grid and avoid shifting costs to its customers.
Here's how average peak power prices fared over the trading period at Western hubs:
Over the trading period, off-peak prices gained between $1.70 and about $5.95. Palo Verde posted the highest average price for off-peak power among Western hubs at almost $18/MWh, a gain of roughly $5.95 versus the previous Friday. Northwest off-peak values, meanwhile, recovered from negative territory (see chart).
Western natural gas prices were mixed compared with Friday, June 3. Over the trading period, Southern California Border gas earned a nickel, closing at $4.63/MMBtu Friday. PG&E CityGate gas lost 4 cents, closing at $4.91/MMBtu.
Henry Hub spot prices traded at $4.83/MMBtu on June 8, up 20 cents over the previous Wednesday. By Friday the hub traded for an average of $4.72/MMBtu, about even with the prior week.
Futures prices for the hub reached $4.92/MMBtu Friday. Bloomberg expects futures pricing to inch higher still based on forecasts of above-normal temperatures, predominantly in the eastern United States.
Working natural gas in storage rose to 2.187 Tcf by Friday, June 3, after an 80 Bcf net injection, according to the U.S. Energy Information Administration. Current stores are 255 Bcf below last year's amount for the same time period.
Peak demand on the Cal-ISO grid hit 29,082 MW Thursday afternoon. Demand should near 34,600 MW in the week ahead.
What's ahead: Seattle and Portland high temperatures are expected to be in the 60s and 70s through Wednesday. San Francisco expects high temperatures in the mid-60s much of the week, while Los Angeles temperatures will exceed 70 °F for much of the week. Temperatures in Palo Verde are expected to hit 106 °F on Tuesday and Wednesday [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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