Western Price Survey
June 22, 2018
Triple-digit heat across California’s inland valleys is expected to propel California Independent System Operator power demand higher, with excessive heat warnings for certain areas.
CAISO grid demand reached 35,029 MW June 21, but the week’s high use was expected June 22, when demand was expected to reach 37,291 MW.
The National Weather Service expected daytime highs that day to reach their highest levels since last September. In contrast, their colleagues in Northern California deem this “a relatively modest heat wave,” with highs in the northern Sacramento Valley expected to reach 105 to 110 degrees Fahrenheit.
Although hot, conditions don’t match last year’s extreme temperatures, which sent demand soaring on June 20 to 44,184 MW. This was still well below the all-time CAISO record of 50,270 MW, recorded July 27, 2006.
Total renewables on the CAISO grid reached 15,201 MW June 16, supplying roughly 56 percent of demand. Thermal generation peaked at 15,169 MW June 21, or about 43 percent of demand.
Between June 14 and June 21, Western peak power prices uniformly lost value, dropping between $1.25 and almost $6 in trading. Mid-Columbia posted the greatest loss, down $5.95 to $17.35/MWh. Prices traded in a range from $17.35/MWh at Mid-Columbia to $36.50/MWh at Palo Verde.
California off-peak power prices added roughly a dollar in trading, while Pacific Northwest hubs shed $4 to $5. Western nighttime power prices ranged from $8.25/MWh at Mid-Columbia to $29.05/MWh at North of Path 15.
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Meanwhile, working natural gas in storage was 2,004 Bcf as of June 15, according to U.S. Energy Information Administration estimates. This is a net increase of 91 Bcf compared to the previous week. Natural gas storage levels are now 27.4 percent less than a year ago and 20 percent less than the five-year average.
National natural gas use ticked up 4 percent week over week, according to the EIA, which attributed the gain to warmer weather across the country. Gas use for power generation increased 12 percent week over week.
Henry Hub natural gas spot prices rose 6 cents, ending at $3.01/MMBtu in June 14 to June 21 trading. Alberta gas gained the most value among Western hubs, up 35 cents to $1.23/MMBtu. Stanfield gas lost the most, down 20 cents to $2.10/MMBtu. PG&E CityGate posted the highest price in trading at $3.10/MMBtu, an increase of 5 cents.
EIA analysts, in the agency’s weekly report, observed that SoCal CityGate natural gas spot prices continue fluctuating based on ongoing storage and pipeline limitations. –Linda Dailey Paulson.
Archives of the Western Price Survey for the past year are also available online.
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