Western Price Survey
June 19, 2015
Use of natural gas for power generation increased by 8.2 percent week over week, according to the U.S. Energy Information Administration's June 18 Natural Gas Weekly Update. The greatest increases were seen in the Eastern U.S., triggered by warmer weather and retirements of nuclear and coal-fired power plants.
This year 12.1 GW of coal-fired capacity is expected to retire because of the implementation of the Environmental Protection Agency's Mercury and Air Toxics Standard, the EIA noted.
Meanwhile in California, renewables continue to flock to the grid. Cal-ISO recorded that total renewables generation reached 11,191 MW June 18, and at one point ran neck and neck with total production from natural gas-fired units (see "Power Gauge," next page). Solar generation peaked at 6,019 MW June 14, while thermal generation reached 17,070 MW June 17.
Peak demand on the Cal-ISO grid reached 37,123 MW June 17, which should prove the week's high. Northwest Power Pool demand reached a peak of 57,574 MW June 18.
Working gas in storage reached 2,433 Bcf as of June 12, according to EIA estimates, a net increase of 89 Bcf from the previous week. Storage levels are now 42.9 percent greater than a year ago and 1.9 percent greater than the five-year average.
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Storage injections were lower than market forecasts, which expected 93 Bcf of natural gas to be added to storage.
Henry Hub gas spot values eroded 2 cents in Thursday-to-Thursday trading, ending at $2.86/MMBtu June 18. Western natural gas prices varied by the end of trading, with most hubs adding between 4 and 8 cents. Southern California gained the most, adding 8 cents to $2.91/MMBtu. The exceptions were Alberta natural gas, which shed 4 cents to $2.04/MMBtu, and PG&E CityGate, which dropped 6 cents to $3.15/MMBtu.
Meanwhile, average peak power prices in the West gained between 95 cents and $5.85 in the June 12 to June 19 trading period. Average daytime prices ranged from $35.80 at Mid-C to $40.05/MWh at North of Path 15.
Nighttime prices varied, with Palo Verde down $1, on average, to $23.80/MWh, while Northwest hubs added as much as $5.50. Average nighttime prices June 19 ranged from $23.80/MWh at Palo Verde to $31.50/MWh at the California-Oregon Border. North of Path 15 posted no trades throughout the week. South of Path 15 posted a single trade of $28/MWh June 18 [Linda Dailey Paulson].
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